HomeMy WebLinkAbout75-22 RESOLUTION04,
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113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Resolution: 75-22
File Number: 2022-0204
DAWSON AFRO, LLC AND SHANNON HOMES, LLC:
A RESOLUTION TO APPROVE A FORTY (40) YEAR GROUND LEASE AGREEMENT
WITH DAWSON AERO, LLC AND SHANNON HOMES, LLC FOR AIRPORT PROPERTY
LOCATED AT 4384 SOUTH SCHOOL AVENUE FOR THE CONSTRUCTION OF A 120' X
100' HANGAR, WITH AN OPTION TO EXTEND THE GROUND LEASE FOR AN
ADDITIONAL FIVE (5) YEAR TERM
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby authorizes Mayor Jordan
to sign a forty (40) year ground lease agreement, a copy of which is attached to this Resolution, with
Dawson Aero, LLC and Shannon Homes, LLC for airport property located at 4384 South School
Avenue for the construction of a 120 x 100' hangar, at a rental rate of $2,160.00 per year for the
discount period and $4,200.00 for the remainder of the term, with an option to extend the ground
lease for an additional five (5) year term.
PASSED and APPROVED on 4/5/2022
Page 1 Printed on 416122
City of Fayetteville, Arkansas 113 West Mountain Street
Fayetteville, AR 72701
(479)575-8323
Text File
File Number: 2022-0204
Agenda Date: 4/5/2022 Version: 1 Status: Passed
In Control: City Council Meetinq File Type: Resolution
Agenda Number: A.2
DAWSON AERO, LLC AND SHANNON HOMES, LLC:
A RESOLUTION TO APPROVE A FORTY (40) YEAR GROUND LEASE AGREEMENT WITH
DAWSON AERO, LLC AND SHANNON HOMES, LLC FOR AIRPORT PROPERTY LOCATED AT
4384 SOUTH SCHOOL AVENUE FOR THE CONSTRUCTION OF A 120' X 100' HANGAR, WITH
AN OPTION TO EXTEND THE GROUND LEASE FOR AN ADDITIONAL FIVE (5) YEAR TERM
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby authorizes Mayor Jordan to sign a
forty (40) year ground lease agreement, a copy of which is attached to this Resolution, with Dawson Aero,
LLC and Shannon Homes, LLC for airport property located at 4384 South School Avenue for the
construction of a 120 x 100' hangar, at a rental rate of $2,160.00 per year for the discount period and
$4,200.00 for the remainder of the term, with an option to extend the ground lease for an additional five (5)
year term.
City of Fayetteville, Arkansas Page 1 Printed on 41612022
Summer Fallen
Submitted By
City of Fayetteville Staff Review Form
2022-0204
Legistar File ID
4/5/2022
City Council Meeting Date - Agenda Item Only
N/A for Non -Agenda Item
3/1/2022 AIRPORT SERVICES (760)
Submitted Date Division / Department
Action Recommendation:
Staff recommends approval and signature of the Mayor on a ground lease with Dawson Aero, LLC & Shannon
Homes, LLC for land located immediately north of terminal at 4384 S. School Avenue to construct a 120' X 100'
hangar.
Budget Impact:
Account Number
Project Number
Budgeted Item? No Current Budget
Funds Obligated
Current Balance
Does item have a cost? No Item Cost
Budget Adjustment Attached? No Budget Adjustment
Remaining Budget
Purchase Order Number:
Change Order Number:
Original Contract Number:
Comments:
Fund
Project Title
$
V20210527
Previous Ordinance or Resolution #
Approval Date:
CITY OF
FAYETTEVILLE
ARKANSAS
MEETING OF APRIL 5, 2022
TO: Mayor and City Council
THRU: Susan Norton, Chief of Staff
Terry Gulley, Assistant Public Works Director
FROM: Summer Fallen, Airport Director
DATE: March 1, 2022
CITY COUNCIL MEMO
SUBJECT: Ground Lease with Dawson Aero, LLC and Shannon Homes, LLC
RECOMMENDATION:
Staff recommends approval and signature of the Mayor on a ground lease with Dawson Aero,
LLC and Shannon Homes, LLC for land located immediately north of terminal at 4384 S. School
Avenue to construct a 120' X 100' hangar.
BACKGROUND:
The area in question was improved via grant funds from the FAA and Arkansas Department
of Aeronautics in 2007 to provide infrastructure for 4 corporate style hangars.
DISCUSSION:
Dawson Aero, LLC and Shannon Homes, LLC will construct a 120' X 100' corporate hangar at
Drake Field. This hangar will have the ability to house multiple corporate sized aircraft.
