Title
ORDINANCE NO. O17-15
AN ORDINANCE OF THE COUNCIL OF THE CITY OF GLENDALE, MARICOPA COUNTY, ARIZONA, AUTHORIZING AND DIRECTING THE CITY MANAGER AND CITY CLERK TO EXECUTE AND FILE AN AIRPORT LAND LEASE AGREEMENT WITH BUTLER AVIATION INVESTMENTS, LLC FOR CERTAIN PROPERTY AT THE GLENDALE MUNICIPAL AIRPORT.
Staff Contact: Jack Friedline, Director, Public Works
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Purpose and Recommended Action
Recommendation
This is a request for City Council to waive reading beyond the title and adopt an ordinance authorizing the City Manager to enter into an aircraft hangar land lease agreement with Butler Aviation Investments, LLC.y
Background
Pad #8 is an undeveloped lot located on a former hangar development area at the far south end of the Glendale Municipal Airport (Airport) that has been vacant since 1997. The Airport was approached by Butler Aviation Investments, LLC to lease the 4,645sf lot to build, and then sell, a 60-foot-wide by 60-foot-deep aircraft storage hangar.
The lease provides for a reduced rent for a construction term of no more than one year or until a date of certificate of occupancy is issued. Thereafter, the term of the lease is 20 years, with two 10-year options, allowing the lease term to be a maximum length of 41 years. The lease will be transferrable to the new airport hangar owner.
Analysis
Having adequate aircraft storage facilities is important in meeting the needs of the flying public. The proposed hangar will complement the existing box hangars on the south end of the Airport, and be an asset to the city at the end of the lease term. Butler Aviation Investments, LLC built a hangar on pad number 12 in 2016 and wished to build another on pad #8.
The initial land lease rate is $692.25, with an increase to $1,393.50 annually on the date a certificate of occupancy is issued. The land lease rate is in accordance with the Airport Rates and Charges within the variable and negotiable structure. This rate (.30 per square foot per year) is comparable to other airports in the valley. After every three-year period, the lease rate shall be adjusted by the latest Consumer Price Index.
At the end of the term and any renewals, all improvements to the lot will become the property of the city.
Previous Related Council Action
On November 10, 2015, Council approved the revised rate and charges at the Glendale Municipal Airport including the variable and negotiable rate structure.
On April 28, 2015, Council authorized entering into an aircraft hangar land lease with Butler Aviation Investments, LLC for pad #12.
Community Benefit/Public Involvement
The Airport plays an important role in meeting the demand for aviation services in the West Valley and serves as a general aviation reliever airport for Phoenix Sky Harbor International Airport.
The Airport Administrator provides updates on this and other projects to the Aviation Advisory Commission during its monthly meetings. The Aviation Advisory Commission approved a motion at the meeting of August 10, 2016 recommending City Council authorize the City Manager to enter into the land lease as presented to the Aviation Advisory Commission with Butler Aviation Investments, LLC for pad #8, to construct a box hangar.
Budget and Financial Impacts
The land lease agreement will provide modest but reliable revenue for the Airport. The hangar building becomes city property after the lease term, extending potential revenue opportunities for new development on the site. The land lease rate is comparable to other airports in the valley.