The Herald Banner, Greenville, TX

September 22, 2013

Council expected to receive L-3 lease

By BRAD KELLAR
Herald-Banner Staff

GREENVILLE — The Greenville City Council is scheduled Tuesday to receive the proposed lease and maintenance agreement with L-3 for property the defense contractor leases at Majors Field, the City of Greenville Municipal Airport.

A presentation of the agreement, as well as an appraisal of Majors Field, are included as part of Tuesday’s regular council session, starting at 6 p.m. in the Municipal Building, 2821 Washington Street. A work session is scheduled at 5 p.m. Tuesday.

The agenda for the meeting also includes executive session items, allowing the council to confer with City Attorney Daniel Ray about the lease agreement and appraisal either before or after the presentations are made during open session. Should the council take any action Tuesday regarding the lease agreement, it would do so in open session.

On May 14, the Council approved a professional services agreement with Airport & Aviation Appraisals Incorporated for an appraisal of Majors Field with a respect of the lease of the airport. The firm’s Win Perkins is scheduled to make Tuesday’s presentation.

Ray has said the appraisal would be based on Federal Aviation Administration (FAA) requirements, as well as a comparison of appraisals and lease agreements with up to 25 comparable airports.

The Council voted in February to approve a non-disclosure agreement with L-3 Communications Integrated Systems prior to negotiations starting on a new lease agreement for the defense contractor at Majors Field.

The airport covers approximately 1,500 acres. L-3 leases much of the airport property from the City of Greenville, with the original lease agreement reached in 1977. The lease agreement is up for consideration again in 2017.

Ray said the eventual agreement would address a worst case scenario should the airport property ever be found to be taxable, adding the eventual lease agreement would adhere to provisions under the Surplus Property Act of 1944 which transferred the federal government’s interests in the airport to the City of Greenville, ensuring the airport would be financially self-sustaining indefinitely.

One of the problems with the earlier agreement, Ray said, is that it did not include an escalation clause which would address increasing payments during the course of the lease.

According to a 1990 FAA report, Majors Field is one of thousands of airports from around the country affected by agreements with the federal government. Majors Field is affected by five such agreements.

Ray explained having three such agreements require all rental monies stay on airport property, per FAA regulations. These agreements also run with the land — i.e., barring an extreme circumstance, these agreements remain intact forever.

Majors Field (now Majors Airport) was given to the city of Greenville by the federal government under the Surplus Property Act of 1944. One of the specifications of that act is that the “recipient [must] use the revenue generated by the property for the operation, maintenance or development of the airport.”

The FAA must approve any lease between Greenville and L-3.