AGENDA CAPTION:
Title
Consider approval of Resolution 2018-106R, approving an Amended and Restated Airport Facility Lease Agreement for Commercial Fixed Base Operator (FBO) Use with Berry Aviation, Inc. for the FBO terminal facility and associated fueling facilities at the San Marcos Regional Airport; authorizing the City Manager to execute the Agreement; and declaring an effective date.
Body
Meeting date: June 19, 2018
Department: Airport-Texas Aviation Partners
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Background Information:
In May 2017, City Council approved a 40-year ground lease for the construction of a maintenance facility for Berry Aviation Inc. ("Berry"). Berry has requested that their existing leases be amended to extend the terms to match the May 2017 ground lease. The proposed new deal clarifies and cleans up areas of confusion with two amended, new leases that improve our mutual business arrangement at the airport. This lease includes the City-owned terminal facility, the City-owned above ground storage tanks (2), and the Berry-owned self-service fueling facility.
Additional changes were made, including:
• Separating FBO and fueling facilities from hangar facilities
• Clarification of leased premises and associated maintenance costs including those associated with the City-owned above ground fuel storage tanks
• Changing responsibility of utility payments from the City to Berry (including electricity, water/wastewater, and alarm monitoring)
• Addition of periodic rent increases
• Removal of 1% gross revenue requirement, consistent with current leasing policy
There is a comparison of Berry's current lease and the proposed lease prepared by Texas Aviation Partners attached as background information. There are two agenda items because there are two separate leases: one for Berry's Fixed Based Operator business and Berry's other aircraft business.
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Recommendation:
Texas Aviation Partners recommends approval.