Title
Consider a memorandum/resolution approving a Ground Lease Agreement at Skylark Field Airport with RD Aviation, LLC.
Body
DATE: February 17, 2026
TO: Kent Cagle, City Manager
FROM: Jarrod Provost, Assistant Director of Aviation
SUBJECT: Authorize a ground lease agreement with RD Aviation LLC, at Skylark Field
BACKGROUND AND FINDINGS:
Airport Staff have negotiated a lease agreement with RD Aviation, LLC, in order to lease vacant ground space at Skylark Field. The vacant land includes the former site of the Killeen Municipal Airport terminal building that was demolished in 2026. The Agreement requires RD Aviation to construct one large hanger for the storing of aircraft and potential commercial aviation related operations. The term of the lease agreement is thirty (30) years, with two thirty (30) year renewal options, which will commence upon completion of construction of the aircraft hangar.
As part of the Agreement, RD Aviation agrees to use the premises solely for aviation-related purposes and grants RD Aviation the right to sublease hangars to various third parties for aviation-related purposes, provided that all such arrangements for subleases with a term greater than five (5) years will be subject to City approval.
RD Aviation will also be responsible for the installation and use of all utility services to all portions of the land and for all other related utility expenses, including expenses required for the installation of meters. RD Aviation is also responsible for all maintenance and repair expenses related to the land and hangars that it constructs on the land.
This lease provides additional aircraft storage capacity and revenue for the Aviation Department and has the potential to attract aviation related businesses that would create jobs, generate economic growth, and increase property value.
Pursuant to Section 145 of the City Charter for the City of Killeen, the Lease Agreement will become effective thirty (30) days following the passage of the resolution effecting it.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
N/A
CONFORMITY TO CITY POLICY:
This item conforms to City policy.
FINANCIAL IMPACT:
What is the amount of the revenue/expenditure in the current fiscal year? For future years?
There is no expected revenue in FY 2027.
For future years, the lease agreement provides revenue for the City that the tenant will pay by way of a ground rate following the completion of the construction of each hangar. The ground rate will be $0.04 per square foot for the first thirty-six (36) months of the lease agreement; $0.05 per square foot for months thirty-seven (37) through fifty-nine (59); and $0.05 per square foot beginning on month sixty (60) through the remainder of the Agreement with a consumer price index increase every second year thereafter.
Is this a one-time or recurring revenue/expenditure?
Recurring revenue
Is this revenue/expenditure budgeted?
N/A
If not, where will the money come from?
N/A
Is there a sufficient amount in the budgeted line-item for this revenue/expenditure?
For future years, Aviation will budget for this revenue is the Aviation Enterprise Fund, Land Lease Tenants account 525-44232-600-602-000000.
RECOMMENDATION:
Staff recommends that the City Council approve the lease agreement with RD Aviation, LLC, and authorize the City Manager or designee to execute same as well as any and all amendments and lease actions requires and as allowed per federal, state, or local law.
DEPARTMENTAL CLEARANCES:
Purchasing
Finance
Legal
ATTACHED SUPPORTING DOCUMENTS:
Agreement
Certificate of Interested Parties
Presentation