HomeMy WebLinkAbout2010-163 Argmt Airport Storage Lease
ASHLAND MUNICIPAL AIRPORT
GROUND LEASE AGREEMENT FOR
STORAGE FACILITY
THIS AGREEMENT is entered into between the CITY OF ASHLAND, OREGON, by and through the
City Council, hereinafter referred to as City, and Burl J. Brim, Jr., hereinafter referred to as Lessee.
RECITALS
A. City owns and operates an airport known as the Ashland Municipal Airport (the "airport").
B. Lessee currently leases a parcel of land at the airport ("Parcel A") more fully described in
Exhibit A, for the purpose of running his business, Brim Aviation.
C. Lessee received land use approval of Planning Application #2007-00578 on May 8,2007, to
construct a hangar on an adjacent parcel of land ("Parcel B").
D. City subsequently granted a one (1) year extension on May 6,2008, when it approved
Planning Action #2008-00595.
E. City subsequently granted an additional eighteen (18) month extension on April 28, 2009,
when it approved Planning Action #2009-00446.
F. Lessee desires to lease additional property ("Parcel C") adjacent to Parcel A to temporarily
stage and store supplies and vehicles used in his aviation business.
G. City desires to lease Parcel C to the Lessee under the circumstances set forth in this
Agreement.
H. Prior to the signing of this Agreement, Lessee paid $1146.00 for the lease of Parcel C for the
prior year ending on June 30, 2010.
In consideration of the matters described above, and of the mutual benefits and obligations set forth
in this Agreement, the parties agree as follows:
1. Recitals Incorporated. The recitals are hereby incorporated into this Agreement by this
reference.
2. Description of Leased Property. City agrees to lease to Lessee a part of the Airport identified as
Parcel C on ExhibitA ("Property"). Property has an area of approximately 6,000 square feet. The
lessee will use Parcel C to temporarily stage and store supplies and vehicles ("storage").
3. Lease Fees.
3.1. Rental Rate Lessee agrees to pay to City an annual rental of $0.193 per square foot,
per year for the use of Parcel C. Lessee agrees to pay to City, for the use of the
Property, a rental rate of$1.158.00, payable on execution of the lease. It is agreed that
the rental rate here specified shall be subject to re-examination and readjustment
pursuant to 3.2, provided that any readjustment of the present rate, or amended rate,
shall be reasonable.
3.2. Periodic rent increase The rental fee is subject to adjustment on July 1st of each year at
the option of the City and the difference between the annual rental rate under section
3.1, and the increased rate is due and payable September 1st following the rent
increase.
3.3. Past due fees. 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.
3.4. Security Deposit. Lessee shall pay a deposit in the amount of one year's rent to secure
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Lessee's compliance with all terms of this agreement. The deposit shall be a debt from
City to Lessee, refundable within 30 days after expiration of the lease term or other
termination not caused by Lessee's default. City may commingle the deposit with its
funds. Lessee shall not be entitled to interest on the deposit. City shall have the right to
offset against the deposit any sums owing from Lessee to City and not paid when due,
any damages caused by Lessee's default, the cost of curing any default by Lessee
should City elect to do so, and the cost of performing any repair or cleanup that is
Lessee's responsibility under this agreement. Offset against the deposit shall not be an
exclusive remedy in any of the above cases, but may be invoked by City, at its option, in
addition to any other remedy provided by law or this agreement for Lessee's
nonperformance. City shall give notice to Lessee each time an offset is claimed against
the deposit, and, unless the agreement is terminated, Lessee shall within 10 days after
such notice deposit with City a sum equal to the amount of the offset so that the total
deposit amount, net of offset, shall remain constant throughout the agreement term.
3.5. Improvement Fee Lessee shall be required to pay a non-refundable improvement fee
of $140.00 at the time of executing this Agreement. The fee shall be used by City to
make improvements at the airport.
4. Term. The term of this lease shall be for a maximum of two (2) years, commencing on July 1,
2010, and ending on June 30,2012. Either party may terminate this lease at any time upon 30
days prior written notice to the other party. If Lessee is not in default 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. In no event shall delay in obtaining permits from any city, state or federal
agencies be deemed as automatically requiring an extension of the term of this Agreement. Nor
shall such delay be interpreted as requiring the City to approve an extension of this Agreement.
