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Item 1.F.
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| City Council Regular | |
| Date: | 03/28/2022 |
| Title: | Two West End Hangar Ground Leases with Beacon Air Group, LLC |
| Presented by: | Kevin Ploehn, Director of Aviation and Transit |
| Department: | Airport |
| Presentation: | No |
| Legal Review | Yes |
RECOMMENDATION
Staff recommends that City Council approve the two West End Hangar Ground Leases with Beacon Air Group, LLC for 25-year terms commencing April 1, 2022, and ending March 31, 2047.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
On February 14, 2022, City Council approved a West End Hangar Ground Lease with Beacon Air Group, LLC (Beacon) to construct the first hangar in the new West End Large Hangar Area. The Airport created this area for space to construct large hangars to accommodate large corporate and private aircraft. Kevin Button of Beacon desires to construct two additional new 100 ft. x 120 ft. hangars in this West End Large Hangar Area. This newly created area has spaces available to accommodate Beacon's request. Staff has worked with Beacon on two new twenty-five year West End Hangar Ground Leases that commence April 1, 2022, and terminate March 31, 2047. The proposed leased premises include two 38,700 square foot parcels on the newly named street Altimeter Drive. These Beacon hangars will be the second and third hangars constructed in the new West End Large Hangar Area. As a principal owner in both Beacon and BAG Billings, LLC, Beacon intends to coordinate the construction of these two hangars with the first hangar on the Lease approved February 14, 2022, and with the construction of the FBO hangars and office building that will be constructed by BAG Billings, LLC under a separate, previously approved twenty-five year Commercial Aviation Ground Lease.
ALTERNATIVES
City Council may:
- Approve the West End Hangar Ground Leases with Beacon; or
- Not Approve the West End Hangar Ground Leases with Beacon.
FISCAL EFFECTS
The initial annual rental for these two Leases will be $11,223 for each Lease, for a total of $22,446 of additional lease revenue for the Airport. Lease rentals in subsequent years will be adjusted on an annual basis on the anniversary dates, using the average of the monthly percentage increases for the previous calendar year, as determined by the Department of Labor Consumer Price Index for All Urban Consumers (CPI-U), published by the Bureau of Labor Statistics.