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AI# 11111
Regular City Council Meeting
7.22.
11/16/2022:
Information
Agenda Item
Resolution - Aviation:
Consider a recommendation authorizing the Mayor to execute a Termination of Lease Agreement between the City of Lubbock and the Roy Neal Insurance Agency, in connection with certain real property located at Lubbock Preston Smith International Airport, and originally leased on August 23, 2018.
Item Summary
Jeremy Barbee (Roy Neal Insurance Agency) currently leases a portion of the building formerly occupied by FAA's Flight Standard District Office. This is a brick building located south of the Silent Wings Museum on the west side of the airport. The remaining portion of this building is currently under construction and will become the Customs Facility, upon completion.
The lease includes 818 square feet of exclusive space and 881 square feet of common space for a total of 1,699 square feet. The lease term is October 1, 2018, through September 25, 2025 (7 years). The current rental rate is $6.06 per square foot, and the current annual rental income is $10,295.94.
In the Fall of 2020, Mr. Barbee sold Roy Neal Insurance Agency to Heritage Risk Management. This sale provided office space at a different location (Sanford & Tatum-5241 98th St.). Mr. Barbee contacted airport staff prior to the sale, explaining he no longer needed the office space and was suffering financially due to the pandemic. He was advised the airport did not have the authority to release him from his obligations; however, the lease did allow for an assignment if the assignee is an aviation related business and approved in advance. Mr. Barbee hired a real estate agent, who led earnest attempts to assign the property. Unfortunately, airport staff did not approve the suggestions brought forward, because they were not compatible aviation related businesses.
Mr. Barbee continued to pay monthly rent until fall of 2021. In January 2022, Roy Neal Insurance Agency vacated the property. He has stated he continues to face challenges from the pandemic and is unable to honor the full term of the lease. In consideration for the termination of the lease, Mr. Barbee proposes payment of $9,324.70 in back rent due and owing, to be paid within 90 days of the signed agreement to terminate the current lease agreement.
Mr. Barbee is a valued and respected member of our general aviation community. In addition to his stature in the community, construction has begun on the opposite half of the building, and the vacancy has allowed for a safer and easier construction environment.
Fiscal Impact
Collection of $9,324.70 of back due payments will be returned to the Airport Fund. Additional fiscal impact is the forfeiture of approximately $30,900 in rent payments through the end of the original term.
Staff/Board Recommending
Bill Howerton, Deputy City Manager
Kelly Campbell, Executive Director of Aviation
Airport Advisory Board
Attachments
Resolution - Roy Neal Insurance Agency
Termination of Lease Agreement - Roy Neal Insurance Agency
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