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.
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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.
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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.
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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.
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Be
De
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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.
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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
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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.
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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.
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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.
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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)
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