06-F-Hangar H - Lease Award - Laserfiche WebLink

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AGENDA INFORMATION SHEET PROJECT: Consider a resolution authorizing the award of a lease agreement for the lease of Hangar H at Cox Field Airport. BACKGROUND: On February 28, 2000, a lease that had a term of five (5) years, with a five (5) year extension, beginning March 1, 1990, expired on Hanger H at the Cox Field Airport. By resolution, the City Council authorized the advertisement for bids for the lease of Hangar H, and bids were received in March of 2000. The original lease payments on the hangar through February of 2000 were $375.00 per month; the subsequent bids included a high bid of $1,500.00 per month for a term of five (5) years, the second high bid of $1,100.00 per month. Subsequently, the City Council authorized the offer of the lease to Mr. J. B. Richey, who holds a right-of-first-refusal for the lease of Hangar H, at the $1,500.00 per month rent proposed by Progressive Marketing Group. Mr. Richey subsequently declined to exercise his right-of-first-refusal, and Council authorized the execution of a lease with Progressive Marketing. However, Progressive Marking failed to timely exercise their opportunity to enter into a lease agreement, and that opportunity expired, while at the same time a security company foreclosed on the aircraft owned by Progressive Marketing. Subsequently, the security company paid all outstanding rental payments in the amount of $1,500.00 per month; however, because of the need to have the hangar on a long-term lease basis to the benefit of the airport operations in general, the City has notified the security holder the City intends to seek a new long-term tenant for the hangar facility by competitive bid. On February 12, 2001, the City Council approved Resolution No. 2001-014, authorizing the taking of bids for the lease of Hangar H. Following Council approval, City staff solicited bids for leasing the facility. The City included a form lease agreement in the bid package which addressed such issues as insurance, indemnity, use, and maintenance of facilities, etc. Each bidder was asked to bid a monthly rate for a term not to exceed ten (10) years. The lease of the facility is compounded by the fact that the hangar must be a working hangar as opposed to a storage hangar, with the lessee obligated to provide an airframe and power plant mechanic with an inspection authorization. In addition, lease of the facility differs from prior leases because the current lease with the City' s fixed base operator for the airport extends a right-of-first-refusal to the fixed base operator affording the operator the opportunity to rent the facility once the terms and conditions of the lease are established through the competitive process. As a consequence, there were several steps to the process of leasing this facility. Subsequently, the City Council, on March 12, 2001, by adoption of Resolution No. 2001-023, designated that the best bid for such lease was made by Jimmy D. Smyers of Powderly, Texas, in the amount of $875.00 per month for a term often (10) years. This amount represents a considerable increase in monthly rental fees from the previous $375.00 charged for this facility. The City's designation of Jimmy D. Smyers as a successful tenant was conditioned upon offering the lease agreement on the same terms and conditions to J. B. Richey, the holder of a right-of-first-refusal for the lease of the hangar as the City's fixed base operator. Subsequent to the Council's action, staff tendered the lease to Mr. Richey for his consideration, and Mr. Richey has since declined to exercise his right-of-first-refusal. Therefore, it is appropriate to go forward with award of the lease to Mr. Smyers. DESCRIPTION: The proposed resolution would authorize award of the lease agreement to Jimmy D. Smyers of Powderly, Texas, as the highest and best bidder for the lease a Hangar H at Cox Field Airport. This lease would be effective on May 1,2001. RECOMMENDED ACTION: Approval of a resolution authorizing award of the lease.