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HomeMy WebLinkAbout1988-031 Lease - Airport Bld.LEASE AGREEMENT FOR THE ASHLAND MUNICIPAL AIRPORT MAINTENANCE BUILDING THIS LEASE AGREEMENT made this--~ day ~f.~~~-~.. , 1988, by and between the CITY OF ASHLAND, a munlclpa± corporation, the Lessor herein, also hereinafter called "City" and ASHLAND AIR, INC., hereinafter called "Lessee"; WI TNESSETH: 1. City does lease to Lessee as a Fixed Base Operator a part of the Ashland Municipal Airport, consisting of the aircraft maintenance building along with ingress and egress, as shown on Exhibit A, the Airport Layout Plan. The balance of the airport is used for general aviation aeronautical activities, and is available on an equal basis to qualified persons, firms and corporations who qualify as "Fixed Base Operators", or "Specialty Operators" at airport and under separate leases. 2. The Aircraft Maintenance Building is leased for the purposes and upon the terms, conditions and provisions of this lease for a term of five (5) years, commencing at 12:01 A.M. on the 1st day of September, 1987, and then terminating at 12:00 P.M. on the 1st day of September, 1992. It is agreed that the parties will, prior to the expiration of this Lease, discuss an extension of this Lease or renewal for an additional five (5) years if the parties can agree upon the terms and conditions for the additional five-year period. If the parties are not able to agree upon an extension no later than one hundred twenty (120) days before the expiration of the original term period, the the Lease shall terminate as stated above and at the end of the original five years. 3. The subject premises are leased to the Lessee solely for the uses and purposes of conducting the business of an aircraft maintenance and repair shop based on the following standards * excerpted from "Fixed Base Operator Standards" adopted by the City on March 3, 1987: "II. Minimum Requirements and Performance Standards A.1 f. Maintenance, inspection and repair of airframes, aircraft engines and aircraft accessories by at least one airplane and power plant mechanic (A&P/IA) certified by the FAA to provide such maintenance, inspection and repair services. The mechanic(s) shall be based in Ashland unless otherwise authorized by the City. * Selected out of context. -1- Lease Agreement A.4 The FBO shall obtain and keep im full force and effect at all times all approvals, licenses, permits and certificates necessary to conduct a fixed base operation on the Airport. A.5 The FBO shall comply with all laws, ordinances, rules, regulations, directives and circulars issued by any Federal, state or local government agency having juris- diction over the Airport, . . . and lease provisions required by the FAA. (Note: See Section 19.) A.6 The FBO shall comply with all the rules and regulations established and maintained by the City. A.7 The FBO shall obtain FAA and City approval, by way of FAA Form 7460-1 or any other appropriate approvals, prior to commencing any construction or installation on the leasehold. A.8 The FBO shall provide reasonable security for the leased premises. A.9 The FBO shall provide necessary and appropriate training of all employees including, but not limited to, training in fuel safety and fire and accident procedures. III. Other Services B. Improvements. 3. Lighting. The FBO shall install lighting fixtures on the leased premises necessary to its operation and to protect the safety of guests, patrons, and employees. Lighting fixtures shall conform to the guidelines for lighting fixtures. The City shall review and approve lighting fixtures, location, intensity and illuminating effects of the light fixture(s) to ensure that it presents no hazard to Airport operations. 4. Graphics and Signs. Ail graphics and signs on the leased premises shall be consistent with the objectives and conform to the regulations for graphics and signs as contained in the rules, regulations, and ordinances of the City of Ashland as they now exist or may hereinafter be amended, and as accepted by FAA requirements. V. Noise Impact. Due consideration for the noise impact on the community surrounding the airport will be given by the FBO in the selection of aircraft and related activities, all in accord with the laws, rules and regulations and ordinances of the City of Ashland as they now exist or may be changed in the future. -2- Lease Agreement VI. In the event the above standards conflict with the provisions of the City or other applicable local, state or Federal regulatory agency, the most restrictive standard shall be applied. VII. Facilities Development. The City has the right to further develop and improve the airport, its property, improvements and future facilities, including hangar construction as the City deems appropriate to the public interest and shall have no responsibility to the FBO for any loss of revenue which might be caused by such development or improvement. VIII. Other FBO Rendered Services: A. The FBO will serve as the City's representative disseminating and monitoring the Rules and Regulations Pertaining to the Ashland Municipal Airport as adopted by Council Resolution No. 78-10 or as amended by the City Council. These Standards shall apply equally to all Fixed Based Operators at said airport. The City agrees that all such services in Fixed Base Operator Standards shall be confined to FBO's meeting these Standards. Among other things, said Standards stipulate the nature and amount of aeronautical activities and services required of all Fixed Base Operators at said airport. 