The State of Montana Department of Natural Resources and Conservation (DNRC) currently rents office space on the first and second floors in IP-9, the City owned office building located in the Airport Business Park.  The DNRC also rents storage space in the basement of IP-9, a garage/shop area attached to IP-9, along with some ground space for vehicle storage, with the vehicle storage ground space being shared with the Department of Environmental Quality, another tenant in IP-9.  The leased premises include 12,500.70 square feet of building space and 22,680 square feet of ground space.  The previous Lease expired February 28, 2019. This State of Montana agency desires to renew the Lease for this space for another five-year term.  Staff has been working with the agency on a five-year renewal lease.

City Council may:

• Approve a new five-year Airport Business Park Building and Ground Lease with the DNRC; or
• Disapprove a new five-year Airport Business Park Building and Ground Lease with the DNRC.

The Lease will generate $108,208.92 per year of revenue for the City's Airport and $541,044.60 for the five-year term.  Should the DNRC opt to extend the Lease for additional years, a new rental rate will be determined for the extended period.

Staff recommends that the City Council approve a new five-year Airport Business Park Building and Ground Lease with the DNRC for the term beginning March 1, 2019, and terminating on February 28, 2024.