HomeMy WebLinkAbout13322RESOLUTION NO. 13322
A RESOLUTION APPROVING A GROUND LEASE AND
OPERATING AGREEMENT BETWEEN PUEBLO, A MUNICIPAL
CORPORATION AND PDC ACQUISITIONS, LLC, A COLORADO
LIMITED LIABILITY COMPANY RELATING TO LAND AND
BUILDINGS AT THE PUEBLO MEMORIAL AIRPORT AND
AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO
EXECUTE SAME
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Ground Lease and Operating Agreement dated October 26, 2015 between the City
and PDC Acquisitions, LLC, a Colorado limited liability company (“Company”) a copy of which is
attached hereto and incorporated herein by this reference, having been approved as to form by
the City Attorney, is hereby approved.
SECTION 2.
The President of the City Council is authorized to execute and deliver the Ground Lease
and Operating Agreement in the name of the City of Pueblo and the City Clerk is directed to affix
the seal of the City thereto and attest same.
SECTION 3.
The officers and staff of the City are directed and authorized to perform any and all acts
consistent with the intent of this Resolution and the attached Ground Lease and Operating
Agreement which are necessary or desirable to effectuate the transactions described therein.
SECTION 4.
This Resolution shall become effective immediately upon final passage.
INTRODUCED: October 26, 2015
BY: Robert Schilling
City Clerk’s Office Item # Q-3
Background Paper for Proposed
Resolution
COUNCIL MEETING DATE: October 26, 2015
TO: President Stephen G. Nawrocki and Members of City Council
CC: Sam Azad, City Manager
VIA: Gina Dutcher, City Clerk
FROM: Daniel C. Kogovsek, City Attorney
SUBJECT: A RESOLUTION APPROVING A GROUND LEASE AND OPERATING
AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND PDC
ACQUISITIONS, LLC, A COLORADO LIMITED LIABILITY COMPANY RELATING
TO LAND AND BUILDINGS AT THE PUEBLO MEMORIAL AIRPORT AND
AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME
SUMMARY:
Attached is a Resolution approving and authorizing the President of City Council to sign a Ground
Lease and Operating Agreement between the City and PDC Acquisitions, LLC, a Colorado limited
liability company (“Company”). The Company is owned by local businessman Sam Brown Jr.
PREVIOUS COUNCIL ACTION:
None.
BACKGROUND:
The City and the Company have negotiated a Ground Lease and Operating Agreement (“Lease”)
containing the following terms and conditions:
1. The Lease is for a term of twenty years and two months starting November 1, 2015
and ending on December 31, 2035. At the request of the Company, the term may
be extended for an additional ten years, however, the City retains sole discretion
regarding the extension.
2. The Lease is for approximately 79,335 square feet of land and approximately
23,000 square feet of structures. The Company also has the non-exclusive use of
approximately 145,304 square feet of ramp area. The ramp may be used by the
Company, the Airport, other tenants, users and occupants of the Airport in
compliance with the City’s Ground Traffic and Aircraft Parking Plans and
Regulations.
3. The Company will pay rent and other charges as follows:
a. $1,000 per month for the land
b. $6,500 per month for the structures
c. $500 per month for use of the ramp
d. Fuel flow fees as follows:
8 cents for each gallon up to 1 million gallons
7 cents for the next 500,000 gallons
6 cents for each gallon over 1,500,000 gallons
e. The City will receive a commission of two percent (2%) on the Company’s
monthly gross revenues on all sales and services, except revenue derived
from the sale of aviation fuel.
f. Rent and fuel flowage fees will be increased biannually based on the
changes to the Consumer Price Index. However, fuel flowage fees shall
not be increased more than ten percent for any two-year period and rent
shall not be increased by more than five percent for any two-year period.
g. The Company will pay a proportionate share of the premium for the City’s
Storage Tank Pollution Liability Insurance.
h. The Company agrees to spend $150,000 to renovate or remodel the
existing structures which the Company is leasing prior to December 31,
2019. If the Company fails to spend $150,000 to remodel the existing
structures, the Company’s rent for the land, structures and use of the ramp
shall each increase by 33.34% beginning on January 1, 2020.
