[PPT] - Phoenix Sky Harbor International Airport West Ground Transportation PowerPoint Presentation

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Phoenix Sky Harbor International Airport West Ground Transportation Center Parking Concession and Hotel Development Concession Opportunity May 22, 2018

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Participants

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City of Phoenix Aviation Department

James E. Bennett, A.A.E., Director of Aviation Services Charlene Reynolds, Assistant Aviation Director and

Procurement Officer

Jay DeWitt, C.M., Deputy Aviation Director

City of Phoenix Community and Economic Development Department

Eric Johnson, AICP, Deputy Economic Development Director

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Agenda

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1. Introduction and Airport Overview
2. Phoenix Economic Overview
3. Airport Parking Opportunity Overview
4. Airport Hotel Opportunity Overview
5. Project Progress to Date and Site Overview
6. ProcurementOverview
7. Questions and Answers
8. Site Tour

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WELCOME AND OVERVIEW

James E. Bennett, A.A.E, Director of Aviation Services

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City/Airport Structure

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The City of Phoenix owns and operates Phoenix Sky Harbor International

Airport (PHX) and two general aviation airports, Phoenix Deer Valley Airport and Phoenix Goodyear Airport

The Airports are operated as a self-supporting business enterprise by the

Aviation Department

The Phoenix City Council adopts ordinances establishing rates and charges

to be paid by tenants and users of the Airports

The City Manager, appointed by the City Council, is responsible for all City

Departments, including the Aviation Department

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City/Airport Organizational Structure

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Mayor and City Council Municipal Court Assistant City Manager Deputy City Manager Acting Deputy City Manager City Clerk Information Technology Aviation Arts & Culture Convention Center Budget & Research City Manager Deputy City Manager Deputy City Manager

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Air Service Is Critical for Phoenix MSA

Geographic location of Phoenix results in a heavy reliance on airline travel
Phoenix-Mesa Gateway Airport is the only other commercial service airport in

the MSA and is located 30 miles SE with 20 average daily departures

Road miles from the Airport to:

Tucson 117 Las Vegas 292 Los Angeles 371 Albuquerque 477 Salt Lake City 656 Denver 809 Dallas/Fort Worth 1,056

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Airport Capital Improvement Program

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FY 2017-2023 Capital Investment Spending ($ millions)

Capital Improvement Program

Total Costs

(including prior spending)

Terminal 3 Modernization $590 Terminal 4 S1 Concourse 310 PHX Sky Train Stage 2 745 Other Terminal & Airfield Improvements 430 TOTAL $2,075

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Terminal 3 Modernization Program

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Terminal 3 Modernization

In lieu of a major investment in Terminal 2, the Terminal 3 Modernization program was developed
Improved Terminal 3 will greatly enhance Airport revenue producing opportunities
Modular approach that delays debt financings until demand dictates, and design and construction risks are

mitigated

Through May 2018, Terminal 3 development on-schedule and on-budget
Developed based on LEED Silver Standard

Phase 1 Terminal Processor Phase 2 South Concourse Phase 3 North Concourse

Phase 1 Complete Renovation of Central Processor Phase 2 New South Concourse Phase 3 Renovation of North Concourse and addition of concessionsnode

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Terminal 4 S1 Concourse Addition and Facility Improvements

A new $310M concourse with

8 gates is planned for Terminal 4, which Southwest Airlines has committed to utilize

This project, tentatively

scheduled to open in Q1 2022, will complete the full build-out of Terminal 4

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PHX Sky Train Stage 2 – Rental Car Center Station

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RCC Station West GTC Station Future Taxiway Crossings Future Terminal Station

PHX Sky Train Stage 2 Major Components

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2016 2017 2018 2019 2020 2021 2022

Facilities Design Opening Mid 2022 May 2018 Facilities Construction System Design Train System Installation

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System Testing

PHX Sky Train Stage 2 Milestone Schedule

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ECONOMIC OVERVIEW

Eric Johnson, AICP, Deputy Economic Development Director

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Phoenix is #1

in terms of growth

in finance industry jobs, – Forbes, 2014 Phoenix Metro in

top 10 for Startup Activity

– Kaufmann Index, 2016 CBRE’s Tech-Thirsty list: Phoenix

No. 2 high-tech

job growth

– CBRE, 2016 Phoenix Sky Harbor

#1 forbest airports

– USA Today,2016 Phoenix 11thin best

big cities to live

– Business Insider, 2016

Top 20 Metro in America for

Transit Accessibility – Access Across America,2014

Phoenix (Phx-Mesa-Glendale) is the #1 city for swiping financial jobs from the big boys

n Wall Street

– Forbes, 2014 Phoenix ranked11th

leadingtech market

– CBRE, 2016 Phoenix ranked #4best metro foryoung

professionals

– Forbes, 2017 Phoenix ranked 10thamong

top 25 hottestcities for startups

– Fortune, 2016 Phoenix #8in the top 10 cities for

future jobgrowth

– Forbes, 2016 Arizona State University ranked

#1 in U.S.

