HomeMy WebLinkAbout39-03 RESOLUTIONRESOLUTION NO. 39-03
A RESOLUTION APPROVING A GROUND LEASE AGREEMENT
WITH FLYING INVESTMENTS, LLC FOR SPACE AT THE
FAYETTEVILLE MUNICIPAL AIRPORT TO CONSTRUCT A
HANGAR AND AN OFFICE/SHOP.
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 Flying Investments, LLC for space at the Fayetteville Municipal
Airport to construct a hangar and an office/shop. A copy of the Lease
Agreement marked Exhibit "A" is attached hereto and made a part hereof.
PASSED and APPROVED this 18th day of March, 2003.
By:
O,,t $1/1x.4,
SONDRA SMITH, City Clerk
APPROVED:
By
Zeit
DAN COO 1 Y, Maydo
,t
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LEASE AGREEMENT
Ground Lease
This Lease Agreement entered into this t 3'1.11 day of F't{Cilt , 2003, by and between the City
of Fayetteville, Arkansas, hereinafter referred o as the "City" andFlying
Investments, LLC, P. O. Box 8157, Fayetteville, Arkansas 72703 hereinafter referred to as
Flying Investments .
WHEREAS, the City owns and operates an Airport known as Fayetteville Municipal Airport -
Drake Field, situated in Washington County in the State of Arkansas; and
WHEREAS, Flying Investments desires to lease from the City certain space for the construction of
an aircraft hangar and ramp as described below:
A CERTAIN TRACT OF I AND 120 FT. X 130 FT. LOCATED AT 4560 S.
SCHOOL AVENUE AT THE FAYETTEVILLE MUNICIPAL AIRPORT -
DRAKE FIELD AND MORE PARTICULARLY SET FORTH AND SHOWN
ON EXHIBIT "A", ATTACHED HERETO AND MADE A PART HEREOF.
NOW, THEREFORE, the Parties hereto agree as follows:
1. LEASEHOLD. The City docs hereby grant, demise and lease unto Flying Investments certain
premises situated in Washington County, Arkansas, within the boundaries of the Fayetteville
Municipal Airport- Drake Field. Flying Investments will be responsible for all improvements to the
Leased Premises.
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 , 2003), and
ending at midnight the end of the previous month in the year 2033 ( , 2033),
unless otherwise terminated, canceled or extended as set forth herein below.
Flying Investments shall have six (6] months from April I, 2003 to begin construction of the hangar.
The City or Flying Investments 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 April 1, 2003
date, or prior to the ground breaking for the new facility. Failure to begin construction before
October I, 2003 will be an automatic cancellation of this ground lease.
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A. Option to Extend. Flying Investments shall have the option to extend the I rase Term of
this Lease for one (1) period of Twenty (20) years if Flying Investments has satisfied the
following conditions (extensions beyond Fifty (50) years must be renegotiated and approved
by the City Council):
1). Flying Investments has complied with and performed all conditions, covenants,
and terms of the Agreement without any defaults known to Flying Investments, or
any defaults that are not otherwise in the process of being resolved in the manner
provided in this Agreement.
2). Notice of Flying Investments's request to renew has been made and presented in
writing to the City 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, Flying Investments agrees to pay the City an
annual ground rental fee of five cents ($.05) per square foot of total leased ground space. Leased
ground space totals 15.600 square feet. Annual rental due the City is Seven Hundred and Eighty
Dollars ($780.00) . Said rental is to be paid in advance in yearly installments on the I5I day of
next month following the date of the Occupancy Permit is granted ( , 2003) .
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.
A delinquency charge will be imposed.oi; 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. Flying Investments 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 City shall not be required to furnish to Flying Investments 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 Flying Investments for their use and purposes shall be their sole and exclusive
responsibility and agree to hold City of Fayetteville harmless from any responsibility or liability
therefore.
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5. TERMS AND CONDITIONS. Flying Investments agrees to comply with and abide by all terms
and conditions set forth in this original Agreement of Lease.
6. USE OF THE PREMISES. Flying Investments agrees that the leased premises shall be used
and occupied only as an aircraft hangar and for related lawful purposes.
