10.F.
City Council Meeting - FINAL
- Meeting Date:
- 04/16/2019
- From:
- Charity Lee, Real Estate Manager
Information
TITLE:
Consideration and Approval of Contract: Lease Agreement with American Airlines
STAFF RECOMMENDED ACTION:
Approve Lease Agreement with American Airlines
Executive Summary:
The Lease Agreement with American Airlines expires on August 23, 2019. Staff recommends approving the Lease Agreement with American Airlines which will provide continued air service.
Financial Impact:
Article 2. Term
2.02 Term
- The term of the Lease is 10 years with two 5-year extensions. Either party can terminate Lease upon 90 day written notice.
Article 6. Rents, Fees, and Utilities
6.01 Rental Amount
- $36,000/ year for 1,027 square feet of ticket counter space/storage.
- $30.74/ square foot per year for 144 square feet of office space.
6.01.1 Storage
- $.34 per square foot for semi-permanent storage unit.
6.02 Landing Fee
- Airline shall pay to City a landing fee at the rate of $1.09 per thousand pounds of declared maximum certified gross landing weight of the aircraft landed.
6.05 Rental Rate Adjustment
- 2% rental rate adjustment annually.
Article 7. Payment Provisions
7.02 Taxes
- Airline responsible for payment of all taxes.
7.04 Fuel Charges
- Airline liable for all fuel costs.
2.02 Term
- The term of the Lease is 10 years with two 5-year extensions. Either party can terminate Lease upon 90 day written notice.
Article 6. Rents, Fees, and Utilities
6.01 Rental Amount
- $36,000/ year for 1,027 square feet of ticket counter space/storage.
- $30.74/ square foot per year for 144 square feet of office space.
6.01.1 Storage
- $.34 per square foot for semi-permanent storage unit.
6.02 Landing Fee
- Airline shall pay to City a landing fee at the rate of $1.09 per thousand pounds of declared maximum certified gross landing weight of the aircraft landed.
6.05 Rental Rate Adjustment
- 2% rental rate adjustment annually.
Article 7. Payment Provisions
7.02 Taxes
- Airline responsible for payment of all taxes.
7.04 Fuel Charges
- Airline liable for all fuel costs.
Policy Impact:
None
Connection to Council Goal, Regional Plan and/or Team Flagstaff Strategic Plan:
ECONOMIC DEVELOPMENT
Grow and strengthen a more equitable and resilient economy
Grow and strengthen a more equitable and resilient economy
Has There Been Previous Council Decision on This:
No
Options and Alternatives:
Approve the Lease Agreement
Don't approve the Lease Agreement and redirect Staff
Don't approve the Lease Agreement and redirect Staff
Background and History:
August 23, 2009 the City and US Airways, Inc. entered into a Lease Agreement for Ticket Counter and Office Space at the Flagstaff Airport. US Airways and American Airlines merged and American Airlines assumed the lease. The existing lease expires August 23, 2019. Currently, American Airlines provides air transportation to Phoenix and beginning April 1, 2019, to Dallas.
Key Considerations:
Approving the Lease Agreement with American Airlines will provide for continued air transportation for Flagstaff and surrounding areas which in turn may increase tourism and provide for additional business growth in our community.
Community Benefits and Considerations:
- Rent increased from $30,637.80 per year to $36,000 per year for 1,027 square feet of ticket counter space/storage.
- Rate increase from $29.84 per square foot per year to $35.05 per square foot per year.
- Addition of storage fee of $.34 per square foot added to new lease.
- Landing fee increase from $1.05 per thousand pounds of declared maximum certified gross landing weight of the aircraft landed to $1.09 per thousand pounds.
Community Involvement:
Continued air transportation to Phoenix and Dallas.
Expanded Options and Alternatives:
Northern Arizona Center for Technology (NACET), Economic Collaborative of Northern Arizona (ECONA), Northern Arizona University (NAU), W.L. Gore & Associates, and other business leaders work together to encourage air travel out of Flagstaff.