HomeMy WebLinkAbout18475 - RESOLUTIONS - 9/21/1994 RESOLUTION NO. 18475
OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA, ACCEPTING A RENTAL
PACKAGE, SUBJECT TO FEDERAL AVIATION
ADMINISTRATION (FAA) CONCURRENCE, FOR
' THE PALM SPRINGS AIR MUSEUM 10.44 ACRE
SITE, AND AUTHORIZING STAFF TO SUBMIT
SAID PACKAGE FOR FAA APPROVAL.
WHEREAS the Palm Springs Air Museum, a non-profit organization, has offered to construct
up to $6 million worth of improvements to develop a "flying" Air Museum at the Airport; and
WHEREAS the Airport's new Master Plan has designated approximately 10 acres on the Gene
Autry Trail frontage for development of an Air Museum; and
WHEREAS the Air Museum use of actively flown aircraft to rotate displays with other
museums has been found by the FAA to be an "Aeronautical Use"; and
WHEREAS when lease arrangements are developed for an "Aeronautical Use" other than full
fair market value may be utilized to determine a return on the property; and
WHEREAS the Palm Springs Regional Airport Commission has carefully scrutinized new
regulations related to revenue diversion, and find that the rental package negotiated with the
Palm Springs Air Museum to be appropriate and in no way will diminish the Airport's ability
to meet its obligation to be as self-sufficient as possible; and
WHEREAS on September 7, 1994, the Palm Springs Regional Airport Commission
unanimously accepted the rental package, as later enumerated in this Resolution,
NOW THEREFORE BE IT RESOLVED as follows:
Section 1 . That the City Council finds that because the Air Museum will involve the
use of actively flown aircraft to rotate displays and will therefore involve
the operation of aircraft rather than mere static display, the use is an
appropriate "Aeronautical Activity" for the Airport property. Moreover,
the Museum will promote and encourage the general public interest in
aviation and is consistent with national effort to enhance public
awareness and support for airports and aviation.
Section 2. That the City Council concurs with the concept of a 40 year lease with
the improvements reverting to the Airport at the end of the lease, of the
10.44 acres of property identified as Parcel 94-1, copy attach as Exhibit
1 to this Resolution, subject to the lease restrictions described herein.
Section 3. Lease provisions shall include:
A. Air Museum to construct the museum facility, investing
approximately $5 million, which Museum facility will revert to
the Airport at the end of the 40 year lease free and clear. The
' value of the reversionary interest to the Airport is tangible but
cannot be fully assessed until construction plans are finalized.
B. The Air Museum design, in addition to regular City approval
processes, shall be subject to Airport Commission review and
approval prior to construction.
C. The Air Museum shall be responsible for maintaining the
premises throughout the term of the lease and shall allow no
open storage of dismantled aircraft.
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D. The Air museum will charge an admission fee of which 250 per
head) shall be paid to the Airport, which amount shall be
increased by the percentage increase in admission fees as they
rise during the lease term.
E. The Airport will receive 10% of gross sales if the Air Museum '
decides to operate a snack bar facility.
F. The Airport will receive 3% of gross sales from the Air Museum
gift :shop.
G. Civil Air Patrol Youth Group, which will be housed in the
facilities, will provide 260 hours of volunteer time for the Airport
(such as weed control) per year.
H. The Air Museum will provide the mounting location at the time
of Certificate of Occupancy, for the Airport beacon, which needs
to be relocated, and provide the electricity necessary for its
operation, but Airport will be responsible for the cost of beacon
installation and maintenance.
I. The Air Museum will install landscaping in accordance with plans
approved by the Airport & Planning Commissions prior to the
issuance of a Certificate of Occupancy, for the Airport along the
new frontage road and will maintain it, including water.
J. The Air Museum will complete certain street improvements that
not only service its facility but will serve others and the Airport
will avoid these costs. Based on acreage benefit, the Museum '
will be installing $174,960 of street improvements which benefit
the Airport in its efforts to attract more development.
Section 4. Additional benefits that will accrue to the Airport are:
A. Palm Springs Air Museum will distribute over 100,000 brochures
annually which shall include Airport advertising, approved by the
Airport.
B. The: Air Museum physical facility will be heavily promoted as a
filming venue. The Airport will receive its normal filming fees.
C. The: Museum activities, special fly-ins, etc., will generate 5000
additional aircraft operations which will purchase fuel and pay
the established fuel flowage fee to the Airport.
D. That the Museum is estimated to attract 60,000 visitors per year
to the Airport. This will stimulate general interest in aviation and
specific interest in the Airport. Bringing these visitors to the
Airport is consistent with the Airport Master Plan and will
enhance the lease potential of other Airport parcels.
Section 5. That the City Council estimates that the above package will generate ,
approximately $57,296 in annual compensation to the Airport (see
Exhibit 2 to this Resolution) and that as the activity increases on the
site, so will the revenue to the Airport.
