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HomeMy WebLinkAbout10983RESOLUTION NO. 10983 A RESOLUTION APPROVING A HANGAR LEASE AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND STEEL CITY AVIATION, LLC, AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO. that: SECTION 1. A certain Lease Agreement, a copy of which is attached hereto and made a part hereof by reference, after having been approved as to form by the City Attorney, by and between the City of Pueblo, a Municipal Corporation, and Steel City Aviation, LLC, for land, hangar and other improvements located at Pueblo Memorial Airport, by and the same is hereby approved, subject to the conditions as set forth in said Lease Agreement. SECTION 2. The President of City Council is hereby authorized to execute said Lease Agreement on behalf of Pueblo, a Municipal Corporation, and the City Clerk shall affix the Seal of the City thereto and attest the same. INTRODUCED April 23, 2007 BY Randy Thurston Councilperson APPROVED: RRESIDIENTof City Council ATTESTED BY: CITY CLERK ,Ri- S. /09 y3 Background Paper for Proposed RESOLUTION AGENDA ITEM # 5 DATE: April 23, 2007 DEPARTMENT: AVIATION - JERRY BRIENZA TITLE A RESOLUTION APPROVING A HANGAR LEASE AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND STEEL CITY AVIATION, LLC, AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME ISSUE Should the City Council approve a Hangar Lease Agreement for land, hangar and other improvements at Pueblo Memorial Airport between the City and Steel City Aviation, LLC? RECOMMENDATION Approval of this resolution. BACKGROUND Steel City Aviation will use and occupy the facility to conduct business activities associated with a flight school and aircraft maintenance. The lease is for a term of one month commencing May 1, 2007 and will automatically be renewed each month unless terminated by either party. FINANCIAL IMPACT Steel City Aviation will lease the land, hangar and other improvements for the rental of $860 per month, a combined service fee of $41.77 per month, and 2% of the monthly gross revenues. PUEBLO MEMORIAL AIRPORT HANGAR "F" LEASE AGREEMENT This Lease Agreement entered into this 23rd day of Apr 1 , 2007, between the City of Pueblo, a Municipal Corporation, herein called Lessor, and Steel City Aviation, L.L.C. a Colorado corporation, herein called Lessee, Witnesseth: That in consideration of the payment of rent hereinafter provided and the keeping and performance of each of the covenants and agreements of the said Lessee hereinafter set forth, said Lessor has and does hereby lease unto the said Lessee the real property marked "Lease Boundary" on the plot plan, Exhibit "A ", attached hereto and made a part hereof, together with the following structures thereon, at the Pueblo Memorial Airport, hereinafter called Airport, in the County of Pueblo, State of Colorado, to wit: A one -story hangar /shop /office building of approximately three thousand nine hundred forty five square feet (3,945 SF). (Collectively, the real property and structures are herein referred to as "leased premises'. To have and hold the same unto the said Lessee for a term of one calendar month, commencing May 1, 2007. Said term shall automatically be renewed each month unless terminated by either party by written notice delivered to the other party at least 14 calendar days prior to the date of termination, at a rental of $860.00 per month for the leased premises. In addition, Lessee shall pay a monthly fee to Lessor for the Lease herein granted of two percent (2 %o) of Lessee's monthly gross revenues derived from all sales, operations and services made, furnished or conducted on or from the leased premises. Lessee shall also pay combined service fee for services and facilities now furnished by the Lessor at the Pueblo Memorial Airport, namely: public street maintenance, fire protection and Street lighting based upon the amount established by Lessor which is currently $499.92 per acre per year. The Lessor may, from time to time, reduce, alter, or eliminate any or all of the services or facilities presently being furnished and may modify, increase, or decrease the annual combined service fee therefore and the manner by which it is calculated, including making separate charges, therefore, provided (1) such services and fee shall be nondiscriminatory among other tenants and owners of land at Pueblo Memorial Airport receiving such services and facilities then being furnished and (2) such fee shall be reasonable in relation to the Lessor's actual cost and expense of furnishing the services and facilities then being furnished. The Lessor's cost may include the cost of capital improvements amortized over the useful life of the improvements. Only domestic wastewater shall be discharged from the leased premises to Lessor's sanitary sewer system. Lessee shall be subject to the same