5. Construction. Lessee shall have the right to construct storage improvements and structures in
conformance with all approved plans and permits. Lessee shall have the right to erect, maintain,
and alter structures upon the leased property provided such structures conform to the applicable
requirements of all federal, state, and local laws. All plans for such structures or improvements
shall be reviewed and approved in writing by the City prior to construction.
6. Lessee Covenants. Lessee agrees to:
6.1. Use Parcel C for short-term temporary storage and staging of supplies, equipment, and
vehicles.
6.2. Discontinue use of Parcel C upon notification by city staff if development of the airport
requires Parcel C to be developed pursuant to the Airport Master Plan.
6.3. Obtain a Specialized Aviation Service Operator (SASO) lease agreement in accordance
with Section 9 to allow Lessee to operate a business that engages in airport related
commercial activities on Parcel C.
7. Title to Improvements. At the conclusion of this lease, any improvements to Parcel C and any
areas used to access Parcel C, including changes to the surface, shall be left or removed at the
sole discretion of the airport. If Lessee is notified by the city staff that lessee must remove all
improvements, the improvements must be removed prior to Lessee vacating the premises.
8. Use of Premises. Except as provided in this paragraph, the premises shall be used only for the
storage of aircraft and machinery and equipment that is necessary for the operation of Brim
Aviation. No commercial activities including but not limited to aircraft mechanical or maintenance
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work or repair or service are to be conducted on the premises unless otherwise permitted under
section 9 3 The preceding sentence does not apply, however, to work, maintenance, repair or
service on aircraft owned by the Lessee. Other items of personal property may be stored
temporarily when such storage in no way interferes with the normal storage area of the aircraft in
the hangar, and does not otherwise violate this rental agreement.
9.1 Flammables and explosives orohibited Lessee shall not store any flammable or explosive
liquids or solids within the premises without a permit. For the purpose of this rental agreement,
"flammable or explosive liquids or solids" shall not apply to fuel or other flammables contained
within any airplane placed in the hangar. Fueling of the aircraft while in the hangar is strictly
prohibited.
9.2 Pets and animals prohibited Lessee shall not, without the City's written consent keep any pets
or animals on the premises. If allowed, Lessee agrees to be liable for damage to the premises
or other persons caused by the pet or animal.
9.3 When commercial activities permitted Lessee may conduct airport related commercial
activities upon obtaining a business license, as specified in the "Minimum Standards for
Commercial Aeronautical Activities, Ashland, Oregon", and entering into a Specialized Aviation
Service Operator (SASO) lease agreement, which allows the Lessee to operate as a
Specialized Aviation Service Operator in accordance with current adopted standards.
9. Maintenance. Lessee shall keep and maintain the premises and all improvements in good and
substantial repair and condition, including the exterior condition. Lessee shall make all necessary
major repairs and alterations and shall maintain the 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 premises free and clear of weeds, rubbish,
debris, and litter at all times. City shall have the right to conduct reasonable inspections and
investigations of the property and the operations conducted on the premises at any time, and from
time to time with reasonable advanc~ notice, and Lessee shall cooperate fully with City during
such inspections and investigations.
10. Rights Reserved to the City. The City reserves the following rights:
11.1 Improve landing area The right to develop or improve the landing area of the airport without
interference or hindrance of the Lessee.
11.2 Maintain airoort 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.
11.3 Protect airport 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.
11.4 Temporary closures 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. Lessee is not
entitled to any compensation or damages for such temporary closures.
11. Compliance with laws. Lessee shall comply with:
12.1The current adopted, or any future, "Minimum Standards for Commercial Aeronautical
Activities, Ashland, Oregon" (Minimum Standards) are part of this lease agreement. If this
lease and the Minimum Standards conflict in the requirements for the Lessee, the Minimum
Standards take precedence.
