Airport commission approves $1.98/sq ft ground-lease addendum for 208 Aviation

The North Little Rock Airport Commission approved an addendum to the ground lease for 208 Aviation that sets the non-aeronautical ground rent at $1.98 per square foot for 3,042 square feet of office space.

Staff described the change as necessary to comply with Federal Aviation Administration guidance that non-aviation uses on airport land be charged market rent. "You all know that Chris Stewart and I have been here multiple times ... we are working on our lease now," a staff member said while recommending the addendum; the staff member asked the commission to authorize drafting and execution of the addendum.

Staff told the commission the $1.98 per-square-foot figure came from a comparable ground lease the commission holds with Central Arkansas Water, which staff used to establish a market rate for non-aviation use. The commission also referenced an independent appraisal that valued the ground at about $120 per square foot and a staff FAA-based capitalization calculation that produced a higher per-square-foot estimate when capitalized, but commissioners said the Central Arkansas Water figure provided a defensible, conservative comparable.

Tenant Chris Stewart said he supported the $1.98 rate. "I believe it's 42 cents per," he stated when asked about the current base rate, then added that the new figure was preferable to earlier proposals.

A commissioner moved to amend Stewart’s lease as described by staff; the motion was seconded and the addendum was approved by voice vote.

The commission directed staff to prepare the written addendum and to follow standard practice on legal review before final execution. The action is recorded as an approval of the lease addendum; details such as final executed effective date were not specified in the meeting record.

Next steps: staff will draft the addendum, secure city-attorney review, and return the executed document for administrative processing.