SR-6-I (108)
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APR 1 2 1994
AP:TAW:mh Santa Monica, Call.fornl.a
Council Meeting 4/12/94
To: Mayor and City Council
From: Cl.ty Staff
Subject. Recommendation to Authorize City Manager to
negotiate and execute a lease with Air Capital
Inc. for hangar space at Santa Monica Airport.
Introdnr.t ion
This report requests the City Council to authorize the City
Manager to negotiate and execute a lease with Air Capital,
Inc. for hangar space at the Santa Monica Airport Specialty
Hangar Building.
Bnc.kground
The Specialty Hangar Building has hangar space available for
lease to aircraft specialty operators to conduct flight
training, aircraft maintenance and repair, avionics work and
aircraft charter and rental. The hangar space is located on
the upper level of the building with the lower level reserved
for non-aviation businesses. The revenue from the hangar
space is used to pay the debt service on the construction of
the building. There has been very little turnover of tenants
in the building since l.t was fl.rst leased in 1989. Recently,
with the recession the airport has seen tenants downsizing
and some tenant turnover in the building. The airport
receives market rents for the aVl.ation space.
APR 1 2 199It
C,-I
Discussion
Air Capital, Inc. intends to occupy 10,000 square feet of
hangar space for a period of five years beginning May 1,
1994. Air Capital provides aircraft maintenance, sales and
charter services to the public. The lease negotiated with Air
Capital is similar to previous leases approved by Council for
the Specialty Hangar aviation spaces. The company is sound
financially and reference checks were positive. The company
has been in the space for a period of one year on a month-to-
month lease and the operation is compatible with the other
aviation tenants.
Budaetary/Financial ImDact
The five year lease with Air Capital will generate $242,778
in revenue for the City <:rhe revenue is included in the
1993/94 budget and will be budgeted for 1994/95.
Recommendation
Staff recommends that the City Council authorize City Manager
to negotiate and execute a lease with Air Capital Inc for
hangar space In the Specialty Hangar Building at Santa Monica
Airport.
Prepared by: Timothy A. \"Ialsh, Airport Manager
Jeffrey P. Mathieu, Director, Resource Management