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Shelbyville staff previews 30-year land lease, lower insurance for private airport hangar
Summary
City staff told the Shelbyville mayor and council that an individual has requested the city's standard 30-year lease for a 60-by-60 private hangar at Shelbyville Municipal Airport, with a proposed reduction in minimum liability insurance from $2 million to $1 million and a recommended rent of $0.35 per square foot.
City staff and the airport authority described a proposed land lease for a private hangar at Shelbyville Municipal Airport during the study session.
Paul Perry, the city's director of the airport, told councilmembers the proposal is for a private individual to build a 60-by-60 hangar and that the airport authority is recommending the city adopt its standard 30-year lease. Perry said the lease would include a reversion clause so that after 30 years the hangar would revert to city ownership and the city would hold first right of refusal if the lessee sought to sell earlier.
Perry said the applicant asked to reduce the lease's insurance requirement because leases written the city's standard way are structured to cover individuals and corporations and, in his view, the $2 million liability requirement is heavy for an individual owner. "Our insurance requirements are a bit heavy for what would be, individual," Perry said, and the requested change would reduce the minimum from $2,000,000 to $1,000,000 while still covering equipment inside and the city's ability to replace a building if necessary.
Perry also said the airport authority recommends a rent rate of $0.35 per square foot. He said the applicant would lease about 7,200 square feet (the hangar footprint plus apron), and that the hangar would be visually similar to existing private hangars at the airport.
Councilmembers asked whether they would see a completed lease before any vote. One councilmember asked about the packet material and whether the lease with names filled in would be provided; staff replied the blank form had been circulated while they waited for the applicant's details and that the fully completed lease would be provided before council consideration.
No formal council vote or final action on the lease was recorded at the study session; staff presented the terms and answered clarifying questions.
Ending
Staff said they would provide the completed lease document to council before any final vote. The airport director and airport authority recommended the standard 30-year term, the 35-cent-per-square-foot rate, and the adjusted $1 million insurance minimum for an individual lessee.