FINANCIAL IMPLICATIONS:
The Company shall be responsible for maintenance and repair of the leased premises. The
Company has the right to use three aviation fuel tanks located at the City’s Fuel Farm. Title to all
structures, including structures which are remodeled or renovated, shall remain the in the name
of the City. However, the premises are leased “as is” and the City has no obligation to maintain,
repair or restore the structures, all such obligations and responsibilities are the Company’s. The
Company further agrees to maintain commercial liability insurance in the amount of $1 million and
to indemnify and save harmless the City from all claims and liabilities arising out of the Company’s
negligent acts or omissions.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Resolution.
STAKEHOLDER PROCESS:
Not applicable to this Resolution.
ALTERNATIVES:
If this Resolution is not approved, the City will no longer receive income for the Fixed Base
Operations location at the Airport, other than that currently being paid by Rocky Mountain FBO.
RECOMMENDATION:
Approval of the Resolution.
Attachments: Proposed Resolution and Ground Lease and Operating Agreement
GROUND LEASE AND OPERATING AGREEMENT
THIS LEASE made and entered into as of October 26, 2015 between the City of Pueblo,
a Municipal Corporation, "Lessor", and PDC Acquisition$, tom, a Colorado limited
Hebility-eempatay, "Lessee". �� L 6 r P. $C J
WITNESSETH:S�
WHEREAS, Lessor is the owner and operator of Pueblo Memorial Airport ("Airport"),
together with the land on which said Airport is situated, and
WHEREAS, Lessee is desirous of leasing certain real property and using ramp space and
fuel tanks on said Airport property for the purpose of the sale of aviation fuels.
NOW THEREFORE, in consideration of the mutual covenants set forth herein, the
parties agree as follows:
1. Land Parcel:
Lessor hereby leases unto Lessee and Lessee hereby leases from Lessor for the
term and upon the rental and conditions hereinafter stated, the real property,
marked Parcel C on the plot plan, Exhibit "A", attached hereto and made a part
hereof, situated in the County of Pueblo, State of Colorado, together with the
following structures thereon which Lessee acknowledges are the property of
Lessor:
An office building of approximately three thousand (3,000) square feet of
improved space, a hanger/shop/office building of approximately ten
thousand (10,000) square feet, with attached office space of approximately
five thousand (5,000) square feet, in two levels, an attached storage
structure of approximately two thousand (2,000) square feet, and an
attached vehicle shop of approximately three thousand (3,000) square feet.
The term "Leased Premises", as used in this Lease, means and includes the real
property and structures described above as well as any improvements hereafter
constructed or added thereto.
Subject to Section 7, Lessor hereby grants to Lessee the non-exclusive right to
use 145,304 square feet of ramp space, marked "Ramp" on Parcels A and B on
the plot plan, Exhibit "A", attached hereto and made a part hereof, situated in the
County of Pueblo, State of Colorado. The term "Ramp" means and includes the
area marked "Ramp"on Parcels A and B on attached Exhibit"A".
Subject to Section 8, Lessor hereby leases to Lessee Jet A tanks 2 and 2a and
Avgas tank 1 fuel tanks (hereinafter the "Fuel Tanks") at Lessor's fuel farm
located at the Airport (hereinafter the "Fuel Farm") for the exclusive purpose of
storing aviation fuel to be dispensed to aircraft using the Airport.
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The Leased Premises, Ramp and Fuel Tanks and Lessee's right to use same are
subject to all easements, reservations, covenants, rights-of-way and restrictions of
record.
2. Term:
The term of this Lease is for a period of 20 years and 2 months commencing
12:01 a.m. November 1, 2015 ("Commencement Date") and ending midnight on
the last day of December, 2035, unless sooner terminated as herein provided. The
term of this Lease may be extended for one additional ten (10) year period at the
sole and absolute discretion of the City of Pueblo and upon rental and other
conditions mutually agreeable to Lessor and Lessee.
3. Fee and Other Charges:
A. Lessee shall pay to Lessor monthly as rent for the land and structures
covered by this Lease, the following amounts: $1,000 per month for the
land portion of Leased Premises Parcel C on attached Exhibit "A"; and
$6,500 per month for the structures located on the Leased Premises; and
$500 per month for the non-exclusive use of the Ramp on Parcels A and B
on attached Exhibit "A." In addition, Lessee shall pay a monthly fee to
Lessor for the Lease herein granted of two percent (2%) of Lessee's
monthly gross revenues derived from all sales, operations and services
made, furnished or conducted on or from the Leased Premises and Ramp,
with the exception of revenue derived from the sale and dispensing of
aviation fuel.