BUDGET/STAFF IMPACT:
Dawson Aero, LLC and Shannon Homes, LLC will pay $2,160 per year during the 18-month
discount period, and $4,200 per year after the discount period is expired.
Attachments:
Staff Review Form
City Council Memo
Ground Lease
Exhibit A
Exhibit B
Mailing Address:
113 W. Mountain Street www.fayetteville-ar.gov
Fayetteville, AR 72701
Ground Lease Agreement
between The City of Fayetteville, Arkansas
And
Dawson Aero, LLC & Shannon Homes, LLC
The purpose of this Lease Agreement is to establish an agreement between the City of
Fayetteville, Arkansas ("CITY") and Dawson Aero. LLC, a forgeign LLC registered to do
business in Arkansas & Shannon I lorries. LLC ("LESSEES') for the use of space for the
construction of an aircraft hangar and associated aprons and taxilanes as described below-.
I . Leased Premises. For and in consideration of the rents, covenants and agreerrnents
herein entered into and agreed upon by LESSEES as obligations to the CITY, the CITY lets, leases
and demises unto LESSEES. subject to the terms and conditions contained herein, the following
described property situated in Washington. County, Arkansas:
A certain tract of land located immediately north of the Drake Field Terminal building for
construction of a 120' x 100' hangar.
2. Term. The initial term is for forty (40) years beginning on APhk 5 2022.
and shall end on �f.QC►� 5 2062 unless otherwise terminated, canceled or extended as set
forth hereinbelow:
a. LESSEES shall have eighteen (18) months from Ayc;` Cj , 2022 (the
"Discount Period") to begin construction of the hangar. The CITY or LESSEES
may terminate this lease at any time by giving the other party thirty (30) days
written notice of termination during the first eighteen (18) months following the
2022 date, or prior to the ground breaking for the new facility,
whichever occurs earlier. The Discount Period may be extended by up to an
additional eighteen (18) months upon written agreement of CITY and LESSEES.
Failure to begin construction before Rpr;k S 2022 (or the expiration
of any extended period agreed upon by the parties pursuant to this subsection) shall
be an automatic cancellation of this ground lease. EXHIBIT A contains the fuel
pricing breakdown that is valid for the term of the lease.
b. Option to Extend. LESSEES shall have the option to extend the lease term of this
lease for one (1) period of five (5) years if LESSEES have satisfied the following
conditions:
i. LESSEES have complied with and performed all conditions, covenants, and
terms of the Agreement without any defaults known to LESSEES, or any
defaults that are not otherwise in the process of being resolved in the manner
provided in this Agreement.
ii. Notice of LESSEES' 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 initial term.
iii. The amount of rental fees shall have been successfully negotiated and
agreed to by the parties for the extended lease term.
3. Rent. LESSEES agree to pay to CITY for the Discount Period set forth in
paragraph 2.A above a discounted annual ground rental fee of eighteen cents (SO.18) per square
foot of total leased ground space. Annual rental due for this Discount Period is TWO TI IOUSAND
ONE HUNDRED AND SIXTY DOLLARS ($2.1601. The discounted rate shall expire at the end
of Discount Period (including any extension a -reed upon by the parties pursuant to paragraph 2.A
above) or upon the issuance of a Final Certificate of Occupancy, whichever shall occur first.
Upon the expiration of the Discount Period. LESSEES agree to pay to CITY an annual ground
rental rate of thirty-five cents ($0.35) per square foot of total leased ground space. Annual rental
due for this period of time is FOUR THOUSAND TWO HUNDRED DOLLARS ($4,200).
Rental payments during the Discount Period shal I be paid in advance on the first day of each month
beginning—�!'� —�. 2022. Rental payments after the Discount Period shall be paid in
advance m year installments on the first day following the issuance of a final certificate of
occupancy.
