HomeMy WebLinkAbout2009-258 SASO Lease - Ridsdale & Tripp CITY OF
ASHLAND
SPECIALIZED AVIATION SERVICE OPERATIONS LEASE AGREEMENT
FOR THE ASHLAND MUNICIPAL AIRPORT
Lease made 9116 1 2009, between the City of Ashland ("City") and JLC Avionics
"Elizabeth Tripp/Dave Ridsdale, ("Lessee").
RECITALS:
A. City is the owner of the Ashland Municipal Airport (further referred to in this lease as
"the airport".)
B. On Se.QFem'loef 16, 2009, the City and Lessee entered into a Lease of real
property described in the attached Exhibit A (further referred to as "Original Property"). The
"Original Property" lease is not affected by this lease agreement.
C. The City of Ashland, through its Airport Commission, has adopted the Oregon
Department of Aviation Minimum Standards for Commercial Aeronautical Activities as shown
in their Oregon State-Owned Category IV Airports (dated April 17, 2002) adopted by the City
Council on June 21, 2002 as they now exist or as they may be changed in the future.
D. Lessee desires to now be authorized as a Specialized Aviation Service Operations
(SASO) as defined in the Oregon Department of Aviation Minimum Standards, (further
referred to as"Minimum Standards").
E. The City is willing to authorize Lessee as a SASO and to lease additional property to
Lessee for this purpose.
City and Lessee agree:
1. Description of leased premises. In addition to the Original Property, City leases to
Lessee space for increased use at the airport, supplementary parking and landscaping in
the amount of 1.6 times the Original Property Hangar footprint, or 2100 SF X 1.6 = 3360
SF as shown on the attached drawing (to be defined as the "Leased Property" for this
SASO Agreement); located as a part of 391 E12 Tax Lot 301.
2. Term. The term of this agreement shall commence at 12:01 AM on the day of signature
by the City Administrator, and the agreement shall continue for an initial term of 5 years
or as long as a commercial operation exists.
2.1 Extension of Agreement. This lease may be extended for three additional
terms of five years each if no material breach exists or continues in the performance of any
of the provisions of this agreement. Any extension of this lease shall be as provided in this
section 2.
2.1.1 The renewal terms shall be on the terms, covenants and conditions as
the parties may mutually agree.
2.1.2. Lessee shall exercise the process for a renewal in the following
manner: At least 60 days prior to the expiration of the term, Lessee notifies Lessor in
writing of it's election to exercise the process to renew the term of this lease.
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2.1.3. Upon the giving of such notice, this lease, subject to the parties
agreement on the terms, covenants and conditions shall be deemed to be renewed
and the term renewed for a period of five years from the date of expiration of the
preceding term.
3. Lease Fee to City.
3.1 Base Lease Fee. During the original term, Lessee shall pay to City as base
lease fee the sum of$0.191 (based on the January 2009 All Urban Consumers Consumer
Price Index for the fiscal year starting July 1, 2009 through June 30, 2010) per square foot of
the Leased Property, rounded up to the nearest dollar, per year in advance. Lease fee shall
be payable on the date this lease is executed to the City of Ashland, attention Public Works
Director. Subsequent annual payments shall be made on this date each year during the term
of this lease. First year's base lease fee is $0.191 x 3360 SF — $496.00 (already paid for
from previous SASO agreement) = !�I is prorated from signature date of this
agreement until end of period June 30, 2010. Previous SASO agreement is void upon
signing date of this agreement.
3.1.1 Periodic lease fee increase. The base lease fee is subject to
adjustment on July 1 of each year at the option of the City and is payable, monthly in
advance, on the first day of each month.
3.1.2 Annual lease fee increase. The lease rate shall increase annually on
July 1 of each year, but not decrease, based on the previous calendar year's
Consumer Price Index ("CPI"). The CPI will be calculated on the difference between
January of the prior year and January of the current year. The adjustment will be one
increase in the CPI using the All Urban Consumers (CPI-U), U.S. City Average, CPI--
All Items Index as published by the Bureau of Labor Statistics of the United States
Department of Labor. If the CPI is no longer being published, then the Index 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 CPI. All
sums resulting from the computation of annual lease fees shall be rounded up to the
nearest whole dollar.
3.1.3 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.
