CITY COUNCIL STAFF REPORT
DATE: April 8, 2026 CONSENT CALENDAR
SUBJECT: APPROVE NON-EXCLUSIVE OPERATING AND LEASE AGREEMENT NO. 26L047 WITH AIR FAYRE CA INC. FOR THE USE OF APRON
SPACE TO PARK TWO CATERING VEHICLES AT THE PALM SPRINGS
INTERNATIONAL AIRPORT
FROM: Scott C. Stiles, City Manager
BY: Airport
SUMMARY:
This action will approve the Non-Exclusive Operating and Lease Agreement (Agreement) with Air Fayre CA Inc. for the parking and staging of catering vehicles in support of airline catering operations at the Palm Springs International Airport (Airport).
RECOMMENDATION:
1. Approve the Airport Non-Exclusive Operating and Lease Agreement No. 26L047 with Air Fayre permitting the parking of two catering vehicles at the Airport from April 1, 2026, through March 31, 2027, with two one-year options to extend.
2. Authorize the City Manager or designee to execute all necessary documents subject to such changes/revisions agreeable to the City Manager and City Attorney.
BUSINESS PRINCIPAL DISCLOSURE:
According to the Public Integrity Disclosure form (Attachment B) submitted on March 17, 2026, Air Fayre CA Inc. is a California Corporation licensed to do business in the City of Palm Springs.
BACKGROUND:
Some of the airlines provide catering for flights originating at the Airport and have a contract with outside vendors, such as Air Fayre, to provide these catering services.
According to our records, Air Fayre has been providing catering services since November 17, 2021. Air Fayre’s current Commercial Activity Permit allows them to deliver catering
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April 8, 2026 -- Page 2
Non-Exclusive Operating and Lease Agreement with Air Fayre CA Inc. to the aircraft; however, it does not allow them to park catering vehicles on the apron. Air Fayre’s Commercial Activity Permit will expire on April 11, 2026. Air Fayre is currently renewing their Commercial Activity Permit with the Airport.
Air Fayre, working under DNATA Catering, will begin servicing American Airlines effective April 8, 2026. This additional service will require parking of catering vehicles on the apron, after their vehicle is inspected. Lease of apron space requires Air Fayre to enter into a Non-Exclusive Operating and Lease Agreement with the Airport.
STAFF ANALYSIS:
Given the unique needs of catering passenger aircraft, parking catering vehicles near the passenger aircraft at the Airport is an important aspect of their business. The Airport has identified two parking spaces on the apron (approximately 568 square feet) between the Bono and Agua Caliente Concourses as depicted in the image below. This area of the apron will provide proximity to the passenger aircraft without impeding the operations of the Airport and its other tenants. The rent for both spaces will be $947 per month, based on $20.00 per square foot annually for approximately 568 square feet.
Air Fayre has provided $30,871.06 in revenues to the City so far in Fiscal Year 2026. This figure includes the commercial service fee on sales ($27,400.06) and miscellaneous fees such as badging and vehicle permits ($3,471).
Should the Airport determine that it can no longer provide these parking spaces on the apron, the Airport has the right to provide Air Fayre with a 30-day written notice of intent to terminate the Agreement.
ENVIRONMENTAL ASSESSMENT:
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
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April 8, 2026 -- Page 3
Non-Exclusive Operating and Lease Agreement with Air Fayre CA Inc. 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 Council’s Broad Goal of Economic Development, as well as the Airport’s Strategic Plan Priority 3 – Goal 2: Create Revenue Diversification Through Strategic Partnerships.
FISCAL IMPACT:
Approval of this action will result in the generation of Airport Revenues of approximately $2,841 for the remainder of Fiscal Year 2026 and $11,364 for Fiscal Year 2027 to Airport Fund 415.38105 – Non-Airline Terminal Rent Fee. This action will also result in the generation of Airport Revenues of approximately $47,000 to Airport Fund 415.38135 – Commercial Service Fees and approximately $3,500 to Airport Fund 415.38175 – Badge and Vehicle Fees. The Agreement provides for two extension options. If the two extensions are exercised, the revenue would continue through March 31, 2029, as adjusted annually on July 1st in an amount equal to the increase in the consumer price index for All-Urban Consumers (CPI-U) in the Riverside-San Bernardino-Ontario Metropolitan Statistical Area (MSA).
REVIEWED BY:
Assistant Director of Aviation: Victoria Carpenter
City Attorney: Geremy Holm
City Manager: Scott Stiles
ATTACHMENTS:
A. Airport Non-Exclusive Operating Lease Agreement Air Fayre CA Inc.
B. Public Integrity Disclosure