Hangar Lease Contract

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GAHorn
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Re: Hangar Lease Contract

Post by GAHorn »

TAXPAYER and CONSTITUENT
:lol:
'53 B-model N146YS SN:25713
50th Anniversary of Flight Model. Winner-Best Original 170B, 100th Anniversary of Flight Convention.
An originality nut (mostly) for the right reasons. ;)
AR Dave
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Re: Hangar Lease Contract

Post by AR Dave »

The mayor / city being the CONSTITUENT?
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GAHorn
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Re: Hangar Lease Contract

Post by GAHorn »

It was a joke, meaning that you are a taxpayer and their constituent, therefore they should be nice to you (since their officeholder position relies upon your(s) support. :wink:
'53 B-model N146YS SN:25713
50th Anniversary of Flight Model. Winner-Best Original 170B, 100th Anniversary of Flight Convention.
An originality nut (mostly) for the right reasons. ;)
AR Dave
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Re: Hangar Lease Contract

Post by AR Dave »

So it wasn't exactly what I thought it was - Mayor wasn't there. It was a pre-proposal meeting. Actually read my own contract, has 15 yr extension instead of only 10. Airport Commission Chairman, 3 other Hangar Owners, and the business wanting to buy hangar were present.
Last edited by AR Dave on Mon May 11, 2015 2:21 am, edited 3 times in total.
AR Dave
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Re: Hangar Lease Contract

Post by AR Dave »

Leases are currently 25 + 15 year extensions. I'm going to propose this -

Renewal: Tenant shall have the right to extend the Lease Term for an additional twenty (20) years upon delivering written notice to Landlord of Tenant's intent to extend the Lease Term no less than ninety (90) days prior to the expiration of the current Lease Term and provided Tenant is not in default at any time between the date of such delivery and the commencement of the extended Lease Term. Upon expiration of 20 year lease, Lessor, in its sole discretion, may determine to permit any subsequent extensions of this Agreement on terms offered by Lessor when agreed to by both parties in writing.

Surrender and Restoration of Leased Premises: Upon termination of Lease and with no Lease renewal or pending new Lease, Tenant shall surrender the Leased Premise. Any property left behind after (90) days shall become the property of the Landlord.

Well we'll have to get the fee's in there.
AR Dave
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Re: Hangar Lease Contract

Post by AR Dave »

Chairman had his own version - it went like this -

At the end of the current hangar lease (Chairman's Lease), which expires on August 31, 2025, the lessee shall have the option to extend the lease for 20 years past the end of the current lease with the option to extend for an additional 20 years.

It's in the city attorney's hands now - will be brought before City Council on the 19th..
Last edited by AR Dave on Sat May 09, 2015 12:00 pm, edited 1 time in total.
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wingnut
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Re: Hangar Lease Contract

Post by wingnut »

Dave, after our conversation I did speak with our airport manager about the current system here in Mena. It had been a mess for years prior to recent, and that is why since approx. year 1995 all new construction has been on private land adjacent to the airport (thus the taxi across highway deal where all the development and construction occurred between the mid 90's thru about 2008. This is why the Mena Airport has about a 70% "thru-the-fence" operators ratio). After years of the powers-that-be seeing what was happening, they extended the land lease to 30 years with an additional 30 year extension option. The way he explained it to me is this;
If I lease city/airport owned land and build a hangar on this land, I will pay .0075 cents per sq ft for the land. I will pay the city this land lease for 30 years. When the 30 years is up, I have the option to extend the land lease another 30 years. The land lease rate is subject to change every 5 years according to COL index. Once the hangar is built on city/airport property, I cant remove it. It's theirs, but I only pay for the land lease (and I learned we don't have to pay property tax on the land, only the improvements (the hangar(s), concrete ramp, side walks, parking area, etc). So, from what I gather, in recent years with a more airport friendly "commissioners" and manager, and mayor, we basically have a 60 year deal. Longer than I'll see the end of.
Note to add......the .0075 cents per sq ft seemed really cheap to me. But this is not just the sq footage of the hangar. It is the sq ft of the lot, which may be 300'x200'= $450 per month for the land lease. Most lots on the airport are at least that size, some larger, some much larger.
Of course if the lessee faults on the contract in any way (with limited exception), or vacates at any time, game over. Also, I cannot build a hangar on city property and sell the lease. The city owns the improvements the day they happen, but the person who makes the improvements have an option for a 30+30 land lease. If I vacate at any time, it all goes to city and whomever leases will be paying a meshed lease to include land and hangar/improvements.
13 years ago when I approached the city about building a hangar, the terms were not reasonable at all. It was a 20 year land lease, and then I would have to pay lease on the hangar/improvements too. I could not make that math work just like many others.
Our city owned hangars lease for .20 cents per sq ft. and this includes the lot they sit on, and property taxes. We just leased an 8,000 sq ft city owned hangar for $1,600. This is only a penny off what I am paying for the private owned hangar that we've been in for a long time, so I think it is a standard rate around here.
Del Lehmann
Mena, Arkansas
AR Dave
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Re: Hangar Lease Contract

Post by AR Dave »

Thanks Del, Mena is my go-to example of what happens when our constituents are not airport friendly.
Last edited by AR Dave on Mon May 11, 2015 2:07 am, edited 1 time in total.
AR Dave
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Re: Hangar Lease Contract

Post by AR Dave »

Everyone got involved - Mayor, City Council, Airport Commission, New Airport Director, Old Airport Director - lots of closed door meetings. Airport Commission Meeting. I'm not that optimistic. If we get an extension, maybe I'll put in LED Lights and paint the floor. Money isn't falling off a pipeline anymore. :wink:
AR Dave
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Re: Hangar Lease Contract

Post by AR Dave »

So the new Airport Director hit us with - http://www.faa.gov, 5190.6B, Chapter 12, page 3, 3.(Term). Which states that FAA Offices should not consent to proposed lease contracts that exceed 50 yrs from original build date.
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GAHorn
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Re: Hangar Lease Contract

Post by GAHorn »

That sounds pretty reasonable when compared to most. (Sounds like you have a director who wants to do a good job and educates himself on matters.)

Sometimes it's difficult to keep in mind that building upon public land does not entitle one to convert the improvement to private ownership. 50 years is outstanding.
In fact, most bldgs. are fully depreciated long before that.
'53 B-model N146YS SN:25713
50th Anniversary of Flight Model. Winner-Best Original 170B, 100th Anniversary of Flight Convention.
An originality nut (mostly) for the right reasons. ;)
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