HomeMy WebLinkAbout1998-080 Airport Lease - DayCITY OF ASHLAND
GROUND LEASE AGREEMENT
for
HANGAR CONSTRUCTED BY LESSEE
ASHLAND MUNICIPAL AIRPORT
Ground lease agreement made this ,~'day off,is ,1998, by the
CITY OF ASHLAND (City) by and through its Air sion (Commission) and
John P. Day (Lessee).
Recitals:
A. City is the owner and operator of Sumner-Parker Airport situated in the City
of Ashland, Oregon, called "Airport", with power to grant right and privileges with
respect to its use.
B. Lessee wishes to construct a hangar at the Airport for commercial storage
of aircraft.
C. City is willing to lease to Lessee a portion of the Airport premises together
with such rights and privileges as are set forth in this lease.
Lessor and Lessee agree:
1. Description of leased premises. City leases to Lessee a part of the Airport
described in Exhibit "A" ("the premises").
2. Lease Fees. An initial annual rental of $576.00 is established and shall be paid
annually in advance for the succeeding twelve months beginning with the
commencement date specified in paragraph 3.
2.1. Annual rent increase. The rent shall increase annually, but not decrease,
by multiplying the rent by one-half times a fraction, the numerator of which is the CPI
Index Figure for the month of January of that subject calendar year, and the
denominator of which is the Base CPI Index Figure. To illustrate the preceding
sentence, the annual rent for the year beginning one year from the date of this
agreement shall be equal to the product determined by multiplying $576.00 (the rent
specified in paragraph 2), by one-half times a fraction, the numerator of which is the
CPI Index Figure for the month of January 1998, and the denominator of which is the
Base CPI Index Figure.
2.1.1. As used in this paragraph, "Index" shall refer to the following index
published by the Bureau of Labor Statistics of the United States Department of Labor:
Consumer Price Index, All Urban Consumers (CPI-U), U.S. City Average, CPI--AII
Items ("standard reference base period" 1982-84 = 100). "Base CPI Index Figure"
shall refer to the Index number indicated for the month of January 1998, and the "CPI
Index Figure" for any other month shall refer to the Index number for that month. If
PAGE 1-HANGAR GROUND LEASE
the "Index" is no longer being published as of a particular date, then the "CPI Index
Figure" for that date shall be the figure reported in the U.S. Department of Labor's
most recent comprehensive official index then in use and most nearly answering the
description of the Index (or, if the U.S. Department of Labor is not then publishing any
such similar index, shall be determined under another comparable, authoritative,
generally recognized index to be selected by mutual agreement of Lessor and
Lessee). If the Index is calculated from a base different from the base 1982-84 = 100,
then the figures to be used in calculating any adjustment mandated under this
Agreement first shall be converted (if possible, under a formula supplied by the
Bureau of Labor Statistics of the U.S. Department of Labor) to account for that
difference.
2.2. Lease fees will become past due ten days past the due date and the City
will charge interest of 1.5% per month on past due lease fees.
2.3. All sums resulting from the computation of annual lease fees shall be
rounded to the nearest whole dollar in favor of Lessor.
3. Term. The term of this lease is 25 years, commencing upon the issuance of a
certificate of occupancy by the City of Ashland or 180 days from the date of this
lease, whichever occurs first. At the end of this term, Lessee shall have the first right
of refusal to lease the premises from the City at the rates and terms then in effect as
established by the City.
4. Use of Premises. Except as provided in this paragraph, the premises shall be used
only for the commercial storage and limited maintenance of aircraft. Other items of
personal property may be stored temporarily when such storage in no way interferes
with the normal storage area of aircraft in the hangar, and does not otherwise violate
this lease.
4.1. Lessee shall not store any flammable or explosive liquids or solids within
the premises. For the purpose of this lease, "flammable or explosive liquids or solids"
shall not apply to fuel or other flammable contained within any airplane or automobile
placed in the hangar. Fueling of the aircraft while in the hangar is strictly prohibited.
4.2. Lessee shall be required to construct a ramp in accordance with
specifications to be approved in writing by the City to provide ingress and egress to
the hangar.