4. The Lessee agrees to operate the leased premises for the use and benefit of the public and to make available to the public on fair and reasonable terms all leased airport facilities and services at reasonable prices so as to result in a reasonable profit to the Fixed Based Operator. If the parties disagree as to reasonable charges to be made for any facility, product or service, the matter shall be submitted to arbitration, with one arbitrator to be selected by each party, and a third by the first two arbitrators, and the decision to be final. Each party shall pay the cost of his or her arbitrator, and the remaining costs to be shared equally. Prices shall not be changed until arbitration and the matter is finally determined. 5. It is expressly understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of exclusive rights within the meaning of Section 308(a) of the Federal Aviation Act of 1958 as amended. The Lessee shall be responsible for the actions of all of its employees, and shall render the City, its officers, agents and employees harmless from any actions or negligence of Lessee's officers, agents or employees for doing anything, or failure to do anything, that in any way whatsoever relates to this Lease Agreement or the operation of the Ashland Airport. -3- Lease Agreement 6. Lessee shall obtain and maintain continuously in effect at all times during the term of this Agreement, at Lessee's sole expense, the following insurance: comprehensive general liability insurance protecting City and its officers, agents and employees against any and all liabilities that may allegedly in any way relate to the operation or maintenance of the airport by Lessee, or the adjacent premises thereto, including, but not limited to, the leased premises, the adjacent roads, driveways and/or other public places, including runways and taxiways, said insurance to be in the minimum amount of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00), 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 said limits are found to be not totally applicable to a city. All policies shall include the City, its officers, commissions, elected officials, employees and agents as additional insureds. Said insurance shall be considered primary to any other insurance or self- insurance of the City. A certificate evidencing such insurance coverage shall be filed with the City prior to the effective date of this Agreement, 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 thirty (30) days prior written notice to the City. Said policy shall be continuous until canceled as stated above. If such insurance coverage is canceled or changed, Lessee shall, not later than fifteen (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 (10%) of the cost for City administration. 7. Each party agrees to notify the other in writing as soon as practicable of any notice of any claim, demand or action arising out of the operation of the airport by the Fixed Base Operator, and to cooperate in the investigation and defense thereof. 8. 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 Agreement, except for the extent attributed to acts or omissions of City of its officers, agents or employees. 9. Lessee further agrees to: ae Keep the leased area and premises in a neat and orderly manner, free of offensive or dangerous materials or conditions. -4- Lease Agreement Be De Ee Pay all utility costs. Not sublease all or any portion of the aircraft maintenance hangar. Store only aircraft being repaired or waiting to be repaired. Not fuel aircraft or store fuel in the maintenance hangar. Make an irrevocable election (binding on the lessee and all successors in interest under this Agreement) not to claim depreciation or investment credit with respect to any property financed with tax-exempt obligations of the City (including all property used by the lessee under this Agreement); (2) the lessee certifies to the City that the term (as defined in 168(i)(3) of the Code) is not more than 80 percent of the expected economic life of the property used by the lessee under this Agreement (as determined in Section 147(b) of the Code); and (3) the lessee acknowledges that it has no option to purchase any such property. Certify that it will not use any part of the hangars financed with proceeds of any tax-exempt obligations hereafter issued by the City for office space, except for office space that is de minimus in size and cost and that is directly related to its day-to-day operations at the Airport as required by Section 142(b)(2) of the Code. Not use or permit the use of the Leased Facility as any lodging facility, any retail facility (including food and beverage facilities) in excess of a size necessary to serve passengers and employees at the airport, as any retail facility (other than parking) for passengers or the general public located outside the terminal, as an office building for individuals who are not employees of the City, or as any industrial park or manufacturing facility. No part of the Leased Premises financed with any portion of the proceeds of any tax- exempt obligations hereafter issued by the City shall be used to provide any airplane, skybox or other private luxury box, health club facility, a facility primarily used for gambling, or store the principal business of which is the sale of alcoholic beverages for consumption off- premises as prescribed by Section 147(e) of the Code. -5- Lease Agreement 10. Lessee agrees to pay to the City on or before the tenth day of each calendar month during the term of this Lease, the following sums and amounts: a. The rental of $0.00 per month until 1 June 1988; and b. $450.00 per month during the remaining term of this lease. The monthly rental rate in "b" above shall be adjusted yearly as follows: The monthly rental shall increase, but not decrease, in accord with the increase in the Consumer Price Index. The year 1967 shall equal 100 and the index used shall be Consumer Price Index for all urban consumers for the Portland, Oregon area. The base period shall be for the period ending July 1988. If information for that month is not available, the next preceding month(s) shall be used. The increase in the rent shall be determined and made effective on an annual basis, with the first period being one (1) year from the date this Lease commences, and on each succeeding year. The rent will not decrease if the Consumer Price Index decreases. In the event the relevant Consumer Price Index for the Portland, Oregon area is no longer published, the U.S. Department of Labor's comprehensive official index most nearly answering the foregoing description shall be used. If either of the above indices are no longer published, then an index generally recognized as authoritative shall be substituted. If the parties are unable to agree within sixty (60) days after demand by either party, a substitute index shall be selected by the chief officer of the Portland regional office of the Bureau of Labor Statistics or its successor. 11. Lessee agrees to pay all sums due without notice by check payable to the City of Ashland, delivered or mailed to the Finance Department, City Hall, 20 East Main Street, Ashland, Oregon 97520. A delinquency charge of 1.5% per month shall be added to payments required by this Lease Agreement which are more than ten (10) days delinquent. Further, if more than two (2) payments are more than ten days delinquent during the term of this Lease, the City may decline to discuss any extensions of this lease. 12. The City shall be responsible for the maintenance of the roof, structural items, plumbing, electrical and exterior painting of the building. All other repairs and maintenance shall be the responsibility of the Lessee. 13. The Lessee shall comply with all State and Federal rules, including but not limited to, the effluent standards or prohibitions established under Section 307(a) of the Clean Water Act for Toxic Pollutants. The Lessee shall install all facilities -6- Lease Agreement necessary for the operation and shall properly operate and maintain all facilities and systems and related appurtenances of treatment that are required to comply with the Clean Water Act for Toxic Pollutants. 14. The Lessee, if it is a corporation, shall prior to the commencement of this Lease, designate essential employees of the Lessee, and who are acceptable to the City, and any change in said employees shall either result in the termination of the Lease, or shall be accomplished the same as any transfer of the Lease by the Lessee. 15. It is expressly agreed by the parties that all rights, privileges and liabilities imposed by this Lease are subject and subordinate to any conditions, restrictions, limitations, rules, regulations or future requirements for modification of this Lease, by any agreement or contract pertaining to said airport between the United States Government or any other department or agency of either the United States Government or the State of Oregon. 16. The Lessee agrees to the terms and conditions of the City's adopted Minority Business Plan currently in effect with the FAA and to be amended from time to time as required by the FAA. 17. It is expressly understood and agreed by the parties that this Lease may be terminated upon proper notice ninety (90) days in advance of such termination date, and upon the following conditions. 