forInnovation

2nd year in a row

– US News, 2016 Phoenix gained 10 places to

#17 bestcity

in the U.S. for Jobs – Forbes, 2016 Arizona ranked among the

top 5 states

with the largest job growthof 2014 – AZ Tech Beat, 2014 Phoenixranked6th for Best City for Sports Travel

– Hotels.com & SeatGeek, 2015

Phoenix City/Metro Rankings

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1.6 M 800,989 2.3 M

Population Workforce Regional Workforce

33.4

Median Age

4.1%

Unemployment Rate

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Demographics

Sources: U.S. Census – 2016 ACS 1yr Estimates BLS – March 2018

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#1 in the Nation for Entrepreneurial Activity (Fast Company) #2 in High-Tech Software/Services Job Growth (CBRE) Top 10 Major Employers

1. Banner Health – Health Care
2. Honeywell – Aerospace
3. American Express – Financial
4. Wells Fargo – Financial
5. Bank of America – Financial
6. Fry’s Food Stores – Retail
7. JP Morgan Chase – Financial
8. Walmart – Retail
9. U Haul – Advanced Business Services
10. Amazon – e-Commerce

Large Diverse Employment Base

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Target Industries:

Advanced Business Services Emerging Technologies International Business/ Trade Manufacturing Bio/Life Sciences Software

Job Creation

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318%

Best metro for Young Professionals(3) Leading Tech Market(4) For high-tech job growth(2)

#4 #2 #11

Increase in Central City technology companies(1)

By the Numbers

Technology Growth

Sources: 1 – City of Phoenix, CEDD (2012-2017) 2 – CBRE, Tech Thirty 2016 3 – Forbes 2017 4 – CBRE, 2016 Scoring Tech Talent 23

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$14.4 B. $14.3 B. $14.3 B. $13.8 B. $12.7 B.

Mexico Canada South Korea China UK Electronics Products Transportation Equipment Electrical Equipment Machinery Fabricated Metals

Exports 20.3 %

2013-2017

Top 5 Export Countries Top 5 Export Commodities

Trade with Mexico is up more than 150% since 2010 to $8.04B.

International Business Development

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Phoenix’s Competitive Advantage

Aerospace and Defense Big Data Circular Economy / Sustainability Cybersecurity Entrepreneurship Financial Services Healthcare / Bioscience Software Development Web Development

Phoenix’s Competitive Advantage

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Phoenix Has a Positive Outlook

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Phoenix population of 1.6 million; 64% growth since 1990
Robust real estate recovery; median sales prices up 10.0%

(Feb 2018 vs Feb 2017)1

Phoenix MSA represents:
67% of the State’s population2
70% of the State’s employment3
70% of Arizona’s personal income4
4.1% unemployment rate3

Sources: 1 – Zillow, Feb 2018 2 – U.S. Census, 2016 ACS 1year estimates 3 – U.S. Bureau of Labor Statistics, March ‘18 4 – U.S. Bureau of Economic Analysis

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Tourism and Forward Major Event Calendar

Phoenix Convention Center activity for the

remainder of 2018:

30 Groups (over 1,000 attendees)
101,550 Attendees
164,318 Contracted Room Nights
Phoenix is home to Mega Events (2015-2017)
$1.3 billion economic impact
$1.7 million visitors to downtown Phoenix
Upcoming Major Events
2019 WWE Royal Rumble
2023 Super Bowl (bidding)
2023-2026 NCAA Final Four (bidding)

Sources: ASU’s WP Carey School of Business & Phoenix Convention Center

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PARKING OVERVIEW

Jay DeWitt, C.M., Deputy Aviation Director

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Parking Opportunity Overview

Sky Harbor currently provides approximately 22,500

public parking spaces and 3,500 employee spaces

The public parking spaces are divided between premium

/ terminal garage and economy products

Approximately 13,000 employees are permitted to park

in designated employee lots throughout the airport

Total gross parking revenue (gross = public + employee, before

taxes) for Fiscal Year 2016-17 was $86.1 million on

approximately 3 million public transactions

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Historical and Forecast Traffic

Source: City of Phoenix Aviation Department, 2017 Bonds Official Statement (2017 OS).

