Springdale commission works on airport lease

SPRINGDALE — The Airport Commission declined an offer from the airport’s fixed-base operator to spend $300,000 to renovate the Springdale Municipal Airport terminal in exchange for a 30-year extension of its lease.

Instead, commissioners hope the city will pay for interior renovation at the terminal using money from the city’s capital improvement program, said Neil Johnson, commission chairman, at a work session Thursday.

Summit Aviation proposed in January spending up to $300,000 to renovate the interior of the terminal. The company said the renovation would include the first-floor bathrooms and flooring, new furnishings, a new monument style sign and painting and replacing flooring upstairs.

Summit Aviation had said it would need time to recover its investment if the company spent that much completing the renovation.

Commissioner Joel Gardner said 30 years would be a long time for the lease. Mark Myers, co-owner of Summit Aviation, said five years, however, would

be a short time. Myers said he would like the lease to be for a minimum of 15 years.

The City Council on Jan. 12 approved allocating up to $45,000 in capital improvement program money for exterior work on the terminal. The work includes resealing windows and painting.

A $40,000 grant will help pay for the exterior work, Johnson said. The grant is to the city from the Northwest Arkansas Economic Development District and on behalf of the Airport Commission, said Wyman Morgan, city director of administration and financial services.

The city expects the capital improvement program

to be reimbursed for all but $5,000 spent on the exterior of the terminal, Mayor Doug Sprouse has said.

Summit’s lease on the terminal expires in 2017, Johnson has said.

Summit Aviation also asked for its lease on the airport’s fuel station to last 30 years. It requests the option of two 10-year extension options on both the terminal and fuel station. It also proposed for the lease rate would be adjusted every five years.

Another update to the lease proposes Summit Aviation be allowed to continue using a hangar it occupies. Summit Aviation owns the building, but ownership will revert to the city later this year because of a prior agreement, Johnson said.

Summit Aviation doesn’t pay rent for the hangar,

Johnson said. The company does, however, pay $50 per month to lease the land it sits on, said James Smith, airport manager. The rent would increase to about $3,000 per month, Johnson said.

Another change noted in Summit’s proposal would allow the company to continue to lease the terminal for an increased rate of $2,350 per month, according to the proposal.

The city receives $2,210 in rent from the terminal building. The amount includes rent from Summit, a restaurant and another organization in the building. Summit has proposed collecting rent from those two other entities, then paying the sum of all three rent amounts to the city.

Morgan mentioned Summit has a lease on the fuel station until 2022.

This means the lease expiration dates are different for the fixed base operator agreement, the hangar and the fuel station. Commissioner Greg Willoughby said the commission could make all three run concurrently.

Johnson suggested a generic agreement form with blanks to be filled in. Morgan said he would draft the document and bring it back to the commissioners.