4.3. Lessee may conduct such other airport related commercial activities upon
the premises provided a permit is first obtained from the commission as provided in
the "Minimum Standards at Ashland Municipal Airport, Ashland, Oregon" adopted by
the City Council on January 4, 1990, and as may be amended from time to time.
5. Grant of Right. Lessee and Lessee's subtenants are granted the right to operate
their aircraft and to use the Airport, together with all facilities, equipment,
improvements, and services which have been or may be provided at the Airport
PAGE 2-HANGAR GROUND LEASE
including the landing field and any extensions or additions, readways, runways,
aprons, taxiways, floodlights, landing lights, beacons, signals, radio aides, and all
other conveniences for flying, landings, and take-offs.
6. RiQht of Ingress and Egress. Lessee and Lessee's subtenants shall have the right
of ingress and egress to and from the premises described in Exhibit "A". Lessee shall
take reasonable care to assure that Lessee and Lessee's subtenants do not interfere
with City's operation of the Airport for the benefit of the public and of all aircraft using
the Airport.
7. Rights and Privileges Reserved to the City Include:
7.1. The right to develop or improve the landing area of the airport without
interference or hindrance of the Lessee or Lessee's subtenants.
7.2. The right, but not the obligation, to maintain and keep in repair the landing
area of the Airport, together with the right to direct and control all activities of Lessee
and Lessee's subtenants.
7.3. The right to take any action considered necessary to protect the aerial
approaches of the airport against obstruction, together with the right to prevent
Lessee from erecting, or permitting to be erected, any building or other structure on
the Airport which, in the opinion of the City, would limit the usefulness of the Airport
and constitute a hazard to aircraft.
7.4. The right to temporarily close or to restrict the use of the Airport or any of
the facilities for maintenance, improvement, or for the safety of the public.
8. Compliance with laws. Lessee shall comply with
8.1. The "Minimum Standards at Ashland Municipal Airport, Ashland, Oregon"
adopted by the City Council on January 4, 1990, and as may be amended from time
to time.
8.2. All federal, state, county, and city laws, orders and ordinances, the rules
and regulations of the Lessor, and all rules and regulations of the State Department of
Transportation Aeronautics Division and the Federal Aviation Administration.
9. Lessee compliance with environmental laws.
9.1. Definition of "hazardous material". As used is this paragraph, the term
"hazardous material" means any hazardous or toxic substance, material, or waste,
including, but not limited to, those substances, materials, and wastes listed in the
United States Department of Transportation Hazardous Materials Table (49 C.F.R. §
172.101) or by the United States Environmental Protection Agency as hazardous
substances (40 C.F.R. Part 302) and any amendments, ORS 466.567, 466.205,
466.640 and 468.790 and regulations of the Oregon State Department of
PAGE 3-HANGAR GROUND LEASE
Environmental Quality, petroleum products and their derivatives, and such other
substances, materials and wastes as become regulated or subject to cleanup
authority under any environmental laws. Environmental laws means those laws cited
in this subparagraph.
9.2. Lessee's compliance with laws and permits. Lessee shall cause the leased
property and all operations conducted on the leased property (including operations by
any subtenants) to comply with all environmental laws.
9.3. Limitation on uses of hazardous materials. Lessee shall not use or allow
any agents, contractors or subtenants to use the leased property to generate,
manufacture, refine, transport, treat, store, handle, recycle, release or dispose of any
hazardous materials, other than as reasonably necessary for the operation of
Lessee's activities as contemplated under this lease.
9.4. City's Rights. City shall have the right to conduct reasonable inspections
and investigations of the leased property and the operations conducted on the leased
property at any time and from time to time, and Lessee shall cooperate fully with City
during such inspections and investigations.
9.5. Indemnification. Lessee agrees to defend (with counsel approved by City),
fully indemnify, and hold entirely free and harmless City from and against all claims,
judgments, damages, penalties, fines, costs, liabilities, or losses (including, without
limitation, diminution in value of the leased property, damages for the loss or
restriction on the use of rentable or usable space or of any amenity of the leased
property, damages arising from any adverse impact on marketing of space, sums
paid in settlement of claims, attorneys' fees, consultant fees, and expert fees) which
arise during or after the lease term and which are imposed on, or paid by or asserted
against City by reason or on account of, or in connection with, or arising out of
Lessee's generation, manufacture, use, transportation, refinement, treatment,
storage, or disposal of hazardous materials, or any release of hazardous materials as
a result of Lessee's use or activities, or of Lessee's agents, contractors, or
subtenants.
