CITY COUNCIL STAFF REPORT
DATE: JANUARY 28, 2026 CONSENT CALENDAR
SUBJECT: APPROVE AMENDMENT NO. 2 TO CONCESSION AGREEMENT NO. 23P069 FOR AIRPORT DISPLAY ADVERTISING WITH FUSE CONNECT,
LLC FOR SPONSORSHIP AND MANAGEMENT OF VACANT TERMINAL
BUILDING SPACE AND ADDITIONAL CAPITAL INVESTMENT AT THE
PALM SPRINGS INTERNATIONAL AIRPORT
FROM: Scott C. Stiles, City Manager
BY: Department of Aviation
SUMMARY:
This action will approve Amendment No. 2 to Concession Agreement No. 23P069 for Airport Display Advertising with Fuse Connect, LLC (Fuse) for sponsorship and management of vacant terminal building space and capital investment of fifty thousand dollars ($50,000) toward the remodeling, improvement, and customization of the terminal building space at the Palm Springs International Airport (Airport).
RECOMMENDATION:
1. Approve Amendment No. 2 to Concession Agreement No. 23P069 for Airport Display Advertising with Fuse Connect, LLC for sponsorship and management of vacant terminal building space and capital investment of $50,000 at the Palm Springs International Airport.
2. Authorize the City Manager or designee to execute all necessary documents.
BUSINESS PRINCIPAL DISCLOSURE:
According to the Public Integrity Disclosure form (Attachment B), Fuse Connect, LLC is a Limited Liability Company registered in the state of California with principal offices in Orange, CA and possesses a license to do business in the City of Palm Springs.
BACKGROUND:
In 2020, the Airport closed certain facilities due to the Covid Pandemic. The Bistro Restaurant, also known as the Cocktail Lounge, was one of the facilities closed, in order
City Council Staff Report
January 28, 2026 -- Page 2
Amendment No. 2 to Display Advertising Concession Agreement 23P069 with Fuse Connect, LLC to comply with State and local Health and Safety directives. The approximate 580 square feet of Terminal Building space has remained unoccupied since that time and has not generated revenue since 2020 (Illustration 1 and Photo 1 below).
Illustration 1 Photo 1
On April 27, 2023, City Council awarded a contract to Fuse Connect, LLC (Fuse), Agreement No. 23P069, Attachment C, a three-year Display Advertising Concession Agreement effective July 1, 2023, through June 30, 2026, with two one-year renewal options at the City's discretion. Under the Agreement, the Airport receives 57% of gross revenues generated through the advertising program (Table 1 below).
Table 1
FUSE CONNECT, LLC
Calendar Year Gross Revenues Airport (57%)
2023 $406,240 $231,557
2024 $1,496,557 $855,591
2025^ $1,375,641 $784,645
^ - Revenues through November 2025
STAFF ANALYSIS:
Terminal Building space leased for aeronautical and non-aeronautical purposes at the Airport has a rental rate of $181.03 per square foot. Consequently, the 580 square feet of Terminal Building space could potentially generate up to $104,997.40 a year.
Under the Display Advertising Concession Agreement, Fuse holds exclusive advertising rights in all assigned areas throughout the terminal and is authorized to develop a comprehensive advertising program.
Fuse is authorized to pursue sponsorship and naming rights for airport services, facilities, and venues, and to develop unique partnerships that include special events, product demonstrations, and strategic product placement. As part of the agreement, Fuse is required to complete a minimum capital investment. As of July 1, 2025, Fuse has completed their required $350,000 minimum capital investment. In Amendment No. 2,
City Council Staff Report
January 28, 2026 -- Page 3
Amendment No. 2 to Display Advertising Concession Agreement 23P069 with Fuse Connect, LLC Fuse commits to an additional $50,000 capital investment to remodel, improve, and customize the space for a future sponsor of the Terminal Building space.
In preparation for Fuse taking on the management and future remodel, improvement, and customization of the Terminal Building space, the City agrees to demolish and remove any existing fixtures, interior partitions, walls, ceilings, and flooring of the space.
On July 16, 2025, the Airport Commission unanimously approved support of Airport staff extending the Airport Display Advertising Concession Agreement with Fuse Connect, LLC through the issuance of two (2) one-year extension letters to support the sponsorship of the vacant terminal space.
ENVIRONMENTAL ASSESSMENT:
In accordance with the California Environmental Quality Act (“CEQA”) Guidelines Section 15303 “New Construction or Conversion of Small Structures”, Class 3 projects consist of construction and location of limited numbers of new, small facilities or structures; installation of small new equipment and facilities in small structures; and the conversion of existing small structures from one use to another where only minor modifications are made in the exterior of the structure. Therefore, Staff has determined that the future Terminal Building remodeling is considered categorically exempt from CEQA.
In addition, the requested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The requested action is to approve contracts for the above-mentioned services, and is exempt from CEQA pursuant to Section 15378(b), in that a “Project” does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
ALIGNMENT WITH STRATEGIC PLANNING:
Approval of this action supports City of Palm Springs’ Strategic Plan Broad Goals of Infrastructure and Facilities and Economic Development, and it also supports the Airport's 2025-2029 Strategic Plan’s Strategic Priorities for Infrastructure.
FISCAL IMPACT:
Approval of this action will result in the generation of annual Airport Revenues in the amount of approximately $77,000 for to Airport Fund 415.38115 – Advertising.
City Council Staff Report
January 28, 2026 -- Page 3
Amendment No. 2 to Display Advertising Concession Agreement 23P069 with Fuse Connect, LLC City Council Staff Report
January 28, 2026 -- Page 4
Amendment No. 2 to Display Advertising Concession Agreement 23P069 with Fuse Connect, LLC REVIEWED BY:
Department Director: Harry Barrett Jr.
Deputy City Manager: Geremy Holm
City Manager: Scott Stiles
ATTACHMENTS:
A. Amendment No. 2 to Concession Agreement 23P069
B. Public Integrity Disclosure Form
C. Agreement 23P069
D. Amendment No. 1 to Concession Agreement 23P060