Agenda

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Item # 10.

Council Meeting

Meeting Date:	10/26/2021
Department:	Airport
Pillars:	Excellence in Transportation Systems
Milestones:	Implement the Asset Management Plan in accordance with the Asset Management Policy, utilizing information systems

AGENDA CAPTION:

Consider Action on a Resolution Approving a Second Amendment to Ground Lease Between the Town of Addison and Duke’s Ice House, LLC for Commercial Aviation and Restaurant use on Property Located at 16101 Addison Road, Addison Airport, and Authorizing the City Manager to Execute the Second Amendment.

BACKGROUND:

Duke’s Ice House, LLC, is the ground lease tenant at 16101 Addison Road at Addison Airport and is a tenant in good standing with the Town. The leasehold is located at the eastern-most end of Taxiway Tango fronting the northwest corner of the Addison Road/Keller Springs intersection. The building improvements consist of a restaurant (Austin’s BBQ) and a long-established aircraft maintenance and repair facility servicing based and transient aircraft. The purpose of this action item is to approve a resolution consenting to the proposed Second Amendment to the Ground Lease, which is presently scheduled to expire February 28, 2025.

The proposed Second Amendment provides for:

Extending the current lease term by 46-months to December 31, 2028;
In consideration of this term extension, the Tenant agrees to pay an increased ground rental (currently $0.71) of $0.85 per gross square foot of the demised premises ($8,014.20 increase annually) beginning January 1, 2022.

The 2016 Airport Master Plan contemplates redevelopment of Taxiway Tango. This new ground-lease expiration date better aligns with the lease expiration dates of adjacent leasehold properties, which supports the timing and planning of the redevelopment of Taxiway Tango. With regards to the Duke’s Ice House leasehold, airport management has determined the optimum strategy is to extend the ground lease 46 months, encouraging the restaurant operator (under the same ownership as the Tenant) to remain over the extended term until the land is needed for redevelopment. The modified rental provided for in the Second Amendment is intended to compensate the Town for rents it might have otherwise received for the hangar portion of the leased premises had the ground lease term not been extended.

The requested action is consistent with the 2013 Addison Airport Strategic Plan and the 2016 Airport Master Plan.

RECOMMENDATION:

Administration recommends approval.

Attachments
Resolution - 16101 Addison Road Second Amendment to Ground Lease
Aerial - Location Map 16101 Addison Rd