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Recent Historical Traffic by Type

By type of passenger Fiscal Year Originating Quarter Resident Visitor Total Connecting Total 2016 6,147 7,391 13,538 8,517 22,056 Jul-Sep'15 1,509 1,351 2,860 2,508 5,368 Oct-Dec 1,506 1,871 3,378 2,068 5,445 Jan-Mar'16 1,396 2,279 3,675 1,881 5,557 Apr-Jun 1,736 1,890 3,626 2,060 5,686 2017 6,558 7,827 14,385 7,435 21,820 Jul-Sep'16 1,621 1,468 3,088 1,983 5,072 Oct-Dec 1,638 1,982 3,620 1,767 5,387 Jan-Mar'17 1,483 2,368 3,851 1,679 5,531 Apr-Jun 1,817 2,009 3,826 2,005 5,831 2018 Jul-Sep'17 1,671 1,497 3,168 2,014 5,183 Oct-Dec'17 1,688 2,089 3,777 1,696 5,472 2015-2016 6.9% 5.8% 6.3% (2.7)% 2.6% Jul-Sep'14-15 6.6 7.7 7.1 6.8 7.0 Oct-Dec 6.2 5.3 5.7 (1.0) 3.1 Jan-Mar'15-16 7.3 4.1 5.3 (4.7) 1.7 Apr-Jun 7.5 6.9 7.2 (12.0) (0.7) 2016-2017 6.7% 5.9% 6.3% (12.7)% (1.1)% Jul-Sep'15-16 7.4 8.7 8.0 (20.9) (5.5) Oct-Dec 8.7 5.9 7.2 (14.6) (1.1) Jan-Mar'17 6.2 3.9 4.8 (10.7) (0.5) Apr-Jun 4.7 6.3 5.5 (2.7) 2.5 2018 Jul-Sep'17 3.1 2.0 2.6 1.6 2.2 Oct-Dec'17 3.1 5.4 4.3 (4.0) 1.6

Resident passengers (originating trips

locally at PHX) initiate approximately 6.5 million trips per year

PHX is a “Top 15” resident market when

compared to other U.S. airports

Recent resident passenger growth has

been consistent and strong, exceeding forecast expectations

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PHX Sky Harbor Parking Facilities

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PARKING FACILITY PUBLIC SPACES EMPLOYEE SPACES TOTAL SPACES YEAR BUILT Public Parking Terminal 2 2,201 2,201 1962 Terminal 3 1,831 317 2,148 1979 Terminal 4 6,406 453 6,859 1990 Terminal 4 High Profile Lot 189 189 1990 East Economy Surface Lot 3,681 3,681 1998 East Economy Garage A 2,338 2,338 2001 East Economy Garage B 3,509 3,509 2006 West Economy Lot 1,368 192 1,560 1995 Employee Parking 44th St Employee Lot 2,246 2,246 2014 Terminal 4 RAC 591 591 1990 South Air Cargo 209 209 1997 South Air Cargo #2 187 187 1997 West Air Cargo 216 216 1990

PHX Sky Harbor Parking Facilities

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Parking Rates – 10 Year History

All Locations Terminal Garages Economy Fiscal Year Per Hour Δ Daily max Δ Covered Δ Uncovered Δ 2008 $4.00 n.a. $20.00 n.a. $10.00 n.a. $8.00 n.a. 2009 4.00

25.00

5.00 10.00

8.00
2010

4.00

25.00
10.00
8.00
2011

4.00

25.00
11.00

1.00 9.00 1.00 2012 4.00

25.00
11.00
9.00
2013

4.00

25.00
11.00
9.00
2014

4.00

25.00
11.00
9.00
2015

4.00

25.00
11.00
9.00
2016

4.00

25.00
11.00
9.00
2017

4.00

25.00
11.00
9.00

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Parking Rates – November 2017 Increase

In November 2017, the Airport implemented rate increases at each of its parking facilities

Prior Rate ($) Current Rate ($) Δ ($) Terminal 2 Garage 25.00 26.00 1.00 Terminal 3 Garage 25.00 27.00 2.00 Terminal 4 Garage 25.00 27.00 2.00 East Economy Garage 11.00 14.00 3.00 East Economy Surface 9.00 12.00 3.00 Terminal 2 Economy (Covered) 11.00 12.00 1.00 Terminal 2 Economy (Uncovered) 9.00 10.00 1.00 West Economy 7.00 7.00

