MEMORANDUM 05-107

TO: Mayor Hornaday and Homer City Council

THRU: Walt Wrede, City Manager

FROM: Sheri Hobbs, Personnel/Airport Terminal Manager

DATE: June 7, 2005

RE: Grant Aviation Lease

Grant Aviation has requested to lease the aircarrier space recently vacated by Olson Air. Bruce McGlasson, President of Grant Aviation has provided a history of their airline for information. Their tentative plans at this time are to operate two flights per day to Anchorage with a stopover in Kenai. Grant has recently opened operations in Kenai and will begin flight service in Homer on August 1, 2005.

Grant’s lease is for one year with an option to renew if agreed upon by both parties for an additional 4 years. Grant will be leasing the aircarrier office, ticket counter and cargo area. Lease fees are $2,370.60 per month.

RECOMMENDATION: Approve Grant Aviation, Inc. lease and authorize the City Manager to sign.

FISCAL IMPACT: Air Carrier Revenue estimated at $28,447.20 annually.