HomeMy WebLinkAboutMINUTES-06/23/1992-SpecialJune 23, 1992
' COUNCIL OF THE CITY OF FORT COLLINS, COLORADO
Council -Manager Form of Government
Special Meeting - 6:00 p.m.
A special meeting of the Council of the City of Fort Collins was held on Tuesday,
June 23, 1992, at 6:00 p.m. in the Council Chambers of the City of Fort Collins
City Hall. Roll call was answered by the following Councilmembers: Azari,
Edwards, Kirkpatrick and Maxey.
Councilmembers Absent:
Staff Members Present:
Fromme, Horak and Winokur.
Burkett, Krajicek, Roy.
Ordinance No. 73, 1992,
Authorizing the Lease of Certain
Property at the Fort Collins -Loveland
Municipal Airport by Mesa Airways, Inc., d/b/a
The following is staff's memorandum on this item.
"FINANCIAL IMPACT
' Leasing certain portions of the Airport Terminal Facility to Mesa Airways, Inc.,
d/b/a United Express Airlines ("United Express") will provide lease and landing
fee revenue for the Fort Collins- Loveland Municipal Airport. These revenues will
be available for the airport operations to offset expenses and maintain the
airfield.
Adoption of this Ordinance will authorize the Mayor to sign an Airline Use and
Lease Agreement with United Express.
EXECUTIVE SUMMARY
The Ordinance authorizes the Mayor to execute a lease agreement with United
Express Airlines similar to the Airline Use and Lease Agreement executed August
17, 1990, with Continental Express.
Although the details are still being negotiated, staff anticipates that United
Express will need approximately 260 sq. feet of space in the Terminal Building
for its exclusive use. The lease terms will be based on the same terms in effect
with Continental Express. Presently the lease rate, including Operating and
Maintenance charges, is $11.50 per sq. foot. Based on the 260 sq. foot figure,
the Airport will see an additional $2,990 in lease revenues each year.
Additionally, landing fees will be charged at a rate of $ .58 per 1000 lbs. of
landing weight. Each landing of a Beech 1900 Aircraft will generate
approximately $9.25. Based on the three (3) flights a day United Express will
' pay to the Airport approximately $10,000 per year in landing fee revenue.
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June 23, 1992
As specified in the Ordinance the changes to the Airline Agreement will deal t
primarily with the term, level of service and other details required to make the
lease specific to United Express rather than Continental Express.
Term:
The term of the Agreement will commence upon the effective date of this
Ordinance and will end November 1, 1995. The November 1st date makes it
possible for the leases with both scheduled carriers (Continental and
United) to terminate on the same date so negotiations for new, leases can
be simultaneous.
Level of Service:
United wi11 be required to provide a minimum level of service of three (3)
round trips per day for three (3) months. Continental was required to
provide not less than four (4) round trip flights per day during their
first year of operations. Continental now provides eight (8) round trips
per day. United has indicated that they do not presently have the number
of aircraft available to provide more than three (3) flights per day. The
type of service (common rated fares) that will have to be provided out of
Fort Collins is unique to United Express and they consider this to be a
trial. If the service is successful they will make service level
adjustments that make reasonable business sense to them. If not, they '
will be able to cease service after 90 days. Like Continental, however,
their requirement to continue to pay lease rates will survive until the
end of the term of the lease.
Staff is working with United Express and the airport architect, the VanSant
Group, to determine how to best accommodate United Express in the existing
building. Any improvements that need to be made in the exclusive use area that
will be assigned to United Express will be solely its responsibility. Although
expansion of the terminal facility may be desirable at some date in the future,
United has indicated that it will not want any additional square feet of space
beyond what is needed now. Staff will examine the cost/benefit of expanding the
terminal and how that might be funded during the next several months. The
building was designed to be expanded when the demand was generated.
Assuming service does begin in July, the Airport can expect to see approximately
$1495 of unanticipated lease revenue and at a minimum, $2,500 in landing fees in
1992. If the service is deemed a success by United Express and continues beyond
the three (3) months required, a total of $5,00O in landing fees will be
generated in 1992. This is an excellent opportunity for the Airport to generate
additional revenues, and staff strongly recommends that Council adopt this
Ordinance on First Reading. Additionally, staff respectfully requests that
Council consider accommodating United's desire to be a signatory carrier by July
1 I'
Airport Manager Fred Anderton spoke of signage size and placement in the terminal '
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June 23, 1992
for United Express.
Councilmember Maxey made a motion, seconded by Councilmember Azari, to adopt
Ordinance No. 73, 1992 on Second Reading.
The vote on Councilmember Maxey's motion was as follows: Yeas: Councilmembers
Azari, Edwards, Kirkpatrick and Maxey. Nays: None.
MOTION CARRIED.
Adiournment
The meeting adjourned at 6:05 p.m.
4
Mayor
ATTEST:
u �
City Clerk
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