City committee reviews 50-year ground lease for Hangar 5 at New Bedford Airport

The Committee on Finance on Wednesday reviewed a proposed ground lease between the New Bedford Airport Commission and the trustees of the 5 Hangar Trust to construct a new Hangar 5 at New Bedford Regional Airport and voted to refer the matter to the full City Council for approval.

The lease covers about 28,160 square feet of airport property and is structured as a ground lease in which the tenant owns the building and the city retains the land. Scott Service of the airport team said the deal is “a 50 year lease, 5 year primary term, 9, renewals,” and that the parties currently rely on a 2020 aviation appraisal that set the ground rent at $0.32 per square foot.

Why it matters: committee members pressed the airport for details on monthly and annual rent, temporary abatements during construction, five‑year rent adjustments and contractual language that would allow the airport to retake property if needed. Several councilors expressed concern about using an older appraisal for long leases and asked the airport to supply clearer documentation tying an LLC listed on the signature page to the trustees who would sign the lease.

Key terms and questions Scott Service said the ground rent amounts to “exactly 750 and 93¢” per month and “Per year, that is $9,011.20.” Service told the committee that, to ease construction costs for the developer, the lease contains abatements: “for the initial 9 months, there is an abatement of 90%. For the following 9 months, there's an abatement for 70%.” After those 18 months the lease reverts to full market value, Service said.

Service estimated the developer’s construction timeline at about 12 to 13 months and said the airport expects some short‑term revenue sacrifice with the goal of stimulating longer‑term development and activity that would generate fuel sales and FBO business.

Rent adjustments and authority to retake property Committee members pressed on how the city will protect long‑term value. Service and airport staff said rent will be adjusted every five years, based on the greater of a new appraisal or the cumulative five‑year CPI change. On the question of whether the airport can take back land if a different airport use becomes necessary, Service said there are “indemnification and clauses in there and stuff where we we can take the property back if it's better used for other airport purposes.” The chair requested the specific lease sections describing that authority prior to the council vote.

Document change and ownership clarity Airport staff told the committee a revised signature page (page 46) adds FMV Associates LLC, named in connection with the trustees of the 5 Hangar Trust. Committee members said FMV Associates LLC does not appear elsewhere in the body of the 45‑page document and asked the airport to provide corporate formation documents, trustee certificates and solicitor review tying the LLC to the trust before the full council considers the lease. The chair said the item may be laid on the table at the full council meeting if the requested information is not provided.

Action The finance committee voted by voice vote to receive and place the lease on file and refer the order and the lease documents to the full City Council for approval. The committee required the airport to supply the lease sections and supporting documents that clarify signing authority and the LLC’s role.

What’s next Airport staff committed to send the lease excerpt and evidence of trustee and LLC authority to the committee chair and the city solicitor ahead of the council meeting. Councilors said they expect the full City Council to consider the lease at its next available meeting.