CITY COMMISSION AGENDA ITEM

Department:	MSO		Commission Meeting Date:  December 4, 2018
Staff Contact:	Charles Soules, Assistant Director
Recommendations/Options/Action Requested:
Authorize the City Manager to execute a long-term Fixed Base Operator (FBO) premises lease agreement and ground lease agreement with Hetrick Air Services, Inc.
Executive Summary:		Hetrick Air Services has been providing FBO (Fixed Base Operator) Services since June, 1983. The FBO provides the following services at the Lawrence Municipal Airport: · Dispensing of aviation fuels · Providing aircraft tie downs · Hanger storage and rental · Aircraft maintenance · New and used aircraft sales · Flight instruction · Aircraft rentals and charters · Aircraft parts sales Hetrick provides staffing to provide services to the public during hours when the airport is open, monitors airport activities, schedules landings and departures, and reports maintenance issues and accidents. Earlier this year, Hetrick requested a lease of Lot 1, Block 2 of the Lawrence Municipal Airport to construct a new hangar, approximately 12,000 square feet in size, to support expansion of his business and provide additional space for aircraft storage. Hetrick also requested to negotiate a new FBO agreement that would enable Hetrick Air Services to continue providing FBO services in the future. With the stability of a new long-term FBO agreement, Hetrick plans to open two new lines of business at the airport.  Both the current facilities leased by the FBO and the new ground lease were independently appraised by Aul Appraisal. The new lease rates are based on the appraiser’s market-based recommendation. Additionally, some of the City’s other contractual obligations, either shared or provided in full by the City under the current/historical FBO agreement, will be provided by the tenant under the new agreement. Utilities costs are one example of this correction. In negotiating these agreements, staff attempted to reach more equitable terms in the proposed FBO agreement compared to the current/historical agreement. A comparative matrix of the proposed terms is attached.
Strategic Plan Critical Success Factor		Effective Governance/Professional Administration Sound Fiscal Stewardship Collaborative Solutions
Fiscal Impact (Amount/Source):		The agreements will result in additional airport revenue. Please see attached matrix for details.
Attachments:		FBO Agreement and Attachments Land Lease Agreement and Attachments Comparative Matrix

Reviewed By: (for CMO use only)

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