Title
An Ordinance authorizing the execution of a ground lease agreement by and between the City of Lee's Summit and Hangar V, LLC for a period of 20 years with options for four additional five-year terms for the continued operation of Hangar "V" located at the Lee Summit Municipal Airport and authorizing the Mayor to execute an agreement for the same.
(Note: First read by Council on March 25, 2025. Passed by unanimous vote.)
Body
Issue/Request:
An Ordinance authorizing the execution of a ground lease agreement by and between the City of Lee's Summit and Hangar V, LLC for a period of 20 years with options for four additional five-year terms for the continued operation of Hangar "V" located at the Lee Summit Municipal Airport and authorizing the Mayor to execute an agreement for the same.
Key Issues:
Hangar V is an existing hangar located on the west side of the Airport and is under new ownership.
The new owner of Hangar "V" has requested a new ground lease. There are 15 years plus renewals remaining on the original lease.
The hangar will be used to store Aircraft. Hangar V, LLC has agreed to same terms as the previous owner and will assume a new, more current, rent rate of $0.43 per square foot.
The initial annual rental cost will be $15,660. The annual rent will be increased each year by 3% for the initial 20 year term.
The lease term is for an initial twenty (20) years with options for up to four (4) additional five (5) year renewal periods.
Proposed Committee Motion:
I move to recommend to City Council for approval of an Ordinance authorizing the execution of a ground lease agreement by and between the City of Lee's Summit and Hangar V, LLC for a period of 20 years with options for four additional five-year terms for the continued operation of Hangar "V" located at the Lee Summit Municipal Airport and authorizing the Mayor to execute an agreement for the same.
Background:
Hangar V is under new ownership and the new owners have requested a new ground lease. The Lease Agreement is for a existing hangar that encompasses 36,419 square feet. The tenant intends to use the hangar to store aircraft. The Lease is substantively the same terms and conditions as the previous ground lease for this property. Currently there are four other privately developed aircraft hangar storage facilities located on the Airport. The Lease contains comprehensive indemnification and insurance provisions, as well as detailed termination provisions, which allows the City to terminate the Lease if Hangar V, LLC defaults on its payments to the City.
Impact/Analysis:
Annual increase in annual ground lease revenues.
Timeline:
Other Information/Unique Characteristics:
Presenter
Joel Arrington, Airport Manager
Recommendation
Recommendation:
Committee Recommendation
Committee Recommendation: