Thanks to a new lease agreement approved by the Lebanon City Council on Tuesday, the city’s municipal airport should soon be getting a facelift.
In a unanimous show of approval, a lease agreement for the corporate aircraft hangar west side lot C found favor with the city and will soon pass to the care of SAG Properties, LLC.
The city expressed intent that this portion of the airport should be devoted to business aircraft of companies that will encourage the economic development and prosperity of Lebanon and Wilson County.
The agreement extends a 40-year lease to SAG Properties that officially commences on Sept. 15. After the 40 years expire on Sept. 14, 2061, SAG Properties will have an option to extend the agreement an additional 10 years.
Once the term expires, whether 40 or 50 years from now, the hangar and all improvements become the property of the city. However, SAG Properties will have the first right of refusal at the end of the agreement to rent the hangar and improvement from the city at a “fair market value,” which will be determined by an independent aviation appraiser.
Per the lease agreement, SAG Properties shall begin the construction process promptly once approved by the city council. The base rent reflects the square footage of the leased premises containing 10,000 square feet. The base lease sum is $0.37 per square foot for a total of $3,700 per year.
The company will be required to maintain a policy of insurance in the amount of the insurable value of the improvement on the premises and a liability policy in the amount of $1 million. They will also pay all utility installation and service charges incurred in providing and furnishing necessary electric, gas, water, sewerage and telephone infrastructure.
During the council meeting, an ordinance to increase the rates for T-hangars in rows A and B of the airport passed its second reading, making it official. The ordinance implements a 20% increase to go into effect on Jan. 1, 2022.
It establishes staggered increases over the next two years, with an addendum that leases be signed to four-year contracts. The first increase of 20% starts next year, with the second 20% increase starting in 2024.
As that increase is compounded, it ultimately represents an overall 44% increase of current rates.
Those current rates are $200 per month for hangars in row A. When the increase goes into effect, the new monthly rate will be $240 per month. In 2024, those rates will increase again to $288 per month.
In row B, the hangar rates at present are $245 per month. In January, those rates will increase to $294 per month. In 2024, those rates will increase to $352.80 per month.
The debate over how much to raise the rates was recently settled by the airport commission, which submitted this recommendation of two 20% increases spread between January 2022 and 2024.