With new rules for sale or lease of property in place, the Helena Regional Airport has retraced a number of its steps in negotiating a lease agreement with Blue Cross and Blue Shield of Montana for a new office building.

Airport manager Ron Mercer told the chamber of commerce's monthly Transportation Committee meeting Tuesday that Blue Cross had submitted a new proposal to lease 9 acres, under the same terms the parties negotiated earlier this year. The insurer also submitted a 5 percent deposit on the first year's payment, around $13,000.

The new rules, approved earlier this month by the Helena City Commission and the Lewis and Clark County Commission, call for a third-party property valuation within three months of the start of the lease, in order to ensure the airport is getting at least market value.

The airport sought opinions from Mike Casey, broker/owner of the Trimac Group, and Tim Moore, a local certified appraiser. While neither offered a specific value for the 9 acres (plus an option for an additional 3 acres), both said that the proposed terms of the lease are above the current Helena market value.

"We were very pleased with how that turned out," said Dan Ellison, chairman of the airport authority board. "We worked hard to try to put a proper valuation on that property well before we had any discussions with Blue Cross. This valuation tells us we were very much in the ballpark and entered into a good agreement for the airport and for the people of Lewis and Clark County."

The airport is also required to twice advertise its intent to lease, giving anyone the chance to make a better offer. The first advertisement appeared in the Independent Record on Sunday.

"We haven't had anybody knocking on our door yet," Mercer said.

The terms of the lease for the ning acres, near the southeast corner of Washington Street and Skyway Drive, call for annual lease payments of $241,000, to increase by 10 percent every five years over the life of the 40-year lease. The initial payment is based on the land being valued at $8.25 per square foot, capitalized at 7.5 percent.

In a letter accompanying his analysis of the market value, Casey said, "I believe the fair market value of the subject property to be less than eight dollars per square foot."

Casey noted that while other, smaller parcels are priced higher, it's generally understood that larger parcels have lower per-square-foot values. Casey called the deal "an exceedingly good lease for the Landlord."

Blue Cross and the airport signed a letter of intent in June, and still hope to have a lease finalized by mid-December, so payments can begin on the first of the year and construction can start soon thereafter.

Reporter John Harrington: 447-4080 or john.harrington@helenair.com.