10. Construction of Im13rovements. Lessee shall erect a hangar on the premises in
accordance with this paragraph.
10.1. The hangar shall be erected wholly within the boundary lines of the
premises. Lessee shall submit plans and specifications for the hangar to the
Commission and the city building official, for review and approval of the Commission
and the building official, within 120 days after the date of execution of this lease.
Following approval of Lessee's plans and specifications by the Commission and the
building official, Lessee shall expeditiously apply for all necessary permits and make
continued and substantial progress towards permit issuance. Lessee shall commence
construction in accordance with plans and specifications approved by the
Commission within 60 days following approval by City of Lessee°s plans and
specifications. If required permits are not issued by the appropriate authority within 90
PAGE 4-HANGAR GROUND LEASE
days of approval of plans and specifications by the Commission, City may, upon 30
days written notice to Lessee, terminate this Lease and Lessee shall have no further
liability to City under this lease.
10.2. Prior to commencement of the construction of the hangar and before any
building materials have been delivered to the premises, Lessee shall comply with
each of the following conditions:
10.2.1. Submit to the Commission one set of preliminary construction
plans and specifications prepared by an architect or engineer licensed in the
State of Oregon which are sufficient to enable Commission to make an
informed judgment about the design and quality of the construction. Lessee
shall not commence construction until all required permits have been obtained
and the Commission has approved of the preliminary construction plans and
specifications, including the color of the hangar. Commission shall not
unreasonably disapprove such plans and specifications. Approval or
disapproval shall be communicated to Lessee within 30 days after receipt of
complete plans and specifications by Commission. Any disapproval shall be
accompanied by a statement of the reasons for such disapproval. Following
any disapproval, Lessee may elect either to revise the plans and specifications
and resubmit them to the Commission pursuant to this paragraph or terminate
this Lease upon 30 days written notice to City.
10.2.2. Deliver to City such other proofs and copies as City shall
reasonably request, including, without limitation, proof that workers'
compensation insurance has been procured to cover all persons employed in
connection with the construction, proof of issuance of all building and other
permits required for the construction and proof that all systems development
charges of the City have been paid.
10.2.3. Once construction has begun Lessee shall prosecute it to
completion with diligence. All work shall be performed in a good and
workmanlike manner and shall comply with all applicable governmental
permits, laws, ordinances and regulations. Lessee shall pay or cause to be
paid the total cost of the construction. Construction work shall conform in all
significant respects with the approved preliminary plans and specifications and
the working drawings approved by the Commission except as otherwise
authorized by the Commission.
10.2.4. This paragraph shall not be construed to authorize Lessee to do
any act or make any contract so as to encumber in any manner the title of City
to the property or to create any claim or lien on or against the interest of City in
construction of the improvements. It is expressly agreed that all the expenses
of the construction of the improvements shall be promptly paid by Lessee as
required by the terms of any contract therefor.
PAGE 5-HANGAR GROUND LEASE
10.3. Lessee shall also construct to standards established by the Commission
adequate drainage on the premises, an asphalt taxiway to the hangar and a paved
parking stall to the hangar for one automobile.
10.4. Lessee may, but is not required to, provide electricity to the premises and
within the hangar and may rough-in plumbing. No septic or holding tanks shall be
permitted on the premises.
11. Title to Improvements. Upon completion of construction and issuance of a
certificate of occupancy, the improvements described in paragraph 10 including any
further improvements to the premises approved by the Commission, shall become
property of City, free and clear of all claims of Lessee, any one claiming under
Lessee or caused, permitted or suffered to attach through Lessee. Lessee or any one
claiming under Lessee, shall indemnify and defend City against all liability and loss
arising from such claims.
