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Hangar Lease Key Points

• 40 Year Lease renewable up to an additional 40 years! That's 80 years total!
• The lease is transferable! If you decide to sell the hangar, the lease transfers to the next owner!
• Property Tax Exempt
• Hangars built to a Class I Structure can Sub Lease at their discretion

What is permitted?

• Storage of active aircraft.
• Shelter for maintenance, repair, or refurbishment of aircraft, but not the indefinite storage of non-operational aircraft.
• Construction of amateur-built or kit-built aircraft provided that activities are conducted safely;
• Storage of aircraft handling equipment, e.g., tow bar, glider tow equipment, workbenches, and tools and materials used to service, maintain, repair or outfit aircraft; items related to ancillary or incidental uses that do not affect the hangars' primary use.
• Storage of materials related to an aeronautical activity, e.g., balloon and skydiving equipment, office equipment, teaching tools, and materials related to ancillary or incidental uses that do not affect the hangars' primary use; Storage of non-aeronautical items that do not interfere with the primary aeronautical purpose of the hangar (for example, televisions, furniture).
• A vehicle parked at the hangar while the aircraft usually stored in that hangar is flying, subject to local airport rules and regulations.

What is NOT permitted?

• Use as a residence. No apartments or sleeping at your hangar allowed. The FAA does distinguish between residential and crew rest areas. Crew rest areas are acceptable.
• Operation of a non-aeronautical business, e.g., limo service, car and motorcycle storage, storage of inventory, non-aeronautical business office.
• Activities which impede the movement of the aircraft in and out of the hangar or other aeronautical contents of the hangar.
• Activities which displace the aeronautical contents of the hangar or impede access to aircraft or other aeronautical contents of the hangar.
• Storage of household items that could be stored in commercial storage facilities.
• Long-term storage of derelict aircraft and parts. No Hangar Queens!
• Storage of items or activities prohibited by local or state law.
• Fuel, and other dangerous and Hazmat materials. Fuel farms must be approved and meet all Federal, State, Local, and Environmental Regulations.
• Storage of inventory or equipment supporting a municipal agency function unrelated to the aeronautical use.

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Still interested in building?
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​Follow these steps!

This guide is a work in progress. Please let us assist you with 

1. Figure out your building size and costs:

Hangar Land Lease and Impact Fees

​Hangar Leases are based off of the following formula:
(((Hangar Square Footage) * Acre Sq Footage 43,560) * Current Property Value $24,200 per acre)/10 years = Hangar Lease

​Here are some examples:

Use our Excel Sheet Template to figure out your hangar cost!:

Hangar Impact and Land Lease Calculator
File Size:	12 kb
File Type:	xltx

Download File

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Hangar Width	Hangar Depth	Annual Land Lease	One Time Impact Fee
40	50	$242	$6,000
45	50	$242	$6,750
50	60	$242	$7,500
60	80	$266.67	$9,000
100	90	$500.00	$15,000

Minimum Annual Land Leases are $242 until 2030. Impact fees are a minimum of $5000.

Existing Hangar Widths and Values per Owners

Width	Depth	Estimated Costs	Aircraft Capacity
42*	60	$50,000	2
60	60	$70,000	4-5 Depending on Size
64	56	$75,000	1-4
60	80	$130,000	5-6 Depending on Size

These numbers are based off of wood construction. Steel construction is substantially higher.

Recommended Builders, Manufactures, and Utilities

Builders	Hangar Door Manufacturers	Utilities
Gosman Inc	Schweiss	Internet - In Progress
Graber Post Buildings, Inc.	Diamond Doors	Electric - Duke Energy
Mid-States Construction	Powerlift Doors	Gas - Vectren Energy
T-Hangars - FulFab	Higher Power Doors	Water/Sewage - City of Madison

2. Figure out how to pay for the Hangar

Typically, Individuals building a hangar will build with one of the following
- Already have the money and pay upfront
- Lease Hold Improvement Loan (New)
- Home Equity Loan
- Unsecured Private Loan (Don't recommend)

German American Bank has worked with the Madison Municipal Airport to provide options for personally financing a hangar. Information on each option is listed below. For more information or to start the lending process contact German American Bank at (812) 273-4949.

