Company Signs 30-Year Airport Lease
Mooney Airplane Company has entered into a new lease for its
buildings and land in Kerrville (TX). Mooney, the City of
Kerrville, the Kerr County Commission and the Kerrville Airport
Authority have been negotiating for several months according to
Mooney President, J. Nelson Happy.
"The new lease will be effective for 30 years and adds
considerable stability to Mooney's operation. Our old leases were
fragmented, covered too much land and only had nine years left to
go. We were reluctant to make investments in the physical plant
without a long-term lease. The new lease rate is only $1,434 per
month for the first 10 years, about 2.5 cents per square foot, then
escalates to about $3,263 per month for the next 10-year term. The
final 10-year term will be at $6,527 per month. This is very
reasonable rent, and Mooney retains title to all of our buildings
and fixtures for the entire 30-year term," Happy said. The base
rent escalates annually based on the CPI.
The terms of the new agreement reduced Mooney's leased acreage
from 51 acres to the 17 acres the company actually uses. "This will
drastically cut our tax burden and eliminate the need for Mooney to
maintain several old deteriorated buildings. We are keeping a right
of first refusal on the surplus property for 10 years just in case
we need it, but I don't foresee any possibility that we will need
more than our core 17 acres," Happy stated. Kerr County Judge Pat
Tinley described the lease as a win-win situation for everybody. "I
think this is a great step, frankly," he said. "The cooperation
between all the entities showed a lot of good communication."
"We were very pleased by the efforts of Kerrville City Manager
Ron Patterson and Airport Manager David Pierce who worked long and
hard to make this new lease happen," Happy observed. "In fact Mayor
Stephen Fine and the entire City Council and County Commission
worked efficiently to expedite this new lease."
Sam Rothman, Mooney's board chairman, commented: "We were
gratified by the support we received from the Kerrville
governmental units. They worked hard to make a fair deal for all,
and we think the new lease will help maintain and increase value
for our shareholders. Another important factor for Mooney was that
our $5 million USDA insured loan required us to have a 30-year
lease in place by March 31, 2004. This new lease fulfills that
condition, and also provides considerable long-term savings for
Mooney. Another plus is that land surplus to us can now be leased
to other tenants at the airport, which should stimulate airport
development which is also good for Mooney."
Mooney currently sells five models: the four-place single engine
piston powered aircraft, the Bravo DX, which is available with the
Garmin G-1000 glass panel display as the GX; and its stablemates,
the Ovation2 DX and GX, and the Ovation. Mooney is celebrating its
51st anniversary in Kerrville, this year, where it has manufactured
more than 10,000 aircraft.