CITY COUNCIL STAFF REPORT
DATE: JULY 8, 2026 CONSENT CALENDAR
SUBJECT: APPROVE NON-EXCLUSIVE OPERATING AND LEASE AGREEMENT FOR HANGAR SPACE NO. 26L114 WITH THE PALM SPRINGS AIR
MUSEUM, INC AT THE PALM SPRINGS INTERNATIONAL AIRPORT
FROM: Scott C. Stiles, City Manager
BY: Airport
SUMMARY:
This action will approve Non-Exclusive Operating and Lease Agreement for Hangar Space No. 26L114 with the Palm Springs Air Museum, Inc. (Air Museum) at the Palm Springs International Airport (Airport).
RECOMMENDATION:
1. Approve the Airport Non-Exclusive Operating and Lease Agreement No. 26L114 with the Palm Springs Air Museum, Inc. (Attachment A) for the lease of 5,927 square feet of hangar floor space at $4.56 per square foot per year, effective July 1, 2026 through July 31, 2028 at the Palm Springs International Airport.
2. Authorize the City Manager or designee to execute all necessary documents subject to such changes/revisions agreeable to the City Manager and City Attorney.
BUSINESS PRINCIPAL DISCLOSURE:
According to the Public Integrity Disclosure form (Attachment B) submitted on May 26, 2021, Palm Springs Air Museum, Inc. is registered as a 501(C)3 non-profit in the state of California.
BACKGROUND:
In November of 1995, the Palm Springs Air Museum, Inc. (Air Museum) commenced with a ground lease at the Airport for a term of forty (40) years. The purpose of the lease was for the construction and operation of an aviation museum on a ten-acre parcel of land west of Gene Autry Drive and north of Ramon Road in Palm Springs, CA.
City Council Staff Report
July 8, 2026 -- Page 2
Non-Exclusive Operating and Lease Agreement with Palm Springs Air Museum, Inc. for Hangar Space The Palm Springs Air Museum serves as one of the premier cultural and educational attractions in the Coachella Valley, offering visitors a world-class aviation experience that brings history, innovation, and human achievement to life. An important component of the Museum's mission is its Living History Flight Experience program, which allows guests to experience historic aircraft firsthand through flights conducted under a Federal Aviation Administration (FAA) exemption pursuant to 14 CFR Part 11.
The Museum preserves, exhibits, and operates a nationally significant collection of historic aircraft representing key eras in the evolution of aviation and aerospace technology. Through immersive exhibits, educational programs, and flying demonstrations, the Museum connects visitors with the pilots, engineers, innovators, and service members whose contributions helped shape modern aviation and American history. To maintain these aircraft in airworthy condition and support its educational mission, the Museum requires leased hangar space at the Airport.
In February of 2020, the Air Museum signed Amendment No. 4 to the original ground lease (A3613) for an additional 10,000 square feet of hangar space (APN 502 100 038) located on the west side of the Airport as depicted in the illustration below.
APN 502 100 038
City Council Staff Report
July 8, 2026 -- Page 3
Non-Exclusive Operating and Lease Agreement with Palm Springs Air Museum, Inc. for Hangar Space STAFF ANALYSIS:
In September of 2025, the Airport signed a Non-Exclusive Operating and Lease Agreement with a ground handling company for hangar and office space at the Airport.
The 2,290 square feet of hangar floor space (APN 502 100 036) is located in a hangar on the west side of the Airport as depicted in the illustration below. Pursuant to leasing using fair market value (non-aeronautical), the lease rates for the office space and hangar floor space were determined by comparing office and hangar lease rates at other airports in Southern California.
APN 502 100 036
The Air Museum has requested to lease the remaining 5,927 square feet of hangar floor space in the hangar located at APN 502 100 036, in which to store and maintain aircraft as part of the Air Museum’s living history flight experiences. The proximity to the additional aircraft storage in the hangar immediately adjacent at APN 502 100 038, makes this location extremely convenient for their operations. Pursuant to leasing using fair market value (aeronautical), the lease rate for the hangar floor space was determined by using the current lease rate for the hangar located at APN 502 100 038.
City Council Staff Report
July 8, 2026 -- Page 4
Non-Exclusive Operating and Lease Agreement with Palm Springs Air Museum, Inc. for Hangar Space As an aeronautical purpose, the Airport is obliged to consider leasing this space to the Air Museum under a Non-Exclusive Operating and Lease Agreement. Accordingly, staff recommends approval of the proposed Non-Exclusive Operating and Lease Agreement for 5,927 square feet of hangar space to support the Air Museum’s aeronautical operations at the Airport.
ENVIRONMENTAL ASSESSMENT:
The requested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The requested action consists solely of approving a Non-Exclusive Operating and Lease Agreement for existing hangar space at the Palm Springs International Airport, and is exempt from CEQA pursuant to Section 15378(b), in that a “Project” does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
ALIGNMENT WITH STRATEGIC PLANNING:
Approval of this action supports City Council’s Strategic Plan Broad Goal of Economic Development, as well as the Airport’s Strategic Plan Priority 3 – Goal 2: Create Revenue Diversification Through Strategic Partnerships.
FISCAL IMPACT:
Approval of this action will result in the generation of Airport Revenues of approximately $24,774.86 for Fiscal Year 2026 and approximately $27,027.12 for Fiscal Year 2027 to Airport Fund 415.38070 – Hangar Rental. The term of this lease shall commence on July 1, 2026 and shall continue until July 31, 2028 or the expiration of Agreement A9440. In no event shall the new lease extend beyond the term of the Underlying Agreement.
REVIEWED BY:
Interim Executive Director of Aviation: Victoria Carpenter City Attorney: Geremy Holm
City Manager: Teresa Gallavan for Scott Stiles
ATTACHMENTS:
A. Non-Exclusive Operating and Lease Agreement No. 26L114 B. Public Integrity Disclosure