HomeMy WebLinkAbout~Master - Approving lease with Summit Aviation RESOLUTION NO. 22-468
RESOLUTION APPROVING LEASE FOR 10,FIVE-YEAR PERIODS WITH
SUMMIT AVIATION,LLC
FOR THE CITY OF AMES,IOWA
WHEREAS, a new private hangar development was proposed by Summit Avaition, LLC
(Summit). To facilitate this new development, the City staff worked with Summit to draft a long-
term land lease. This new lease reflects the City's standard format for land lease at the Airport as
approved for the other private hangars on July 1, 2022; and,
WHEREAS, there are two adjustments to the standard hangar lease format in response to
Summit's specific development needs. First, because there will be a mortgage on the
improvements, the City's standard language under Section 3, "Lessor's Right to Terminate." has
been modified to identify the scope of termination to only per FAA regulatory requirements for
the first 20 years (while a lender is involved). After that period, when the improvements are
expected to be paid off, the lease reverts to the standard language used in all other land leases,
which allows termination if reasonable and necessary for Airport purposes. The second adjustment
is that rather than a standard twenty-five-year lease term, this lease calls for a twenty-five-year
initial term with the possibility to extend for another twenty-five years by mutual agreement. This
longer term is in consideration for Summit investing approximately $4.5 million at the Airport;
and,
WHEREAS, the proposed hangar is 17,300 square feet. The City's current land rental rate
at the airport for FY 2022/23 is $0.35 per square foot. Therefore, the annual lease amount for the
first year will be $6,055. All land leases at the Airport increase annually based on the 5-year
Consumer Price Index (CPI-U), which is currently at approximately 2.7%; and,
WHEREAS, Summit will also be required to make a lease payment for the fuel tank area
which in the first year will be $687. In addition, Summit estimates its annual fuel flowage to be up
to 45,000 gallons, which at$0.08/gal would provide $3,600 in flowage fee revenue to the Airport
the year. Summit also has plans to eventually base a third jet in the hangar.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa,
that the long-term land lease for 10,five-year periods with Summit Avaition,LLC for a new private
hangar at the Ames Municipal Airport is hereby approved.
ADOPTED THIS 23rd day of August, 2022.
Renee Nall, City Clerk John A. Haila, Mayor
Introduced by: Corrieri
Seconded by: Betcher
Voting aye: Beatty-Hansen, Betcher, Corrieri, Gartin, Junck, Rollins
Voting nay: None Absent: None
Resolution declared adopted and signed by the Mayor this 23rd day of August, 2022.