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12.2AII federal, state, county, and city laws, orders and ordinances, and rules and regulations
apply, including but not limited to all rules and regulations of the Oregon Department of
Aviation and the Federal Aviation Administration.
.1 Local Laws. The terms, restrictions and requirements of approvals are set forth in the
applicable City Ordinances, including the Ashland Land Use Ordinance, applicable
State statutes and regulations, the preliminary and final approvals, and this Agreement.
All local development approvals and permits identified by local law or this Agreement
shall be obtained at the sole cost of the Lessee. The failure of this Agreement to
address a particular permit, condition, term or restriction shall not relieve Lessee of the
duty to comply with any laws governing permitting requirements, conditions, terms or
restrictions. Any matter or action to be taken pursuant to the requirements of the
ordinances of the City of Ashland shall not be otherwise amended, modified or waived
unless such modification, amendment or waiver is expressly provided for in this
Agreement with specific reference to the provisions so modified waived or amended.
.2State and Federal Laws. The following sworn statement shall be submitted prior to
commencement of Physical construction:
Sworn Statement, Verification of Federal, State, and Local Permit Compliance.
Prior to any land clearing, alteration, or physical construction (other than survey work
or environmental testing) on the property, the Lessee shall execute a sworn
statement under penalty of perjury and false swearing, that the Lessee has obtained
all required Federal, State, and local authorizations, permits and approvals for
Phase One, including any proposed use, or alteration of the site, including also any
off-site improvements. Lessee shall be solely responsible for obtaining all
approvals, permits, licenses, insurance, and authorizations from the responsible
Federal, State and local authorities, or other entities, necessary to use the property
in the manner contemplated, including all authorizations necessary to perform land
clearing, construction and improvement of property in the location and manner
contemplated. This provision includes, but is not limited to, when applicable, a
permit or statement from the Federal Aviation Administration that the activities
contemplated comply with all federal regulations. Further, it is expressly agreed and
understood that the City of Ashland has no duty, responsibility or liability for
requesting, obtaining, ensuring, or verifying Lessee's compliance with the applicable
state and federal agency permit or approval requirements. Any permit or
authorization granted by the City, including any exemption, exception, permit,
approval or variance pursuant to the Ashland Land Use Ordinance shall not in any
way be interpreted as a waiver, modification, or grant of any state or federal agency
permits or authorizations or permission to violate any state or federal law or
regulation. Lessee shall be held strictly liable, and shall hold the City of Ashland, its
officers and employees harmless for administrative, civil and criminal penalties for
any violation of Federal and State statutes, regulations, or rules implementing such
laws. Nothing herein shall be interpreted as restricting or limiting the City from
bringing an enforcement action under the Ashland Municipal Code.
12. Lessee compliance with environmental laws. As used in 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. S 172.101) or by the United States Environmental
Protection Agency as hazardous substances (40 C.F.R. Part 302) and any amendments, ORS
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466.567, 466.205, 466.640 and 468.790 and regulations of the Oregon State Department of
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 any federal, state, or local statutes; regulations, or
ordinances or any judicial or other governmental orders pertaining to the protection of health,
safety, or the environment.
13.1 Lessee's compliance with laws and permits. Lessee shall cause the premises and all
operations conducted on the premises (including operations by any subtenants) to comply with
all environmental laws.
13.2 Limitation on uses of hazardous materials. Lessee shall not use or allow any agents,
contractors or subtenants to use the premises 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. '
13.2.1 Disposal and contamination clean-up. Lessee shall be responsible for disposing of all
hazardous materials in compliance with environmental laws, and Lessee shall be
responsible for any environmental clean-up of the premises that is necessary due to
Lessee's activities.
13. Utilities. Lessee shall promptly pay any charges for electricity, water and sewer, and all other
charges for utilities which may be furnished to the 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:
16.1 ComDrehensive 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
$1,000,000, 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.
.1 All policies shall include the City, its officers, commissions, elected officials,
employees and agents as additional insureds with respect to general liability and
aviation liability on a primary and non-contributory basis.
.2A certificate evidencing such insurance coverage shall be filed with the City Drior 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. Cancellation
or termination of the policy shall terminate the lease.
