A city-owned airport hangar is expected to have a new tenant this week.
Battle Creek city commissioners will vote today on whether to lease its hangar at the W.K. Kellogg Airport to Duncan Aviation. The Nebraska-based company, which operates a facility in Battle Creek, plans to take over the hangar at 16101 S. Airport Road from Kellogg Co.
A staff memo said Kellogg has “taken a different route regarding their transportation needs” and no longer wants to lease the airplane hangar.
The city said Duncan would begin leasing the facility this year with the possibility of purchasing it after June 2018.
“They’ve made a significant investment in our community, and we are pleased they want to continue that investment by expanding their footprint in Battle Creek,” Assistant City Manager Ted Dearing said Monday. “Duncan is a big company. For them to choose to continue to invest in Battle Creek is obviously a great thing for this community.”
If approved, Duncan would pay the city $296,640 for the first year of the lease. Rent is expected to be adjusted on an annual basis beginning next year following the results of a rent study, which would develop a profile of the airport and its premises.
The study is expected to be conducted by the city through an aviation consultant, the company’s lease agreement with the city shows.
Dearing said he does not anticipate the city needing to reevaluate terms of the lease, as it is believed Duncan intends to purchase the site next year.
Kellogg entered into an agreement with the city for the space beginning in 2007. In the late 2000s, the company built office space onto the existing Hangar 1 and constructed a new, larger hangar — known as the Kellogg Hangar — and a breezeway to connect the two facilities.
The Battle Creek-based cereal and snack food giant signed a nine-year lease for the property in 2010 set to expire Dec. 1, 2019.
Kellogg spokesperson Kris Charles said in an email the company decided to exit aviation operations by summer 2017, which includes selling its corporate plane and ending its lease with the airport.
“We made this decision because of the improvements over the last several years in the availability of commercial air travel in Southwest Michigan, and to deliver cost savings,” Charles said. “We’re pleased that we’ve now completed this work.”
The company makes its final payment of $321,143.16 to the city in August.
Contact Battle Creek Enquirer income and opportunity reporter Dillon Davis at 269-966-0698 or firstname.lastname@example.org. Follow him on Twitter: @DillonDavis
Read or Share this story: http://www.battlecreekenquirer.com/story/news/local/2017/08/01/duncan-aviation-lease-former-kellogg-airport-hangar/526037001/