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HomeMy WebLinkAbout70-02 RESOLUTIONT °°• s '4 RESOLUTION NO. 70-02 A RESOLUTION APPROVING A GROUND LEASE AGREEMENT WITH MR. DON NELMS FOR SPACE AT THE FAYETTEVILLE MUNICIPAL AIRPORT TO CONSTRUCT A CORPORATE HANGAR. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council hereby approves a Ground Lease Agreement with Mr. Don Nelms for space at the Fayetteville Municipal Airport to construct a corporate hangar. A copy of the Lease Agreement marked Exhibit "A" is attached hereto and made a part hereof. PASSED and APPROVED this 7th day of May 2002. ........YC .IN l: `. C/1+ a > tri ' r' . � I ` a BY APPROVED: By: EAT WOODRUFClerk • • NAME OF FILE: CROSS REFERENCE: Resolution No. 70-02 •. 05/07/02 Resolution No. 70-02 05/07/02 Exhibit "A" (Ground Lease Agreement) 04/16/02 Memo to Mayor Coody & City Council Members thru Staff Review Committee from Ray M. Boudreaux, Director, Airport, regarding Airport Ground Lease for Corporate Hangar Construction 05/07/02 Staff Review Form 05/08/02 Memo to Ray Boudreaux, Airport, from Heather Woodruff, City Clerk NOTES: m. • LEASE AGREEMENT Ground Lease This Lease Agreement entered into this / —4 day of , 2002, by and between the City of Fayetteville, Arkansas, hereinafter referred to as the `Lessor," and Don Nelms, 2933 N. College Avenue, Fayetteville, Arkansas 72703 hereinafter referred to as "Tenant' ; II EXHIBIT A 4. Zia WHEREAS, the Lessor owns and operates an Airport known as Fayetteville Municipal Airport - Drake Field, situated in Washington County in the State of Arkansas; and WHEREAS, Tenant desires to lease from Lessor certain space for the construction of an aircraft hangar and ramp as described below for aviation operations, heavy aircraft maintenance and aircraft storage: A CERTAIN TRACT OF LAND 140 FT. X 140 FT. LOCATED AT THE FAYETTEVILLE MUNICIPAL AIRPORT - DRAKE FIELD AND MORE PARTICULARLY SET FORTH AND SHOWN ON EXHIBIT "A", ATTACHED HERETO AND MADE A PART HEREOF, ONCE COMPETED TO HAVE AN ADDRESS ON SOUTH SCHOOL AVENUE. NOW, THEREFORE, the Parties hereto agree as follows: 1. LEASEHOLD. The Lessor does hereby grant, demise and lease unto Tenant certain premises situated in Washington County, Arkansas, within the boundaries of the Fayetteville Municipal Airport- Drake Field. Tenant will be responsible for all improvements to the Leased Premises, (aircraft hangar and ramp). 2. TERM. The term of this lease is for thirty (30) years beginning on the first day of the next month, following the date the occupancy permit is granted ( day of , 2002), and ending at midnight the end of the previous month in the year 2032 ( 2032), unless otherwise terminated, canceled or extended as set forth herein below. Lessor or Tenant may terminate this lease at any time by giving the other party thirty (30) days written notice of termination during the first six (6) months following the date of the lease and prior to the ground breaking for the new facility. A. Option to Extend. Tenant Don Nelms shall have the option to extend the Lease Term of this Lease for one (1) period of twenty (20) years if Tenant Don Nelms, has satisfied the following conditions (extensions beyond fifty (50) years must be renegotiated and approved by the City Council): (1). Tenant has complied with and performed all conditions, covenants, and terms of the Agreement without any defaults known to Tenant, or any defaults that are not otherwise in the process of being resolved in the manner provided in this Agreement. -1- m 2 D • • 0 (2). Notice of Tenant Don Nelm's request to renew has been made and presented in writing to City of Fayetteville at least one hundred twenty (120) days prior to the expiration of the term. (3.) The amount of rental fees shall have been successfully negotiated and agreed to by the parties for the extended lease term. 3. RENTAL FEES. During the term of this lease, Tenant Don Nelms agrees to pay Lessor an annual ground rental fee of five cents ($.05) per square foot of total leased ground space. Leased ground space totals 19,600 square feet. Annual rental due the Lessor is Nine Hundred and Eighty Dollars ($980.00) . Said rental is to be paid in advance in yearly installments on the first day of the next month following the date the occupancy permit is granted ( day of 2002). If paid annually, or in increments of five (5) years or less, rental charges shall be reviewed every five (5) years and the rental charges for the next five (5) years of the lease term will be adjusted up to reflect the Consumer Price Index (CPI) plus one (1) percent, using the formula on Lease Attachment #1. The parties agree that the rental to be effective