restrictions, conditions, fees and charges as other users of Lessor's sanitary sewer system. All such rent and fees shall be paid in advance without notice on or before the tenth day of each calendar month throughout the effective term, at a place to be designated by the Lessor. RIGHTS AND PRIVILEGES OF LESSEE A. The leased premises shall be used and occupied by Lessee as a facility to conduct aeronautical business activity associated with a flight school and aircraft maintenance operation including, but not limited to, the following services: aircraft storage, rental and sales; flight training; aircraft service and maintenance and other such incidental purposes directly related to such use including storage of aircraft equipment and parts. Lessee shall have no right to utilize the leased premises, or any improvement thereon, other than as specifically allowed under this subsection, and it is specifically understood that the leased premises shall not be used for an aviation fixed base operation, for the sale of aviation fuel, or to dispense aviation fuel in aircraft other than aircraft owned or leased by Lessee. Lessee shall not assign nor sublet the leased premises without the prior written approval of the Lessor. B. Lessee, it's employees and invitees shall have the right to ingress and egress between the main entrance of the airport as the same now exists or may hereafter be relocated and the leased premises over, upon and through such streets and no other as from time to time shall be designated by the Director of Aviation. 2. RIGHTS AND PRIVILEGES OF LESSOR A. All rights not herein granted to the Lessee are reserved to Lessor and nothing herein contained shall be construed to grant or authorize the granting or an exclusive right within the meaning of Section 308 of the Federal Aviation Act of 1958. B. Lessor shall have full and unrestricted right to enter upon the leased premises, and Lessor, it's agents or representatives shall be permitted to inspect same at any reasonable hour. C. Lessor reserves the right to maintain and keep in repair the landing area of the Airport and all publicly owned facilities of the Airport but shall not be obligated to the Lessee for any failure to so maintain or keep in repair. D. There is hereby reserved to the Lessor, it's successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the premises hereby leased, together with the right to cause in said airspace such noise as may be inherent in the operation of aircraft, now known or hereafter used for navigation of or flight in the au, using such airspace or landing at, taking -off from, or operating on Pueblo Memorial Airport. E. It is further understood and agreed that this agreement is subject to written prior approval of the Federal Aviation Administration and that the provisions hereof cannot be modified without prior written approval by said Federal Aviation Administration. 3. OBLIGATIONS OF LESSEE A. The Lessee agrees to indemnify, defend, and save the Lessor, it's agents, officers, representatives and employees, harmless from and against any and all penalties, liability or loss including costs and attorney fees resulting from claims or court action, whether civil, criminal or in equity, and arising directly or indirectly out of acts of the lessee, his agents, employees, or servants in connection with its use or occupancy of the leased premises, or through any injury or casualty occurring on the leased premises. The provision of this section shall survive the termination of this Lease. B. Except as provided in 4.A. below, Lessee shall maintain and keep the leased premises in good condition and repair. Lessee shall be responsible and liable for all fuel releases and spills occurring on the leased premises including clean -up and remediation thereof. 4. OBLIGATIONS OF LESSOR A. Lessor shall maintain the floor, walls, roof and doors of said premises, except that the cost of repairs for any damages to the same caused by Lessee, his employees, agents or invitees shall be home solely by Lessee. B. All risk of loss or damage to aircraft and other personal property in or upon the leased premises is assumed by Lessee, and Lessor shall not be liable or responsible for any loss or damage to such aircraft and other personal property regardless of the cause thereof, including, without limitation, the negligence of Lessor, its officers, agents or employees. 