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ITEM 1

City Council Memorandum Airport Memo No.

Date:

February 5, 2024

To:

Vice Mayor and Council

From:

Mayor Kevin Hartke

Subject:

Final Adoption of Ordinance No. 5077 Approving an Amendment to the First Amended and Restated City of Chandler Lease No. 017 with Chandler Aviation Services, Inc.

Proposed Motion:

Move City Council adopt Ordinance No. 5077 to approve a lease amendment with Chandler Aviation Services, Inc., and authorize the Mayor to execute the amendment and the City Manager or his designee to sign all related documents and take all action necessary or appropriate to implement this Ordinance.

Background/Discussion

Chandler Aviation Services, Inc., is an FAA-certified aircraft repair station servicing several single and multi-engine aircraft brands including Piper, Cessna, Mooney, and Beechcraft. The company's work includes, but is not limited to, engine repair and overhaul, airframe repair, inspections, aircraft rebuilding, and general maintenance. The company has been a tenant at Chandler Municipal Airport since 1985 under a long-term ground lease (the “Lease”), The leasehold includes an existing hangar/office building with a parking lot and aircraft tie-downs on approximately 1.4 acres of Airport land.

The company is being sold and the new owners are seeking financing through the U.S. Small Business Administration (“SBA”). To enable this financing, the SBA is requesting that the city make certain revisions to the existing Exhibit “D,” Landlord’s Consent and Agreement, originally included as an attachment to the Lease. The revised Exhibit “DD” provides the SBA with certain rights related to the Lease as security for the loan.

Given the benefit Chandler Aviation Services provides to the Airport and the tenant's desire to continue operating a business at the Airport, both parties agreed to amend the ground lease for mutual benefit, subject to City Council approval. Except for the revisions to Exhibit D, the terms of the lease will remain the same.

Ordinance was introduced and tentatively adopted on January 25, 2024.

Financial Implications
No fiscal impacts are anticipated, as the sale of Chandler Aviation Services, Inc., will not result in any change to the business conducted at Chandler Municipal Airport.

Attachments

Ordinance No. 5077

Amendment No.1 to Ground Lease

Exhibit DD