as of the commencement of each period of the lease shall be equal to the rate set forth, as adjusted by the CPI, as defined to mean the monthly index published by the United States Department of Labor, Bureau of Labor Statistics. Index utilized will be for the month nearest to the renewal date as published by the United States Department of Labor, Bureau of Labor Statistics prior to the renewal date. A delinquency charge will be imposed on payments not received by the close of business on the tenth day after the due date. Such delinquency charge shall be the maximum amount allowable under Arkansas law. All payments shall be delivered or mailed to: City of Fayetteville, 113 West Mountain Street, Fayetteville, Arkansas 72701. 4. UTILITIES AND JANITORIAL SERVICES. Tenant shall be responsible for the payment of the utilities associated with any but not limited to, electric, gas, heating, water/sewer, and trash removal to the leasehold. The Lessor shall not be required to furnish to Tenant any facilities or services of any kind, such as, but not limited to, water/sewer, trash removal, electricity, or gas. Any such facilities or services required by Tenant for their use and purposes shall be their sole and exclusive responsibility and agree to hold Lessor harmless from any responsibility or liability therefore. 5. TERMS AND CONDITIONS. Tenant agrees to comply with and abide by all terns and conditions set forth in this original Agreement of Lease. -2- • • 6. USE OF THE PREMISES. Tenant agrees that the leased premises shall be used and occupied only as an aircraft hangar and for related lawful purposes. A. Flammable Material. Tenant further agrees not to store any flammable material on the demised premises other than a limited supply of oils and agents necessary for the operation of an aircraft hangar. B. Hazardous Substance. Tenant shall not cause or permit any Hazardous Substance to be used or stored on or in the Leased Premises with out first obtaining the Lessor's written consent. If Hazardous Substances are used, stored, generated, or disposed of on or in the Leased Premises or if the Leased Premises or any other Airport property becomes contaminated in any manner for which Tenant is responsible or legally liable, Tenant shall indemnify and hold harmless the Lessor from any and all claims, damages, fines, Judgements, penalties, costs, liabilities, or losses (including, without limitation and decrease in value of the Lease Premises, damages caused by loss or restriction of rentable or usable space as part of the Leased Premises) arising during or after the term hereof and arising as a result of that contamination by Tenant, Tenant's agents, employees, and invitees. This indemnification includes, without limitation, and all costs incurred because of any investigation of the Airport or any cleanup, removal, or restoration mandated by a federal, state, local agency or political subdivision. C. Tenant shall not start or operate aircraft engines within the facility leased hereby and shall not allow such operations by any other person. 7. USE OF THE AIRPORT. Tenant is granted the use, in common, without charge, with others similarly authorized, of the airport, together with all facilities, equipment, improvements, and services which have been or may hereafter be provided at or in connection with the Airport from time to time including, but not limited to, the landing field and any extensions hereof or additions thereto, roadways, runways, ramps, aprons, taxiways, flood lights, landing lights, beacons, control tower, signals, radio aids, and all other conveniences for flying, landings and takeoffs Tenant agrees to observe and obey Lessor's Ordinances and Regulations with respect to the use of the demised premised and Airport; provided, however, such Ordinances and Regulations shall be consistent with safety and with all city, county, state, and federal ordinances, rules and regulations. Tenant agrees to abide by the rulings of the Federal Aviation Administration with respect to the use of the Leased Premises. "Airport Minimum Standards for Operations and Commercial Activities " herein referred to as Airport Minimum Standards at Fayetteville Municipal Airport are made part of this lease by reference as if included word for word. 8. REPAIRS, MAINTENANCE AND APPEARANCE. A. Tenant shall at all times during the term of this Lease Agreement, at Tenant's expense, keep and maintain in good repair and safe condition the leased premises and the equipment and appurtenances, both inside and outside, structural and non-structural, extraordinary and ordinary, -3- • • • whether or not necessitated by wear, tear, obsolescence