Al wrote:
Our airport is opening up some new areas for hanger
construction. There is some concerns over the length of the new lease
terms and I was hoping to get the following from some of your airports:

1. Length of ground lease in year (20-30-40, more?)
2. Number of term renewals (one or two or more):
3 Length of renewal period (5 years, more)?
4. Lease rate per square foot for original lease term? For renewal terms?
5. Reversion clause at end of lease and renewal periods. (I'm not a
hanger owner, but apparently after these terms owenership of the hanger
reverts to the airport with no compensation to the owner? Is this
true? If so, why would anyone build a hanger and why would anyone buy a
hanger from someone without a long term remaining on the lease?)
6. Any other clauses?

I realize that these are a lot of questions. Hopefully some of you can
give me some insight.

Thanks.
- - -
Al Gilson
64 Skyhawk
SFF Spokane Wa

Let me give you some answers. I was the past chairman of our airport
advisory board and now on the board. Hangars have always been a topic as
we have been wanting the city to build more. What I have learned and
other locales may be different. 1) Investors want and need more than 20
years to recover their investment. Our city use to hold to 20 years
and finally came around. 2) the property does revert to the city as
sometime. But, the investor should have made his money back by then. 3)
I do not believe we have any limits on renewal numbers. Obviously the
first renewal will be the 30 years, etc. An investor will not want to
invest money for 30 years and then only have a contract for 5 years. 5)
Be sure the fire marshall is involved in the ground leases. The city
does have some rights in what you store in your hangars. Protects the
city and the other tenants next to you. 6) Hangars must be first and
foremost for airworthy aircraft, and not boats, household goods, etc.
However, you may want to allow that only if you meet the first part of
this statement.

That is all I can think of right now. We attempted to get the city to
build the hangars, but they wanted to go private. So we came up with the
ground lease agreement and hopefully we will soon break ground. I have
been trying for 10 years.

--

Regards, Ross
C-172F 180HP
KSWI