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HomeMy WebLinkAboutRES 041426-5.S - Amending Airport Leasing Policy to Align with City Code 12.32.300 AmendmentRESOLUTION NO. OLA 14;?,& - 5.5 AN RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS, UPDATING SECTION III OF THE GEORGETOWN EXECUTIVE AIRPORT AT JOHNNY GANTT FIELD LEASING POLICY; REPEALING CONFLICTING RESOLUTIONS; INCLUDING A SEVERABILITY CLAUSE; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City Council is amending the City's Code to allow Airport lease lengths to exceed thirty years; WHEREAS, the City Council has determined that the Airport lease lengths shall not exceed the maximum duration allowed by the FAA or TXDOT, subject to the Johnny Gantt Field Leasing Policy (hereafter "Airport Leasing Policy"); WHEREAS, the City Council, in order to ensure compliance with the newly amended City Code and to ensure the Airport's benefits continue to be made available to all types, kinds, and classes of aeronautical activity on fair and reasonable terms and without unjust discrimination, therefore finds that updating Section III of the Airport Leasing Policy will be in the best interest of the public and the Georgetown Executive Airport, as set out herein. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS: Section 1. The meeting at which this resolution was approved was conducted in compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. Section 2. The facts and recitations contained in the preamble of this resolution are hereby found and declared to be true and correct and are incorporated by reference herein and expressly made a part hereof, as if copied verbatim. Section 3. The Section III of the Leasing Policy is updated as stated herein as Exhibit A and is hereby adopted. Section 4. All resolutions that conflict with the provisions of this resolution are hereby repealed, and all other resolutions of the City not in conflict with the provisions of this resolution shall remain in full force and effect. Section 5. If any provision of this resolution, or application thereof, to any person or circumstance, shall be held invalid, such invalidity shall not affect the other provisions, or application thereof, of this resolution, which can be given effect without the invalid provision or application, and to this end the provisions of this resolution are hereby declared to be severable. Resolution Number: Ozi 1,4 xG — 5 . 5 Page 1 of 2 Subject: Updating Section III of the Airport Leasing Policy Date Approved: April 14, 2026 Section 6. The Mayor is hereby authorized to sign this resolution and the City Secretary to attest. This resolution shall become effective and be in full force and effect immediately in accordance with the provisions of the City Charter of the City of Georgetown. PASSED AND APPROVED on the 141h of April, 2026. ATTEST: CITY OF GEORGETOWN: 2ab���( qIL" J Robyn Dc� Wore, City Secretary Josh Schroeder APPROVED AS TO FORM: Skye laassoCity Attorney Resolution Number: 0LA I L4 ou —5 ,S Page 2 of 2 Subject: Updating Section III of the Airport Leasing Policy Date Approved: April 14, 2026 SECTION III LEASE RATES, TERMS AND PROVISIONS Rates and Charges TxDOT/FAA guidelines require that the Airport be as financially self-sustaining as possible. Whenever possible, rental rates for unimproved Airport land or existing hangars and related facilities used for commercial aviation activities are set at market value of the property in use. Market value will be determined through an appraisal or market analysis of comparable parcels or structures undertaken by the Airport. A rate adjustment based on the Consumer Price Index -Urban (CPI-U) for the Dallas -Fort Worth region will be applied to leases on either a regular basis, but no more than annually, between appraisals to facilitate parity between new and longstanding tenants. In an effort to stimulate economic development, support aviation industry growth, and encourage airport property development, the Airport may consider a reduced rate for the following property uses: 1. Large Scale Development 2. Aeronautical Manufacturing 3. Substantial aviation -related educational facilities (such as an FAA -certified A&P Program or a Flight Training Program) 4. Any commercial business that creates and maintains new jobs that pay, on average, no less than 115 percent of the average annual wage for City of Georgetown, as determined by the City of Georgetown Office of Business and Economic Development Each Airport tenant, subtenant, licensee, or occupant user of the Airport shall pay the then applicable and appropriate rate or fee for such tenancy or use. Operating expenses may also be included in Airport Leases for the cost of upkeep and maintenance of common areas and facilities in and adjacent to the leased areas. Each airport lessee will be required to pay Williamson County Property taxes. All Leases: Each lease will be evaluated on its own merit. The current maximum term length is determined by the more restrictive of current City of Georgetown Ordinance, TXDOT or the FAA. The lease may be written to have an initial term length with one or more extension periods. The total length will not exceed the limits set previously. All lease lengths shall be at the sole discretion of the City. At the expiration of an existing lease the Title to Lease rules will take effect. See below. Lone Tcrm Ground Leases: The Georgetown