or defects, latent or otherwise. When used herein, the term "repairs" shall include all necessary replacements, renewals, alterations, additions, and betterments. Tenant acknowledges that Tenant shall be responsible for the repairs and maintenance necessary to maintain the structural integrity of the hangar. Tenant will at all times maintain the Leased Premises in a clean, orderly, and attractive condition; not allow the accumulation of rubbish, trash, refuse and any unsightly conditions or fire hazards on the Leased Premises. Tenant shall be responsible for mowing and the upkeep of the outside grounds of the Leased Premises. Tenant shall be responsible for all janitorial services and trash removal from the Leased Premises. B. The necessity for and adequacy of repair to the Lease Premises, pursuant to subparagraph (a.) hereof, shall be measured by the standard which is appropriate for improvements of similar construction and also shall meet the requirements and standards set out and promulgated by the City of Fayetteville pursuant to the primary lease referred to above. C. Tenant agrees to reimburse Lessor for all sums and expenses incurred in the repairs or maintenance required or caused to be made pursuant to the regulations and rules of the Lessor mentioned in subparagraph (b) above as a result of failure by Tenant to maintain or repair the demised premised as required. 9. ALTERATIONS AND IMPROVEMENTS. Tenant shall have prior written consent from the Lessor, meeting all City requirements, to make any alterations, additions and improvements Tenant deems necessary and desirable to the interior of the leased premises. Tenant shall not be entitled to make any major or material alterations, additions or changes to the exterior of the leased premises without the Lessor's prior written consent. Tenant acknowledges and agrees that all such alterations, additions and improvements, including paneling, partitions, railings, floors, ceilings and the like, shall become the property of the Lessor upon the terminations of the Lease Agreement. 10. INSURANCE Tenant shall obtain and maintain property insurance coverage for the repair or replacement of the leasehold and any adjacent improvements, with an insurance company licensed to do business in the State of Arkansas, naming the City of Fayetteville and the Fayetteville Municipal Airport and their trustees, agents, officers, and employees are named as an additional insured on the policy, and Tenant shall provide the Airport Administration Office with a Certificate of Insurance during the term of this Lease. Tenant acknowledges that it is the Tenant's responsibility to maintain insurance on Tenant's personal property. 11. SUB -LEASING AND ASSIGNMENT. Tenant shall not be entitled to sub -lease or assign the Tenant's interest in this Lease Agreement without first obtaining the written permission of the Lessor. A request to sub -lease or an assignment of the lease will not be unreasonably withheld. • • 12. EVENTS OF DEFAULT. The following shall be "events of default" under this Agreement, and the terms "events of default" or "default" shall mean, whenever they are used herein, any one or more of the following. A. Tenant shall fail to pay when due and owning any rentals hereunder and such nonpayment shall continue for twenty days after written notice thereof by the Airport; B. Tenant voluntarily shall abandon, desert, or vacate the Leased Premises; C. Tenant shall fail to comply with insurance requirements imposed hereunder, D. Tenant shall fail to observe or perform any other of its obligation hereunder, and such failure shall continue unremedied for twenty (20 days after the Lessor shall have given to the Tenant written notice specifying such default. Provided, the Airport may grant Tenant such additional time as it's reasonably required to correct any such default if Tenant has instituted corrective action and diligently is pursuing the same; E Tenant shall fail to provide and maintain any security assurances required hereunder. 