Space is getting increasingly rare – and, therefore, increasingly valuable – at Lakeland Linder International Airport with all 100-plus warehouse/office sites rented to private businesses and government agencies at the city-owned airport.
“We’re full-up – 100% occupied,” Airport Director Gene Conrad told the city’s Real Estate & Transportation Committee Friday as he introduced two new lease agreements with flight school operators and an amended agreement with a helicopter sales and maintenance operation.
The committee endorsed the deals on Friday, and on Monday the Lakeland City Commission unanimously approved them with little comment.
During Friday’s Real Estate & Transportation meeting, the panel discussed lease pricing. With airport space a sought-after commodity, Conrad said the city could “get higher rates” for its leases based on ambient use and valuation metrics, but it will not tie annual increases in rental rates to the Consumer Price Index. Instead, he said, the airport will institute standard 2.5% annual rent increases in lease agreements.
“In all fairness” to the airport’s tenants, it would be a significant cost for many to be hit with a 6% to 7% increase in annual rents, which they would be subject to just this year alone if increases were tied to the CPI, Conrad said. The city will use CPI to gauge annual rent increases for ground leases, he said.
Switching annual rent increases from CPI to 2.5% was the entire point of amending a 10-year lease agreement with Lakeland-based Lance Aviation, which has been selling and servicing helicopters for more than 20 years at 3131 Flightline Dr.
Commissioners approved a one-year agreement with Lakeland-based Kingsky Flight Academy to lease an additional 1,012 square feet of office space for $4,228.13 per month at the Flight Safety Building, where it already occupies 3,047 square feet.
The agreement gives Kingsky, also a longtime airport tenant, “first right of refusal to lease an additional 1,492 square feet of adjacent office space at the prevailing rental rate of $12.50 a square foot in the event Polk State College does not rent the adjacent space.”
Commissioners gave the green-light to a five-year agreement with a new tenant — ITPS (America), LLC, which will lease approximately 10,200 square feet of hangar/office space at 3904 Aero Dr. at $6,800 a month or $81,600 annually, which breaks out to $8 per square foot.
ITPS, International Test Pilot School, is a subsidiary of ITPS Canada of London, Ont., and was founded in 1986 in the United Kingdom. The three planes it will operate out of Lakeland Linder will be their first in the United States.
The Canadian company was fortunate in that it “cold-called” the airport looking to lease space just as a space came available, Conrad said.
“Guess that means we should build more leasable space,” committee chair and Commissioner Mike Musick said.
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Would love to see a small passenger airline start operating out of there! Something like an Allegiant or Fronteir!
Just so I understand, everyone was ok using the CPI when it was less than 2%.
How rapidly are the city’s expenses rising?
If the money doesn’t come from the tenants, where then does it?