AGENDA CAPTION:
Title
Consider approval of Resolution 2024-167R, approving an Airport Facility Lease Agreement for commercial use for airport property located at 1982 Airport Drive with Compliance Aviation dba Blue Skies Aviation for an initial one-year period with options to renew totaling five years; also approving a related 14 month lease extension with Compliance Aviation at 1815 Airport Drive to expire at the same date; authorizing the City Manager, or her designee, to execute the lease on behalf of the city; and declaring an effective date.
Body
Meeting date: September 3, 2024
Department: Airport
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☒ Economic Development - Promote & Support Potential of San Marcos Regional Airport
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Background Information:
Compliance Aviation, Inc. dba Blue Skies Aviation (“BSA”) is an existing airport commercial tenant operating from two separate hangars located at 1982 and 1815 Airport Drive.
In 2011, Compliance Aviation dba Blue Skies Aviation (“BSA”) purchased a ground lease hangar located at 1982 Airport Drive. The ground lease expires and reverts in ownership to the City on September 28, 2024. Under the lease, BSA has the right to enter into a new 5-year lease.
The proposed commercial facility lease commences on September 28, 2024 and expires on September 27, 2025 with four automatic one-year extensions, as requested by BSA. The monthly rent is $1,540.00.
In order to remain compliant with the requirement to have an office and restroom facilities for any commercial operator open to the public, the commercial facility lease for 1815 Airport Drive will be extended by 14 months to match the term of the 1982 Airport Drive lease.
As is standard practice, tenant has agreed to all proposed terms of the lease prior to Council consideration.
The $3.30 PSF rate is consistent with all other box hangars that have come up for renewal in the 2023/2024 time period. The Airport is subject to Grant Assurances by the Federal Aviation Administration which ensures lease terms are reasonable and without unjust discrimination when compared to similarly situated users.
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Recommendation:
Airport Management and City Staff recommend approval of both documents.