Item No: 5G.
Meeting Date: May 28, 2013
From: Raymond S. Sharp, Interim City Manager
Subject: Request by BHI Central Florida, LLC. to consider a lease agreement for properties located at Leesburg International Airport
Staff recommends disapproval of lease agreement as presented.
Mr. Brainerd requested that this item be placed on the agenda for commission consideration and vote. I have advised Mr. Brainerd that I cannot support this lease agreement in its present form.
On Monday, May 20, at 2:30 pm, I met with Mr. Brainerd and others from his firm. At that time, I advised him that based upon input from the City Attorney, the corporate name “BHI Central Florida, LLC.” could not be used as a party to any legal document because it is not a registered corporate identity. As of this writing, on May 22, it is still not registered – on that count alone, this lease agreement cannot be recommended for approval.
The contents of the lease proposed by Mr. Brainerd are at considerable odds with past practices and the spirit and intent of the proposed lease policy. The proposed lease is also at odds with the current forms of the leases for the three properties.
Most notably, the proposed lease represents a significant loss of revenue to the airport, totaling approximately ten million dollars over the course of thirty years. As a secondary concern, there is no justification for a lease term of greater than 20 years for the lease expiring in October, 2013, and no present justification for extension of modifications to the other two leases which expire in some eight to ten years. I have advised Mr. Brainerd that I am unable to support this proposed lease for these reasons.
1. Reject the lease agreement as proposed; or,
2. Such alternative action as the Commission may deem appropriate.
Although the use of an incorrect corporate name does not allow execution of this lease as provided by Mr. Brainerd, the terms of the lease agreement serve to reduce the expected revenues of the airport by some ten million dollars over a period of thirty years. This severely limits the ability of the airport to perform capital projects, repair and replacement projects, and perform required maintenance.
Department: City Manager_
Prepared by: R. Sharp
Attachments: Yes X No ______
Advertised: ____Not Required ______
Attorney Review : Yes X No ____
City Attorney did not approve.
Reviewed by: Dept. Head ________
Finance Dept. __________________
Deputy C.M. ___________________
City Manager ___________________
Account No. _________________
Project No. ___________________
WF No. ______________________