DEPARTMENT: Aviation
DEPARTMENT HEAD: Frank Miller
COUNCIL DISTRICTS IMPACTED: Citywide
SUBJECT:
Lease Amendment with Ocotillo Aviation, LLC at Stinson Municipal Airport
SUMMARY:
This Ordinance will authorize an amendment to a lease agreement with Ocotillo Aviation, LLC (Ocotillo). The proposed amendment will extend the lease agreement an additional two years to June 30, 2030. The amendment also authorizes the deferral of a transfer of the titles for Hangars 11 and 12 to the City for up to five years for each $12,500.00 in capital improvements Ocotillo completes before March 1, 2019. If Ocotillo invests $62,500.00 in capital improvements to the hangars, the firm will retain the property until March 1, 2024.
BACKGROUND INFORMATION:
Ocotillo is a current tenant at Stinson Municipal Airport and provides T-Hangar space for general aviation aircraft. In 2007, City Council authorized an assignment of a lease agreement with Check-Six Aviation, Inc. to Ocotillo through Ordinance 2007-06-28-0781 which included T-hangars 11 and 12. As part of the lease agreement, the two T-hangars will vest to the City on March 1, 2019. The lease agreement expires on June 30, 2028.
Amendment
The proposed amendment will extend the lease agreement with Ocotillo for an additional two years to expire June 30, 2030. The amendment will also authorize the deferral of the transfer of the titles of T-hangars 11 and 12 one year for each $12,500.00 in capital investments Ocotillo completes by March 1, 2019 for up to five years. The additional time will assist Ocotillo in recouping its initial investment.
ISSUE:
Amendments to lease agreements require the authorization of City Council.
ALTERNATIVES:
City Council could elect to not authorize the lease agreement. This action would result in the lease expiration date remaining June 30, 2028 and the option for Ocotillo to defer the transfer of the two T-hangars would not be allowed.
FISCAL IMPACT:
This amendment authorizes an extension of the lease term of a lease agreement.
RECOMMENDATION:
Staff recommends authorization for an amendment to the lease agreement with Ocotillo at Stinson Municipal Airport.