LEGISLATIVE ACTION ITEM
SPONSOR: Grover C. Robinson, IV, Mayor
SUBJECT:
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PENSACOLA INTERNATIONAL AIRPORT - PENSACOLA AVIATION CENTER LEASE (F/K/A AEROSE LLC) AMENDMENT NO. 4
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RECOMMENDATION:
recommendation
That City Council authorize the Mayor to execute Amendment No. 4 with Pensacola Aviation Center, LLC (f/k/a Aerose LLC) for the construction of a 20,000 square foot hangar and to provide for the extension of the lease. Further, that City Council authorize the Mayor to take all actions necessary to execute the Amendment.
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HEARING REQUIRED: No Hearing Required
SUMMARY:
Pensacola Aviation Center (PAC) is the full-service Fixed Base Operator serving the Pensacola International Airport. As a Fixed Base Operator, PAC is required to provide fueling, aircraft maintenance, pilot and passenger waiting areas, aircraft parking and storage, and a variety of other services to the operators of the privately and corporate-owned aircraft using the facility.
To provide aircraft parking and storage, Pensacola Aviation Center currently manages various hangars on the Airport. In addition to the facilities covered under PAC’s 1997 lease, they also manage facilities constructed by Aerose, LLC (also known as Innisfree) under a separate 2004 agreement. Pensacola Aviation assumed the Aerose lease in 2016, which included a single 15,200 square foot hangar.
The recently completed Master Plan reviewed all of the facilities on the Pensacola International Airport and outlined those items needed to meet current and forecast demand. The number of hangars was last expanded in 2008. Given the growth in general aviation activity over the last eleven years, the Master Plan identified a current need for an increase these facilities.
In lieu of providing these facilities itself, the City of Pensacola typically works with private entities such as Pensacola Aviation to fund, construct, and operate the various hangars and buildings required to accommodate the needs of the general aviation community. In consideration of the development and to allow a company to amortize the investment, the City grants longer term leases.
To meet the current needs for expanded hangar facilities, Pensacola Aviation previously proposed to invest $2.9 million dollars into the development of various types of hangars. This included $1.6 million in hangar improvements to their 1997 lease area and approximately $1.3 million in hangar improvements to the old Aerose leasehold. The original proposed overall capital investment between both leaseholds has since been increased to $3.4 million, of which $1.5 million is now for the construction of a 20,000 square foot hangar on the old Aerose leasehold.
To allow for the amortization of the investment, PAC has requested an extension for each separate lease. The proposed extension for the old Aerose agreement would take that lease out to September 30, 2049.
PRIOR ACTION:
May 5, 2004: City Council approved the lease with Aerose LLC.
September 9, 2007: City Council approved Amendment No. 1 to the lease.
November 15, 2012: City Council approved Amendment No. 2 to the lease.
June 18, 2015: City Council approved Amendment No. 3 to the lease.
July 14, 2016: City Council authorized the assignment and assumption of the lease from Aerose, LLC to Pensacola Aviation Center LLC.
FUNDING:
N/A
FINANCIAL IMPACT:
Pensacola Aviation pays a ground rent for the property it uses. The annual rental payment for the former Aerose LLC leasehold is currently $72,576.72. The additional property required for the hangar construction will be added to the annual rent. The overall rental rate is adjusted every five years.
CITY ATTORNEY REVIEW: Yes
5/28/2020
STAFF CONTACT:
Keith Wilkins, City Administrator
Richard Barker, Jr., Deputy City Administrator - Administration & Enterprise
Daniel Flynn, Airport Director
ATTACHMENTS:
1) Pensacola Aviation Center (f/k/a Aerose LLC) Amendment No. 4
PRESENTATION: No end