Council approves ground lease with Executive Hangars of Lincoln for new airport hangars

City Manager Sean presented a proposal authorizing the city manager to enter into an airport ground lease agreement with Executive Hangars of Lincoln LLC, a veteran‑owned company, to allow private construction, operation and management of new hangars at Lincoln Regional Airport.

The lease covers private development of 48 T‑style hangars and 20 larger 50-by-60 box hangars. City staff said the project would expand the airport—s hangar portfolio by roughly 30 percent and is expected to drive additional fuel sales. “What you have in front of you is a lease, an agreement, with Executive Hangers of Lincoln, a veteran owned company that is, seeking to sort of effectuate, an award of an RFP that occurred in the fall of 20 23 for the construction, operation and management of privately owned aircraft hangars at the at our airport,” City Manager Sean said.

City staff described the business model as city ground lease revenue plus increased fuel sales from greater tenancy. City staff member Nida said the lease term is 40 years with an automatic 10‑year extension if the tenant remains in good standing, and noted provisions allowing subordination for financing, an annual escalator, market adjustments and possible common‑area maintenance charges. “This lease has really been a collaboration between, city staff, Etc Bar, and, supported very wholeheartedly by the airport committee,” Nida said.

Staff provided financial estimates to the council. The ground rent in the agreement is roughly $60,000 per year, and staff estimated an uplift in fuel sales of about $261,000 annually if the new hangars generate approximately 60,000 gallons a year of avgas; they cautioned that jet fuel sales would generate a larger margin and could yield additional revenue beyond the floor estimate. Sean described the calculation as a conservative floor and said the project could add about 12 percent to the airport—s budget depending on fuel mix.

Ed, the project lead for Executive Hangars of Lincoln LLC, spoke in support of the proposal and described coordination with federal and local permitting bodies, including the FAA and the U.S. Army Corps of Engineers. “I—ve made so many friends, so many, just incredible. At the city level, everybody is working really, really diligently and very hard on this project,” Ed said.

One public commenter, Darla, told the council she supported the project as a way to reduce the annual subsidy the city currently provides to the airport. “I—m for it. Because every year, this town has been sponsoring that airport, and we get nothing in return,” she said.

Council action: A motion to authorize the city manager to enter the ground lease was moved and seconded. Roll‑call responses captured in the transcript show Mayor Pro Tem Brown voting yes, Council Member Reedy voting yes and Council Member Mary Andreatta voting yes; the transcript does not record the full roll call or other members— votes. The motion was approved as recorded.

Council and staff said construction could begin this summer if the agreement is executed; staff described an initial underground and concrete phase followed by erection of steel hangar structures. City staff also noted a long waiting list for hangars at the airport—between about 100 and 150 people—indicating local demand.

The lease includes a reversion concept: at the end of the lease term the city would take ownership of physical structures constructed by the tenant unless other arrangements are made. Staff told the council that reversion and the length of lease terms were discussed during negotiation and that long terms are common in comparable airport hangar arrangements to enable private financing.

Councilors expressed support and asked technical questions about lease length, runway impacts and safeguards. Staff noted that the agreement allows the tenant to recover construction costs through sales of individual hangars and that the tenant proposes an association model to manage tenant obligations.

The council approved the authorization to execute the ground lease; staff will return with final contract documents and any subsequent ministerial approvals needed to begin construction.