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. .
In the event Lessee shall fail to furnish the City with the certificate of insurance required,
City may secure the required insurance or selfinsure 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.
.2Property Insurance. Lessee shall bear the expense of any insurance insuring the personal
property of Lessee on the premises against such risks, but Lessee shall not be required to
insure his personal property.
16. Indemnification; Waiver of Subrogation. Lessee will defend, indemnify and save City, its
officers, employees and agents harmless from any and all losses, claims, actions, costs,
expenses, judgments, subrogations, or other damages resulting from injury to any person
(including injury resulting in death,) or damage (including loss or destruction) to property, of
whatsoever nature arising out of or incident to this lease or the activities that take place on leased
property. Lessee waives the right of subrogation regarding the insurance policy listed in Section
16. Lessee will not be held responsible for damages caused by negligence of City.
17. Non-appropriations; No Agency. The City and Lessee are entering into this Agreement
voluntarily in the spirit of cooperation and coordination to facilitate Lessee's desire to develop
Parcel B by constructing a hangar. However, nothing in this Agreement makes the City
responsible for the contracts or commitments of Lessee regarding construction of the hangar.
Lessee is not subject to public contracting rules and regulations and nothing herein makes Owner
subject to such public agency requirements. No City funds are provided by this agreement for
City construction of public infrastructure in this project.
All City obligations pursuant to this Agreement which require the expenditure of funds
are contingent upon future appropriations by the City as part of the local budget process. Nothing
in this Agreement implies an obligation on the City to appropriate any such monies. City
acknowledges that following the required review and approval of Final Plan and Site Reviews,
approval of final civil plans (construction plan approval) and associated construction permits, and
the determination for issuing building permits for the construction of a hangar on the Property is
not an obligation that would require the expenditure of funds; therefore, construction of the hangar
is not contingent upon future appropriations by the City.
18. Damage or Destruction of Premises.
19.1 If the premises or any improvements are damaged or destroyed by fire or other casualty,
Lessee shall:
.1 Promptly repair, rebuild or restore the property damaged or destroyed to substantially
the same condition consistent with the applicable building codes; and
.1Apply 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 15.1 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.
.2Lessee shall be responsible for damage or destruction to the premises or any improvements
resulting from Lessee's operations, or anything done or permitted by Lessee under this lease.
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19. Events of Default. The following shall be events of default:
19.1.Default in Rent: Failure of Lessee to pay any rent or other charge within ten days after it is
due.
19.2.Default in Other Covenants: Failure of Lessee to comply with any covenant, term or
condition, or to 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 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.
19.3.lnsolvency: 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.
20. 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.
20.1.Damages. In the event of termination of default, City shall be entitled to recover
immediately the following amounts as damages:
20 . 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.
20.1.2. 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.
20.2. 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:
20 . 2 . 1 . Lessee shall vacate the premises immediately, and within thirty (30) 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. 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.
20.3.Re-letting. Following re-entry or abandonment, City may re-Iet the premises and to that
end the City may:
20 . 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 re-Iet 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.
20 . 3 . 2 . Re-Iet 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
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. .
conditions, including the granting of some lease fee-free occupancy or other lease fee
concession.
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 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. 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 after the expiration of the lease term and all
extensions authorized 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 paragraph 22.1.2 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.
21.1.5. For the purposes of this subparagraph, a devise under a will by the Lessee
shall not be considered a sale, sublease, assignment or transfer.
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.
24. Hangar Construction Requirements. The Hangar Construction Requirements are incorporated
into this Agreement and shall apply to any construction that takes place on the leased property.
25. 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: LESSEE:
City of Ashland Brim Aviation
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Attn: City Administrator
20 E. Main Street
Ashland, OR 97520
Attn: Burl Brim
P.O. Box 3009
Ashland, OR 97520
INTENDING TO BE BOUND, the parties have executed this Agreement as of the date written below.
LESS
ORDER
Pursuant to ORS 271.360 the governing body hereby approves and authorizes the terms of this lease
as set forth above.
CITY:
10/1.,01/0
Mayor/Mayor's Designee, City of Ashland
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