18. Termination: TERMINATION BY LESSEE. This Agreement shall be subject to termination by Lessee in the event of any one or more of the following events: The abandonment of the Airport as an airport or airfield by the Lessor. The default by the City in the performance of any of the terms, covenants or conditions of this Agreement, and for the failure to continue for a period of thirty (30) days after receipt of notice from Lessee concerning said default, provided that if the remedy takes longer than thirty (30) days, then the term of notice shall be so extended. Damage to or destruction of all or a material portions of the premises, and which are necessary for the operation of Lessee's business, and election by Lessor not to replace such improvements within six (6) months after destruction. -7- Lease Agreement be The lawful assumption by the United States, or any authorized agent of the operation, control, or use of the airport, or any substantial part or parts, in such a manner as to substantially restrict Lessee from conducting business operations for a period in excess of ninety (90) days. TERMINATION BY CITY. This Agreement shall be subject to termination by City in the event of any one or more of the following events: Failure to pay rent or failure to pay any money due to the City as set forth. The default by Lessee in the performance of any of the terms, covenants or conditions of this Agreement, and the failure of Lessee to remedy or undertake to remedy, to City's satisfaction, such default for a period of thirty (30) days after receipt of notice from City to remedy the same. The filing of a voluntary petition in bankruptcy, including a reorganization plan, or filing in Chapter 11 of the Bankruptcy Act, and general or other assignment for the benefit of creditors, or as adjudicated as bankrupt or if a receiver is appointed for the property or affairs of Lessee. 4. Abandonment of the premises by Lessee. The failure to conduct the business or to perform any duty as required in Section 4. EXERCISE. Any notice required shall be given thirty (30) days in advance of the termination date. d. REMOVAL OF PROPERTY. Subject to paragraphs 2 and 3 below, upon termination of this Agreement, Lessee, at its sole expense shall remove from the premises temporary structures, signs, trade fixtures, furnishings, personal property, equipment and materials owned by Lessee and which Lessee was permitted to install or maintain under the rights granted herein. If Lessee shall fail to do so within ten (10) days, City may, at its option, effect such removal or restoration at Lessee's expense, and Lessee agrees to pay City such expense promptly upon receipt of a proper invoice. Any improvements not removed by Lessee pursuant to this paragraph shall become the property of City without any right of Lessee to compensation or reimbursement, except per sub-paragraph 2 below. -8- Lease Agreement At any time three months prior to the Termination Date, City shall have the option to purchase, on such Termination Date, all permanent improvements on the premises at an agreed price. If no agreement can be reached, the purchase price shall be the fair market value to be determined by agreement of two MAI appraisers, one chosen by each party. If the two appraisers cannot agree upon a fair market value, they shall choose a third MAI appraiser. The determination of fair market value by a majority of the three appraisers shall be final and binding upon the parties, provided, City may elect not to purchase said improvements. All fees of arbitration shall be paid by the party appointing such arbitrator. All other fees and expenses of the arbitration shall be shared equally by the parties. 19. The Lessee assures that it will undertake an affirmative action program as required by 14 CFR Part 152, sub-part E, to insure that no person shall, on the grounds of race, creed, color, age, national origin or sex, be excluded from participating in any employment activities covered in 14 CFR, Part 152, sub-part E. The Lessee assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by the sub-part. The Lessee assures that it will require that its covered sub-organizations provide assurances to the City that they similarly will undertake affirmative action programs and that they will require assurances from their sub- organizations as required by 14 CFR, Part 152, sub-part E to the same effect. 20. The City of Ashland covenants and agrees to pay all real property taxes assessed against the lease property during the term of this Lease. 21. The Lessee shall also have a non-exclusive right to use, in common with others, all public airport facilities and improvements of a public nature which are now, or may hereafter be connected with, appurtenant to, landing, taxiing, parking areas, and other use facilities. 22. It is further understood and agreed that the Lessor may choose to do construction work or maintenance work on portions of the airport and accordingly the Lessor may, when reasonably necessary, close the airport so that the Lessee will be required to temporarily suspend activities, and will not have ingress and egress to its leased facilities. -9- Lease Agreement IN WITNESS WHEREOF, the City of Ashland, State of Oregon, and Ashland Air, Inc. have each caused this instrument to be executed and attested by their appropriate officers as representatives on the ~ day of~~~ , 1988. / City of Ashland (Lessor) ATTEST: City Recorder ATTEST: BY: Mayor Operator (Lessee) -10- Lease Agreement