3.2. Percentage Lease Fee. Should this lease be extended as provided in section
2, City reserves the right to impose a percentage lease fee in addition to the base lease fee.
In such case, Lessee shall pay to City a percentage lease fee the amount by which five
percent of Lessee's gross receipts exceed the annual base lease fee.
3.2.1. Definition of Gross Receipts. "Gross receipts" means the amount paid
or payable for all goods or services sold or provided by Lessee for the SASO
Classifications as described in this agreement, for cash or on credit and including the
value of any exchanges. Sales made or services rendered by Lessee, directly or
indirectly, from any other premises because of orders originating in or arising out of
business transacted on the Original or Leased Property are included. The following
shall not be included within gross sales:
3.2.1.1 Sales taxes collected or paid by Lessee;
3.2.1.2 Discount sales to Lessee's employees (if accounted for
separately);
3.2.1.3 Bulk sales of inventory or trade fixtures not in the
ordinary course of business.
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3.2.2. Annual Payments. Payments of percentage lease fee shall be made
on an annual basis at the end of each lease year as provided below. Each annual
payment shall be determined by applying the percentage to the gross receipts for the
year in excess of the applicable portion of the annual exclusion.
3.2.3. Annual Adjustment. On or before 45 days after a lease year ends,
Lessee shall submit to City an unaudited statement for the preceding lease year
showing Lessee's total gross receipts, the aggregate percentage fee payable, and the
amount actually paid. Any deficiency shall be paid upon submission of the statement.
3.3. Records. The City, for the purpose of ascertaining the correctness of any
license application, or for the purpose of estimating any license fee, may examine or may
cause to be examined, by an agent or representative designated by it, any books, papers or
payroll records, state or federal payroll reports, bearing upon the matter.
3.4. Continuous Operation. Lessee shall occupy the Original and Leased
Property continuously for the purpose stated in this lease and carry on business during the
hours customary in comparable businesses similarly situated with adequate inventory and
personnel. This shall not prevent Lessee from closing for brief periods when reasonably
necessary for inventory, repairs, remodeling (when permitted), or other legitimate purpose
related to the business carried on, or when closure is the result of a labor dispute, however
caused; or other factors not within Lessee's control.
3.5. No Partnership. City is not by virtue of this section a partner or joint venturer
with Lessee in connection with the business carried on under this lease, and shall have no
obligation with respect to Lessee's debts or other liabilities, and no interest in Lessee's
profits.
4. Purpose. Lessee shall provide a service at the airport solely for the uses and purposes
relating to conducting the business of a Specialized Aviation Service Operations (SASO)
as described in the Minimum Standards as they now exist or as they may be required to
be changed in the future by the Oregon Aeronautical Division or the FAA. Any other
changes to these standards shall not apply to Lessee unless mutually agreed upon. As a
SASO, lessee shall provide:
4.1 Aircraft Storage and Hangars. An aircraft storage and hangar service
operator leases and rents hangars, multiple T-hangars, and/or shade hangars
to aircraft owners or operators solely for aircraft storage purposes. The aircraft
storage and hangar service operator shall comply with all of the requirements
in the minimum standards. (see also 14 CFR 43)
5. FAA Exclusive Rights Prohibition. Nothing contained in this agreement 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.
5.1 City shall require of other lessees or permittees at the airport to comply with
substantially the same requirements of Lessee, if applicable, as set forth in this lease. City
shall enter into such leases or grant such permits in a manner so as to not favor any lessee
or permittee over Lessee under this lease. It is the intent of the parties that City treat Lessee
on an equitable basis with other lessees and permittees of City so that Lessee is not put in
an unfair advantage.
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6. Insurance. 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:
6.1 Comprehensive 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 by Lessee, this incurrence 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 provision of ORS 30.270, or changes to the
Oregon Department of Aviation requirements as adopted by the City, or in the event these
limits are found to be not totally applicable to a city.
6.2 Additional insured. All policies shall include the City, its officers,
commissions, elected officials, employees and agents as additional insured.
6.3 Primary Insurance. The insurance shall be considered primary to any other
insurance of self-insurance of the City.
6.4 Insurance Certificate. A certificate evidencing such insurance coverage
shall be filed with the City, 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 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.
7. Indemnification. Lessee will defend, indemnify and save City, its officers, employees and
agents harmless from any and all losses, claims, actions, costs, expenses,judgements,
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. Lessee will not be held responsible for
damages caused by negligence of City.
