Airport authority approves 4-year reduced-rate lease for parking parcel tied to MTSU project

The Municipal Airport Authority voted to approve a four-year lease with Azure for a parcel intended to provide temporary parking and site access for a Middle Tennessee State University (MTSU)-related project. The board set the rent at 25¢ per square foot with no annual escalation, and members said the lease will include an exhibit describing tenant obligations for grading, leveling and lighting.

The discussion followed weeks of confusion about which lease language tenants had been sent. Board members said an older sample lease lacking the board’s adopted 3% annual escalation clause had been emailed to tenants; several speakers described the mismatch as a mistake. "This is a screw up," one board member said during the discussion when describing the airport sending an outdated lease version.

Board members weighed the financial impact of leaving the escalation clause out for a four-year term against the immediate benefit of having Azure begin site work to strip and regrade the parcel. Board staff said Azure needs to remove roughly 5,000 cubic yards of material and that the closing on the property was scheduled in the record for late August; staff also advised that title and council approval timelines mean no on-site work should occur before closing unless city officials approve an exception.

Several members noted that the authority’s 2021 policy set permanent ground-lease rates at 35¢ per square foot with a 3% annual escalation for 20-year improved leases, but that policy was adopted for long-term, improved ground leases and did not explicitly describe short-term raw-land leases. Proponents of the reduced rate argued Azure will make significant site improvements (grading, roads, lighting) that increase long-term value to the airport and to potential future aeronautical users.

A motion to approve the four-year lease at 25¢ with no escalation was moved, seconded and adopted by a voice vote; the record shows the chair called for 'aye' and the motion passed. The board directed staff and legal counsel to incorporate explicit soil-removal and intended-use language into the draft lease and to attach a site-plan exhibit that defines Azure’s improvement obligations.

The board’s approval allows staff to present the revised lease to the city council (scheduled in September, per staff comments) for any additional approvals required by the city; staff cautioned that certain steps—such as title clearance and council sign-off—must be completed before Azure begins work that could affect title insurance.