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Council tables airport lease proposals after FAA/grant‑assurance discussion; items continued indefinitely
Summary
After debate about FAA grant assurances, fair‑market rent and airport use, the council voted to table two lease items for office space at the Hubler terminal (economic development and police leases) rather than approve proposed rents; staff will return with additional analysis.
The Caldwell City Council voted to table indefinitely two proposed five‑year leases for office space at the Hubler terminal building on the airport after discussion about Federal Aviation Administration (FAA) grant assurances, fair‑market rental value and how airport property can be used.
Agenda items removed from the consent calendar and discussed under new business were leases authorizing (1) the City of Caldwell Economic Development Department to lease 368 square feet at the Hubler terminal for $9,060.16 annually and (2) a separate lease for the Caldwell Police Department (the police lease was discussed together with the economic development lease). Scott Swanson, director of aviation, reviewed federal guidance (referencing a 1999 Federal Register final policy and Grant Assurance 25 on airport revenues) and said the FAA allows airport property to be used for public/community purposes in some cases, but charging below fair‑market rates to non‑aeronautical users can be considered revenue diversion under grant assurances.
Council concerns and staff context: Swanson said the $24.60 per‑square‑foot figure historically used in the hub building fee sheet is a gross rate (including janitorial, utilities and maintenance) and that local commercial triple‑net rents average $16–$22 per square foot — but that the $24.60 figure is inclusive of services. Councilors expressed concern about charging city departments and whether the arrangement in effect places costs on taxpayers rather than airport users; Councilor Williams and others said the city should not shift new costs to economic development or the police department without clearer justification and recommended further FAA consultation and market analysis.
Outcome: Councilor Denver moved to table both items (26 and 27) indefinitely; the motion was seconded and passed. Staff will return with further analysis, market–rate comparisons and FAA/grant‑assurance guidance as requested by council.
Why it matters: the discussion raised federal grant‑assurance issues about using airport property for non‑aeronautical public purposes and the risk of below‑market leases being viewed as improper revenue diversion; councilors asked staff to better document fair‑market value and FAA compliance before approving leases for internal city users.
Next steps: staff will prepare additional documentation on fair‑market rentals, FAA grant‑assurance implications and recommended lease terms for council consideration at a future meeting.
