City approves 3-year lease with Arkansas Therapy Group for airport building with rent-credit structure

The City of Hot Springs on July 15 adopted Resolution R-25-142 approving a lease with Jason and Jill Locomfora, doing business as Arkansas Therapy Group LLC, for a 2,400-square-foot building at Hot Springs Memorial Field Airport.

Don Rowlett, airport director, told the board the building had been vacant since a ground lease expired in 2017 and that the tenant proposes significant renovations to operate a pediatric therapy clinic. Rowlett said the lease would be for three years with two three-year renewal options.

“Itwas said that $8 a square foot on the lease. Its a 2,400 square foot building and the land that goes with is 0.37 acres, which gives a total monthly rent of $1,859,” Rowlett said during the staff report. He also described a proposed rent-credit structure intended to offset the tenants upfront renovation costs.

Rowlett said the tenants immediate renovation work would likely exceed typical contracted construction estimates; staff estimated parts and materials of about $66,000 and suggested a contractor-bid cost could exceed $100,000. To encourage private investment and bring the building back into service, staff proposed rent credits for the early lease years as described in the packet.

Board members asked about the separation of building and land charges and about the CPI adjustment schedule. Staff explained the lease breaks out building and land amounts because of Federal Aviation Administration requirements and that no CPI adjustment would apply during the first three years; a cumulative CPI adjustment would be applied if the tenant exercises renewal options.

No public comment was registered on the lease item. The board adopted the resolution by roll call; all voting members recorded affirmative votes.