TITLE
Consider a memorandum/resolution approving a lease agreement with CSI Aviation, Inc. at the Killeen Fort Hood Regional Airport.
SUMMARY
DATE: June 1, 2021
TO: Kent Cagle, City Manager
FROM: Mike Wilson, Executive Director of Aviation
SUBJECT: CSI AVIATION LEASE AGREEMENT APPROVAL
BACKGROUND AND FINDINGS:
In 2019 and 2020, the City received two grants through the Federal Aviation Administration’s (FAA) Military Airport Program (MAP) for the purpose of building a commercial hangar to accommodate the expansion of a current tenant, CSI Aviation. At that time, the Aviation fund did not have the available funding needed for the required match of $375,000. CSI agreed to fund the match with a cash contribution through a performance agreement signed by both parties in December of 2019. The intent was for the City to repay CSI the $375,000 plus interest in the form of rent abatements for the first five years of the lease.
Staff has negotiated a lease agreement with CSI Aviation, Inc. to lease a 22,646 square foot hangar and office space at Killeen-Fort Hood Regional Airport (KFHRA). The term of the lease agreement is for a period beginning February 1, 2022 and ending January 31, 2032. The agreement will authorize the tenant to conduct air transportation and related general aviation operations, including but not limited to passengers, charter, air cargo, medical flight services, aircraft maintenance and fixed base operations services at KFHRA. The lease also authorizes the City to repay CSI for the current amount of cash contributions they have made plus interest, in the amount of $50,730.15 and terminate the performance agreement signed in 2019. Aviation now has adequate funding to pay the match requirement, thus keeping us from paying any further interest and allowing us to receive the full rent amount once the building is built and occupied.
THE ALTERNATIVES CONSIDERED:
Alternatives considered were: (1) leave the facility vacant while continuing t...
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