Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Sublease Guidelines topic
No spam. Unsubscribe anytime.
Airport commission adopts sublease guidelines to recover legal costs and share excess rent
Summary
Commissioners approved a new set of sublease guidelines that require application fees, legal-cost recovery and a share of surplus sublease revenue to address perceived unfairness when long-term tenants sublet airport property.
The Nantucket Memorial Airport Commission unanimously adopted new sublease guidelines April 14 aimed at ensuring fairness and recovering staff and legal costs when tenants sublet airport property.
Commissioner Levitt, who drafted the guidance with real-estate counsel Jennifer Platt, said the policy responds to examples where tenants with long-term master leases subleased space for substantially higher rents while the airport continued to receive the original lower base rent. Levitt said the guidelines are intended to "give our council and staff opportunity to negotiate each lease" and to ensure the airport participates if market rents increase.
Key provisions described in the draft: an application fee (proposed $1,000) to cover staff and preliminary legal review, a requirement that prospective subtenants reimburse legal expenses incurred by the airport during negotiations, and a revenue-sharing concept in which the airport receives a portion of the excess above the prime lease (Levitt described a 75/25 split of excess as a starting illustration).
Commissioners debated whether the percentage should be applied to gross sales or net profits. Commissioner Louette cautioned against tying airport revenue to net profit figures, calling that "Hollywood accounting" and recommending gross-sales measures instead. Commissioners also discussed exemptions and flexibility for small businesses and suggested staff negotiate final terms case by case.
After discussion Commissioner Marks moved, and a colleague seconded, to adopt the guidelines; the motion carried by unanimous roll call.
What happens next: staff and real-estate counsel will implement the guidelines and incorporate them into future negotiations. The commission emphasized the rules are guidance rather than a rigid policy and that individual exceptions may be negotiated.
