MEMORANDUM 08-154

TO: Mayor Hornaday and City Council

THRU: Walt Wrede, City Manager

FROM: Sheri Hobbs, Personnel/Airport Terminal Manager

DATE: November 28, 2008

RE: Era Aviation Airport Terminal Lease

The City leases the land the airport terminal is located on from DOT therefore all airport terminal leases are considered subleases. After airport leases are presented to Council they must be sent to DOT for approval and meet FAA requirements before consent to sublease is given by DOT.

Era Aviation began leasing at the Homer Airport Terminal on December 29, 1993. Era currently leases two office areas, one ticket counter area, baggage and cargo areas for a total of 1380 square feet. Era’s latest lease with the City terminates on December 31, 2008.

We have negotiated a new five year lease with Era until December 31, 2013. The annual lease fee is $51,007.08 with an annual CPI. After Council approval the lease will be sent to the State of Alaska Department of Transportation, Aviation Leasing for their review and approval.

RECOMMENDATION: Approve the Era Aviation Homer Airport Terminal Air Carrier/Ticket Counter Sublease and authorize the City Manager to sign.

FISCAL IMPACT: $51,007.08 annually to the airport terminal account.