AQRD Hangar Management LLC, a Texas limited liability company, desires to acquire certain city-owned (or soon to be city-owned) properties located at 4582 and 4584 Claire Chennault Drive at Addison Airport, subject to a long-term lease arrangement (Ground Lease) subject to the Town’s consent.
AQRD Hangar Management LLC (Tenant) is an affiliate of Aerospace Quality Research and Development (AQRD), a special purpose entity created to hold the leasehold interests created by the proposed Ground Lease and title to the existing building improvements. AQRD, an aerospace engineering firm and PART 135 repair station, also owns the leasehold interests located at 4600 Claire Chennault Drive and at 4400 Westgrove Drive. The building improvements subject to the Ground Lease, will greatly facilitate AQRD’s expected growth and expansion with their neighboring 4600 Claire Chennault facility.
Pursuant to the terms of the Ground Lease, the Tenant will pay initial rent in the sum amount $635,000 as a one-time single installment, fully earned and non-refundable, on or before taking possession of the existing building improvements. Additionally, the Tenant will pay on or before the Commencement Date $51,188 in annual rental payable in twelve (12) equal monthly installments subject to biennial adjustments over the lease term. The initial lease term is sixty (60) full-calendar months form the Commencement Date. The Tenant has the option to extend the lease term to June 30, 2057 (30+ additional years) provided the Tenant satisfactorily completes a minimum of $1 million in building capital repairs and renovations before the expiration of the initial lease term.
The Tenant’s permitted use of the lease premises includes sale of aircraft and aircraft parts, aircraft maintenance and repair, aircraft storage, aircraft training, aircraft charter, and aircraft rentals, which is the same for 4600 Claire Chennault.
The proposed redevelopment represents an estimated $51,188 in annual real-estate revenue (ground rent) to the Airport. This equates to approximately $2.4 million over the 34-year lease term.
| Overview of Estimated Economic Impact |
| Ground Rent |
$51,188 |
$.75/SFL; 1.57 acres (68,250 SFL) |
| Fuel Flowage Fees (FFF) |
|
N/A |
| Projected Business Property Tax |
|
N/A |
| Ad Valorem Tax |
$12,300 |
$2M @ $.61466/mil |
| Total Annual Economic Benefit |
$63,488 |
|
| |
|
|
| Net Cashflow Over Term |
$2,412,000 |
Ground Rent & Fuel Flowage Fees |
| Net Present Value @ 6% disc. |
$864,000 |
|
| Initial Rent Installment |
$635,000 |
|
| Tenant's Capital Investment |
$1,000,000 |
Minimum Required Investment |
The proposed redevelopment and lease arrangement supports the Town’s objectives for the Airport by enhancing the overall value of the Airport with new and improved aeronautical facilities, increased revenue, and an enhanced tax base. The proposed redevelopment and use of the facilities are consistent with the 2013 Airport Strategic Plan and 2016 Airport Master Plan Update.
The city attorney has reviewed the Ground Lease and other related documents, finding the same acceptable for the Town’s purposes. |