City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: JANUARY 16, 2024 FROM: GENERAL SERVICES DEPARTMENT WARD: 3 SUBJECT: APPROVE RIVERSIDE MUNICIPAL AIRPORT LEASE AGREEMENT WITH KEVIN BOOTH DBA MAINTENANCE ONE FOR A FIVE-YEAR TERM COMMENCING ON OCTOBER 1, 2023, THROUGH SEPTEMBER 30, 2028, WITH THE OPTION TO EXTEND FOR AN ADDITIONAL FIVE-YEAR TERM, WITH THE FIRST-YEAR LEASE AMOUNT OF $15,642.84 PLUS ANNUAL CONSUMER PRICE INDEX ADJUSTMENT ISSUE:
Approve Riverside Municipal Airport Lease Agreement with Kevin Booth dba Maintenance One for a five-year term commencing on October 1, 2023, through September 30, 2028, with the option to extend for an additional five-year term, with the first-year lease amount of $15,642.84 plus annual Consumer Price Index adjustment.
RECOMMENDATIONS:
That the City Council:
Approve Riverside Municipal Airport Lease Agreement with Kevin Booth dba Maintenance One for a five-year term commencing on October 1, 2023, through September 30, 2028, with the option to extend for an additional five-year term, with the first-year lease amount of $15,642.84; plus, rental fee shall be adjusted annually in August of each year to reflect any increase in the Consumer Price Index for All Urban Consumers (CPI-U); and Authorize the City Manager, or designee, to execute the Riverside Municipal Airport Lease Agreement with Kevin Booth dba Maintenance One, including making minor and non-substantive changes.
COMMISSION RECOMMENDATION:
On December 14, 2023, the Airport Commission will review the terms and consider support of the Lease Agreement with Kevin Booth dba Maintenance One.
BACKGROUND:
On November 15, 1994, the City of Riverside (City) approved a Riverside Municipal Airport Lease Agreement (month-to-month) with Kevin Booth dba Maintenance One consisting of approximately 5,861 square feet and 2,500 square foot metal hangar located at 6779-C Airport Drive, Riverside, California at the Riverside Municipal Airport. The monthly rental payment amount was adjusted annually in August by any increase in the Consumer Index Price. The Lessee is a limited fixed base operator and uses the airport property for aircraft maintenance.
On August 1, 2013, the City approved a Lease Agreement (month-to-month) for an office building and increased the hangar space to two (2) hangars (buildings T-33 and T-34), totaling approximately 8,361 square feet. The monthly rental payment amount was adjusted each third year commencing with the monthly payment due on August 1, 2016, and every three years thereafter, to reflect CPI-U percentage increase.
On January 14, 2014, the City approved a Lease Agreement (month-to-month) for an office building and decreased the hangar space to one (1) hangar (building T-33), totaling approximately 5,861 square feet.
DISCUSSION:
The Lessor (City) desires to extend the lease for a five-year term commencing on October 1, 2023, and terminating on September 30, 2028. Lessee may exercise the option to extend the lease for an additional five-year term.
Commencing with the rental payment due October 1, 2023, Lessee shall pay City a rental amount of One Thousand Three Hundred and Three Dollars and 57/100 ($1,303.57) per month, which shall be adjusted annually commencing with the monthly payment due on August 1, 2024, and every year thereafter, to reflect the percentage increase, if any, in the Consumer Price Index for All Urban Consumers (CPI-U) for the Riverside-San Bernardino-Ontario Statistical Area ("Index") published by the Bureau of Labor Statistics of the United States Department of Labor for the most recent 12-month published Index, based upon the corresponding increase, if any, in the Index as it stands on May of that year over the Index as it stood on May of the prior year.
At the time the Lease Agreements on August 1, 2013, and January 14, 2023, were approved, Riverside was included in the CPI-U Index for Los Angeles-Riverside-Orange County. This Lease Agreement updates the CPI-U to reflect the current Riverside-San Bernardino-Ontario Index and establishes the month of May for annual CPI-U review purposes.
STRATEGIC PLAN ALIGNMENT:
This Lease Agreement supports Strategic Priority No. 3 Economic Opportunity and Goal No. 3.1 - Facilitate partnerships and programs to develop, attract and retain innovative business sectors.
This item aligns with EACH of the five Cross-Cutting Threads as follows:
1. Community Trust – City Council approval and Airport Commission discussion of this Lease Agreement demonstrates the Airport’s commitment to the community and Airport users by ensuring transparency.
2. Equity – Retaining an established business at the Riverside Municipal Airport benefits the entire community.
3. Fiscal Responsibility – This Lease Agreement will continue to generate fair market value rent revenue.
4. Innovation – This Lease Agreement demonstrates the City's business - friendly approach to retaining a valued tenant.
5. Sustainability and Resiliency – This Lease Agreement will ensure that the Airport is in full occupancy of hangar space and furthering the Airport’s sustainability as a self-supporting enterprise fund.
FISCAL IMPACT:
The total fiscal impact is estimated to be $15,642.84 in lease revenue during the first year of the term. Revenue will be deposited into the Airport Fund, Airport Building & Ground Rental revenue account 0000530-346120. Future years revenue will be budgeted during budget development to include any increases related to CPI.
Prepared by: Daniel Prather, Airport Manager
Approved by: Carl Carey, General Services Director
Certified as to
Availability of funds: Kristie Thomas, Finance Director/Assistant Chief Financial Officer Approved by: Edward Enriquez, Assistant City Manager/Chief Financial Officer/ Treasurer Approved as to form: Phaedra A. Norton, City Attorney Attachment: Lease Agreement
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