Title
DVT Hangars LLC Rent Credits for Taxiway Construction at Phoenix Deer Valley Airport (Ordinance S-50740)
Description
Request to authorize the City Manager, or his designee, to amend Ground Lease No. 154206 with DVT Hangars LLC (DVT Hangars) to establish rent credits in an amount of up to $3.2 million for the construction of a portion of a taxiway at Phoenix Deer Valley Airport (DVT).
Report
Summary
DVT Hangars is requesting rent credits to pay for the construction of a portion of a taxiway at DVT. DVT Hangars is currently constructing Phase 1 of a two-phase project to build corporate hangars at DVT. Access to the runways from the development is currently available via an existing taxiway, known as Taxiway Charlie that connects to the taxi lane located within the DVT Hangars leased premises. DVT Hangars wishes to improve runway access for its tenants by completing a portion of a second parallel taxiway, known as Taxiway Delta that has been designed by DVT, but not constructed. Completion of this segment of Taxiway Delta will improve the safety and efficiency of ground operations at DVT by decreasing the distance of jets taxiing to and from the DVT Hangars premises from the runway.
Contract Term
This amendment will have no impact to the DVT Hangars 40-year lease term.
Financial Impact
The rent credits will be applied to the DVT Hangars account at the rate of 75 percent of their rent on a monthly basis until the rent credits are exhausted. It is estimated the rent credits will be exhausted within 20 years of the 40-year lease. The time for the rent credits to be exhausted will be reduced if DVT Hangars constructs and begins payment of rent on Phase 2 of their development.
Concurrence/Previous Council Action
The Phoenix Aviation Advisory Board, Business and Development Subcommittee recommended approval of the item on March 7, 2024 by a vote of 3-0.
The Phoenix Aviation Advisory Board recommended approval of the item on March 21, 2024 by a vote of 9-0.
Location
Phoenix Deer Valley Airport, 702 W. Deer Valley Road
Council District: 1
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Aviation Department.