Executive/Council Action Form (ECAF)
ITEM TITLE:
Title
Motion 25-070, establishing lease and rental rates to be charged by Snohomish County Airport at Paine Field
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DEPARTMENT: Airport
ORIGINATOR: Nickolis Landgraff
EXECUTIVE RECOMMENDATION: Michael Fong 1/23/25
PURPOSE: To set rates for rental of certain County owned properties at the Snohomish Airport at Paine Field.
BACKGROUND: .
Q The Airport is required to collect fair market value for its rental properties by federal, state, and local law.
Q Leases used for Airport property include a provision for adjustment to fair market value every 3-5 years.
Q The appraisal of Airport property is used by staff to set rates for leasing airport owned facilities within defined ranges based on building quality and characteristics until the next appraisal.
Q The prior market appraisal of Airport property was approved on August 31, 2022, by County Council via Motion No. 22-311 and, before that, approved on September 25, 2019, by County Council via Motion No. 19-301.
Q The new land and building fair market rental rates are summarized in the attached letter from CBRE. CBRE staff have 25+ years of experience in Airport appraisals in the State of Washington. Furthermore, CBRE has over 90+ offices in the United States with over 750+ appraisal professionals.
Q The conclusions have been generated through the application of two approaches. The use of these separate approaches reflects the full spectrum of land values and market rents resulting in conclusions for different types of land and building use categories throughout the Airport.
Q The airport shall step or phase in these rates of no more than 10% per year when applicable; however, if it’s more than 10% over the three-year term, then the tenant’s rates will be divided equally over the rate term remaining. This allows more time for our tenants to adjust to the new rates instead of all at once.
FISCAL IMPLICATIONS:
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EXPEND: FUND, AGY, ORG, ACTY, OBJ, AU |
CURRENT YR |
2ND YR |
1ST 6 YRS |
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TOTAL |
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REVENUE: FUND, AGY, ORG, REV, SOURCE |
CURRENT YR |
2ND YR |
1ST 6 YRS |
|
Fund 410 Multiple DACS |
$4,275,000 |
$1,425,000 |
$5,700,000 |
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32168016250, 32168026250, 3216802651, |
ESTIMATE |
ESTIMATE |
ESTIMATE |
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32168016252, 32168016255, 32168026255, |
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32168026256, Misc. |
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TOTAL |
$4,275,000 |
$1,425,000 |
$5,700,000 |
DEPARTMENT FISCAL IMPACT NOTES: Each lease has a unique rent adjustment date based on the lease start date and lease terms. It will take between 3-5 years to realize the full net gain of this appraisal. It is estimated the full net increase will be approximately $5,700,000 at fruition.
CONTRACT INFORMATION:
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ORIGINAL |
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CONTRACT# |
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AMOUNT |
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AMENDMENT |
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CONTRACT# |
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AMOUNT |
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Contract Period
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ORIGINAL |
START |
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END |
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AMENDMENT |
START |
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END |
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OTHER DEPARTMENTAL REVIEW/COMMENTS: Reviewed/approved by: Risk Management (Sheila Barker 1/17/25) and Finance (Nathan Kennedy 1/21/25)