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Section 6. The City Council finds that although the actual projected revenue stream
from the lease is less than the fair market rental value of the property,
when certain intangible benefits are factored in, including the
reversionary value of the leasehold;the revenue from Museum activities,
filming and increased aircraft operations; and the enhancement of other
property values from creation of the Air Museum activity center, the
' lease total consideration more nearly approximates fair market rental
value. Moreover, since the Air Museum use is an "Aeronautical
Activity," it is not necessary to attain fair market rental. The City
Council accordingly finds that (a) the consideration received pursuant to
the lease will be adequate compensation in light of all the tangible and
intangible benefits recited above, and (b) the Air Museum lease will
contribute to making the Airport as self-sustaining as possible under the
circumstances, which finding is based on the following:
A. The Airport is receiving as much consideration as it can from the
Air Museum without adversely affecting the ability of the project
to proceed.
B. The Airport will receive substantial revenue from the Air Museum
lease.
C. There are no other prospective users for the site, and the
prolonged slump in Southern California real estate suggests there
will be no users for the foreseeable future.
D. The nature of the Air Museum use is such that it will serve as a
draw to bring visitors to the site, and not merely those involved
' in the aviation industry, but also those with broader educational
interests. This will assist the Airport in marketing other parcels
around the Museum, both to those in the industry and for
broader commercial purposes. In enhancing the leasability of
surrounding property, it will assist in making the Airport as self
sustaining as possible.
Section 7. That the Director of Aviation is authorized to submit this Resolution to
the Federal Aviation Administration for review and approval of the
subject rental package. Once approved by the FAA, the Director of
Aviation and City Attorney are authorized to negotiate a lease agreement
consistent with the foregoing.
ADOPTED this 21st day of September 1994.
AYES: Members Hodges, Kleindienst, Lyons, Reller-Spurgin and Mayor Maryanov
NOES: None
ABSENT: None
ATTEST: ITY OF PALM SPR CALIFORNIA
By�?
ity Clerk ity anage
' REVIEWED & APPROVED:
EXHIBIT I TO RESOLUTION # 18475 ({
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94-1 PARCEL
LEGAL DESCRIPTION
These certain portions of Section 7„Township 4 South, Range 5 East, San Bernardino Base and
Meridian, in the City of Palm Springs, County of Riverside, Slate of California, being more
particularly described as follows:
Commencing at the Southwest corner of said Section 7, thence North 56'55'42" East a distance
of 1,648.17 feet, more or less, to a point which is 1,080.00 feel left of runway 13R/31L '
centerline at station 961-79.56, said point also being the TRUE POINT OF BEGINNING;
thence North 36°32'13" West a distance of 775.00 feel; thence North 5:11'27'47" East a distance
of 626.06 feet; thence along a curve to the right having a radius of 50.00 feet, an angle of
98°26'08", and a length of 85.90 feet; thence South 28°06'05" East a distance of 4112.09 feel;
thence along a curve to the right having a radius of 120.00 feel, an angle of 40"32'09", and
a length of 84.90 feel; thence along a curve to the IeR having a radius of 180.00 feel, an angle
of 40°32'09", and a length of 127.35 feel; thence, South 28°06'05" East a distance of 84.46
feel; thence along a curve to (lie right having a radius of 17.00 feel, an Engle of 8193'52", and
a length of 24.20 feel; thence South 53°27'47" West a distance of 461.42 feet to the TRUE
POINT OF BEGINNING. Said parcel containing 10.4414 acres, more or less. Basis of
bearing is the said centerline of runway 13R/31L, North 36°32'13" West.
EXHIBIT 2 TO RESOLUTION # 18475
AIR MUSEUM RENTAL PROJECTION
Following is a summary calculation of the projected revenue that will accrue to the Airport
from the presence of the Air Museum. Please note that the item numbering below
' corresponds to the appropriate action of the Resolution.
Item # Item Projected Revenue
4 D. Admissions fee - Airport to receive $13,750
26C per paid admission (56,000 paying
admissions @ 25C = $13,750)
4 F. Gift shop - Airport to receive 3% of $1,500
gross sales. ($50,000 gross sales
_ $1500).
4 G. Volunteer work - Civil Air Patrol $4,000
to provide 250 manhours per year of
volunteer work for the Airport
(@ $16/hr x 250 = $4,000)
4 H. Airport Beacon - Beacon electrical usage $4,350
$750 initially, Beacon relocation valued
at $45,000 @ 8% capitalization
rate = $3,600.
' 41. Landscaped frontage - maintenance will be $9,300
worth $5700 per year and the installation
of $45,000 @ 8% of capitalization
rate = $3,600.
4 J. Frontage road construction - street $13,996
improvements @ $174,960
@ 8% capitalization rate = $13,996.
5 A. Advertising - Museum may distribute up $3,500
to 100,000 brochures per year with Airport
@ 3.50/copy = $3,500.
5 B. Filming fees @ $3,500/year $3,500
5 C. Fuel flowage fee - 5,000 operations buying 10 $3,400
gallons of fuel @ 6.8C/gallon
TOTAL ESTIMATED ANNUAL AIRPORT REVENUE $57.296