8. Additional Responsibilities of Lessee. Lessee further agrees to:
8.1 Utilities. Initiate, contract for, and obtain, in its name, all utility services
required on the premises, including gas, electricity, telephone, water, and solid waste
collections and services, and pay all charges for those services as they become due. If
Lessee fails to pay the charges, City may elect to apply them and the charge will then be
added to the fee installment next due.
8.2 Irrevocable Election. Make an irrevocable election (binding on 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 Lessee under this Agreement); (2) Lessee certifies to the City the term (as
defined in 168 (i) (3) of the IRS Code) is not more than 80 percent of the expected economic
life of the property used by Lessee under this Agreement (as determined in Section 147 (b)
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of the IRS Code); and (3) Lessee acknowledged that it has no option to purchase any such
property.
8.3 Limited Office Space. Certify it will not use any part of the hangars, except
for office space that is de minima 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 IRS Code.
8.4 Prohibited Uses. Not use or permit the use of the premises as any lodging
facility, any retail facility (including food and beverage facilities) in excess of a size necessary
to serve passenger 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 premises financed with any portion of the proceeds of any tax-exempt
obligations 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 IRS Code.
8.5 Graphics and Signs. All graphics and signs on the 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 be amended in the future, and as accepted by FAA requirements.
9. Alterations or Improvements. Lessee may not make alterations or improvements
without the prior written consent of City, which consent shall not be unreasonably
withheld. Prior to any construction, construction plans must be approved by the City in
writing as to the physical and aesthetic design, site location, color landscape design,
parking, and land use. All alterations or improvements that Lessee may desire to make
to the premises shall be done by Lessee and at the expense of Lessee. The term
"improvements" means any buildings, structures, or facilities placed or erected on the
property. All, such work shall be done in a good and worker like manner in compliance
with all applicable building and zoning laws and ordinances.
9.1 Ownership of Improvements. Title to all improvements made by Lessee of
a permanent nature shall be the property of Lessee.
9.1.1 Lessee, however, shall be required to enter into a ground lease with
the City prior to any improvement being made that increases the footprint of existing
structures or that utilizes additional land at the airport. Ground lease fee shall be at
fair market rental value.
9.1.2 Prior to construction of any improvements, the parties agree to
negotiate in good faith as to ownership of the improvements to be constructed.
Unless previously agreed in writing between the parties, the improvements 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 upon
completion of construction and issuance of a certificate of occupancy. Lessee, or any
one claiming under Lessee, shall indemnify and defend City against all liability and
loss arising from such claims.
9.1.3 Upkeep. The premises shall be kept in good repair, free of waste
material and debris. Landscaping shall be maintained and properly watered in a
reasonable fashion.
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10. Compliance with Laws. Lessee shall promptly observe and comply with all laws specified
below and all reasonable laws, orders, regulations, rules, ordinances and requirements of
Federal, State, County and City governments with respect to the use, care and control of
the leased premises, except in the event where Lessee reasonably objects to the
application of any such proceeds in good faith with all reasonable and necessary
diligence to protest the same and provided Lessor's interest in the premises is not
jeopardized.
10.1 Lessee Compliance with Clean Water Act for Toxic Pollutants. The
effluent standards or prohibitions established under Section 307 (a) of the Clean Water Act
for Toxic Pollutants. Lessee shall install all facilities necessary for the operation and shall
properly operate and maintain all facilities and systems and related appurtenances of
treatment that are required to keep compliance with the Clean Water Act for Toxic Pollutants.
10.2 Lessee Compliance with Americans with Disabilities Act. Lessee shall be
solely responsible for any improvements, alterations or repairs to the premises required
pursuant to the Americans with Disabilities Act.
10.3 Lessee Compliance with Environmental Laws. 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, material,
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 Environmental
Quality, petroleum products and their derivatives, and such other substances, material and
wastes as become regulated or subject to cleanup authority under any environmental laws.
Environmental laws means those laws sited in this subparagraph.
10.3.1 Lessee's compliances 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.
10.3.2 Limitation on uses of hazardous materials. Lessee shall not use or
allow any agents, contractors or subtenant to use premises to generate, manufacture,
refine, transport, treat, store, handle, recycle, release or dispose of any hazardous
material, other than at reasonably necessary for the operations of Lessee's activities
as contemplated under this agreement.