Executive Airport at Johnny Gantt Field recognizes that allowing tenants to amortize their investments over a longer period of time can encourage further investment in Airport property. To this end, the Airport will consider entering into a lease with a term up to the maximum limit allowed by current City of Georgetown Ordinance, TXDOT or the FAA (the more restrictive limit applying) in those instances where a potential tenant has demonstrated to the Airport's satisfaction that they are prepared to make a significant investment in one or more of the following areas: a. Make a significant initial capital investment in new construction on the property. b. Make a significant capital investment in existing leasehold improvements. c. Create (and maintain) a significant number of new jobs, at higher -than -average wages. d. Make a significant investment in the extension of public infrastructure that will benefit the Airport as a whole (i.e., roads, water, sewer, navigation aids, etc.). Business Retention Considerations. The Airport recognizes the importance of retaining existing businesses that contribute substantially to the local economy. To this end, the Airport may consider entering into a new lease with an existing tenant for a term up to the maximum limit allowed by TXDOT or the FAA (the more restrictive limit applying). Title to lmarovements Title to all fixed improvements constructed or installed on leased or licensed premises shall remain with the Lessee or Licensee during the term, and any renewals thereto, of the Agreement. Upon termination of the Agreement, said improvements shall become the property of the Airport or, at the Airport's sole option, the Airport may require the Lessee to remove said improvements and restore the property to its original condition, all at no cost to the Airport or the City of Georgetown. Reversion After Ground Lease Term Following expiration of a Ground Lease, the land and structures thereon may be leased by the Airport under short-term Facility Leases, typically 1-5 years in duration, at market rates. These leases will be for the property and the building, with the ownership of said property and building residing with the Airport. For larger tracts, the lease rate will typically be predicated upon an appraisal done by an MAI who will set the base rate for the property and building. This information will be available to the prospective tenant. Terminal Building: The Airport will provide structural maintenance, heat and light, but will not provide janitorial service, revamping or other day-to-day services in any tenant's leased or licensed area unless the applicable agreement specifies that the Airport shall be compensated for such services. Airfield: The Airport will maintain all public use runways, taxiways, and aprons. Ramps and aprons leased or otherwise provided to sub -tenants or any other occupants will be maintained by the sub- tenants or occupant of any description as annotated in each respective lease. Land and Building: Tenants may be required to provide all maintenance of land and utility services to leased or licensed land and/or buildings. The Airport shall be sole judge of the quality of maintenance and, upon written notice, may require immediate improved maintenance. If such maintenance is not performed, the Airport may perform such maintenance and invoice the costs of the maintenance to the Lessee, Licensee, or occupant. Non-payment of invoices will be grounds to terminate the agreement that allows the occupant to occupy the property or conduct the activities. Assignments/Subletting/Sale of Stock/Sale of Facilities Constructed The operation of any tenant on the Airport shall be for the public interest and furtherance of Airport activity. Tenants are entrusted with the duty and obligation of providing the public with the highest level of services and facilities, and it is therefore, necessary that the tenant's activities and/or operations be subject to continuing scrutiny by the Airport Manager or Designee, and that the tenant always operate in a businesslike fashion, efficiently and always with courtesy to the public and to the staff of the Airport. For these reasons, the following shall be always be required of tenants: The Airport shall retain total control and exercise sole discretion over the assignment or any method of changing or delivering to others any of the functions to be performed by the tenant, and any such assignment shall have prior written approval by the Airport Manager or Designee. Tenant may sublease a part of the leased area to others only after first receiving written approval from the Airport Manager. Public Service Goals The FAA encourages airport sponsors to establish "Minimum Standards" for providing services to the general public at an airport. The Georgetown Minimum Standards are published on the City of Georgetown website https://georgetowntexas.gov/transportation/georgetown executive_airport_at_johnny_gantt_field /) and are automatically incorporated into each lease in order to ensure the level of public service is of a high quality, consistent with the goals of the Airport. Remedy clauses will be included in all lease agreements for inadequate performance, the quality of which will be determined solely by the Airport Manager or Designee. Encumbrances The Airport may pen -nit a tenant to subordinate leasehold -owned improvements (NOT LAND) for