A. Leasehold Improvement Loan (aka Leasehold Mortgage).

• Key Points to Leasehold improvement loans:

1. Rates trend lower than personal unsecured loans.
2. Maximum term for the loan would not exceed 10-15 years depending on the airports land lease agreement.
3. A prime candidate would have a strong credit rating 700+, good liquidity and net worth, and strong debt service or Debt to Income Ratio.

• Information lenders will likely require:

1. Borrower’s name
2. Loan Amount
3. A completed personal financial statement
4. 2 Years Federal Tax Return (including all statements and schedules)
5. A copy of the building plans if available
6. A copy of the airports land lease agreement

B. Home equities are another option for funding hangar builds.

• Key Points to Home Equities:

1. Offers the flexibility of making interest only payments
2. Home equity loans have long terms
3. Interest rates are most often lower than regular personal loans
4. Home equity loans are set up to be used similarly to a checking account in that you use what you need when you need it.

• Information lenders will likely require:

1. Borrower’s name
2. Loan Amount
3. A completed personal financial statement
4. 2 Years Federal Tax Return (including all statements and schedules)
5. Equity available in home
6. Requires an appraisal of your home

C. Personal Unsecured Loans

• Key Points to Personal Unsecured Loans:

1. Often for smaller amounts this loan can be obtained a little more quickly
2. Terms are usually short, no more than a few years
3. Rates are higher than most other loan types.

• Information lenders will likely require:

1. Borrower’s name
2. Loan Amount
3. A completed personal financial statement
4. 2 Years Federal Tax Return (including all statements and schedules)
5. Collateral to be used

​

3. Contact Airport Manager Brent Spry with Building Plan and Lot Location you wish to build on:

J Lots	I Lots
J1 - SOLD	I1 -SOLD
J2 - SOLD	I2 - Available
J3 - Available	I3 - Available
J4 - Available	---

4. Establish Land Lease with Madison Municipal Airport:

Download Sample Lease

SAMPLE HANGAR LEASE 2021
File Size:	893 kb
File Type:	pdf

Download File

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5. File with FAA:

The FAA requires an Obstacle Evaluation and Airport Airspace Analysis (OE/AAA) prior to any construction on the field. We will assist you on submitting a Notice of Proposed Construction Form 7460-1 prior to being issued a building permit from the City of Madison. This evaluation can take up to 45 days to process or longer. Once you have a building plan ready, you can fill out the information below and we will be in touch to assist you.

WARNING:
THE AIRPORT WILL ASSIST YOU IN SUBMITTING THIS FORM. ISSUES WHEN SUBMITTING CAN DELAY THE APPROVAL BY MONTHS!

6. Establish address:

To establish an address, you will need to contact Postmaster at the local post office. Your Lot # is your Hangar number but the physical mailing address will be at XXXX West IMS Lane. You will need to establish an address before utilities can be placed. If you wish to place a mailbox at the airport, you may do so. We recommend a standard size black mailbox. 

7. Once approved, Building Permits can be obtained from the City of Madison:

A Building Permit may be obtained here.

You will need the following documentation for your permit:

• Approval of Construction Site from Airport
• FAA Form 7460-1 Filed and Approved
• Approved Construction Plans from a builder
• An Approved State Construction Design Release (If Class 1 Structure)
• Address

Building permit costs:

$50 for the first $2,000 of construction costs. There is an additional $1 added per $1,000 of construction cost. (Example: If you have $6,000 of construction costs, your permit will be $54 permit.)

8. Once documents and payments have been received, you will be given a Notice to Proceed from the airport:

You will need the following:

• Approval of Construction Site from Airport
• FAA Form 7460-1 Filed and Approved
• Approved Construction Plans from a builder
• An Approved State Construction Design Release (If Class 1 Structure)
• Building Permit and Fees
• Land Lease Established and Impact Fee Paid

9. File for your Property Tax Exemption:

A hangar is Property Tax Exempt in the State of Indiana. You will need to fill out an Application for Property Tax Exemption State Form 09284 (Form 136) in order to get the exemption. You can find that information at the link here.

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WELCOME TO THE MADISON MUNICIPAL AIRPORT!

This guide is a work in progress. Please let us know if you have questions or concerns. As always, we value any and all feedback!