Report Prepared by: Karen Baker, Economic Development Associate, Merced Yosemite Regional Airport
Title
SUBJECT: Assignment and Restatement of Ground Lease for a Private Hangar at the Merced Yosemite Regional Airport with Hangar # 42, LLC
REPORT IN BRIEF
Assignment and Restatement of a private hangar ground lease for Corporate Hangar #42 at the Merced Yosemite Regional Airport with Hangar # 42, LLC.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the lease Assignment and Restatement between Hangar # 42, LLC. and the City of Merced; and,
B. Authorizing the City Manager or the Deputy City Manager to execute all necessary documents.
Body
ALTERNATIVES
1. Approve as recommended; or,
2. Approve, subject to modifications as conditioned by Council; or,
3. Deny the request completely; or
4. Refer to staff for reconsideration of specific items as requested by Council; or,
5. Continue item to a future Council meeting (date to be specified in City Council motion).
AUTHORITY
Charter of the City of Merced, Section 200.
CITY COUNCIL PRIORITIES
City of Merced adopted Budget Fiscal Year 2022-2023.
DISCUSSION
On October 10, 2004, the City of Merced entered a private hangar ground lease with FWF, Ltd., a Washington State Corporation, owned by Mr. John T. Sessions. This ground lease allowed FWF, Ltd. To build an 80’x80’ corporate style aircraft hangar for personal use. Construction of the hangar was completed in 2006. The hangar is currently identified as Corporate Hangar #42.
In November 2013, FWF, Ltd. sold Corporate Hangar #42 to Flatstone Holdings, LLC., an Arizona limited liability company owned by Mike Trevino. The City Council approved the Restatement and Assignment on January 22, 2014.
Mr. Trevino sold the hangar to Hangar # 42, LLC on September 14, 2015. The lease terms and conditions are the same as those in the Restatement and Assignment of the Lease approved by the City Council when Mr. Trevino purchased Hangar #42. Hangar # 42, LLC assumed all rights and obligations as of September 14, 2015 to present. Hangar # 42, LLC paid the following amount to bring the account up to date:
10/10/2014- $ 320.00 10/10/2018-$ 1792.00 10/23/2022-$ 1792.00
10/10/2015- $ 1792.00 10/10/2019-$ 1792.00 Total $ 14,656.00
10/10/2016- $ 1792.00 10/10/2020-$ 1792.00
10/10/2017- $ 1792.00 10/10/2021-$ 1792.00
Key Ground Lease Terms
Notable terms of the Assignment and Restatement of Ground Lease Agreement include:
Parties
Lessor: City of Merced
Lessee: Hangar # 42, LLC.
Premises
Real Property located at the Merced Yosemite Regional Airport, as a portion of 059-420-056 as described on the map, Exhibit “A”, and described in Exhibit “B”.
Term
30-year ground lease that will expire in 2034.
Tenant Improvements
No tenant improvement allowance is included.
Utilities and Maintenance
Hangar # 42, LLC. will be responsible for all utilities and maintenance for the premises.
Assignment and Subletting
Lessee is prohibited from assigning or subletting His interest in said premises.
Staff is requesting that the City Council approve the Assignment and Restatement of the Ground Lease with Hangar #42, LLC. The tenant is caught up on past payments, and the lease will generate revenue for the Airport.
IMPACT ON CITY RESOURCES
The ground lease revenue generated is deposited into the Airport Revenue Account 561-1303-352.03-05.
ATTACHMENTS
1. Restatement and Assignment of Ground Lease Agreement for Hangar # 42, LLC.