On July 23, 2012, the City Council approved a new twenty-five (25) year Ground Lease with Lynch Flying Service, Inc. DBA Edwards Jet Center (EJC) on a vacant parcel known as Commercial Lot 8, a 73,094 square foot parcel located at the east end of the Airport. EJC recently completed construction of a new large (130' x 160') aircraft hangar on this parcel. The new hangar was designed to meet growing hangar space needs due to the increase in private corporate jet traffic at the Airport. EJC also desires to enhance/improve its FBO operations at the Airport.  Staff has negotiated new Leases with extended terms on four of EJC's existing Leases at the Airport. The new Leases update standard language clauses, Lease exhibits, mandatory insurance requirements in the Leases, cancel and replace the existing Leases, and also grant additional term on each of the Leases. The extended terms will allow EJC to stage and finance its future enhancement/improvement plans. The negotiated arrangement also will allow for the return of one leased parcel to the Airport at the end of the current Lease term this Summer, along with the transfer of ownership of the existing hangar on this parcel to the City. The Airport will utilize this parcel to address and alleviate the shortage of on-site parking for the Terminal facility. The Leases that will be updated and extended cover Commercial Lot 3 (142,115.64 square feet), Commercial Lot 5 (432,407 square feet), Fuel Farm Lot 3 (7,437 square feet), Fuel Farm Lot 4 (4,900 square feet), Fuel Farm Lot 1 (3,483 square feet), and a West End Ground Lease (233,637.18 square feet). The new terms on all of the Leases except the West End Ground Lease will be effective July 1, 2012, and terminate on June 30, 2037. The new term on the West End Ground Lease will be effective September 1, 2012, and terminate on August 31, 2022. In conjunction with the new Leases, new Lessor's Consent to Assignment of Lessee's Interest in Leases to Secure Bank Loan with Stockman Bank are required. Copies of all Leases and Lessor's Consent to Assignment documents are on file in the City Clerk's office.

The City Council may:

• Approve the new Leases with Lynch Flying Service, Inc. DBA EJC and EJC Montana, Inc. updating the standard language clauses, Lease exhibits, mandatory insurance requirements, granting additional Lease term, and canceling and replacing the existing Leases; or
• Not approve the new Leases with Lynch Flying Service, Inc. DBA EJC and EJC Montana, Inc. updating the standard language clauses, Lease exhibits, mandatory insurance requirements, granting additional Lease term, and canceling and replacing the existing Leases.

These ground Leases will generate $165,232.18 in rentals during the first year of the Lease terms. Future rentals will be adjusted annually by the Consumer Price Index for All Urban Consumers (CPI-U). The table below summarizes the first year annual rentals for each Lease.

Lease	Annual Rental
Commercial Lot 3	$28,536.84
Commercial Lot 5 and Fuel Farm Lots 3 and 4	$89,611.08
Fuel Farm Lot 1	$1,408.18
West End Ground Lease	$45,676.08
TOTAL	$165,232.18

Staff recommends that City Council authorize the Mayor to execute the new Commercial Aviation Ground Leases at Billings Logan International Airport with Lynch Flying Service, Inc. DBA EJC and EJC Montana, Inc., and the accompanying Lessor's Consent to Assignment of Lessee's Interest in Leases to Secure Bank Loan with Stockman Bank.