TO: Mayor and City Council
THROUGH: Keith Stahley, City Manager
FROM: Brian D. Martin, PE, Public Works Director
SUBJECT:
title
Ground lease with Hangar II LLC for property located at the Salem-Willamette Valley Airport.
Ward(s): 2
Councilor(s): Nishioka
Neighborhood(s): SEMCA, SESNA
Result Area(s): Strong and Diverse Economy
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SUMMARY:
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Hangar II LLC (Tenant) desires to enter into a ground lease with the City of Salem to construct an aircraft hangar and associated improvements at the south end of the airport.
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ISSUE:
Shall City Council authorize the City Manager to execute a ground lease with Hangar II LLC for property located at the Salem-Willamette Valley Airport?
RECOMMENDATION:
recommendation
Authorize the City Manager to execute a ground lease with Hangar II LLC for property located at the Salem-Willamette Valley Airport.
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FACTS AND FINDINGS:
Tenant and City staff have come to terms on a proposed ground lease (Attachment 1, Lease). Key terms are below.
Lease Start Date: July 1, 2024
Lease End Date: June 30, 2064
Total Square Feet: 42,750 developed; 37,500 billed
Lease Rate: $13,125 annually ($0.35/s.f./year)
The difference between the total square feet being developed (42,750 sf) and the total square feet billed (37,500 sf) accounts for the Lessee’s construction of common area improvements which link their development to the existing taxi lane. This common area will allow airport staff to move vehicles and equipment across their leased space.
In accordance with the approved Airport Ground Lease Policy, Lessee is being granted an additional ten-year term in exchange for constructing common area improvements at Lessee’s sole expense.
BACKGROUND:
Revenue from the ground lease will flow to the Salem-Willamette Valley Airport Fund.
John Paskell
Airport Manager
Attachments:
1. Attachment 1 - Lease