12. Maintenance. Lessee shall keep and maintain the leased premises and all
improvements in good and substantial repair and condition, including the exterior
condition. Lessee shall make all necessary repairs and alterations and shall maintain
the leased premises and all improvements in compliance with all applicable building
and zoning laws and all other laws, ordinances, orders and requirements of all
authorities having or claiming jurisdiction. Lessee shall provide proper containers for
trash and garbage and shall keep the leased premises free and clear of weeds,
rubbish, debris, and litter at all times. City shall at all times during ordinary business
hours have the right to enter upon and inspect such premises.
13. Utilities. Lessee shall promptly pay any charges for electricity and all other
charges for utilities which may be furnished to the leased premises at Lessee's order
or consent.
14. Liens, Taxes. Lessee shall pay all sums of money that become due for any labor,
services, materials, supplies, utilities, furnishings, machinery or equipment which have
been furnished or ordered by Lessee which may be secured by lien against the
premises. Lessee shall pay all real and personal property taxes assessed against the
premises, such payments to be made no later than November 15 of the year in which
the taxes become due and payable, and will submit a copy of the receipt for the taxes
to the City's Director of Finance.
15. Insurance. Lessee shall obtain and maintain continuously in effect at all times
during the term of this lease, at Lessee's sole expense, the following insurance:
15.1. Comprehensive insurance. Owner's, landlord and tenant or premises
insurance protecting City and its officers, agents and employees against any and all
liabilities that may allegedly in any way relate to the operation by Lessee, this
insurance to be in the minimum amount of $500,000, combined single limit coverage.
Such limit shall automatically increase in the event of any change in the provisions of
ORS 30.270, or in the event these limits are found to be not totally applicable to a city.
PAGE 6-HANGAR GROUND LEASE
15.1.1. Additional insureds. All policies shall include the City, its officers,
commissions, elected officials, employees and agents as additional insureds.
15.1.2. Primary insurance. The insurance shall be considered primary to
any other insurance or self-insurance of the City.
15.1.3. Insurance certificate. A certificate evidencing such insurance
coverage shall be filed with the City prior to the effective date of this lease, and such
certificate shall provide that such insurance coverage may not be canceled or
reduced or changed in any way adverse to the City without at least 30 days prior
written notice to the City. The policy shall be continuous until canceled as stated
above. If such insurance coverage is canceled or changed, Lessee shall, not later
than 15 days prior to the termination or change in the insurance coverage, file with the
City a certificate showing that the required insurance has been reinstated or provided
through another insurance company or companies. in the event Lessee shall fail to
furnish the City with the certificate of insurance required, City may secure the required
insurance or self-insure at the sole cost and expense of Lessee, and Lessee agrees
to reimburse City promptly for the cost, plus ten percent of the cost for City
administration.
15.2. Property Insurance. Lessee shall keep the premises insured at Lessee's
expense against fire and other risks covered by a standard fire insurance policy with
an endorsement for extended coverage. Lessee shall bear the expense of any
insurance insuring the property of Lessee on the premises against such risks but shall
not be required to insure.
15.2.1. Additional insureds. All policies shall include the City as an
additional insured.
15.2.2. Waiver of. Subrogation. Neither party shall be liable to the other
(or to the other's successors or assigns) for any loss or damage caused by fire or any
of the risks enumerated in a standard fire insurance policy with an extended coverage
endorsement, and in the event of insured loss, neither party's insurance company
shall have a subrogated claim against the other. This waiver shall be valid only if the
insurance policy in question expressly permits waiver of subrogation or if the
insurance company agrees in writing that such a waiver will not affect coverage under
the policies. Each party agrees to use best efforts to obtain such an agreement from
its insurer if the policy does not expressly permit a waiver of subrogation.
16. Indemnification. Lessee shall keep, indemnify and defend and hold harmless City,
its officers, agents and employees, from and against any and all claims, demands,
suits, judgments, costs, and expenses, including attorney's fees asserted by any
person or persons, including agents or employees of the City or Lessee, by reason of
death or injury to persons or loss or damage to property that allegedly results from
Lessee's operations, or anything done or permitted by Lessee under this lease,
except for the extent attributed to acts or omissions of City of its officers, agents or
employees.
