Council approves airport lease renewal despite councilman’s appraisal concerns

The Vero Beach City Council approved a lease renewal for airport property as consent agenda item e after a brief but pointed discussion about how airport property is appraised and priced.

Councilman Carroll said he could not support the renewal without seeing the fair-market appraisal and criticized the renewal terms as effectively giving away city land. “I can’t support this,” Carroll said, citing figures in the lease that he said equate to roughly $0.21 per square foot for land and about $0.09 per square foot for easements. Carroll told colleagues those rates appear far below current industrial and office market comparables for Indian River County and said the difference could amount to “real money” for the city.

Airport staff and consultants explained the appraisal process to council. City staff said Attachment B of the airport leasing policy — a council-approved document built into airport leases — governs option renewals and typically confines appraisals during renewals to the value of improvements rather than revaluing the land. An airport official said the appraisal approach used an FAA guideline that sets rental rates for non-aeronautical appraisals using an 8% return assumption, which produced the $5.29-per-square-foot number for the improvements referenced in the lease. Assistant airport staff and appraisers said tenant‑commissioned appraisals were run and, after adjusting to FAA requirements for aeronautical property, produced values close to the city’s appraiser.

Council discussed whether the city could change Attachment B for new leases to allow reappraisal of land, with staff noting FAA review would be required for any substantive policy change. Staff also noted annual CPI adjustments built into the lease terms compound over time and that new leases (as opposed to renewal/extension of existing lease terms) give the city the chance to set current fair-market rates.

After the discussion, council moved and took a roll-call vote on consent item e. The motion carried on a recorded vote with four yes votes and one no: Mister Voss — yes; Mister Dingell — yes; Councilman Carroll — no; Vice Mayor Moore — yes; Mayor Catugno — yes. Carroll’s opposition was recorded in the minutes and he cited the need to review the underlying appraisal documentation.

Council did not direct staff to reopen the appraisal for this renewal. Airport staff said they will work with the city attorney and FAA guidance on future lease or policy changes for new tenants.

Ending: The lease renewal advances under the existing airport leasing policy; council members signaled openness to considering policy changes for future, new leases but noted any changes would require FAA coordination and likely new appraisal work.