Agenda Item Wording:
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Authorize an Amendment and Extension to Airport Lease Agreement and Ordinance Adoption - An Introduction and first reading of Ordinance No. 2025-08 authorizing the City Manager to execute an amendment and extension to the Airport Lease Agreement between the City of Visalia and Aircraft Mechanical Services, Inc.for its location at the Visalia Municipal Airport.
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Deadline for Action: None
Submitting Department: Administration - Airport
Contact Name and Phone Number:
Jody Miller, Airport Manager, (559)713-4282, Jody.Miller@visalia.city
John Lollis, Assistant City Manager, (559)713-4323, John.Lollis@visalia.city
Department Recommendation:
Staff recommends that the City Council approve the first reading of Ordinance No. 2025-08 authorizing the City Manager to execute an amendment to the current Airport Lease Agreement with Aircraft Mechanical Services, Inc. (AMS), adding four (4) additional five (5) year mutual extension option periods to the current lease agreement. These options would be exercised upon mutual agreement sequentially at the conclusion of the current lease which ends in 2032, leading to a potential new lease end date of 2052. The amendment also adds Byron Vander Weide as an additional LESSEE with AMS.
Background Discussion:
At its meeting on May 20, 2002, the City Council authorized a thirty (30) year lease agreement between the City of Visalia and Darrel Tunnel Co. for a hangar at Visalia Municipal Airport beginning on July 1, 2002 and ending on June 30, 2032. Darrel Tunnel Co. was subsequently incorporated as Aircraft Mechanical Services, Inc. (AMS) on January 20, 2004. AMS is requesting four (4) additional five (5) year mutual extension options be added to the lease. The proposed lease amendment contains a clause that the LESSEE (AMS) shall provide LESSOR (City) with a written request to extend the term of the Lease pursuant to the requirements of Section 2.A of the proposed amendment at least Ninety (90) days prior to the end of the current term, and thereafter, at least Ninety (90) days prior to the expiration of each mutually agreed to five (5) year extension period. LESSOR reserves the right to deny any extension request, and approval of any extension request by LESSOR shall not be deemed or otherwise interpreted as an approval of any subsequent extension request.
Staff have verified that this agreement is permissible with the Federal Aviation Administration (FAA) as well as with the City Attorney. This proposed extension allows the City to assist a longstanding good tenant at the Airport in providing additional lease term in consideration of planned hangar improvements
It should also be noted that at a later date, AMS intends to present Airport staff with a proposal to add a fuel tank to its operations once the initial improvements to the building have been completed. Staff will present the AMS request to Council once this proposal is received for consideration of approval.
The proposed amendment also adds Byron Vander Weide as an additional LESSEE with AMS, Inc. upon the request of both AMS, Inc. and Vander Weide.
Fiscal Impact:
The Airport will continue to receive the currently agreed upon monthly land lease rental rate of One Thousand Three Hundred and Sixty-Nine dollars and Forty-Nine ($1,369.49) plus annual Consumer Price Index (CPI) increases, through the end of the current lease agreement, and new lease rates will be negotiated for the mutual option periods at the time of adoption.
Prior Council Action:
May 20, 2002: Council authorized the current Airport Lease Agreement and Ordinance No. 2002-10 between the City of Visalia and Aircraft Mechanical Services, Inc. (AMS).
Alternatives:
City Council could not authorize the City Manager to execute an amendment and extension to the Airport Lease Agreement between the City and AMS, resulting in the current Agreement remaining effective until June 30, 2032.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to approve the first reading of Ordinance No. 2025-08 authorizing the City Manager to execute an amendment to the current Airport Lease Agreement between the City of Visalia and Aircraft Mechanical Services, Inc. (AMS) for its location at the Visalia Municipal Airport, extending the current lease for the terms specified within the staff report.
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Environmental Assessment Status: NA.
CEQA Review: N/A
Attachments: .
1. Draft Amendment to Airport Lease Agreement
2. Draft Ordinance 2025-08
3. Airport Lease Agreement - July 7, 2002
4. Ordinance No. 2002-10
5. City Council Agenda Staff Report - May 20, 2002