This action will approve a ground lease with Umatilla-Morrow County Head Start (UMCHS) on a non-aviation portion of the airport property for use as a bus barn.

The airport has approximately 28 acres of land north of Airport Way which has never been developed, and is recognized on the currently adopted Airport Layout Plan as an area for non-aviation related developments.  Staff has further developed a conceptual lot-layout for the area in order to accommodate commercial/light-industrial uses which need approximately 1 acre.  This is in response to the fact that the smaller acreage industrial parcels along Kelli Blvd. and Campbell Drive have been slowly filling up.

UMCHS would like to relocate their bus barn facility from its current location on Diagonal Blvd. and approached the City about locating at the Airport.  The Airport Advisory Committee reviewed this request in the Fall, and recommended proceeding with a ground lease for the area identified as Lot #5 on the attached lot layout plan.

UMCHS has been working on this project through the winter to secure necessary funding, and is still awaiting some final authorizations.  Therefore, a legal survey, which is included in all Airport Leases as “Exhibit ‘A’” has not yet been completed.  However, to aid the process in moving forward, you are being asked to approve this lease contingent upon filing a legal survey substantially similar to the dimensions shown for Lot #5 in the attached Lot Layout Plan.  If UMCHS does not complete their facility by December 31, 2020, the lease will automatically terminate.

Housing Goal 3.3: “Complete Diagonal Road Rezoning.”  The UMCHS’ current Bus Barn facility is located within the Diagonal Rezone Area.  Assisting in its relocation will allow for more rapid conversion of that area for residential development.

This will also add another ground lessee at the Airport to assist in continued financial self-sufficiency of the airport.

This lease will generate approximately $2,200 per year in new airport lease revenue, based on a ground lease rate of $0.05/square foot.  This rate was verified by comparing similarly situated property at the Pendleton Airport, as well as extrapolating it to a purchase price equivalent to $43,560/acre.  This price appears to be comparable to similarly situated industrial land in the area.  This rate will also rise to $0.06/square foot after 10 years, and $0.07/square foot at year 15.

1.  Agree to the proposed lease contingent upon filing a legal survey.

2.  Agree to the proposed lease with additional contingencies.

2.  Deny the proposed lease outright.

Agree to the proposed lease contingent upon filing a legal survey.

Motion to authorize the City Manager to execute the proposed lease with Umatilla Morrow County Head Start for Airport Lot #5 contingent upon the filing of a legal survey for an area substantially similar to Lot #5.