Included in this year's CIP projects are the demolition of the hangar on the Airport's Commercial Lot 2 and the construction of a new Employee Parking Lot.  This project will allow the employees that work at the Airport to move to this new lot and allow the Airport to transform the old employee lot into paid parking, adding an additional 200 parking stalls to the parking concession inventory.  The hangar sitting on Commercial Lot 2 is owned by Edwards Jet Center Montana, Inc. Since the Lease for Commercial Lot 2 was not renewed, the Airport has offered to pay for the removal of this old hangar in exchange for Edwards Jet Center Montana deeding the hangar to the City.  A Warranty Deed and a Realty Transfer Certificate have been executed by Edwards Jet Center Montana, Inc. and these documents must now be completed by the City to finalize the transfer of the hangar.

The City Council may:

•  Approve this transfer of the hangar to the Airport so that it can be demolished to make way for a new Employee Parking Lot; or
•  Decline to approve this transfer and delay this Airport project.

The financial impact resulting from this project has two components to it.  The first is the cost that will be associated with the demolition of the hangar, which will be approximately $190,000 and the loss of approximately $13,000 in annual lease revenue.  The second component is the addition of 200 parking stalls that can then generate revenue.  It is anticipated that the addition of these parking stalls to the parking concession inventory will reduce our overflow parking to nearly zero with the exceptions of possibly Thanksgiving and Christmas holidays.  Subsequently, it is anticipated that parking revenues may grow by as much as $100,000 per year or more.  The Airport's staff believes that the whole project (hangar demolition and parking lot construction) will be fully reimbursed through additional parking revenues in as little as 8 to 10 years.

Staff recommends that the City Council approve the transfer of the hangar owned by Edwards Jet Center Montana, Inc., to the City of Billings Logan International Airport and authorize the Mayor to execute the Warranty Deed associated with this transfer.