Item Coversheet



Staff:
Agenda:
Bruce W. Loy, Airport Manager
1/5/2015

AGENDA REPORT
Cape Girardeau City Council

15-002



SUBJECT
A five-year agricultural land lease agreement with Spring Hills Farms, LLC at the Cape Girardeau Regional Airport.

EXECUTIVE SUMMARY

The Cape Girardeau Regional Airport's agricultural leases are written for a five-year term and are advertised publically near the end of each five year term.  Recently, the City advertised publicly for bids and the high bidder was Spring Hills Farms, LLC, owned by Barry Evans and Ryan Oller, at a rate of $185.50 per acre, or $49,157.50 annually.  The attached lease agreement starts January 1, 2015 and ends December 31, 2019, and is recommended for approval.

BACKGROUND/DISCUSSION
The City owns approximately 630 acres of land at the Cape Girardeau Regional Airport, of which approximately 265 acres, more or less, are available for land lease as agricultural property.  Recently, the City advertised for public bids to anyone interested in farming the available airport property from 2015 to 2019.  Bids were opened on December 9, 2014, for the approximate 265 acres of property and the bid tally sheet is attached.  With four parties responding to the advertisement, the winning bid was provided by Spring Hills Farms at $185.50 per acre, or $49,157.50 per year, or $245,787.50 over the five-year lease period, which represents an approximate 24% increase over the previous five-year term bid.  

FINANCIAL IMPACT
The attached five-year agricultural lease agreement provides revenues of $245,787.50 over the course of the five-year term of the agreement.  Not only does this lease represent nearly $10,000 more in annual revenues than the previous five-year lease, the lease also alleviates the Airport from the expense of maintaining and mowing this acreage. 

STAFF RECOMMENDATION
It is recommended that the City Council approve a resolution authorizing the City Manager to enter into an agreement with Spring Hills Farms for a five-year agricultural lease in the amount of $185.50 per acre, or $49,157.50 annually, in accordance with the attached lease, at the Cape Girardeau Regional Airport.

ATTACHMENTS:
Name:Description:
Spring_Hill_Farms_Airport_Ag_Lease_2014.docSpring Hill Farms Lease Resolution
2015-2019_Airport_Ag_Lease.doc2015-2019 Airport Agricultural Land Lease
2015_Airport_Ag_Lease_Exhibits_A_and_B.pdf2015-2019 Ag Lease Exhibits A and B
December_9__2014_AIRPORT_AG_LEASE_Bid_Tabulation.xlsx2015-2019 Airport Ag Lease Bid Tab