Consent 1.E.
Regular City Council Meeting
- Meeting Date:
- 04/09/2018
- TITLE
- Assignment and Transfer from Kent Williams to Billings Flying Service, Inc.
- PRESENTED BY:
- Kevin Ploehn
- Department:
- Airport
Presentation:
No
PROBLEM/ISSUE STATEMENT
Kent Williams entered into a Non-Commercial Aviation Ground Lease with the City of Billings on April 21, 1994, and subsequently built an executive hangar on the leased parcel located on the west end of the Airport. Mr. Williams has opted to sell his hangar to Billings Flying Service, Inc. The sale of the hangar requires several actions by the City Council: (1) approval of an Assignment and Transfer of Mr. William's existing Lease, which will formally transfer the ground Lease on this parcel from Mr. Williams to Billings Flying Service, Inc., and (2) approval of a new Lease with Billings Flying Service, Inc. with a ten-year term to allow for bank financing for the purchase of the hangar. The term of the new Lease with Billings Flying Service, Inc. will commence on April 1, 2018, and terminate on March 31, 2028. Since Billings Flying Service, Inc. will be financing the hangar purchase, a Lessor's Consent to Assignment of Lessee's Interest in Lease to Secure Bank Loan is also required. Also part of this transfer package, is a Memorandum of the new Lease, which will be placed on record with the Yellowstone County Clerk and Recorder's Office.
ALTERNATIVES ANALYZED
↵City Council may:
- Approve the Assignment and Transfer packet, including a new ten-year Non-Commercial Aviation Ground Lease to Billings Flying Service, Inc.; or
- Disapprove Assignment and Transfer packet, including a new ten-year Non-Commercial Aviation Ground Lease to Billings Flying Service, Inc.
FINANCIAL IMPACT
The first year of this Lease will generate $5,107.20 of revenue for the Airport. Subsequent years will be adjusted using the Consumer Price Index for Urban Consumers (CPI-U) to keep pace with annual inflation.
RECOMMENDATION
Staff recommends City Council approve the Assignment and Transfer, the new Non-Commercial Aviation Ground Lease with Billings Flying Service, Inc., the Lessor's Consent to Assignment of Lessee's Interest in Lease to Secure Bank Loan, and the Memorandum of the new Lease to complete the hangar purchase and lease transfer from Kent Williams to Billings Flying Service, Inc.