Phoenix Sky Harbor Airport Businesses Want Rent Relief Through 2021
Phoenix leaders will soon vote on whether to extend rent relief for concessions at Sky Harbor International Airport through 2021.
When Phoenix originally granted rent relief to airport restaurants and retailers, the Aviation Department estimated it would lose about $20 million over nine months.
During a city subcommittee meeting on Wednesday, the Department said enplanements, which is the number of people who board planes at Sky Harbor, remains about half of pre-pandemic levels. At Terminal 3, 19 food and beverage and retail outlets remain closed, which accounts for 58%. At Terminal 4, 53 outlets remain closed, which is 51%.
Joya Kizer reopened some of her shops in September.
“Sales may be high one week then at a deficit the next. And actually a weekly example is generous. It truly is a day by day fluctuation,” she said.
Bruce Mosby, who owns and operates two coffee shops, told the subcommittee: "At my business we have recalled all our employees, 60% of whom have returned, the rest have found other employment."
The main food and beverage operators at Sky Harbor are HMS Host, which has 24 outlets and SSP America, which has 31 outlets. HMS Host reported to the city that 253 employees have been recalled while SSP America reported 131 employees. In November, subcommittee members told Host and SSP they expected the companies to send the city a letter stating they would call back employees based on seniority. The request came after months of laid off workers brought up concerns during public meetings.
Before the pandemic, monthly retail and restaurants sales averaged $21.8 million. Since COVID, they’ve averaged $5.9 million. Services like banking and shoeshine averaged monthly sales of $991,000 before COVID-19 and now average $376,000. Advertising revenue at the terminals averaged $473,000 pre-pandemic and $175,000 since.
If the City Council approves, businesses would continue paying rent based on a percentage of sales only until:
- Passenger enplanements reach 70% of 2019 levels for two straight months. Then concessionaires will pay an extra 2% of rent.
- Passenger enplanement reach 80% of 2019 levels. Then, concessionaires will pay a minimum annual guarantee based on contracts with the city or percent rent, whichever is greater.
In November, some council members pushed HMS Host and SSP to "do better" when it came to handling laid off workers. During December’s subcommittee meeting, some women made allegations of age discrimination against their current and former employer.
Councilwoman Laura Pastor added these amendment to the rent relief proposal:
“Add to the current requirement that the concessionaires re-employ furloughed or laid off employees that the concessionaire consider the specific challenges facing furloughed and laid off employees as a result of COVID, including the difficulty responding to a recall offer because of health or child care challenges and possible urgent insurance needs. Concessionaires also understand that the City desires that all airport employees be treated equitably.
Require the Aviation Department to provide a concessions update in 6 months.”
The subcommittee approved recommending that the City Council approve the rent relief proposal with stipulations, along with the amendments.