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Parking Revenue and Transactions

$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000

Revenue

FY 2017 FY 2018 50,000 100,000 150,000 200,000 250,000 300,000

Transactions

FY 2017 FY 2018

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Parking Revenue and Transactions

2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 $- $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 $80,000,000 $90,000,000 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Est. Terminal Revenue Economy Revenue Resident-Visitor 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Est. Terminal Transactions Economy Transactions Resident-Visitor

Revenue Transactions

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Parking Data: East Economy Surface Lot

50K 100K 150K 200K 250K 300K 350K 2011 2012 2013 2014 2015 2016 2017

EE Surface Lot Transaction Count

Meet and Greet Daily 2.0M 4.0M 6.0M 8.0M 10.0M 12.0M 14.0M 2011 2012 2013 2014 2015 2016 2017

EE Surface Lot Revenue

Meet and Greet Daily 0K 0K 0K 1K 10K 24 48 72 96 120 144 168 Transaction Count (Log Scale) Duration (hour)

EE Surface Lot Transaction Count by Duration

2014 2015 2016 2017 500 1000 1500 2000 2500 3000 3500

EE Surface Lot Occupancy by Month

2am Average 12pm Average Spaces Occupied

EE Surface Lot Occupancy by Hour of Week

Average Peak

Mon Tue Wed Thu Fri Sat Sun

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Parking Data: Terminal 4

200K 400K 600K 800K 1.0M 1.2M 1.4M 1.6M 1.8M 2011 2012 2013 2014 2015 2016 2017

Terminal 4 Transaction Count

Meet and Greet Daily 5.0M 10.0M 15.0M 20.0M 25.0M 30.0M 35.0M 40.0M 2011 2012 2013 2014 2015 2016 2017

Terminal 4 Revenue

Meet and Greet Daily 0K 0K 0K 1K 10K 100K 1.0M 24 48 72 96 120 144 168 Transaction Count (Log Scale) Duration (hour)

Terminal 4 Transaction Count by Duration

2014 2015 2016 2017 1000 2000 3000 4000 5000 6000 7000

Terminal 4 Occupancy by Month

2am Average 12pm Average Spaces Occupied

Terminal 4 Occupancy by Hour of Week

Average Peak

Mon Tue Wed Thu Fri Sat Sun

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HOTEL OVERVIEW

Jay DeWitt, C.M., Deputy Aviation Director

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Hotel Development Opportunity Overview

RFQ also seeks to identify Respondents

qualified to undertake the Hotel Development Concession on a design, build, finance, operate, and maintain basis. The Hotel Development Concession will be located at the northwest corner of the West GTC site

An Upper Upscale rated hotel, as categorized by STR chain

scale, with a minimum of 200 keys

Meeting room space
A street-level, public facing restaurant/retail component
Additional office, restaurant/retail, or other commercial

development

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61.5% 68.5% 66.8% 70.3% 67.8% 66.7% 62.3% 64.3% 69.8% 68.0% 72.4% 66.4% 69.2% 64.1% 65.0% 70.2% 69.4% 73.1% 67.0% 68.6% 66.1% 55% 60% 65% 70% 75% Mesa/ Chandler Tempe Scottsdale Phoenix Airport Phoenix Central Phoenix West Black Canyon Corridor

Occupancy

2015 2016 2017

Airport Hotel Submarket – Occupancy

Source: Smith Travel Research

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$95.35 $99.75 $180.42 $101.87 $149.99 $90.47 $70.07 $96.52 $101.30 $183.87 $102.27 $152.41 $94.17 $74.18 $100.80 $104.16 $190.06 $104.26 $155.56 $101.49 $76.81 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 Mesa/ Chandler Tempe Scottsdale Phoenix Airport Phoenix Central Phoenix West Black Canyon Corridor

Average Daily Rate

2015 2016 2017

Airport Hotel Submarket – ADR

Source: Smith Travel Research

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$58.82 $68.35 $120.60 $71.60 $101.68 $60.31 $43.64 $62.04 $70.62 $124.98 $74.02 $101.16 $65.14 $47.55 $63.03 $73.08 $130.06 $76.20 $104.23 $69.59 $50.75 $0 $20 $40 $60 $80 $100 $120 $140 Mesa/ Chandler Tempe Scottsdale Phoenix Airport Phoenix Central Phoenix West Black Canyon Corridor

