MEMORANDUM 04-29

TO: Mayor and City Council

THRU: Walt Wrede, City Manger

FROM: Sheri Hobbs, Personnel/Airport Terminal Manager

DATE: February 2, 2004

RE: Olson Air Service, Inc. Airport Terminal Lease

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Olson Air Service has a corporate office in Anchorage. Don Seelinger from Seldovia has been acting as their representative to negotiate an air carrier lease. We have negotiated a one-year lease at the Homer Airport Terminal effective March 8, 2004 to February 28, 2005.

Olson Air will operate flights across the bay and to other locations that are chartered. They will be leasing the ticket counter, office and cargo areas. The lease fee is $28.447.20. It is the City’s intention to offer a one-year lease at this time. If at the end of one year both parties agree a one-year renewal term will be approved.

After Council approval the lease requires the approval of DOT prior to occupation of the premises.

RECOMMENDATION: Approve Olson Air Service, Inc. lease and authorize the City Manager to sign.

FISCAL IMPACT: $28,447.20 in revenue for Homer Airport Terminal.