A. Flammable Material. Flying Investments 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. Flying Investments shall not cause or permit any Hazardous
Substance to be used or stored on or in the Leased Premises with out first obtaining the City
of Fayetteville'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 Flying Investments is responsible
or legally liable, Flying Investments shall indemnify and hold harmless the City of
Fayetteville 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 Flying
Investments, Flying Investments'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. Flying Investments 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. Flying Investmcnrs 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.
Flying Investments agrees to observe and obey City of Fayetteville'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. Flying Investments 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
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word for word. Special provisions for the use of fuel storage facilities are listed on Lease
Attachment #2.
8. REPAIRS, MAINTENANCE AND APPEARANCE.
A. Flying Investments shall at all times during the term of this Lease Agreement, at Flying
Investments'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, 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. Flying
Investments acknowledges that Flying Investments shall be responsible for the repairs and
maintenance necessary to maintain the structural integrity of the hangar. Flying Investments
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. Flying Investments shall be responsible for mowing and the
upkeep of the outside grounds of the Leased Premises. Flying Investments 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 pursuant to the primary lease referred to above.
C. Flying Investments agrees to reimburse the City 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 City mentioned in Subparagraph (b) above as a result of failure by Flying Investments to
maintain or repair the demised premised as required.
9. ALTERATIONS AND IMPROVEMENTS. Flying Investments shall have prior written
consent from the City, meeting all City requirements, to make any alterations, additions and
improvements Flying Investments deems necessary and desirable to the interior of the leased
premises. Flying Investments shall not be entitled to make any major or material alterations,
additions or changes to the exterior of the leased premises without the City 's prior written consent.
Flying Investments 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
City upon the terminations of the Lease Agreement.
10. INSURANCE Flying Investments 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
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Additional Insured on the policy, and Flying Investments shall provide the Airport Administration
Office with a Certificate of Insurance during the term of this Lease.
Flying Investments acknowledges that it is the Flying Investments's responsibility to maintain
insurance on Flying Investments's personal property.
11. SUB -LEASING AND ASSIGNMENT. Flying Investments shall not be entitled to sub -lease or
assign the Flying Investments's interest in this Lease Agreement without first obtaining the written
permission of the City, provided however, Flying Investments may assign Flying Investments's
interest in this Lease Agreement for a One Hundred and Eighty (180) day period to Qualified
Escrow, LLC, in order for Flying Investments to accomplish a tax deferred exchange under Section
1031 of the Internal Revenue Code. A request to sub-lcase 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. Flying Investments 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. Flying Investments voluntarily shall abandon, desert, or vacate the Leased Premises;
C. Flying Investments shall fail to comply with insurance requirements imposed hereunder;
D. Flying Investments shall fail to observe or perform any other of its obligation hereunder,
and such failure shall continue un -remedied for twenty (20) days after the City shall have
given to the Flying Investments written notice specifying such default. Provided, the Airport
may grant Flying Investments such additional time as it's reasonably required to correct any
such default if Flying Investments has instituted corrective action and diligently is pursuing
the same;
E. Flying Investments shall fail to provide and maintain any security assurances required
hereunder; or
13. REMEDIES UPON FLYING INVESTMENTS'S DEFAULT. Whenever an Event of
Default of Flying Investments shall occur, the City may pursue any available right or remedy at law
or equity including:
A. Termination. At its exclusive option, the City deliver to Flying Investments written
notice of termination, specifying the date upon which the Agreement will terminate. In the
event of termination, Flying Investments's rights to possession of the Leased Premises
immediately shall cease. The City may then reenter and take possession of the Leased
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Premises and Flying Investments forthwith shall surrender possession of the Leased
Premises. Upon termination of this Agreement, Flying Investments shall be liable for
payment of:
1.) All sums accrued through the date of termination.
2.) The reasonable costs incurred by the City to re -let the Leased Premises, or any
portion thereof; and
3.) The reasonable cost incurred by the City 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 City from reletting the Leased Premises after the termination of this
Agreement shall be credited against the Outstanding Rental Balance. The acceptance by the City of
any rentals from Flying Investments after the termination of this Agreement shall not reinstate this
Agreement.
