Agenda

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Item # 8.

Council Meeting 2023

Meeting Date:	10/11/2022
Department:	Airport
Pillars:	Innovation in Entrepreneurship & Business
Milestones:	Implement the Asset Management Plan in accordance with the Asset Management Policy, utilizing information systems

AGENDA CAPTION:

Consider Action on a Resolution Authorizing a Thirteen-Year Conventional Hangar Lease for Commercial Aeronautical Use with StoneDome Real Estate, LLC for 4581 Claire Chennault Drive at Addison Airport and Authorizing the City Manager to Execute the Agreement.

BACKGROUND:

StoneDome Real Estate, LLC (“StoneDome”) is a current ground tenant at 4500 Westgrove Drive at Addison Airport. StoneDome is proposing to lease from the Town the existing city-owned hangar and office facility located at 4581 Claire Chennault, subject to a 13-year Conventional Hangar Lease agreement. The proposed annual base rental is $73,176 payable in 12 equal monthly installments subject to periodic adjusted provided for in the agreement. Other salient terms and conditions of the proposed lease agreement are attached.

In consideration of the 13-year term, StoneDome is obligated under the lease agreement to expend a minimum of $250,000 in renovations and capital repairs necessary to restore the hangar and office space to a merchantable, code-compliant aeronautical facility. Upon completion of the renovations and capital repairs, StoneDome intends to sublease the hangar and office space for aeronautical uses.

4581 Claire Chennault is a former ground-leased property that the Town took possession and ownership of in 2016. Prior to these actions, the property was encumbered with protracted family estate litigation and the tenant failed to maintain the property as required under the ground lease. After giving proper notice, the Town early terminated the ground lease and took possession of the property. At that time, it was determined that the office portion of the building improvements were in very poor condition and not marketable for commerical use. The Town elected not to expend the capital resources necessary to restore the office area to a marketable condition and kept it off-market while leasing only the hangar portion of the property for aircraft storage. The proposed lease with StoneDome will allow the entire property to be restored and made commerically viable and operational once again.

Airport staff recommends the Town enter into the proposed agreement with StoneDome as it will allow the airport to receive additional market rent for the facility without expending capital resources and without absorbing any market risk. The property will be renovated by StoneDome at its sole cost and expense, and it will become a viable, commercial aeronautical facility benefiting the airport over the next 13 years, while supporting aeronautical business growth and expansion at the airport. The city attorney has reviewed the proposed Conventional Hangar Lease for Commercial Use agreement and finds it acceptable for the Town’s purposes.

RECOMMENDATION:

Administration recommends approval.

Attachments
Resolution - StoneDome Lease
Location Map
Summary of Lease Terms