10.3.3 City's Rights. City shall have the right to conduct reasonable
inspections and investigations of premises and the operations conducted on premises
at any time with appropriate notification and from time to time, and Lessee shall
cooperate fully with City during such inspections and investigations.
10.3.4 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 premises, damage for the loss or restriction
on the use of rentable or usable space or of any amenity of premises, 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 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
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use or activities, or of Lessee's agents, contractors, or subtenants. Lessee shall not
be held responsible for damages caused by the negligence of City.
10.3.5 To the extent permitted by law, City agrees to indemnify Lessee from
and against all claims, judgments, damages, penalties, fines, costs, liabilities, or
losses (including, without limitation, sums paid in settlement of claims, attorneys' fees,
consultant fees, and expert fees) which arise during the release term and which are
imposed on, paid by, or asserted against Lessee by reason of the presence of
hazardous materials in the soil, groundwater, or solid vapor on or under the premises,
except to the extent that the hazardous materials are present as a result of Lessee's
activities on the premises, or the activities of Lessee's agents, contractors, or
subtenants.
11. Assignment.
11.1 Lessee shall have the right to assign or sublease the whole or any part of
Lessee's rights and duties under this Lease, subject to the written approval of the City, which
such approval shall not be unreasonably withheld. The City, in considering approval, may
take into consideration the experience, qualifications and financial ability of the proposed
assignee to do the obligations required of Lessee, and to operate the airport for the benefit of
the public.
11.2 For the purposes of this paragraph, the sale, assignment, transfer, or other
disposition of any of the issued and outstanding capital stock of Lessee, or a change in
principal officers or directors of the corporation, if Lessee is a corporation, or of the interest of
any general partner or joint venturer or syndicate member or co-tenant, if Lessee is a
partnership or joint venture or syndicate or co-tenancy, which shall result in changing the
control of Lessee, shall be construed as an assignment of this lease. Control, as used in this
paragraph, means 50 percent or more of the voting power of the corporation.
12. Federal Preeminence. All rights, privileges and liabilities imposed by this agreement are
subject and subordinate to any conditions, restrictions, limitations, rules, regulations or
future requirements for modification of this agreement, by any agreement or contract
pertaining to the Airport between the United States Government or any other department
or agency of either the United States Government or the State of Oregon.
13. Minority Business Plan. As required by the FAA, 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.
14. Termination. This lease may be terminated upon proper notice 90 days in advance of
such termination date, and upon the following conditions:
14.1 Termination by Lessee. This agreement shall be subject to termination by
Lessee in the event of any one or more of the following events:
14.1.1 The abandonment of the Airport as an airport or airfield by the City.
14.1.2 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 30 days after receipt of notice from Lessee concerning the default, provided that if
the remedy takes longer than 30 days, then the term of notice shall be so extended.
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14.1.3 Damage to or destruction of all or material portions of the Airport, and
which are necessary for the operation of Lessee's business, and election by City not
to replace such improvements within six months after destruction.
14.1.4 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 of in excess of 90 days.
14.2 Termination by City. This agreement shall be subject to termination by City in
the event of any one or more of the following events:
14.2.1 Failure to pay the basic or percentage fee or failure to pay any money
due to the City as set forth in this agreement on the due date after ten days written
notice by City to Lessee.
14.2.2 The default by Lessee in the performance of any of the terms,
covenant or conditions of this agreement (other than payment of the basic or
percentage fees or any other money due), and the failure of Lessee to remedy or
undertake to remedy, to City's satisfaction, such default for a period of 30 days after
receipt of notice from City to remedy the same.
14.2.3 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.
14.2.4 The failure to conduct the business or to perform any duty as required
in section 5.
15. Affirmative Action Program. 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.
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.
Lessee assures that it will require that its covered sub-organizations will 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.
16. Taxes. Lessee covenants and agrees to pay all real and personal property taxes
assessed against the Leased Property during the term of this Lease, such payments to
be made no later than November 15th 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.
16.1 In the event that there is a change in the method upon which property taxes
are imposed upon the Lessee and such change increases the property tax liability of the
Lessee, City and Lessee agree to renegotiate fee payment to reflect the change.
17. Public Use. 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 which in
the future may be connected with landing, taxiing, parking areas, and other facilities.
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LESSEE CITY
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