Title
Resolution to Approve the Second Amendment and Extension to the Lease Agreement between the City and Avfuel Corporation for a Corporate Hangar Located at the Ann Arbor Municipal Airport
Memorandum
Attached for your review and approval is a resolution to approve the Second Amendment and Extension to the July 1, 2000 lease agreement between the City of Ann Arbor and Avfuel Corporation for the corporate aircraft hangar located at 903 Airport Drive.
The original 2000 lease agreement with Avfuel expired on June 30, 2020. City Council approved the First Amendment and Lease Extension with Avfuel for the hangar in 2020 which extended the lease until June 30, 2021 and provided for three additional one-year options. The City owned building needs some significant work and an agreement was reached to complete that work as part of a new lease extension. The tenant has leased the facility for its corporate flight department and has renovated the office area to provide additional space for their growing corporate office staff.
The lease extension would eliminate the two remaining one-year options from the First Amendment and replace it with a three-year term ending June 30, 2025. The Lessee would also have the option to extend the lease for up to two additional one-year periods beginning July 1, 2025 and 2026 respectively. All other terms and conditions of the original 2000 lease agreement, the First Amendment and Extension, unless specifically changed in the Second Amendment and Extension, would still be in force.
Lease rates for both the land and building are consistent with current rates being charged at the Ann Arbor Airport. Like all airport land leases, the land rate is subject to an annual CPI based increase. The building rate is consistent for the initial term and all subsequent options available under this Second Amendment and Extension.
Under the existing lease, the airport is responsible for several components of the building, including the building s...
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