Title
Resolution to Approve Standard Box Hangar Lease Form (8 Votes Required)
Memorandum
The Ann Arbor Airport is finalizing the construction of six box hangars that will soon be leased out to individuals or businesses for aeronautical purposes. Council had approved the construction of these hangars based on the interest shown from prospective tenants who placed deposits and signed pre-lease options. The City Attorney’s Office has prepared the attached box hangar lease which will become the form of lease that will be used for each of the tenants in these box hangars. The lease terms were developed with input from prospective tenants. The terms, which vary slightly from the standard lease form used for T-hangar rentals, are consistent with a long-term lease arrangement.
It is intended that the Standard Box Hangar Lease form, when approved, would be used for all box hangar tenants. The Airport Manager would execute the lease on behalf of the City. This is the same process currently in use for T-hangar leases at the airport. Council had previously approved a form of lease for T-hangar rentals and that same lease is used for all T-hangar tenants.
The lease duration is an initial term of five years with three additional five year options. The rent has been established at $1,600 per month (plus utilities) with annual CPI based adjustments. The rental rate was set to cover the project construction costs of the six hangars with an understanding of what the market rates are going for. A rental range of $1,400 to $1,800 per month was originally proposed to the prospective tenants when they signed their pre-lease options. While the actual construction of the hangars has taken longer then originally projected, the construction costs remain well within the project budget.
Staff
Prepared by: Matthew Kulhanek, Airport Manager and Mary Joan Fales, Senior Assistant City Attorney
Approved: Roger W. Fraser, City Administrator
Body
Whereas, The City has comple...
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