5. GENERAL CONDITIONS A. The terms and conditions of this lease and Lessee's rights hereunder are hereby made subject to the provisions of Title III Chapter 1 of the Pueblo Municipal Code and as same may be subsequently amended. In the event of conflict between said Code and any provision herein, said Code shall control. B. The Lessee in the operations to be conducted pursuant to the provisions of this lease and otherwise in the use of the Airport, will not discriminate or permit discrimination against any person or class of persons by reason of race, color, religion, sex, or national origin in any manner prohibited by Part 21 of the Regulations of the Office of the Secretary of Transportation, or any amendments thereto. The Lessor reserves the right to take such action as the United States Government may direct to enforce this covenant C. The Lessee by accepting this lease expressly agrees that it will not make use of the leased premises in any manner which might interfere with the landing and taking -off of aircraft from Pueblo Memorial Airport or otherwise constitute a hazard. In the event the aforesaid covenant is breached, the Lessor reserves the right to enter upon the premises hereby leased and cause the abatement of such interference at the expense of the Lessee. D. This lease and all the provisions hereof are subject to all rights the United States Government now has or in the future may have or acquire, affecting the control, operation, regulation, re- entry upon and taking over of the said Airport including the leased premises. E. The Lessee shall observe faithfully all rules and regulations affecting use of the Airport, whether established by the Director of Aviation, by the City, or other political subdivision having jurisdiction, by the State of Colorado or the United States, or agencies thereof, including but not limited to rules affecting the operation of motor vehicles upon, to and from the Airport. F. The Lessee, and all officers, agents and employees of Lessee, hereby agree to be bound by and subject to all the Police Ordinances of Pueblo, a Municipal Corporation, at all times while on the Airport, whether acting in the course of Lessee's business or otherwise, to all intents and purposes the same as though the leased premises were located within the City Limits of Lessor. G. The Lessee represents that it has inspected the leased premises, the Airport and all of it's premises and facilities and that it accepts the conditions of same and fully assumes the risk incident to the use thereof. Lessee acknowledges and agrees that the leased premises are being leased in the present condition, "AS IS WITH ALL ITS FAULTS" without warranty or representation of any kind, express or implied including, without limitation, any warranties of fitness for a particular purpose. The Lessor shall not be liable to the Lessee for any damages or injuries to the property or personnel of the Lessee which result from hidden, latent or other dangerous conditions on the Airport or leased premises. H. Lessee agrees that no inflammable liquids or hazardous materials shall be used or stored in the premises, except the fuel in the aircraft and fuel trucks. It is expressly understood that no person other than the Lessee or his regular employee may perform services (including, but not limited to, maintenance and repair) on any aircraft on the leased premises. J. Lessee agrees to provide drip pans of a non - inflammable material under the aircraft to prevent damage to the floor from dripping oil or fluid. K. It is expressly understood by Lessee that security in the hangar area as elsewhere on the Airport is vital. Only owners of aircraft hangared therein, their employees or invitees will be permitted in the area and the aircraft owner shall be responsible for the actions of these people. Violations of Airport Security Rules shall be sufficient grounds for termination of this agreement. 6. Mobile Refuelers (Fuel Trucks A. Lessee shall: (1) maintain mobile refuelers in good operating condition and repair. All refuelers are subject to inspection by City personnel to ensure compliance with FAR Part 139 standards; (2) immediately notify the Lessor of any fuel release or spills during the loading or unloading of the fuel when fueling or maintaining aircraft. Lessee shall be responsible for clean up to the satisfaction of Lessor of any such fuel releases or spills whether caused by Lessee, its officers, agents, employees, or contractors. B. Lessee shall maintain pollution liability insurance covering the mobile refuelers which are being used by Lessee. Such insurance shall be in limits of $1 million each incident, $1 million aggregate, with a $10,000 deductible. C. Lessee's mobile refuelers and Lessee's use thereof shall meet and comply with all applicable EPA spill prevention control and countermeasure regulations including, if required, drafting and implementing SPCC Plan therefor. Taxes and Licenses Lessee covenants and agrees to pay promptly all valid taxes and other government charges of whatever nature assessed against or applicable to the leased premises, Lessee or Lessee's property or operations thereon. Lessee shall not make any improvements to the leased premises without prior written consent of Lessor. Lessee also covenants and agrees not to permit any mechanic's or material man's lien to be filed against the leased premises or any part or parcel thereof by reason of any work or labor performed or materials furnished by any contractor, subcontractor, mechanic or material man. Lessee further covenants and agrees to pay promptly when due all bills, debts and obligations incurred by it in connection with its operations on the leased premises and not to permit the same to become delinquent and to suffer no lien, mortgage, judgment or execution to be filed against the leased premises which will be in any way an impairment of the rights of Lessor under this Lease Agreement. 