10/07/2024

Meeting Minutes for:
Finance Committee Meeting
Yuma International Airport, Conference Room
Monday, October 07, 2024 at 09:09 AM

    Call to Order:
    The Yuma County Airport Authority, Inc. (YCAA) Finance Committee Meeting of the Board of Directors was called to order at 9:09AM on October 7, 2024, in the Yuma International Airport Conference Room, 2191 E. 32nd Street, Suite 218, Yuma, Arizona 85365. The Presiding officer was Stanley Gourley, Chairman

    YCAA FINANCE COMMITTEE MEMBERS PRESENT WERE:
    Stanley Gourley, Chairman and YCAA Treasurer
    Dean Hager, 1st Vice President
    Russell Jones, 2nd Vice President

    YCAA FINANCE COMMITTEE MEMBERS ABSENT WERE:
    Albert Gardner, Director

    ALSO PRESENT WERE:
    Gladys Brown, Airport Director
    Gerald Hinkle, Jr., Chief Financial Officer
    Silvia Gunderman, 1st Bank Yuma

    CALL TO THE PUBLIC
    There were no Public Comments.

    REGULAR AGENDA
    1) Discussion and possible recommendation to amend the YCAA’s existing lease with Freeman Holdings of Arizona, LLC for the purpose of expanding the FBO and Fuel Farm Premises footprint and extending the overall lease term as a result of recent significant investments into infrastructure beneficial to the airport.

    Ms. Brown, Airport Director, described Freeman Holdings of Arizona, LLC (dba Million Air Yuma) operations at the airport and explained that their sub-lease agreement includes six (6) different Premises on the airport with terms extending up to 2032. Ms. Brown continued by describing Million Air’s recent investment in an expansion of fuel storage capacity, a complete remodel and expansion of the footprint of their FBO has triggered the necessity of another lease amendment to account for modified Premises and related additional rents. The Principals of Million Air have also requested the Board consider an extension of their existing lease term in return for the investment which totals $4 Million.

    Ms. Brown described the investment in some detail to include:

    · Million Air Yuma's expansion of its fuel storage capacity including two additional 30,000-gallon Jet-A Fuel storage tanks, one 2,000-gallon De-Fuel storage tank which increased fuel storage capacity from 152,000 gallons to 212,000 gallons and expanded their footprint an additional 3,000 square feet.
    · Complete remodel of the YCAA owned FBO Facility including new finishes and an expansion of the Line Shack by 234 square feet.
    ·Improvements to the Amelia Earhart Facility to establish a dedicated equipment maintenance and storage area.
    ·A financial commitment of up to $250,000 towards the parking lot improvement project intended to expand the overall number of spaces available for customer parking.

    Ms. Brown described how one element of the proposed lease amendment would be to account for the added rents due on the expanded footprint.

    Ms. Brown then described how the Principals of Million Air have requested an opportunity to extend the current term on all six premises, as allowed the airport’s Minimum Standards in recognition of the total investment underway. She then described how the proposed lease amendment would address this issue using a two-step approach. First, the amendment would recognize the Lessee as having authorization to exercise all existing options available to extend the term, followed by the addition of additional options which overall would move the termination date as far as forty-six (46) years from now which is in compliance with the FAA’s maximum term of fifty (50) years.

    A discussion ensued in which the Committee expressed their pleasure in Million Air’s interest in continuing to invest in the Yuma Airport and Mr. Jones expressed that if it was his business making the investment, the extended term would be desired as well.

    Ms. Brown, Airport Director, also briefed on the Memorandum of Sublease and Landlord Consent. The two agreements have been requested by Million Air’s lending source to reduce risk by asking the YCAA to allow rights contained in YCAA’s lease with Million Air to transfer to the lender. She stated both agreements are under legal review and are subject to negotiation.

    In general, Ms. Brown, described the following key aspects of the agreements:
    ‐Requires the YCAA to give notice to Lender of any breach of our agreement
    ‐Allows Lender the right to to cure the breach on behalf of Million Air
    ‐Allows the Lender to become the tenant or have access to the Premises to retrieve personal property in the case of foreclosure
    ‐Upon the YCAA’s approval, allows Lender to find a new tenant for the premises if they so choose.
    She also explained how the Memorandum of Sublease contains terms that stipulate that if the YCAA’s lease with the County is terminated, and the sublease references any provisions in the lease with the County, none of those provisions will continue in the lease with Freeman/Million Air.

    After a brief discussion about the negotiation underway between the parties’ legal teams to establish the final language, Mr. Jones, described how this type of agreement is standard practice for such an investment into leased property.

    The Committee reached a consensus to recommend the Board of Directors authorize the President, Airport Director or their designated representative to execute Freeman Holdings of Arizona, LLC Lease Amendment #9 for the purpose of expanding the FBO and Fuel Farm Premises footprint and extending the overall lease term as a result of recent significant investments into infrastructure beneficial to the airport subsequent to staff and legal review.

    Additionally, the Committee will recommend to the Board of Directors to authorize the President, Airport Director or their designated representative to execute Memorandum of Sublease and Landlord Consent contingent on staff and legal review.

    CALL TO THE PUBLIC
    There were no Public Comments.

    ADJOURNMENT
    There being no further business before the Committee the meeting adjourned at 9:57AM.




    // Approved //
    Stanley Gourley
    Treasurer, Yuma County Airport Authority; Finance Committee Chairman
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