13. REMEDIES UPON TENANT'S DEFAULT. Whenever an event of default of Tenant shall occur, the Lessor may pursue any available right or remedy at law or equity including: A. Termination. At its exclusive option, the Lessor may deliver to Tenant written notice of termination, specifying the date upon which the Agreement will terminate In the event of termination, Tenant's rights to possession of the Leased Premises immediately shall cease. The Lessor may then reenter and take possession of the Leased Premises and Tenant forthwith shall surrender possession of the Leased Premises. Upon termination of this Agreement, Tenant shall be liable for payment of: (1.) All sums accrued through the date of termination. (2.) The reasonable costs incurred by the Lessor to relet the Leased Premises, or any portion thereof; and (3.) The reasonable cost incurred by the Lessor to restore the Leased Premised or any portion thereof to the condition in which they originally were leased, ordinary wear and tear excepted. All rentals received by the Lessor from reletting the Leased Premises after the termination of this Agreement shall be credited against the Outstanding Rental Balance. The acceptance by the Lessor of any rentals from Tenant after the termination of this Agreement shall not reinstate this Agreement. Upon such notice, Tenant agrees to vacate the premises immediately. Should it become necessary -5- • • • for Lessor to resort to judicial process to enforce the terms of this Agreement, or reclaim possession of the premises, Tenant agrees to pay a reasonable attorney's fee. 14. EXPIRATION OR TERMINATION. On the expiration or other termination of this Lease, Tenant's right to use the demised premises shall cease, and Tenant shall vacate the premises without unreasonable delay. All property installed, erected, or placed by Tenant in, on, or about the premises leased hereunder shall be deemed to remain the property of Lessor. Tenant shall have the right at any time during the term of this agreement, or any renewal or extension hereof, and for an additional period of seven (7) days after the expiration or other termination of this agreement, to remove any or all of Tenant's property, subject, however to Tenant's obligation to repair all damage, if any, resulting from such removal. Any and all property not removed by Tenant prior to the expiration of the aforesaid seven (7) day period shall thereupon become a part of the land on which it is located and title hereto shall thereupon vest in Lessor. 15. TERMINATION OF AIRPORT In the event that the Fayetteville Municipal Airport facility and property are no longer used for aviation purposes, the Tenant may remain in possession of the premises until the end of the lease term with the right to use the premises for any use allowable under Arkansas law. 16. TAXES. Tenant shall pay all ad valorem taxes and assessments upon the leased premises and upon all personal property located upon the leased premises which are assessed during the lease term. 17. MORTGAGING OF LEASEHOLD. Tenant is hereby given the absolute right without the Lessor's consent to mortgage his interest in the leased premises, provided that no such mortgage shall extend to or affect the fee, the reversionary interest, or the estate of Lessor in and to the land and building (hangar facility complex) erected thereon. 18. INDEMNITY. Tenant agrees to indemnify Lessor against any liability for injuries to persons or damage to property caused by Tenant's gross negligent use or occupancy of the leased premises; provided, however, that Tenant shall not be liable for any personal injury, damage or loss occasioned by the negligence of Lessor or its agents or employees, and provided further, that each party shall give prompt and timely notice of any claim made or suit instituted which in any way directly or indirectly affects or might affect either party, and each party shall have the right to compromise and defend the same to the extent of its own interest. This clause shall not be construed to waive that tort immunity asset forth under Arkansas Law. 19. NON -WAIVER. Neither the waiver by Lessor of any breach of Tenant of any provision hereof nor any forbearance by the Airport to seek a remedy for any such breach shall operate as a waiver of any other breach of Tenant. -6- • • • • 20. NOTICES. Any notice or consent required by this Agreement shall be sufficient if sent by Certified Mail, return receipt requested, postage paid, to the following addresses: LESSOR: Airport Administration Office 4500 S. School Avenue, Suite F Fayetteville, Arkansas 72701 PH: 501-718-7642 TENANT: Don Nelms 2933 N. College Avenue Fayetteville, Arkansas 72703 21. This Agreement shall be construed under the laws of the State of Arkansas. 