Title
Resolution to Approve a Lease Agreement Between the City and the Experimental Aircraft Association (EAA), Chapter 333 for (1) Hangar Building 25 and (2) Old Terminal Building 26 at the Ann Arbor Municipal Airport, for Twenty Years (8 Votes Required)
Memorandum
Attached for your review and approval is a resolution to approve a Lease Agreement that will create a new lease agreement between the City and the Experimental Aircraft Association (EAA), Chapter 333, for one twenty-year lease for two buildings at the Ann Arbor Municipal Airport.
The previous lease agreement with the EAA was for this same hangar building (Building 25) on the east side of the airport property that at that time needed significant rehabilitation. That lease has expired and this new lease will bring the EAA into updated terms with conditions to fix the roof, hangar doors and exterior paint which will add enhancement to the south side of the airport that faces State Street at their cost in the amount of $68,610.00 which will be included as a credit back to their rent as set out in their lease.
The rent for this lease shall be $0.50 per square foot per year for a total annual rent in the amount of $3,707.00. Lessee shall pay rent to the City in monthly installments of 1/12 ($308.92) of the annual rent. Rent shall increase each year on July 1 based on the Consumer Price Index (CPI) as set out in the lease.
Renovation of the original structure (Building 26) was completed in their original lease and the results are satisfactory. This new lease agreement is to include timetables for these improvements to Building 25, providing the EAA with ample to absorb the cost of rehabilitating this building.
Chapter 333 of the EAA is based at the Ann Arbor Municipal Airport and has provided positive contributions to the airport. The EAA previously rehabilitated the old terminal building at the airport that was in very poor condition and the results are exceptional.
Staff
Prepared by: Carl Konopaska, Fleet & Facilities Manager
Reviewed by: Mariah Walton, Deputy City Administrator
Approved by: Milton Dohoney, Jr., City Administrator
Body
Whereas, A new twenty-year lease will bring the EAA into an updated lease that is satisfactory to the City based on its contextual standards and will provide the EAA with time to renovate the roof, hangar doors and exterior paint at their cost, with a rent credit as set out in the lease;
Whereas, Chapter 333 of the EAA is based at the Ann Arbor Municipal Airport and has made positive contributions to the airport, including a restoration under similar lease terms of the old terminal building on State Street;
Whereas, The rehabilitation of the original building on the leased premises is complete and the work performed by the EAA is satisfactory; and
Whereas, The Airport Manager has reviewed this proposal and recommend that Council approve this Lease Agreement;
RESOLVED, That City Council approve a Lease Agreement for one twenty-year term between the EAA and the City of Ann Arbor for Building 25 & Building 26 at the Ann Arbor Municipal Airport;
RESOLVED, That rent shall be $0.50 per square foot per year for a total annual rent of $3,707.00, payable by Lessee to the City of Ann Arbor in monthly installments of $308.92, representing 1/12 of the annual rent;
RESOLVED, That a credit against the rent otherwise payable by Lessee for each month during the term shall equal to $285.88 for renovations to the building;
RESOLVED, That any balance of rent due under the Lease Agreement, after application of the rent credit for improvements, shall be recognized as revenue to the Airport Enterprise Fund;
RESOLVED, That the Mayor and City Clerk be authorized and directed to sign said lease agreement upon approval as to form by the City Attorney, and upon approval as to substance by the City Administrator; and
RESOLVED, That the City Administrator be directed to take the necessary administrative actions to implement this resolution.