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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. 407 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 ' 408 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 409