The Transportation Security Administration (TSA) wishes to continue to lease space in the Airport's office building located at the west end of the Airport near the water tower.  On November 10, 2008, the City Council approved a one-year Lease for 4,342 square feet of office space, including utilities and garbage service, for a term beginning March 1, 2008 and ending February 28, 2009. The TSA has been in holdover on the 2008 Lease since the Lease expired. During the holdover period, the TSA has continued to pay for and occupy the space, while working with staff on the potential for improvements to the space the TSA leases.  The TSA has determined that they want to continue to occupy this space, as well as add 3,715 square feet of office space that was previously leased by the Valley Bible Church. Subsequently, staff has been negotiating with the General Services Administration (GSA) to put a new lease in place for the TSA.  The new Lease is for 8,057 square feet of office space, and would be for a five-year firm term, with an ability to extend the Lease for an additional five (5) years at a rate to be determined for that period. The Lease will commence December 1, 2011 and expire on November 30, 2016.  This Lease also provides for some tenant improvements to meet the TSA's needs, for which the TSA will reimburse the Airport.  Additionally, since the TSA has been operating in holdover status on the original 2008 Lease, a Supplemental  Agreement is also required to restate the term on that Lease, so that the term includes the holdover period and coincides with the actual lease occupancy dates.  The Supplemental Agreement restates the actual term as commencing March 1, 2008 and ending on November 30, 2011.

The City Council may:

• Approve the new five-year Lease with the U.S. Government on behalf of the TSA and the Supplemental Agreement on the 2008 Lease restating the term as commencing March 1, 2008 and ending November 30, 2011; or
• Not approve the new five-year Lease with the U.S. Government on behalf of the TSA and the Supplemental Agreement on the 2008 Lease restating the term as commencing March 1, 2008 and ending November 30, 2011. 

The Lease will generate $136,566.12 per year of revenue for the City's Airport, and $682,830.60 for the initial five-year term. Should the TSA opt to extend the Lease for the additional five years, a new rental rate will be determined for that extended period.

Staff recommends that Council approve the Lease with the U.S. Government for the benefit of the TSA for an initial five-year term beginning December 1, 2011 and ending November 30, 2016, and the Supplemental Agreement on the 2008 Lease restating the term as commencing March 1, 2008 and ending November 30, 2011.