In November 2014, the Town issued a Request for Proposals for the redevelopment of a 16-acre site at the southeast corner of Addison Airport that is adjacent to Addison Road. A lease agreement with a developer who proposed to develop the site as a Fixed Base Operator (FBO), was executed. That developer, however, was not able to find an operator for the fixed base operation that would agree to their terms and, therefore, the lease agreement with that developer was terminated. Interest in the site, however, was heightened through the process of the developer trying to find an operator for the business.
After the lease agreement with the initial developer was terminated, several entities contacted Staff expressing interest in developing on the site. Staff then asked several potential developers to submit a proposal for a new development on the site. Those developers were, Black Forest Ventures, Jet Aviation, JexEx, Sheltair, US Jet Center, One Two Right, LLC, Cutter Aviation, and US Sport Aviation. Four developers submitted proposals as outlined below:
| Developer |
Proposed Use |
| Black Forest RE, LLC |
Fixed Base Operator |
| Sheltair |
Fixed Base Operator |
| U.S. Jet Center |
Fixed Base Operator |
| One Two Right, LLC |
Corporate Air-Park Hangar Complex |
A selection committee of Town and Airport staff met with each potential developer to discuss their plans and to request additional information where needed. Prior to the final selection, one developer, One Two Right, LLC withdrew their proposal. Black Forest RE, LLC, (Black Forest) was chosen by the selection committee as the preferred developer for the site.
Since that time, Town, Airport, and legal staff have been negotiating the final terms of the ground lease and the companion fuel dispensing agreement for the proposed development.
A ground lease agreement is proposed between the Town and Black Forest Aviation RE, LLC, for the 15.68 acre parcel of unimproved land at the southeast quadrant of the Airport. The proposed Ground Lease Agreement is a 40-year lease agreement, with the following terms:
- Effective Date: The date the Ground Lease Agreement is executed by the Town.
- Commencement Date: The first day of the calendar month following Substantial Completion of the Building Improvements as those terms are defined in the Ground Lease.
- Expiration Date: The statutory limit of 40 years (480 full calendar months) following the Commencement Date, unless otherwise earlier terminated.
- Demised Premises: Approximately 15.68 acres located in the southeastern portion of Addison Airport
- Inspection Period: First 120 calendar days from the Ground Lease Effective Date
- Base Rental: $488,360 per annum payable in 12 monthly installments of $40,697
- Initial Rent: $1,000,000 as defined in the Ground Lease is due payable upon Tenant's acceptance of the Demised Premises. Initial Rent becomes earned and non-refundable.
- Adjustment of Base Rent: Base Rent remains constant for the first ten years of the Term, thereafter Base Rent increases a fixed 3% over the remaining Term
- Additional Rent: Should tenant elect to transfer title of the Building Improvements to Landlord upon Substantial Completion, Tenant shall pay Additional Rent as defined in the Ground Lease annually over the Term. Additional Rent is a variable amount subject to annual calculation set forth in the Ground Lease.
- Permitted Use: For public fixed based operations (FBO) including but not limited to aircraft storage, sale of aircraft and parts, aircraft maintenance and repair, aircraft charter and management, aircraft rental, retail concessions and concierge services, and other related services.
- Building and Aircraft Apron Improvements: Approximately 20,000 sq. ft. FBO Facility with three 39,000 sq. ft. hangars with additional lean-to office/shop space, over 200,000 sq. ft. of aircraft ramp, and related automobile parking.
- Environmental Remediation: At the Town’s expense, if any, subject to an accepted Remediation Plan as provided for in the Ground Lease
- Demolition and Site Preparation: Tenant’s duty and obligation at Tenant’s sole expense
- Construction Value of Building Improvements: To exceed no less than Fifteen Million Dollars ($15,000,000) (separate and apart from the cost of design).
- Maintenance and Repair Standards: The proposed Ground Lease includes the “Tenant’s Leasehold Minimum Maintenance and Repair Standards and Practices” Addendum.
The terms of the Public Fuel Dispensing License Agreement are summarized below:
- Fuel Tanks: 50,000 gallon Jet-A rated tanks and 15,000 gallon rated AvGas tank.
- Term: Sixty (60) months from the time Black Forest is given permission to begin fueling operations. The License can be extended for additional 5-year terms, as provided for in the Agreement.
- Tank Rental: $41,392 per year comprised of the Base Fee of $.3078 per gallon capacity per year ($20,007 payable in monthly installments of $1,667), plus the Additional Fee of $.3290 per gallon of tank capacity ($21,385, per year payable in monthly installments of $1,782), subject to adjustment as provided for in the Agreement.
- Permitted Use: As Public Fixed Base Operator - for the detail delivery of aviation fuel at the Airport.
- Minimum Standard to Operate Fuel Tanks: The receipt of at least 320,000 gallons of jet aviation fuel per any consecutive 6-month, as required in the License Agreement
- Fuel Flowage Rate: Fourteen cents ($.14) per gallon received into the Fuel Tanks paid one-month in arrears as set forth in the License Agreement.
- Term Extensions: Four consecutive terms of sixty (60) months each with a stepped up Base Rate, as set forth in the Exhibit "D" of the Agreement.
The combined annual revenue to the Airport from the ground lease, the public fuel dispensing license for the tank rental, and the fuel flowage fee can be summarized as shown below:
| Description |
Annual Revenue |
Estimated Value |
| Initial Rent (single installment) |
|
$1,000,000 |
| Minimum Construction Value of Building Improvement |
|
$15,000,000 |
| |
|
|
| Annual Ground Rental |
$488,360 |
|
| Annual Fuel Tank Rental |
$41,392 |
|
| Minimum Estimated Fuel Flowage |
$179,200 |
|
| Total Annual Revenue |
$708,952 |
|
| |
|
|
| Estimate Revenue Over Term |
$36,753,000 |
|
| Estimated Net Present Value @ 8% discount rate |
|
$8,851,000 |
| |
|
|
| Total Estimated Development Impact (Today's Dollar) |
|
$24,851,000 |
The proposed development supports the Town's strategic objectives for the Airport by enhancing the overall value of the Airport with new development, increased revenue, and an enhanced tax base. The proposed use is consistent with the Airport's 2016 Airport Master Plan Update. |