Revenue Per Available Room

2015 2016 2017

Airport Hotel Submarket – RevPAR

Source: Smith Travel Research

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Airport Hotel Submarket – Available Rooms

4,797 4,845 4,845 4,834 4,834 4,834 4,872 4,500 4,600 4,700 4,800 4,900 5,000 2011 2012 2013 2014 2015 2016 2017 Source: Smith Travel Research

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Airport Hotel Submarket – Hist. Occupancy

57.8% 57.6% 61.5% 64.1% 70.4% 72.4% 73.1% 50% 54% 58% 62% 66% 70% 74% 78% 2011 2012 2013 2014 2015 2016 2017 Source: Smith Travel Research

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Airport Hotel Submarket – Hist. ADR

$87.50 $87.75 $87.18 $92.33 $101.97 $102.47 $104.26 $50 $65 $80 $95 $110 2011 2012 2013 2014 2015 2016 2017 Source: Smith Travel Research

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Airport Hotel Submarket – Hist. RevPAR

$87.50 $87.75 $87.18 $92.33 $101.97 $102.47 $104.26 $50 $65 $80 $95 $110 2011 2012 2013 2014 2015 2016 2017 Source: Smith Travel Research

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Site Attributes

Parcels purchased in/around 1997
Environmental Phase I complete
Environmental Phase II underway
Zoned A-1 (light industrial)

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Site Attributes

27” Sewer Line currently bisects parking development site City will relocate and maintain existing service

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PROCUREMENT OVERVIEW

Charlene Reynolds, Assistant Aviation Director

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Transparency Policy

NO CONTACT REQUIREMENT

Section 43-34 & 43-36 of the Phoenix City Code RESPONDENTS THAT VIOLATE THIS POLICY WILL BE DISQUALIFIED

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Restricted Parties

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No Respondent or Team Member may discuss matters associated with this RFQ and/or either Project with any Restricted Party, other than as contemplated under this RFQ The following are the “Restricted Parties”:

Frasca & Associates, LLC
Jacobs
LeighFisher
Nixon Peabody LLP
Squire Patton Boggs (US) LLP

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LATE RESPONSES WILL NOT BE ACCEPTED!

June 28, 2018

2:00PM Local Phoenix Time

City of Phoenix Aviation Department 2485 East Buckeye Road, Phoenix, AZ 85034

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Response Submittal Location

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Deadlines

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Written Questions and Intent to Submit by May 29, 2018

Due: 2:00PM Local Phoenix Time
Email: charlene.reynolds@phoenix.gov

Answers available by June 6, 2018

https://www.phoenix.gov/solicitations/1445

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Equal Opportunity Department Business Diversity Programs

The City of Phoenix strives to advance economic growth of businesses through its Business Diversity Programs The City encourages the participation of certified firms throughout all phases of contracts Participation for certified firms performing a Commercially Useful Function in their certified scope of work REMEMBER confirm certification status of a firm (database is updated daily)

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Equal Opportunity Department SBE/DBE/ACDBE Certification

To locate certified firms visit:

https://phoenix.diversitycompliance.com

Select:

City of Phoenix Directory of SBE Certified Firms

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April May June July August

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Procurement Timeline

April: April: 16 Issue RFQ May: May: 18 Deadline to register for Mandatory Conference andTour May: 22 Mandatory Conference andTour May: 29 Deadline for Submittal of Questions May: 29 Deadline for Submittal of Intent to RespondForm

June:

June: 6 City’s Response to Questions June: 28 Deadline for submittal of Statement of Qualifications July: Week of July 23rd Interviews (If Necessary) August: Announcement of Qualified Respondents

Conference & Tour Interviews (If Necessary) City’s Response to Questions Announcementof Qualified Respondents Deadline for Submittalof Responses Deadline for Questions & Intent to Respond Form Issuance

f RFQ

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Other Information

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No questions on the tour!
All City responses will be published via an Addendum
Arizona Contractor’s Requirement
Firms not meeting minimum qualifications will be deemed non-

responsive

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Questions?

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Disclaimer

This presentation is furnished for informational purposes only. Neither the City nor the Aviation Department makes any representation or warranty as to the accuracy, completeness or suitability of the information contained

herein. Nothing in this presentation, or stated on May 22, 2018, will in any

way modify the Request for Qualification (the “RFQ”) issued on April 26,

2018. Any responses provided by the City, the Aviation Department or their

representatives to questions on May 22, 2018 may not be relied upon (unless such questions are submitted in writing and the Aviation Department provides written responses in accordance with Section I.C of the RFQ).