A delinquency charge shall be imposed on payments not received by the close of business on the
tenth (10"') day after the due date. Such delinquency charge shall be the maximum amount
allowable under Arkansas law. Payments shall be delivered or mailed to: City of Fayctteville,
4500 S School Ave Ste. F. Fayetteville. Arkansas 72701.
4. Use. LESSEES agree to use the leased premises only as an aircraft hangar and any
other related lawful purposes.
a. Flammable Material: LESSEES agree not to store any flammable material on the
leased premises other than a limited supply of oils and agents necessary for the
operation of an aircraft hangar.
b. Hazardous Substances. LESSEES shall not cause or permit any hazardous
substances to be used or stored on or in the leased premises without first obtaining
CITY'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 become contaminated in any manner for which LESSEES are responsible
or legally liable. LESSEES shall indemnify and hold harmless CITY from any and
all claims, damages, fines, judgments, penalties, costs. liabilities or losses
(including, without limitation. a decrease in value of the leased premises or
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 LESSEES. LESSEE'S agents, employees or invitees. This
indemnification includes. without limitation. any costs incurred because of any
investigation of the airport or any cleanup removal or restoration mandated by a
federal state. or local agency or political subdivision.
c. LESSEES shall not start or operate aircraft engines within the facility to be
constructed on the leased premises and shall not allow such operations by any other
person.
5. Use of the Airport. LESSEES are 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 form time to time including, but not limited to, the landing field and any extensions
hereof or additions thereto, roadways, runways. ramps, aprons, taxiways, floodlights, landing
lights, beacons, control tower, signals, radio aids, and all other conveniences for flying, landings
and takeoffs.
LESSEES agree to observe and obey the CITY's ordinances and regulations with respect to use of
the leased premises and airport as well as all applicable county, state or federal regulations or laws.
LESSEES agree to abide by "The Minimum Standards for the Fayetteville Municipal Airport
Drake Field".
6. Repairs, Maintenance and Appearance. LESSEES shall at all times during the
term of this agreement, it their 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 due to wear, tear, obsolescence or defects,
latent or otherwise. When used herein, the term "repairs" shall include all necessary replacements,
renewals, alterations, additions and betterments. LESSEES acknowledge that they are responsible
for the repairs and maintenance necessary to maintain the structural integrity of the hangar.
LESSEES shall at all times maintain the leased premises in a clean, orderly, and attractive
condition and will not allow the accumulation of rubbish, trash, refuse or any other unsightly
condition or fire hazard on the leased premises. LESSEES shall be responsible for all janitorial
services and trash removal from the leased premises.
In the event LESSEES fail to repair or maintain the leased premises as required, CITY may enter
the leased premises for the purpose of making such repairs necessary to maintain the structural
integrity of the hangar or to perform any maintenance required to keep the leased premises in a
clean, orderly and attractive condition. LESSEES shall be liable for any costs incurred by the
CITY in the event CITY exercises its authority due to LESSEE'S Failure to make necessary repairs
or perform other required maintenance work.
7. Alterations and Improvements. Following issuance of a final certificate of
occupancy for the hangar and office space to be constructed on the leased premises, LESSEES
shall have prior written consent from the CITY, meeting all CITY requirements, to make any
alterations, additions and improvements LESSEES deem necessary and desirable to the interior of
the leased premises. LESSEES 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 written consent.
LESSEES acknowledge and agree that all such alterations, additions, attachments and
improvements including, but not limited to, paneling, partitions, railings, floors, ceilings and the
like, shall become the property of the CITY upon the termination of this agreement.
8. Insurance. LESSEES shall obtain and maintain sufficient insurance coverage for
the repair or replacement of the leased premises and any adjacent improvements, with an insurance
company licensed to do business in the State of Arkansas, naming the CITY as an Additional
hlsured on the policy. LESSEES shall provide the Airport Director with a valid certificate of
insurance at all times during the term of this agreement. LESSEES acknowledge that it is their
responsibility to maintain insurance on any personal property on the leased premises.
9. Sub -Leasing and Assignment. LESSEES shall not assign this lease or sublet the
Leased Premises without prior written consent of the CITY of Fayetteville. Consent for any
assignment or subletting shall only be considered at the same rates as established in Paragraph 3
above. Any such assignment or subletting shall in no way relieve LESSEES from liability for the
obligations imposed by this lease. LESSEES may only be released from liability by a specific
written release executed by the CITY.
10. Events of Default. The following shall be Events of Default under this agreement:
LESSEES shall fail to pay when due and owing any rent and such nonpayment
continues for twenty days after written notice by the CITY;
b. LESSEES voluntarily abandon, desert or vacate the leased premises;
c. LESSEES fail to comply with the insurance requirements set forth above;
LESSEES fail to observe or perform any other obligation under the terms of this
agreement and such failure is unremedied for twenty (20) days after the CITY has
provided written notice specifying such default. CITY may, but is not required to,
grant LESSEES such additional time as is reasonably required to correct any such
default if LESSEES have instituted corrective action and are diligently pursuing the
same; or
e. LESSEES fail to provide and maintain any security assurances required under the
terms of this agreement.
