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Council study session reviews lease amendment to extend Chandler Air Service hangar timeline
Summary
City staff presented Amendment 1 to airport lease No. 018 with Chandler Air Service, which would extend performance deadlines after earlier funding and FAA delays; council members asked questions but did not vote in the study session.
City staff on Aug. 11 told the Chandler City Council during a study session that an amendment to airport lease No. 018 would extend deadlines for Chandler Air Service to complete a planned hangar and office building.
The amendment would preserve the originally proposed single 14,400-square-foot hangar and adjoining 3,000 square feet of office space and move the deadline for obtaining a certificate of occupancy to Aug. 31, 2026. "What this amendment will do is extend the deadline for the project for completion until 08/31/2026," staff said during the presentation.
Ryan Reeves, a staff member who presented the proposal, told the council the lease originally included two performance milestones: pulling permits within one year of lease execution and obtaining a certificate of occupancy within two years. Reeves said the tenant received a day-for-day credit for development delays not caused by the tenant and that FAA environmental clearances and a funding partner withdrawal led to a notice of default in June 2024 and a lease termination letter in mid-February 2025. "By May 2025, they obtained all of their construction permits," Reeves said, and staff reported the tenant has since secured bonds, a construction manager under contract and a committed financial partner, identified in the presentation as Core Bank.
Council members asked about alternatives and schedule. "Why we didn't just go back out to RFP on this one?" Council member Poston asked. Reeves replied that reissuing a request for proposals would likely add a year or more and that, given prior investments in planning and contracting, amending the lease was the most direct path. Council member Preston asked about the project's readiness; Reeves said steel was scheduled for delivery the next month and that staff and the tenant considered the guarantees in place sufficient to proceed if council approves the amendment.
No formal motion or vote occurred at the study session; staff indicated the item was scheduled for council consideration at a later meeting. Discussion items included the lease's original performance measures, the reasons for the earlier default and termination, the tenant's renewed financing, and staff confidence in the project's ability to proceed if the amendment is approved. The presentation identified the core steps that had been completed (approved plans, permits, bonds, construction manager and bank commitment) and the single schedule change tied to the new Aug. 31, 2026 deadline.
If council approves the amendment at its subsequent meeting, staff said construction would proceed immediately and steel delivery planned for the near term would support that schedule.
