Boeing Deal With Lambert Calls for Annual Rent Payments of at Least $2.63 Million

Aug. 10—ST. LOUIS COUNTY — The Boeing Co. would pay at least $2.63 million a year to lease about 158 acres at St. Louis Lambert International Airport for a major expansion of its facilities here under a plan endorsed Wednesday by the city Airport Commission.

The lease calls for an initial rent payment in 2026 or when the aerospace giant begins using the new manufacturing complex it hopes to build, whichever is sooner.

After that, at least that amount would be paid annually during the remainder of the 17-year lease, totaling more than $39 million. In addition, there could be periodic increases in the rent tied to the consumer price index.

Boeing would have options to continue the lease in five-year increments through 2070. "We look forward to working with Boeing for many years to come on this project," Airport Director Rhonda Hamm-Niebruegge said.

Whether the nearly $2 billion project happens, though, depends on if Boeing's proposal is selected and funded by the U.S. Department of Defense, Hamm-Niebruegge said. A decision is expected next year, she said.

For that reason, she said, the lease for the airport land includes wording allowing Boeing to terminate at any time prior to 2026. To be able to have a way out "if that didn't come through" was important to the company, Hamm-Niebruegge said.

Boeing has been vague on details on its project, saying it involves advanced manufacturing facilities for "future franchise programs."

The project comes as the aerospace industry readies to compete to build the next generation of fighter jets.

Hamm-Niebruegge, responding to a question from commission member Sean Fitzgerald, said Boeing's bid for the work would include only the sites at Lambert and that no alternative plans involving other regions will be proposed by the company.

The commission, meeting by teleconference, endorsed the lease on a voice vote. No one opposed it. Lambert, while in North County, is owned and operated by St. Louis.

Hamm-Niebruegge said the city's chief fiscal body, the Board of Estimate and Apportionment, is expected to consider the lease next week. Approval also is needed from the city Board of Aldermen.

The St. Louis County Council is considering tax incentives to help Boeing pay for the expansion, which could bring in 500 new jobs.

That deal would give Boeing half off on the project's real and personal property taxes in exchange for the new jobs and investment. The tax break's value is now estimated at $155 million.

"I think it's a good deal for the city, the county and the region," said Airport Commission member John Bales, one of the county's representatives on the panel. The city has a majority on the commission but there also are some members from suburban counties.

Nearly 110 acres covered by the lease are on the eastern end of Lambert in Berkeley, bought over the years to reduce the effect of airport noise on nearby residents.

The remainder is in an unincorporated area on Lambert's northern end and includes two vacant buildings used decades ago for manufacturing by Boeing's predecessor, McDonnell-Douglas. Those are expected to be demolished if the plan goes forward.

Under the lease, Boeing could get back up to $2.5 million from the airport to cover some of the cost of remediating pre-existing environmental conditions if any was determined to have been caused by the airport or another tenant. But Hamm-Niebruegge said in an interview that's highly unlikely.

The lease also gives Boeing the option of leasing an additional 28 acres, with an annual rent payment of about $369,000 plus inflation-related increases. That area now includes a hangar leased to Trans States Holdings, which operates GoJet, a regional airline that works with United Airlines.

Should Boeing's plan eventually require the relocation of Trans States, Boeing would pay as much as $41.3 million to design and construct a replacement facility.

Hamm-Niebruegge said in an interview that airport officials made it clear during negotiations with Boeing that it didn't want to lose Trans States.

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