Airport staff presented a draft airport leasing policy during the Dec. 2 work session that aims to update municipal procedures to comply with FAA grant assurances and to clarify how the city will process leases, transfers and extensions at the municipal airport.

Ryan (airport presenter) said the policy centers on two FAA concerns: preserving the airport sponsor's rights and powers and promoting airport financial self‑sufficiency. He described a recommended standard ground lease of 20 years with two 10‑year extensions (a 40‑year effective term) as a compromise between tenant amortization needs and FAA guidance that tenant investments are typically amortized over 30–35 years.

Reversion — whether improvements on leased airport land revert to the airport at lease end — emerged as a primary point of contention. Ryan explained reversion is common and gives the airport future assets and revenue streams, but acknowledged it can be politically difficult to exercise. Staff outlined alternatives to abrupt reversion, including facility condition index (FCI) assessments that tie extensions to third‑party condition evaluations, deferral fees (a net‑present‑value payment for additional term), or an improved‑hanger rent layered on ground rent.

Council also debated rent adjustments. The draft policy proposes a fixed 3% annual increase rather than tying annual adjustments directly to CPI; staff and finance argued a fixed rate approximates recent regional inflation for replacement costs and provides predictability, while acknowledging tenants advocated for a CPI‑based approach.

Staff addressed tenant transfers and sales: the draft would preserve airport approval rights for any lease transfer and require a new city lease for a new owner to prevent undocumented assignment. Staff also proposed using FCI assessments to evaluate maintenance and to qualify tenants for extensions rather than basing extensions solely on past investment.

Next steps: staff recommended more stakeholder engagement and scheduled Title 8 code amendments to be considered after stakeholder input. Council agreed to continue the policy discussion at a future work session and to provide more time for detailed questions.