New Leasing policy at Airport has been developed by Renton Transportation Committee

Councilmembers Rich Zwicker, Don Persson, and I put the final touches on a new Renton Airport Leasing policy at last Thursday’s Transportation Committee Meeting. Huge credit also goes to Marcie Palmer, who chaired this committee last year when the lion’s share of the work was done. We put many, many hours of committee time into this policy, and received much input from residents and the aviation community during the past year.

The new leasing policy, which comprises about a dozen pages of text, makes some important improvements to the process of leasing airport property in the future. Some of the changes are:

(1) A clear application process for people who wish to lease airport property. Up until now, individuals have sent letters or made phone calls with proposals, but it is not always clear whether they are “applying” for lease consideration. A new application process fixes that for future applicants, and makes it clear who is “first in line” on future applications. (Unfortunately, this does not fix the confusion regarding who is first in line for current applicants. The mayor’s office, airport manager, and city attorney will be working with those individuals who believe they have an outstanding commitment from the city… they will try to resolve these situations as fairly as possible)

(2) City ownership of new airport buildings. Applicants who want a ground lease in order to build a hanger, office, or other facility, will now be directed to construct the building in coordination with the city. If they are proposing an appropriate improvement, the city will finance it, own it, and lease it back to the airport tenant. This will be better for all parties. Under the old policy, tenants have to give their buildings to the city at the end of their lease, resulting in an incentive for some to delay/forgo maintenance near the end of the lease period. In addition, the new policy will enable the city to shorten lease periods since new leaseholders will not need 30-50 years to amortize the cost of a building. The shorter lease periods will give the city more options if a tenant is not working out, or if the city wants the land or building for another aviation purpose.

(3) The new lease policy does not give priority to a jet center….instead, it encourages a wide range of aviation uses.

(4) The new lease policy REDUCES the priority placed on the airport fully paying for itself under all circumstances. The old policy made financial return, and self-sustainment a factor above all other considerations. Under our new policy, it is seen as desirable for the airport to pay for itself, but it is recognized that that there may be occasions when the city-as-a-whole would prefer to provide a small subsidy to the the airport to maintain a more peaceful aviation use (i.e. to prevent loud fly-overs.) The highest revenues is not always going to be considered the best use.

(5) The leasing policy gives clear expectations for the financial capability/stability of new applicants for airport space. This addition, strongly promoted by Councilman Don Persson, makes good financial sense and is in line with good leasing practices for other types of real estate.

There are many other improvements in this document as well. As Transportation Chair, I have the honor of presenting the new document to the full council a week from tomorrow.