Upon such notice, Flying Investments agrees to vacate the premises immediately. Should it become
necessary for City to resort to judicial process to enforce the terms of this Agreement, or reclaim
possession of the premises, Flying Investments agrees to pay a reasonable attorney's fee.
14. EXPIRATION OR TERMINATION. On the expiration or other termination of this Lease,
Flying Investments 's right to use the demised premises shall cease, and Flying Investments shall
vacate the premises without unreasonable delay. All property installed, erected, or placed by Flying
Investments in, on, or about the premises leased hereunder shall be deemed to remain the property of
City. Flying Investments 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 Flying Investments's property, subject,
however to Flying Investments's obligation to repair all damage, if any, resulting from such removal.
Any and all property not removed by Flying Investments 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 City.
15. TERMINATION OF AIRPORT. In the event that the Fayetteville Municipal Airport facility
and property are no longer used for aviation purposes, the Flying Investments 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. Flying Investments 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.
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17. MORTGAGING OF LEASEHOLD. Flying Investments is hereby given the absolute right
without the City of Fayetteville'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 City
of Fayetteville in and to the land and building (hangar facility complex) erected thereon.
18. INDEMNITY. Flying Investments agrees to indemnify the City against any liability for injuries
to persons or damage to property caused by Flying Investments's gross negligent use or occupancy of
the leased premises; provided, however, that Flying Investments shall not be liable for any personal
injury, damage or loss occasioned by the negligence of City 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 City of any breach of Flying Investments 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 Flying Investments.
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:
CITY OF FAYETTEVILLE:
Airport Administration Office
4500 S. School Avenue, Suite F
Fayetteville, Arkansas 72701
PH: 479-718-7642
FAX: 479-718-7646
FLYING INVESTMENTS LLC:
Flying Investments
P. O. Box 8157
Fayetteville, Arkansas 72703
PH: 479-530-4000
FAX: 470-443-9424
21. NON-DISCRIMINATORY CLAUSE.
A. Flying Investments agrees to not discriminate by segregation or otherwise against any
person or persons because of race, creed color, religion, national origin, sex, martial status, or
handicap in the famishing, or by refusing to furnish, to such persons the use of any facility,
including any and all services, privileges, accommodations, and activities provided thereby.
Nothing herein shall require the furnishing to the general public of the use of any facility
customarily furnished by the City solely to tenants, their employees, customers, patients,
client, guests, and invites.
B. This Agreement shall be construed under the laws of the State of Arkansas.
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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: ��'teic�a--)
City Clerk
ATTEST:
By:
Title:
CITY OF FTTEVI4,LE, ARKANSAS
By:
Dan Coody, Mayor
Flying Invest
By:
8
i Pi crop i 77 6'4
Title
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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-1 Consumer Price Index -All City Average, " "all
items groups, subgroups and special groups, "published monthly in the Monthly Labor Review ofthe
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 Icss
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.
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LEASE ATTACHMENT NUMBER TWO
Fuel stored in the Airport Fuel Storage Facility shall be coordinated with the Airport Administration
Office and all fees and charges required by City Ordinance shall be remitted to the City of
Fayetteville. Deliveries shall be coordinated so as not to overfill the fuel storage tanks. In addition
to Buyer and Supplier Fees (Fuel Flowage Fees) charged by City of Fayetteville Ordinance, an In -To -
Plane Fee shall be charged at the following rate schedule for each calendar year.
First:
Second:
Third:
Fourth:
And Subsequent:
100,000 gallons delivered in-to-plane$.25 per gallon
100,000 gallons delivered in-to-plane$.20 per gallon
100,000 gallons delivered in-to-plane$.15 per gallon
100,000 gallons delivered in-to-plane$.10 per gallon
10
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Exhibit 'A"
•
`� • I•
NAME OF FILE:
CROSS REFERENCE:
Date
Resolution No. 39-03
Document
•
1
03/18/03
Res. 39-03 w/lease agreement
2
02/21/03
Staff Review Form
3
03/20/03
memo to Ray Boudreaux
NOTES:
• FAYETTEtI LLE
THE CITY OF FAYETTEVILLE, ARKANSAS
DEPARTMENTAL CORRESPONDENCE
To: Ray Boudreaux
Airport \ate(}
From: Clarice Buffalohead-Pearman v `�
City Clerk Division
Date: 3/20/2003
Re: Res. No. 39-03
Attached please find an executed copy of the above resolution passed by the City Council on
March 18, 2003, approving a ground lease agreement with Flying Investments, LLC for space at
the Fayetteville Municipal Airport to construct a hangar and an office/shop.
