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Item 1.E.
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| City Council Regular | |
| Date: | 06/26/2023 |
| Title: | Commercial Aviation Ground Lease with BAG Billings LLC |
| Presented by: | Jeff Roach |
| Department: | Airport |
| Presentation: | No |
| Legal Review: | Yes |
| Project Number: | N/A |
RECOMMENDATION
Staff recommends that City Council approve the Commercial Aviation Ground Lease with BAG Billings LLC for a 23-year, 2-month term commencing August 1, 2023, and ending September 30, 2046.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
On October 11, 2021, the City Council approved a Commercial Aviation Ground Lease with BAG Billings LLC. Beacon Air Group (BAG) principals, Joel Simmons and Kevin Button, are constructing facilities for a second Fixed Base Operator (FBO) business at the Airport. Presently the Airport has one FBO operator, Edwards Jet Center, providing various services for both commercial and general aviation operators. BAG Billings proposes to offer aviation fuel sales, hangared aircraft storage space, aircraft tie down/parking, aircraft maintenance/repair/servicing, flight/pilot training, charter brokerage, and services for general aviation pilots. The BAG Billings FBO operation will include two phases. Phase 1 is currently underway and involves the construction of the two FBO hangars and an FBO office building. Phase 2 will involve the construction of the aircraft ramp area for the FBO operation and the FBO's fueling facility. The initial 2021 FBO Lease is a twenty-five-year Commercial Aviation Ground Lease that commenced October 1, 2021 and terminates September 30, 2046. The initial FBO Lease also included the last available lot in the East End Fuel Farm complex. BAG Billings is preparing for Phase 2 of its construction and has now requested additional space for aircraft parking and tie downs to utilize the ramp space for aircraft movements. Staff identified a suitable space adjacent to the current BAG Billings leasehold that will provide the additional space requested, and worked with BAG Billings on a new supplemental FBO Commercial Aviation Ground Lease for the additional ramp space. The term of this supplemental lease is set to coincide with the expiration of the initial 2021 FBO Lease and match all other conditions contained in the initial FBO Lease.
ALTERNATIVES
City Council may:
- Approve the Commercial Aviation Ground Lease with BAG Billings LLC for a 23-year, 2-month term; or
- Not Approve the Commercial Aviation Ground Lease with BAG Billings LLC for a 23-year, 2-month term.
FISCAL EFFECTS
The initial rental amount will be for a 2-month period at $1,057.28/month. The rental amount will adjust effective October 1, 2023, along with the rentals in the initial 2021 FBO Lease. Lease rentals are adjusted on an annual basis using the average of the monthly percentage increases for the previous calendar year, as determined by the Department of Labor Consumer Price Index for All Urban Consumers (CPI-U), published by the Bureau of Labor Statistics.