22. All the covenants, conditions, and provisions under this agreement shall extend to and bind the legal representatives, successors, and assign of the respective parties hereof. IN WITNESS WHEREOF, the parties have executed this lease on the day and year first above written. ATTEST: By: Title: LESSOR: CITY OF F By: ETTEVILLE, ARKANSAS Dan Coody, Mayor TENANT: Don Nelms By: -7- Title • • • LEASE ATTACHMENT NUMBER ONE Rent adjustments shall be made as of the commencement of each of the Dates Upon Which Rent Increases Apply and shall be determined by the following formula: Rent as last so increased under this Lease multiplied by: 1 + Current Index - Base Index Base Index plus one percent (1%) of the Rent as last so increased under this Lease Where, "Current Index" shall be the CPI (D -I Consumer Price Index -All City Average," "all items groups, subgroups and special groups," published monthly in the Monthly Labor Review of the Bureau of Labor Statistics of the United States Department of Labor) for the month immediately prior to the applicable Dates Upon Which Rent Increases Apply, and Base Index shall be the CPI for the month immediately prior to the Commencement Date or the most recent Dates Upon Which Rent Increases Apply, whichever is applicable. In no event, however, shall the Rent for any period be less than the Rent as last so increased under this Lease. In the event that such CPI is no longer published or otherwise available, the adjustment provided for herein shall be by the successor (or the most nearly comparable successor index) thereto, adjusted as appropriate to the applicable dates. • -8- } FAYETTEVILLE • THE CITY OF FAYETTEVILLE, ARKANSAS DAN GOODY, MAYOR MEMORANDUM TO: Dan Coody, Mayor City Council Members THRU: Staff Review Comm FROM: Ray M. Boudreaux, DATE- April 16, 2002 SUBJECT: Airport Ground Lease for Corporate Hangar Construction Background: Attached please find the final ground lease signed by Don Nelms of Fayetteville. Mr. Nelms will construct a corporate hangar on propertyleased from the City at Fayetteville Municipal Airport from which to operate a flying business. Purpose: To approve an airport ground lease contract with Don Nelms. Budget Considerations: Don Nelms will pay the City $980.00 a year for the ground. Requested Action: Approval by the City Council. Signature by the Mayor and City Clerk. Attachments: Staff Review Form Lease agreement Aviation and Economic Development Department Fayetteville Municipal Airport, Drake Field 4500 South School Avenue, Suite F Fayetteville, Arkansas 72701 Ray M. Boudreaux, Director 1 f c • STAFF REVIEW FORM X_ AGENDA REQUEST X CONTRACT REVIEW _ GRANT REVIEW For the Fayetteville City Council meeting of May 7, 2002 • FROM: Ray M. Boudreaux Airport Name Division Aviation & Economic Development Department ACTION REQUIRED: Approval of Don Nelms ground lease agreement for the purpose of constructing an aircraft hangar and signature by the Mayor and City Clerk. COST TO CITY: $ ( 980.00 Cost of this Request 5550.0955.4457.00 Account Number N/A Project Number $ 28 160.00 Category/Project Budget $ 0 Funds used to date $ 28,160 Remaining Balance Ground Rent/Freight Category/Project Name Charges for service Program Name Airport Fund Budget Ma ger Cc, X Budgeted Item '7-/9- 9001 Date Administrative Services Dir. Date Budget Adjustment Attached CO CT/G T/LEASE REVIEW: ng Mr age h Date Internal Auditor Date GRANTING AGENCY clatio Vtt4I njtge� ADA Coordinator Purchasing Officer Date Date Grants Coordinator Date STAFF RECOMMENDATION: Approve the Airport Ground Lease Contract lith Don Nelms. irectorDate Unvi 4-05 000 Cross Reference New Item: Yes X Prev. Ord/Res#: Orig Cont. Date: Orig Cont #: No 0 • • • • • STAFF REVIEW FORM Page 2 Meeting Date: May 7, 2002 Comments: Review and approve airport ground lease contract with Don Nelms. Mr. Nelms will construct a hangar in the newly developed corporate area and house aircraft which he uses in his business. Budget Manager Accounting Manager City Attorney Purchasing Officer Internal Auditor ADA Coordinator Grants Coordinator Reference Comments: Reference Comments: Reference Comments: Reference Comments: Reference Comments Reference Comments: Reference Comments: FAYETTEVALLE THE CITY OF FAYETTEVILLE. ARKANSAS DEPARTMENTAL CORRESPONDENCE • To: Ray Boudreaux, Airport From: Heather Woodruff, City Clerk Date: May 8, 2002 Please find attached a copy of Resolution No. 70-02 approving Don Nelms ground lease agreement for the purpose of constructing an aircraft hangar. The original will be microfilmed and filed with the City Clerk. cc: Nancy Smith, Internal Audit c M 0! 010 03 Update Document Reference RES Date 5072002 City";Fayetteville Cndex Maintenance Item Action Ref, Taken Brief Description 70-02 • 5/23/2002 8:45:04 NELMS/CONSTRUCT A CORPORATE HANGAR Enter Keywords • RES. 70-02 GROUND LEASE AGREEMENT NELMS, DON SPACE FAYETTEVILLE MUNICIPAL AIRPORT CONSTRUCT CORPORATE HANGAR HANGAR File Reference # • MICROFILM Security Class Expiration Date Date for Cont/Referred: Name Referred to • • • Cmdl-Return Cmd8-Retention Cmd5-Abstract Yes No Retention Type: **** Active **** Cmd4-Delete Cmd3-End Press 'ENTER' to Continue (c) 1986-1992 Munimetrix Systems Corp.