8. Insurance and Damage A. At all times during the term of this Lease Agreement, and of any renewal or extension hereof, Lessee agrees that it will, at its own costs and expense, provide and keep in force airport and commercial general liability insurance which includes personal injury, products liability, hangar keepers general liability, and property damage with a combined single limit of not less than one million dollars ($1,000,000). Lessee shall insure the structures and other improvements in an amount equal to their full insurable value naming Lessor as a loss payee. Lessee shall provide workers' compensation insurance complying with the Colorado Workers' Compensation Act. Lessee shall provide Lessor with copies showing proof of such insurance and subsequent renewals or changes as might occur during the term of this lease. With respect to any insured loss to the leased premises, structures and property thereon, including aircraft, Lessee releases Lessor, it's officers, agents, and employees from any claim or liability Lessee may have on account of such loss and waives any right of subrogation which might otherwise exist in or occur to any person on account thereof. B. Such polices shall provide that they may not be materially changed, altered, or canceled by the insurer during its terms without first giving ten (10) days written notice by certified or registered United States mad to the parties to this lease. C. The parties shall not violate the terms or prohibitions of any insurance policy herein required to be furnished. D. If the structures or other improvements (the "Improvements' are damaged or destroyed by fire or other casualty, Lessee shall within one hundred twenty (120) days from the occurrence of such casualty either (1) repair and restore the damaged or destroyed Improvements, (2) demolish the damaged or destroyed Improvements, restore the leased premises to their original condition, and terminate this Lease, in which event the net proceeds of the property damage insurance required to be provided by Lessee pursuant to Section B.A. shall be retained by Lessor, or (3) demolish the damaged or destroyed Improvements and commence construction of replacement Improvements, and thereafter complete such construction within nine (9) months from the occurrence of such casualty. All repairs to or restoration of Improvements and /or construction of replacement Improvements shall be in compliance with applicable laws and codes, and in accordance with plans and specifications therefore approved by Lessor, which approval will not be unreasonably withheld. Except in the event of (2) above, the net proceeds of property damage insurance provided by Lessee pursuant to Section B.A. shall be released by City and paid to Lessee for the purpose of Lessee repairing, restoring or replacing improvements damaged or destroyed by such insured fire or other casualty. Rent shall be proportionately abated during the period from the date of the occurrence of such casualty to the completion of repairs, restoration or replacement based upon the square feet of the improvements damaged by such casualty. 9. MISCELLANEOUS PROVISIONS A. That no assent, expressed or implied, to any breach of any one or more of the covenants and agreements hereof, shall be deemed or taken to be a waiver of any succeeding or other breach. B. Lessee shall pay all utilities and fees supplied to and used in or on the Leased Premises, and shall enter into separate agreements with the utility organizations for metering such services. C. In the event of any litigation arising out of this Lease, the court shall award to the prevailing party its costs and expense, including reasonable attorney fees. Venue for any such litigation shall be Pueblo County, Colorado. D. That all covenants and agreements in this lease contained shall be binding upon and inure to the benefit of the heirs, successors, assigns and legal representatives of said Lessor and said Lessee. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and year fast above written. LESSOR CITY OF PUEBLO, A Municipal Corporation By Judy \ aver Title: Presi ent of City Council LESSEE: STEEL CITY AVIATION, LLC 7 By' I/ Derek G(fova, President /Owner Attest: City (26rk Approved as to form: City Attorney