May 7-13 is proclaimed as Public Service Recognition Week and National Travel and Tourism Week
PASO ROBLES — The City Council had difficulties coming to an agreement for a new airport lease policy and strategy during the Tuesday night meeting on May 2. Staff brought forward a new policy and lease agreement for the Paso Robles Municipal Airport after recent California State Law and Federal Aviation Administration (FAA) policy changes.
Councilmembers disagreed on the increased lease rates and its effects on long-term lease agreements at the airport. Councilman John Hamon recused himself from the agenda item due to a conflict of interest, leaving only four council members to vote. This led to several motions failing due to a tied vote.
The essential elements of the revisions are as follows:
In the case that existing lease agreements cannot be extended because their combined length would then exceed the 35-40 year limit per FAA guidance:
- At expiration, with no development proposed, existing lessees may enter into a new short-term agreement (5 years);
- At expiration, with commensurate capital investment, existing lessees may enter into a new long-term agreement.
Clarifications were made to the City’s obligatory reversionary rights. The basic premise of reversion being that at the conclusion of the lease term all improvements revert to the Airport and allow its further occupancy as an Airport-owned facility. Rental rates for any new lease agreement will consider the Airport’s ownership of the improvements.
Existing reversionary language will be honored upon expiration with any subsequent lease agreements including updated language.
In accordance with FAA orders and guidelines, rental rates for leases on non-aeronautical sites will be based on Fair Market Value and rental rates for aeronautical sites based on fair and reasonable value as established for the site. FAA guidelines and periodic market analysis are the method in which market rates are determined.
Additionally, the airport commission revised the lease agreement to reflect recent FAA guidance as follows:
In addition to the yearly Consumer Price Index (CPI) adjustments, rent adjustments can be made every five years by representative appraisal. Increases are capped at 20 percent over a five year period.
A new monthly Base Rent shall be determined by representative appraisal at the expiration of the initial lease term and as a condition to exercise any renewal options.
An additional event of default is established to address the failure to complete proposed development within the agreed upon timeframe.
Finally, Councilmember Steve Gregory made a motion to approve the new lease agreement and policy as is, but with staff bringing the agreement back to the council for review. The motion was seconded by Councilmember Fred Strong and approved with a 3-1 vote, with Mayor Steve Martin voting no.
Several proclamations were made at the start of the meeting. Martin proclaimed May 7-13 as Public Service Recognition Week, the entire month of May as National Foster Care Month, and the week of May 7-13 and the entire month of May as National Travel and Tourism Week and California Tourism Month.
The next Paso Robles City Council meeting is scheduled for Tuesday, May 16, at 6:30 p.m.