I am retuming one executed contract to you. The other original contract will be microfilmed and
filed with the city clerk's office. If anything else is needed please let the city clerk's office know.
/cbp
Nancy Smith, Internal Auditor
•
•
XAGENDA RE 11L
X CONTRACT REVIEW
_
GRANT REVIEW
For the Fayetteville City Council meeting of March 4, 2003
S'T'AFF REVIEW FORM
gm 44 67(03
•
65
Vire
31-1'3
FROM:
Ray M. Boudreaux
Name
Airport
Division
Aviation & Economic Development
Department
ACTION REQUIRED: Review and approve ground lease to Flying Investments, LI.C. for construction of a hangar and
office/shop complex at Fayetteville Municipal Airport, Drake Field.
COST TO CITY:
Cost of this Request Category/Project Budget
Account Number Funds used to date
Project Number Remaining Balance
Category/Project Name
Program Name
Airport
Fund
ETREVIEW:
Budget Manager
Date
X Budgeted Item
Budget Adjustment Attached
Administrative Services Dir.
Date
C RACT/G t A''T/LEASE RE
111 A •
IEW:
cc unting:Ana
�tLvl I1�
C o cy 1ate ADA Coordinator Date
Purchasing Officer
Internal Audi
00
Date GRANTING AGENCY
Date Grants Coordinator
Date
STAFF RECOMMENDATION: Approve Lease for Mayor Signature.
Cross Reference
New Item: Yes X No
Prev. Ord/Res#:
Orig Cont. Date:
Orig Cont #:
• •
STAFF REVIEW FORM Page 2
Meeting Date: March 4, 2003
Comments: Flying Investments, LLC has a ground lease on Fayetteville Municipal Airport, Drake Field and is
in construction of their first hangar. This ground lease will allow the company to construct an additional hangar
and to connect the two buildings with a shop and office complex. Flying Investments represents several
companies in the aircraft maintenance and repair, aircraft modifications, aircraft sales and aircraft management
businesses.
Budget Manager
Accounting Manager
City Attomey
Purchasing Officer
Internal Auditor
ADA Coordinator
Grants Coordinator
Reference Comments:
Reference Comments:
Reference Comments:
Reference Comments:
Reference Comments
Reference Comments:
Reference Comments:
FAYETTWILLE
THE CITY OF FAYETTEVILLE, ARKANSAS
DAN COODV, MAYOR
TO:
THRU:
FROM:
DATE:
SUBJECT:
MEMORANDUM
Dan Goody, Mayor
City Council Members
Staff Review Committee
Ray M. Boudreaux, Director, Aviation and E
February 14, 2003
Ground Lease for Flying Investments LLC
•
•
mic Development
Background: The Airport Board approved at their meeting of February 13, 2003, a ground
lease to Flying Investments, LLC for the construction of a second hangar and connecting
shop/office complex at Fayetteville Municipal Airport, Drake Field. Flying Investments is in
construction of their first hangar. The second hangar will be adjacent to and west of the first
hangar. Flying Investments, LLC represents several aviation related businesses that are
partners in the enterprise located at the airport.
Purpose: Review, approval and signature by the Mayor
Budget Considerations: Lease of 15.600 square feet of ground at $.05 per SF with increases
every 5 years at the rate of increase in the CPI plus 1 %. Initial term is 30 years with one renewal
for 20 years.
Requested Action: Mayor, sign the ground lease contract.
Attachments: Staff Review Form
Ground Lease Contract (2 cys)
Aviation and Economic Development Department
Fayetteville Municipal Airport, Drake Field
4500 South School Avenue, Suite F
Fayetteville, Arkansas 72701
Ray M. Boudreaux, Director