PAGE 7-HANGAR GROUND LEASE
17. Damage or Destruction of Premises. If the leased premises or any improvements
are damaged or destroyed by fire or other casualty, Lessee shall:
17.1. Promptly repair, rebuild or restore the property damaged or destroyed to
substantially the same condition consistent with the applicable building codes; and
17.2. Apply for any net proceeds of insurance resulting from claims for such
losses, as well as any additional money of Lessee necessary.
If the damage or destruction which occurs is such that the cost of repair, rebuilding or
restoration of the property damaged or destroyed exceeds 50% of the fair market
value of the improvements, Lessee shall have the option within 60 days from the date
of damage or destruction, to notify City in writing whether or not Lessee elects to
repair, rebuild, or restore in accordance with paragraph 17.1 or to terminate this
lease. Upon giving such notice to terminate, this lease shall terminate on the date
specified in the notice and City shall be entitled to the net proceeds of insurance.
18. Events of Default. The following shall be events of default:
18.1. Default in Rent: Failure of Lessee to pay any rent or other charge within
ten days after it is due.
18.2. Default in Other Covenants: Failure of Lessee to comply with any term or
condition or fulfill any obligation of the lease (other than the payment of rent or other
charges) within 30 days after written notice by City specifying the nature of the
default. If the default is such that it cannot be completely remedied within the thirty
(30)-day period, this provision shall be complied with if Lessee begins correction of
the default within the 30-day period and proceeds in good faith to effect the remedy
as soon as practicable.
18.3. Insolvency: Insolvency of Lessee and assignment by Lessee for the
benefit of creditors; the filing by Lessee of a voluntary petition in bankruptcy; an
adjudication that Lessee is bankrupt or the appointment of a receiver of the properties
of Lessee; the filing of an involuntary petition of bankruptcy and failure of the Lessee
to secure a dismissal of the petition within 30 days after filing; attachment of or the
levying of execution on the leasehold interest and failure of the Lessee to secure
discharge of the attachment or release of the levy of execution within ten days.
19. Remedies on Default. In the event of a default, the City at its option may terminate
the lease by notice in writing by certified or registered mail to Lessee. The notice may
be given before or within thirty days after the running of the grace period for default
and may be included in a notice of failure of compliance. If the property is abandoned
by Lessee in connection with a default, termination shall be automatic and without
notice.
19.1. Dama.qes. In the event of termination of default, City shall be entitled to
recover immediately the following amounts as damages:
PAGE 8-HANGAR GROUND LEASE (,:,~,,,t~,y ~,.~.~.)
19.1.1. The reasonable cost of re-entry and reletting including the cost of
any clean up, refurbishing, removal of Lessee's property and fixtures, or any
other expense occasioned by Lessee's failure to quit the premises upon
termination and to leave the premises in the required condition, any remodeling
costs, attorney fees, court costs, broker commissions and advertising cost.
19.1.2. The loss of reasonable lease fee value from the date of default
until a new tenant has been or, with the exercise of reasonable efforts could
have been secured.
19.2. Re-entry After Termination. If the lease is terminated for any reason,
Lessee's liability to City for damages shall survive such termination, and the rights
and obligations of the parties shall be as follows:
19.2.1. Lessee shall vacate the property immediately, and within 60
days remove any property of Lessee including any fixtures which Lessee is
required to remove at the end of the lease term, perform any cleanup,
alterations or other work required to leave the property in the condition required
at the end of the term.
19.2.2. City may re-enter, take possession of the premises and remove
any persons or property by legal action or by self-help with the use of
reasonable force and without liability for damages.
19.3. Relettin.~. Following re-entry or abandonment, City may relet the
premises and in that connection may:
19.3.1. Make any suitable alterations or refurbish the premises, or both,
or change the character or use of the premises, but City shall not be required to
relet for any use or purpose (other than that specified in the lease) which City
may reasonably consider injurious to the premises, or to any tenant which City
may reasonably consider objectionable.
19.3.2. Relet all or part of the premises, alone or in conjunction with
other properties, for a term longer or shorter than the term of this lease, upon
any reasonable terms and conditions, including the granting of some lease fee-
free occupancy or other lease fee concession.
