The Scottsdale Airport has begun executing lease agreements for its terminals and in-the-works aviation business center that will generate just over $1 million per year, local aviation experts contend.
At a February Scottsdale City Council meeting, three items related to the Scottsdale Airport were passed on consent, 7-0, by elected leaders:
- A lease amendment with Gemini Air Group, Inc. for space at the airport;
- A contract with Scottsdale West Holdings, LLC for lease of space in the aviation business center; and
- A contract with Volanti Restaurant and Lounce, LLC for lease space inside the aviation business center.
The Scottsdale Airport is at 15000 N. Airport Drive.
The city’s $25 million terminal area redevelopment project is intended to serve as a new hub of the Scottsdale Airport and larger airpark area by enhancing and upgrading the former terminal area, a city council report states.
Phase I of the project began in July 2017, involving construction of site utilities, a parking lot and two hangar complexes which are scheduled for completion in May.
Phase II is also underway, and involves the demolition of the former terminal building and the construction of the new two-story aviation business center building, scheduled for completion in July.
The city’s lease with Gemini Air Group was first entered into in June 2016, for the lease of two hangars at the local airport. The original lease was based on a conceptual design of two hangars plus ancillary office space for a total of 65,000 square feet. Based on the final design, the revised total for the two hangars and space is 66,464 square feet.
This amendment will reflect the slight increase in the base rental rate, the city council report states.
The base rent for the 20-year lease will generate $885,516.48 in annual revenue to the Airport Enterprise Fund. One option to renew at 10 years is available to Gemini Air Group, the report states.
The lease for Scottsdale West Holdings, LLC is for 1,678 square feet of office space on the aviation business center’s ground floor. The term of the lease is five years with the option for two additional three-year periods, a city staff report states.
The base rent will generate $50,340 in annual revenue for the Airport Enterprise Fund.
The restaurant and office space lease for Volanti Restaurant and Lounge, LLC is for 4,510 square feet of space, including a patio. The term of the lease is 10 years, with the option for two additional five year periods.
The base rent for the restaurant space will generate $101,578.08 yearly, a city staff report states.
Volanti first entered into two lease agreements for a restaurant and catering business under the name Maza Concepts, LLC, doing business as The Brick.
This legal entity was not properly formed, requiring the prior lease agreements to be formally terminated.
The business entity formed a new legal entity under the name of Volanti Restaurant and Lounge, which is recognized and in good standing with the state of Arizona, the city council report states.
Funding for these projects is available from a May 2017 $23.5 million Municipal Property Corporation longterm debt issuance to finance the airport redevelopment project.
The city’s staff report states that due to a favorable market, an additional $1.7 million of premium was received, giving the project a total available budget of $25.2 million.
The longterm contracts for leased hangars, restaurant facilities and office space, along with fixed tenant rents, miscellaneous rental agreements and permit fees are forecast to cover debt service requirements, the staff reports states.