9.B.
City Council Meeting - FINAL
- Meeting Date:
- 10/07/2014
- Co-Submitter:
- Amy Hagin, Senior Procurement Specialist
- From:
- David McIntire, Asst. to City Manager - Real Estate
Information
TITLE:
Consideration of Bid and Approval and Lease Agreement: Flagstaff Airport Terminal First Floor Office. (Lease of a small office space on the first floor of the Airport terminal)
RECOMMENDED ACTION:
Approve the Lease Agreement with Route 66 Enterprises Inc. for an initial three (3) year term, with an annual rent of $7,212 ($601 per month) and the option for two (2) five (5) year extensions.
Policy Decision or Reason for Action:
Route 66 Enterprises Inc. was the highest responsive and responsible bidder to an Invitation for Bids (IFB) for the Flagstaff Airport First Floor Terminal Office. Executing the Lease Agreement will provide revenue for the Airport, which is an enterprise fund. The proposed use, is a gift shop which will also provide an additional commercial service to Airport users and potentially generate sales tax. The Airport Director has confirmed this is a use compatible with the location of the space. Currently the space is being used for storage.
Subsidiary Decisions Points: No subsidiary decision points.
Subsidiary Decisions Points: No subsidiary decision points.
Financial Impact:
The Lease Agreement is for $7,212 per year for the initial three (3) years with the option for two (2) five (5) year extensions.
Total revenues to the Airport for the initial term will be $21,636. The airport is an enterprise fund. Additionally, there is a potential for the generation of sales tax through the use of the space which would benefit the general fund.
Total revenues to the Airport for the initial term will be $21,636. The airport is an enterprise fund. Additionally, there is a potential for the generation of sales tax through the use of the space which would benefit the general fund.
Connection to Council Goal:
COUNCIL GOALS:
5. Retain, expand, and diversify economic base
11. Effective governance
REGIONAL PLAN:
Goal T.10 - Strengthen and expand the role of Flagstaff Airport as the dominant hub for passenger, air freight, public safety flights and other services in Northern Arizona.
Goal ED.5 The Flagstaff Airport will continue to serve the Northern Arizona region for air transportation, multi-modal connectivity and business growth potential.
5. Retain, expand, and diversify economic base
11. Effective governance
REGIONAL PLAN:
Goal T.10 - Strengthen and expand the role of Flagstaff Airport as the dominant hub for passenger, air freight, public safety flights and other services in Northern Arizona.
Goal ED.5 The Flagstaff Airport will continue to serve the Northern Arizona region for air transportation, multi-modal connectivity and business growth potential.
Has There Been Previous Council Decision on This:
There has been no previous Council decision on this item.
Options and Alternatives:
1. Approve the Lease Agreement which will provide revenue and services for the Airport for a minimum of three (3) years.
2. Not approve the Lease Agreement with the vendor and provide staff direction on Council preference for potential use or terms.
3. Not approve the Lease Agreement and choose to leave the space vacant.
2. Not approve the Lease Agreement with the vendor and provide staff direction on Council preference for potential use or terms.
3. Not approve the Lease Agreement and choose to leave the space vacant.
Background/History:
The Flagstaff Airport terminal first floor office space is approximately 9' X 16' space (144 square feet) currently being used for storage and located in the general proximity of the baggage claim area. The Airport Director requested Real Estate and Purchasing work to lease the space to provide revenue and services to the Airport. An Invitation for Bids (IFB) was released in mid-July. The City received two (2) bid responses to the IFB. One (1) of the bid responses was withdrawn making Route 66 Enterprises Inc. the highest responsive and responsible bidder.
Key Considerations:
The space is currently used as a storage room. It is 144 Square Feet.
The proposed new use will be a gift shop.
The lease term is for an initial three (3) years with the option for two (2) five (5) year extensions.
The annual rental fee is $7,212 which will provide resources for the Airport. This equates to $50.08 per square foot per year or $4.17 per square foot per month. The Airport is an enterprise fund.
The use is considered compatible with the Airport.
The proposed new use will be a gift shop.
The lease term is for an initial three (3) years with the option for two (2) five (5) year extensions.
The annual rental fee is $7,212 which will provide resources for the Airport. This equates to $50.08 per square foot per year or $4.17 per square foot per month. The Airport is an enterprise fund.
The use is considered compatible with the Airport.
Expanded Financial Considerations:
The annual rental fee is $7,212 which will provide resources for the Airport. This equates to $50.08 per square foot per year or $4.17 per square foot per month. The Airport is an enterprise fund.
It is also anticipated that the retail use will generate sales tax revenue and provide local business income.
It is also anticipated that the retail use will generate sales tax revenue and provide local business income.
Community Benefits and Considerations:
The Regional Plan speaks of strengthening the airport and this Lease Agreement will provide beneficial revenue and create additional options for customers and users.
Community Involvement:
Inform