2004/10/04 Resolution 4941 - Airport LeasesREPORT TO:
FROM:
SUBJECT:
MEETING DATE:
BACKGROUND:
a Kalispell
City of
Po-, Offlice Box 1997 - Kahsptll, Ivloniana 9903-1997-Telephone (406)758-.700 Fax(406)758-7758
The Honorable Mayor Pamela B. Kennedy and City Council
Susan Moyer, Community Development Director
Frank Garner, City Manager
Changes to Airport Leases
October 4, 2004
On September 20, 2004, Council heard at a workshop the request by the City Airport Manager regarding a need for "clew
construction" leases to run a term of twenty years or the life of the financing up to twenty years with two five year options to extend.
The letter from Glacier Bank stating that this is standard banking practice was included in your September 20a' packet.
Additionally, all new construction lease holders will enter into a Developers Agreement at the tirne the building permit is taken out.
The Developers Agreement will insure the new structure is placed upon the tax roles and that the taxes paid will meet a pre-
determined amount, set by the County Tax Assessor. This document will then generate a guaranteed amount of taxes in the event
future state taxing legislation results in the reduction of personal property taxes. This Developers Agreement will be similar to the
standard "payment -in -lieu of taxes" agreement used in all city developers' agreements.
RECOMMENDATION: Council approves Resolution No. 4941 adopting the change to the Airport lease document:
• Renewal of existing leases to be based on a 10-year lease with the option of two additional five year terms.
• New construction leases will run for a period of 20-years or the life of the construction financing as established by the
lending institution. This change allows flexibility for new hanger owners to negotiate with lending institutions for
permanent financing based on size and cost of the project.
FISCAL IMPACT: Based on the written interest provided to council at the September 20"' workshop, an estimated $22,000+
will be generated in an increased tax base and approximately $15,000 in annual lease payments.
ALTERNATIVES: As suggested by Council.
Respectfully submitted,
Susan Moyer, Director,
Community Development
All
..
Fifank Garner,
Interim City Manager
RESOLUTION NO.4941
A RESOLUTION TO ALLOW THE TERM OF HANGER LEASES AT THE
KALISPELL CITY AIRPORT TO EXTEND TO TWENTY YEARS IF SO REQUIRED
BY THIRD PARTY FINANCING AND TO REQUIRE NEW CONSTRUCTION LEASE
HOLDERS TO ENTER INTO A DEVELOPERS' AGREEMENT WITH THE CITY OF
KALISPELL.
WHEREAS, on July 1, 2003 the Kalispell City Council passed Resolution No. 4804,
establishing the fee structure and lease rates for hanger leases at the Kalispell City
Airport; and
WHEREAS, on March 1, 2004 the Kalispell City Council, by motion, approved the standard
lease form for hanger leases at the Kalispell City Airport, which standard lease
forth offers a 10 year term lease with two five year extensions; and
WHEREAS, further review by Council and evidence provided by current and potential lessees
of hanger sites on the airport property indicate that investment at the airport by
means of third party financing would be impaired unless the City offers up to a
20-year term lease for third party financing in the lease improvement; and
WHEREAS, it is in the best interest of the City and the Airport Tax Increment District that the
City enter into a developer's agreement with new construction lease holders
which insures that any new structures are placed on the City tax rolls and that
such tax payments meet a predetermined amount as set by the County Tax
Assessor.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL AS FOLLOWS:
SECTION I. The City Manager is hereby authorized to execute hanger leases on behalf
of the City of Kalispell for terms longer than 10 years or for a term of up
to 20 years if third party financing in the lease improvement requires such
term.
SECTION II. The City shall hereafter enter into a developer's agreement with new
construction airport hanger lease holders which insures that any new
structures are placed on the City tax rolls and that such tax payments meet
a predetermined amount as set by the County Tax Assessor.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF
THE CITY OF KALISPELL, THIS 4"' DAY OF OCTOBER, 2004.
Pamela B. Kennedy
Mayor
ATTEST:
Theresa White
City Clerk