20. Termination. Upon termination of the lease by the passage of time or otherwise,
Lessee shall surrender the leased premises in good condition. The Lessee's
obligations under this paragraph shall be subordinate to the provisions of paragraph
11 related to improvements as required and the City shall have the remedies
described in paragraph 19.
21. Assignment of Interest or Rights. Neither Lessee or any assignee or other
successor of Lessee shall sublease, assign, transfer or encumber any of Lessee's
rights in and to this lease or any interest, nor license or permit the use of the rights
PAGE 9-HANGAR GROUND LEASE
granted except as provided in this paragraph. Lessee shall not assign all or any part
of its rights and interests under this lease to any successor through merger,
consolidation, or voluntary sale or transfer of substantially all of its assets, without
prior written approval of the City. City acknowledges that it is Lessee's intention to
assign the lease to a limited liability corporation or family partnership. Written
approval of the City shall not be unreasonably withheld.
21.1. Right of first refusal. City shall have the following described right of first
refusal with respect to the interest of Lessee under this lease:
21.1.1. Lessee shall not sell, sublease, assign or transfer to anyone
other than City, unless Lessee shall have first communicated to City, by written
notice, a written offer to sell, sublease, assign or transfer this lease or any
interest, which offer shall specify, in commercially reasonable detail, the price,
terms and conditions upon which Lessee is willing to sell, sublease, assign or
transfer this lease or any interest.
21.1.2 City shall have a period of 30 days, following the notice, within
which to accept the offer by giving Lessee written notice of acceptance. If the
offer is accepted, the parties shall be obligated to close the sale, sublease,
assignment or transfer in accordance with the terms of Lessee's offer. Closing
shall occur within 60 days following acceptance or within such longer closing
period as may be specified in the offer.
21.1.3 If City does not accept the offer, Lessee may sell, sublease,
assign or transfer the lease or any interest to any other party, provided that
such a sale must be consummated within 60 days following the earlier of the
expiration of the 30 day acceptance period specified in 21.1.2 for the offer or
the date of any written rejection of the offer by City, and for and upon the same
price, terms and conditions as those specified in the offer.
21.1.4. City's rights under this paragraph shall apply to any subsequent
or contemporaneous offer made to Lessee or Lessee's successor or
successors in interest.
21.2. Subleases without consent. Lessee may sublease portions of the
premises for the purpose of placing other aircraft within the hangar without consent of
City.
22. Nonwaiver. Waiver by either party of strict performance of any provision of this
lease shall not be a waiver of or prejudice the party's right to require strict
performance of the same provision in the future or of any other provision.
23. Consent of City. Whenever consent, approval or direction by the City is required,
all such consent, approval or direction shall be received in writing from the City
Administrator.
PAGE 10-HANGAR GROUND LEASE
24. Notices. All notices required under this lease shall be deemed to be properly
served if sent by certified or registered mail to the last address previously furnished
by the parties. Until changed by the parties by notice in writing, notices shall be sent
to:
City of Ashland
20 E. Main Street
Ashland, OR 97520
Attn: City Administrator
LESSEE:
John P. Day
124 S. Foothill Rd.
Medford, OR 97504
LESSEE
BY
Title q
State of Oregon
County of Ja~son
This instrument was acknowledged before me on
i',.~.~ )FFICIAL SEAL
;~AREN STALEY
:OTARY PUBLIC - OREGON
$OMMISSION NO.037442
MY CO~,;MtSSION EXPIRES AUG. 25, 199...~
N0tar~ Public for Oregon
My commission expires:
State of Oregon
County of Jackson
This ins,~rumenL.was acknowledged before_. me on ~jb, z/~ ,~
by .///,/~( /L/~d",'~t:~,~'~ as
of Ashland, Oregon.
1998,
of the City
COfv~MI,gS~ON NO.
MY COt~'~ISSIO~9 EXPIRES SlePT, 18,
Not~'y Pul~J9/for Oregon
My Commis¥ion expires:
PAGE 11-HANGAR GROUND LEASE
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