11. Remedies Upon Default. Whenever an Event of Default shall occur, and at its
exclusive option, CITY may deliver to LESSEES written notice of termination specifying the date
upon which the agreement shall terminate. In the event of termination, LESSEES rights to
possession of the leased premises shall immediately cease. CITY may reenter and take possession
of the leased premises and LESSEES shall surrender possession. Upon termination, LESSEES
shall be liable to CITY for payment of.
a. All rents and sums accrued through the date of termination.
b. The reasonable costs incurred by CITY to re -let the leased premises, or any portion
thereof: and
c. The reasonable cost incurred by CITY to restore the leased premises or any portion
thereof to the condition in which they were originally leased, ordinary wear and
tear excepted; and
d. Reasonable attorney's fees and costs related to the termination of the lease
agreement including those incurred through the judicial process if LESSEES fail to
vacate.
All rental payments received by CITY from re -letting the leased premises after termination of this
agreement shall be credited against the LESSEES' Outstanding Rental Balance. The acceptance
by CITY of any rent payments by LESSEES after termination of this agreement shall not be
considered a reinstatement or waiver of any other remedies available to CITY.
CITY may also pursue any other available right or remedy available to it in the event of default.
12. Joint and Several Liability of Lessees. LESSEES acknowledge that they are
jointly and severally liable for the obligations imposed on them by this agreement
13. Expiration or Termination. LESSEES hereby agree that upon termination of this
lease by expiration or by earlier termination for any reason whatsoever, it will remove its property
from the leased premises immediately. All property installed, erected or placed by LESSEES in,
on, or about the leased premises shall be deemed to remain the property of CITY.
14. Closure of Airport. In the event that the Fayetteville Municipal Airport facility
and property are no longer used by the CITY for aviation purposes, LESSEES 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.
15. Taxes. LESSEES 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.
16. Indemnity. LESSEES agree to indemnify the CITY against any liability for
in to persons or damage to property caused by LESSEE'S gross negligent use or occupancy
of the leased premises; provided, however, that LESSEES shall not be liable for any personal
injury, damage or loss occasioned by the negligence of the 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 may in any way directly or indirectly affect either party. 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 granted to the CITY under Arkansas law.
17. Non -Waiver. It is agreed that the failure of CITY to invoke any of the available
remedies under this lease or under law in the event of one or more breaches or defaults by
LESSEES under the lease shall not be construed as a waiver of such provisions and conditions and
shall not prevent the CITY from invoking such remedies in the event of any future breach or
default.
18. Notices. Am notice or consent required by this agreement shall be sufficient if
sent by Certified Mail. return receipt requested. postage paid. to the following addresses:
LESSEES
Dawson Aero. LLC
4468 Jean Lane
Fayetteville, AR 72704
CITY
City of Fayetteville
A I TN: Airport Manager
4500 S School Ave. Ste. F
Fayetteville, Arkansas 72701
Shannon I-lomes. LTD.. A Limited Liability Company
17663 Ilighway 412 East
Springdale. AR 72764
19. Succession. This lease agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs. successors and assigns.
20. Severability. Each paragraph of this lease agreement is severable from all other
paragraphs. In the event any court of competent jurisdiction determines that any paragraph or
subparagraph is invalid or unenforceable for any reason, all remaining paragraphs and
subparagraphs will remain in full force and effect.
21. Interpretation. This lease agreement shall be interpreted according to and
enforced under the laves of the State of Arkansas.
22. Entire Agreement. This lease agreement contains the entire agreement of both
parties hereto, and no other oral or written agreement shall be binding on the parties hereto. This
lease agreement supersedes all prior agreements, contracts and understandings ofanv kind between
the parties relating to the subject matter hereof. This agreement may be executed in all or more
counterparts. each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
CITY OF FAYETTEVILLE:
Bv: ��._
ONE AN, Mayor
ATTEST'.'
By: _
KARA PAX�O I�,ef-jtt�`�r
;A
FAYETTEVIL'_E
�'.�'•:%Atir�P •''�•�•
9;i NG QO A
DAWSON AFRO, LLC & SHANNON HOMES,
LLC
BY: r
Printed Name: _—
Title: ✓r ',� ; i �! : <. - 1._ . &E
EXHIBIT A
YEARLY TIERED FUELING DISCOUNT BREAKDOWN- DAWSON AERO
1-50,000 GALLONS COST + .55
50,001-75,0000 GALLONS COST + .45
75,0000-100,000+ GALLONS COST + .40
** DISCOUNT RESETS AS OF JANRUARY I EACH YEAR