2015-07-22 Council Airport Committee Minutes� �i i
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Director of Aviation, Mr. Hix asked the committee if the Board could start with Item (3) three
to appoint a committee chairman.
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Newly elected Council Member and Chair, Kathleen Wazny, continued with Item 1.
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(See comments above.}
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Director of Aviation, Mr. Hix provided some history on several leases Business Air
Management has with the City of Denton Airport. BAM is building a hangar now on land
they already lease and plan to build another hangar next to the property where the new
building is being built. Consalidating the leases makes the total square footage under lease
785,057 square feet of property. All of the consolidated square footage will be leased at
($0.1942) cents per square foat. Two new parcels added to the lease will be charged at
twenty seven cents ($0.27) per square foot. This will be a forty-year lease.
Airport staff wants ta have this item placed on the August 4th Council agenda with the
committee's recommendation.
Mr. Ward commented that their lease started in 2001, and with the Economic Incentive to
their company they are happy with this lease. Mr. Ward wanted to express his enthusiasm
for being at the Denton Enterprise Airport, and that he has plans to be at the Airpart for a
long time.
Director of Aviation, Mr. Hix, asked the Council Airport Committee to recommend this
lease as written.
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Mr. Damon Ward left the meeting.
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Director of Aviation, Mr. Hix, cammented that this lease is a new industry, Survival
Systems USA, which pravides aviation water rescue training for helicopter and fixed wing
aircraft crews using state-of-the-art simulators. Part of this facility is a water training pool,
with simulator equipment that is computerized. The training is required by the military and
some commercial flight providers. Council Member Joey Hawkins asked why this
company wants to come to Denton. The individuals went to four or five airports that they
wanted to look at; and, they came to Denton because of our Economic Development and
Airport Staff. Michelle Cunningham and Mr. Hix hosted the individuals at our airport and
satisiied their requirements for location of their facility and training staff.
Council Member and Chairman Kathleen Wazny offered congratulations to our Economic
Development Department, Michelle Cunningham, and the Airport Staff for recruiting this
company to Denton. Chairman Kathleen Wazny asked Director of Aviation Mr. Hix when
they want to start ground work. Mr. Hix said they want to have their building built by
January 1, 2016. No building permit has been issued, yet, but the drawings are almost
finalized.
Normally, the Airport Staff would nat bring this lease to the committee until signed.
Because this is a time-sensitive lease, and the owner is negotiating financing with their
bank, it is being presented for Cauncil Airport Committee consideration in anticipation of
receiving the signed lease soon.
Airport Staff will need to bring this lease back to the Council after the lease is signed.
Council member Greg Johnson asked if the only thing we are waiting on is the lease
document to be signed. He also asked if it has to come back through this Board or if the
CAC can make a recommendation to the City Council based upon finalizing the lease. Jon
Fortune indicated this Committee can make a recommendation, as long as the lease
document stays with the terms and canditions as presented. Mr. Hix indicated there may
be a separate document from the bankers in a form called an Estoppel. This is a normal
business practice with lenders for tenants constructing improvements on leased property.
Chairman Kathleen Wazny asked Jon Fortune to let the Planning Department know the
plans are coming soon, since this is a time sensitive project.
Council Member Joey Hawkins made a motion to approve the lease with the City of Denton
and Survival Systems USA as written followed by a second from Council Member Greg
Johnson. The motion carried unanimously.
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on this lot. Mr. Hix provided the lease to Mr. Hicks to review with his attorney, and, there
were no issues with the lease.
Mr. Hix asked the Committee to provide a recommendation on Mr. Hicks' lease like the
Survival Systems lease, with approval as long as no terms or conditions are changed.
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Council Member Greg Johnson asked for information regarding why is the City getting
into the landlord business with improved properties at the Airport. He asked what return
on our investment does the Airport receive from praperty improvements. Mr. Hix
commented that there are two ways to calculate this: First, the annual revenue from
invested funds would be about 10% of the total amount invested, but, when the value of
the property is included in the calculation, the rate of recovery for invested funds would be
less. Second, the formula for return on investment uses a 4.25% annual return with
principal and interest amortized over a twenty (20) year term.
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the bids. Airport Staff's recommendation is to re-scope the project with a private sector
restaurant developer to help fund a larger building.
Airpart staff is asking for direction regarding the proposal to re-scope the project with a
restaurant developer, and then rebid the project.
The committee discussed different options to put a RFP together. Mr. Greg Johnson
volunteered to help with terms on an RFP to select an investor/operator for a restaurant as
part af the terminal expansion project.
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Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of
community interest regarding which no action will be taken, to include: expressions of
thanks, congratulations, or condolence; information regarding holiday schedules; an
honorary or salutary recognition of a public official, public employee, or other citizen; a
reminder about an upcaming event organized or sponsored by the governing body;
111fOT1111$IOIl TegaT'C�lrig a SOC1aI, ceremonial, or community event organized or sponsored by
an entity other than the governing body that was attended or is scheduled to be attended by
a member of the governing body or an official or employee of the municipality; or an
announcement involving an imminent threat to the public health and safety of people in the
municipality that has arisen after the posting of the agenda.
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9. Adjaurnment:
1:00 p.rn.
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THLEEN WAZNY
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COMMITTEE CHAIR
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� �J��11� MULLINS
I�.].aC'C�I�[�ING SECRETARY