financing purposes, with a mortgage approved by the Airport Manager or Designee. If such an arrangement is permitted the mortgagee may be granted the right to cure any default including the assumption of the lease. This encumbrance provision will assist private investment in financing capital improvements, protect the mortgagee's interest, and does not endanger the interest of the Airport. NOTICE: Obligations to pay rent and charges to the Airport shall not be subordinated. Indemnification and Insurance To the maxiinum extent permitted by Texas law, the tenant shall indemnify and hold harmless Georgetown Executive Airport at Johnny Gantt Field, City of Georgetown, its officers and employees and contacts from any and all liabilities, damages, losses and costs, including, but not limited to, reasonable attorneys' fees and paralegals' fees, to the extent caused by the negligence, recklessness, or intentionally wrongful conduct of the Lessee or anyone employed or utilized by the Lessee in the performance of this Agreement. This indemnification obligation shall not be construed to negate, abridge, or reduce any other rights or remedies which otherwise may be available to an indemnified party or person described in this paragraph. This does not pertain to any incident arising from the sole negligence of the Airport. The Tenant shall provide all insurance deemed appropriate by the Airport Manager or Designee, as determined by the City of Georgetown Safety & Risk Management Division. Taxes Williamson Central Appraisal District (WCAD) requires that all building owners/lessees will pay a property tax on the lease amount for the year. It is the responsibility of the lessee to pay their property tax. If your aircraft is registered under a business that is based here, there will be a tax paid. Federal, state, or local taxes not paid by Lessee or Licensee may be deemed sufficient cause to cancel or terminate the lease. Rules and Regulations Airport rules and regulations shall be a part of each lease. Such regulations may be amended from time -to -time by the Airport including such reasonable and uniform landing fees, rates or charges, as may from time to time be levied for airfield operational privileges and/or services provided at the Airport. Lessee shall also comply with any and all applicable governmental statutes, rules, orders, and regulations. A violation of any Airport rule or regulation may be deemed sufficient cause for lease cancellation or termination by the Airport. Appraisals Appraisals may be used for determining the Fair Market Value (FMV) of the highest and best use of land and/or facilities the Airport leases. The Airport may require a prospective tenant to pay for an appraisal and may reasonably withhold approval of a proposed appraisal firm lacking demonstrated experience in airport appraisals. Once an appraisal is conducted for land and/or facilities, the Airport may apply the appraisal on other similar land and/or facilities for up to five (5) years. If five years have lapsed since an appraisal has been conducted, a new appraisal for that category may be conducted if it is determined that the prior appraisal is out of date. In lieu of appraisals the Airport may, at its option, apply airport industry standards for determining the FMV of granting privileges and leasing land and/or facilities for aviation related or airport support agreements. Variance Prospective tenants who cannot meet the criteria identified in this Leasing Policy may make application for variance through the Airport Manager or Designee. Upon reviewing justification for such application, the Airport will submit the request to the Georgetown Transportation Advisory Board, who may or may not recommend approval to the Georgetown City Council. The City Council may grant a variance by affirmative majority vote during one voting session. Variances are not favored and there must exist compelling reasons for the granting of any variance. The basis for the variance must always be beyond the control of the applicant for the variance. Economic hardship shall never be a valid basis upon which to grant any variance. Zoning All leases shall remain consistent with the Airport Master Plan, Airport Development Standards and the Airport Layout Plan (ALP), as well as the City of Georgetown Comprehensive Land Use Plan Dominant Agreements Any Lease, License or Operating Agreement with the Airport is subject to all existing agreements between the Airport and the Federal Aviation Administration (FAA), the Airport and the State of Texas, and the Airport and City of Georgetown. Leases, Licenses and SASOs are sometimes subject to FAA approval, which approval may be withdrawn. Accordingly, the Airport reserves the right to immediately terminate any lease that the FAA has found to interfere with the safe operation and maintenance of the airport, or otherwise conflict with regulations governing public -use airports. Furthermore, and during the time of war or national emergency, the Airport shall have the right to lease the landing area or any part thereof to the United States Government for military or naval or similar use, and, if such lease is executed, the provisions of this Lease insofar as they are inconsistent with the provisions of the lease to the Government, shall be suspended. Other Lease Provisions This Leasing Policy does not include all of the provisions of Airport leases.