AGENDA MEMORANDUM

 

 

Meeting Date:           March 10February 25, 2008

 

From:                          Charlie Weller, Airport Manager

 

Subject:                      Resolution authorizing an Amendment to Lease agreement with Phillips Buick-Pontiac-GMC, Inc.

 

 

Staff Recommendation:

Staff recommends approval of the Amendment to Lease with Phillips Buick-Pontiac-GMC, Inc.

 

Analysis:

Phillips-Buick-Pontiac-GMC, Inc. currently has a lease for the site at 8910 Airport Boulevard.  The original lease agreement was signed in December 1995 and expires on December 31, 2015.  At this time, the tenant is planning to make improvements to the hangar valued at approximately $300275,000.00 including probable cost over-runs.,000.00.  The improvements include 768 square feet of office space, 2,520 square feet of covered parking and 178 square feet of covered porch. Renovations will also be made to the interior of the existing facility.  Extensive landscaping and an irrigation system will be installed as part of this project.   All renovations must be completed by December 31, 2008.  An artist’s rendering of the addition is included with this memo.

 

In return for this investment in a hangar that will eventually revert to the City, Mr. Phillips has requested a fourteen thirteen (14) year extension to the lease term.  This extension would will make the end date of the lease term December 31, 20292028

 

Based on the value of the planned hangar improvements, staff is proposing that this lease be extended thirteenfourteen (14) additional years as requested.  The current monthly rent for this site is $183.50 plus applicable taxes.  All other terms of the original lease agreement will remain in effect. 

 

The Airport Advisory Board reviewed this agreement at their February 13, 2008, meeting and recommended approval.

 

Options:

1.  Approval the Amendment to Lease agreement.

2.  Such alternative action as the Commission may deem appropriate

 

Fiscal Impact

To determine the appropriate number of years to extend Mr. Phillips's lease based on an investment between $250,000.00 and $300,000.00, the following was done:

 

1.   Rental income for the City from the remaining eight years of his lease was calculated.

2.   At the end of the eight-year period when the hangar would revert to the City, the rental rate was calculated at $4.00/square foot.

3.   Income from the remaining eight years of Mr. Phillips's lease, plus annual income from rent, based on a yield of $4.00/square foot was used to determine the number of years to amortize the investment that Mr. Phillips expects to make to enlarge the hangar (finished offices), have covered parking, and significant landscaping.

 

In today's dollars, it is feasible to build an 80 foot x 80 foot corporate hangar of the type that Mr. Phillips now owns and occupies.  

Approval of the agreement will have no fiscal impact on the City of Leesburg.

 

 

Submission Date and Time:    3/6/2008 11:53 AM2/29/2008 9:18 AM2/27/2008 9:40 AM2/14/2008 5:18 PM2/13/2008 1:17 PM____

 

Department: ___Airport_____________

Prepared by:  ___Charlie Weller________                     

Attachments:       Yes _X__   No ______

Advertised:   ____Not Required __X___                     

Dates:   __________________________                     

Attorney Review :      Yes _X_  No ____

                                                

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. __________________                                     __JB______________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________


 

RESOLUTION NO._______________

 

A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AMENDMENT TO LEASE AGREEMENT WITH PHILLIPS BUICK-PONTIAC-GMC, INC. FOR SPACE AT LEESBURG INTERNATIONAL AIRPORT; AND PROVIDING AN EFFECTIVE DATE.

 

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

 

            THAT the Mayor and City Clerk are hereby authorized to execute an Amendment to Lease agreement with Phillips Buick-Pontiac-GMC, Inc. whose address is Post Office Box 491907, Leesburg, Florida 34749, for space at Leesburg International Airport.

 

             THAT this resolution shall become effective immediately.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _10th____ day of _March________ 2008.

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

__________________________

City Clerk