Airport Master Plan October 1985

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Additional revenues can be generated from several types of leases. The most common and likely to occur at Gateway are the following: Hangar Building Leases Hangar Land Leases Fixed Base Operator Lease(s) Aviation Business Lease (AVTI, specialty shops, airport office/hangars, etc.) No historic revenue data is available for meaningful com- parison. Thus, basic revenue policies are discussed. The underlying approach to airport leasing is that it has to be a "win -win" strategy for both the community and the tenants. A basic principle of airport leasing is that comparable tenants should pay the same rate, receive the same ser- vices and have the same responsibilities when leasing comparable facilities. At the same time, the airport should maximize its revenue to offset improvement costs and operating expenses while not placing an undue finan- cial strain upon its tenants. Another principle of airport leasing is that all agree- ments should be of sufficient length to permit any airport tenant who makes a substantial capital investment to fully amortize his capital investment over the duration of the lease. All agreements which do not involve substantial capital investment on the part of the tenant should have a maximum lease term of three to five years. It should be noted that leases based on a raw land or space rental rate, or fixed fee, which are in excess of one year in length, should have some provision so that the airport is not burdened by inflation, or at least have rates which are renegotiable every two or three years. This is parti- cularly important considering the impact of inflation on today's operating costs. The impacts on operating costs can be severe even with a modest inflation rate. For example, an inflation rate of 6% per year would increase costs as follows: 10-17