Council to take action on Resolution No. 15-26 approving the Development Agreement between the City of Buckeye, an Arizona municipal corporation and Vermillion Development, LLC, an Arizona limited lia

5.A
CITY OF BUCKEYE
Regular Council Meeting
COUNCIL ACTION REPORT
MEETING DATE: 01/20/26
AGENDA ITEM: 5.A. AV - Hangar
Development Agreement and Airport
Lease Agreement with Vermillion
Development, LLC.
DATE PREPARED: 01/20/26
DISTRICT NO.: 1
STAFF LIAISON: Scott Gray, Aviation Director, sgray@buckeyeaz.gov, (623) 349-
6885
DEPARTMENT: Buckeye Municipal
Airport
AGENDA ITEM TYPE: Public Hearing
and Non Consent - New Business Items
ACTION/MOTION: (This language identifies the formal motion to be made by the Council) 
Council to take action on Resolution No. 15-26 approving the Development Agreement between the City
of Buckeye, an Arizona municipal corporation and Vermillion Development, LLC, an Arizona limited
liability company, and, the related long-term lease agreement; authorize and direct the Mayor, City
Manager, City Attorney, and City Clerk to take all steps necessary to cause the execution and delivery of
the Agreements and all documents and other necessary or desirable instruments connected with the
Agreements and to take all steps necessary to carry out the purpose and intent of said Agreements.
SUMMARY
PROJECT DESCRIPTION:
In March of 2025, the City issued a Notice of Intent to Lease for approximately five (5) acres of airport
land for the construction of executive hangars. Vermillion was the only offeror. As this was the first major
land lease opportunity in recent years, significant effort by Vermillion and city staff was necessary to
ensure the business points, development and lease language were acceptable to both parties.
Because the business points included the development of up to twelve (12) executive hangars over a
period of time, staff determined that a development agreement for hangar construction, and individual
ground leases, was appropriate. The Hangar Development Agreement establishes the framework and
process for the hangar development. The Airport Lease Agreement provides the standard lease
relationship for each of the hangars constructed. Except for Hangar No. 1 -- the first hangar to be
constructed -- Vermillion will construct and potentially sell each 50-year Airport Lease Agreement hangar
to third-party aircraft owners and assign each Airport Lease Agreement, accordingly.
The Hangar Development Agreement commits Vermillion to complete four (4) of the executive hangars
within eight (8) years from execution of the Development Agreement. This will provide ample time for
Vermillion to market these hangars. Given the high demand, there is a potential that all twelve (12)
hangars may be sold in the first several years, thus completing the project within the eight (8) year
provided. The Hangar Development Agreement also commits the city to provide utility infrastructure,
similar to the city's existing leases, including water service, sewer tank service, and taxi lane access. The
Airport Lease Agreement is for a fifty (50) year term in compliance with State statute.  The Airport Lease
Agreement includes uncapped consumer price index increase every two years, a fair market assessment
at each ten (10) year interval, and a full building inspection to ensure the building is maintained over the
term of the Lease. These provisions ensure the city will receive fair market value throughout the term of
the Airport Lease Agreement.
Upon the expiration or termination of each Airport Lease Agreement, ownership of the capital
improvements -- the Hangar -- vests with the city.

BENEFITS:
Vermillion Development will construct up to a total of twelve (12) executive hangars.  Four (4) hangars
must be completed within eight (8) years. The Airport is in need of aircraft storage options, and these
hangars are focused on corporate aircraft which will provide an opportunity to attract corporate aircraft
operators. 
FUTURE ACTION:
Each additional hangar Airport Lease Agreement will be approved administratively, as set forth in the
Hangar Development Agreement.
FINANCIAL IMPACT STATEMENT:
Annual revenue from each of the Airport Lease Agreements will be approximately $1,225. Additional
revenue is anticipated with aviation fuel sales associated with the new based aircraft.
CURRENT FISCAL YEAR TOTAL COST:
N/A.
BUDGETED:
No
FISCAL YEAR:
FY2026 - FY2027
FUND/DEPARTMENT:
10001200-413131
Items related to a project or facility location must include an attached vicinity map for Council
Review.
ATTACHMENTS:
Hangar Development Agreement with Vermillion.pdf
Airport Lease Agreement with Vermillion.pdf
Resolution No. 15-26 Hanger DA Vermillion.pdf
Council 1-20-25 - Airport Hangar Development v2.pdf