In April 2001, Edwards Jet Center Montana, Inc. (EJC) purchased the Lynch Flying Service Fixed Base Operator (FBO) facilities and operation. This sale included three buildings just east of the Terminal Building. As part of this sale and transfer, on December 10, 2001, the City Council also approved a new Commercial Aviation Ground Lease with EJC on Commercial Lot 3, containing 140,605.64 square feet. Rocky Mountain College (RMC) is, and has been for several years, conducting an aviation program as part of its curriculum, and has since September 2007 used one of these buildings for its off-campus office, instruction, and hangar space in connection with this program. As owner of the hangar that RMC uses for its aviation program, EJC and its sole shareholder Clifford Edwards, desire to donate and partially exchange to RMC, EJC's hangar building and improvements, and to sublease to RMC a portion of the leasehold property covered by the Commercial Lot 3 Ground Lease with the Airport. Under the Sublease Agreement, RMC would utilize 83,766.08 square feet of EJC's leasehold for its aviation program.

The expiration of the Sublease Agreement corresponds with the November 30, 2024 expiration of EJC's Ground Lease on Commercial Lot 3. In conjunction with the Sublease Agreement, RMC is also required to enter into an Operating Permit with the City, to ensure that specific operating requirements will continue to be met. The Airport Operating Permit ensures that RMC follows certain operating parameters and procedures, including providing proof that the proper insurance coverage is in place. The Permit is automatically renewable for one-year periods, provided that RMC is not in default in any payments or obligations to the City under the Permit, or either party chooses to cancel the Permit upon 30 days written notice.

The City Council may:

• Approve the Sublease Agreement by and between EJC and RMC, and the Airport Operating Permit by and between the City of Billings and RMC; or
• Not approve the Sublease Agreement by and between EJC and RMC, and the Airport Operating Permit by and between the City of Billings and RMC.
   

Under the Sublease Agreement, EJC will continue to be directly responsible for all rental payments to the City, so there is no financial impact from the sublease, nor any financial impact from the Airport Operating Permit with RMC. 

Staff recommends that the City Council approve and the Mayor execute the Sublease Agreement by and between EJC and RMC, and the Airport Operating Permit by and between the City of Billings and RMC.