B. Lessee shall also pay as rent and for the privilege to sell or dispense
aviation fuel from the Leased Premises a monthly fuel flow fee of 8 cents,
up to 1,000,000 gals per year, 7 cents for the next 500,000 gals per year,
and 6 cents for over 1,500,000 gals per year, starting with the
Commencement Date and each month thereafter for each gallon of
aviation fuel delivered, or caused to be delivered by Lessee to the Fuel
Tanks or, if, Lessee constructs its own fuel storage facilities, either alone
or with other Lessees, or uses other fuel storage facilities at the Airport,
delivered, or caused to be delivered by Lessee to such fuel storage
facilities.
C. Such rent and fees shall be paid monthly without notice, offset or
deduction on or before the tenth (10th) of the following month at the City
of Pueblo Director of Finance's office and shall be accompanied with such
reporting forms as the Director of Finance shall determine. Lessor shall
have the right to examine and audit Lessee's and its subtenant's books and
records to determine the accuracy of the fees and their calculation.
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D. Any rent or fees overdue for more than thirty (30) days will accrue interest
at the rate of eight percent(8%)per`annum.
E. The rent and fuel flowage fee shall be increased biennially based upon the
consumer price index for all urban consumers, CPI-U (all items 1982-
1984=100) or comparable index if the Department of Labor changes or
modifies the CPI-U or no longer publishes the CPI-U. The rent and fuel
flowage fee shall be increased by a percentage equal to the percentage
increase in the CPI-U during each preceding two-year period over the
comparable CPI-U for the first month of each 2-year period. If there is no
percentage increase in the CPI-U for any preceding 2-year period, the rent
and fuel flowage fee will remain the same as the preceding 2-year period
for the next 2-year period. In no event, shall the percentage increase for
the fuel flowage fee be greater than ten percent (10%) for any 2-year
period nor the percentage increase for the rent be greater than five percent
(5%) for any 2-year period.
F. So long as Lessee uses the Lessor's Fuel Tanks for storage of aviation
fuel, Lessee shall pay annually to Lessor, on the anniversary dates of the
Commencement Date, a proportional share of Lessor's cost for storage
tank pollution liability insurance. Lessee's portion of such charges shall
be in the ratio that the gallon capacity of Fuel Tanks Lessee leases
hereunder bear to the total gallon capacity of the Fuel Tanks in Lessor's
Fuel Farm being used by Lessor, Lessee and other parties.
G. Lessee has committed to remodeling the existing structures located on
Parcel C on the attached Exhibit "A." Lessee agrees to spend a minimum
of One Hundred Fifty Thousand Dollars ($150,000.00) to remodel the
existing structures located on Parcel C by December 31, 2019. Lessee also
agrees to furnish Lessor documentation, reasonably satisfactory to Lessor,
that Lessee has spent a minimum of $150,000 to remodel the existing
structures on the Leased Premises. If Lessee fails to spend the $150,000
hereby agreed to for remodeling purposes or fails to provide Lessor with
the appropriate documentation demonstrating said expenditures, Lessee
agrees that the then prevailing monthly rent, as listed in Section 3 A
supra., for:
® the land portion of the Leased Premises;
® the structures portion of the Leased Premises; and
® use of the Ramp
shall each increase by 33.34 percent (33.34%) beginning on January 1,
2020.
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4. Improvements and Use:
A. The Leased Premises shall be used and occupied by Lessee as a facility for
the sale of aviation fuel and other related aeronautical services and
products.
B. Lessee shall maintain the Leased Premises in accordance with the
requirements and regulations of Lessor and Lessor's fire code. Lessee
shall be responsible for all costs, fees, charges, and penalties associated
with the discharge or release of any hazardous material (including
petroleum products) or mitigating the containment or removal of any
contamination or hazardous material (including petroleum products) on,
over and under the Leased Premises, Fuel Farm and Ramp which is caused
by Lessee, its officers, agents, employees, contractors or fuel suppliers. It
is understood that Lessee is not responsible for any conditions, which may
be determined to have been caused by parties other than Lessee, its
officers, agents, employees, contractors or fuel suppliers. The storage and
accumulation of aviation fuel, flammables, explosive liquids, or solids,
waste, debris or other hazardous materials within or on the Leased
Premises, Ramp or Fuel Farm shall be in an environmentally sound
manner and comply with all Federal, State and Local laws and regulations.
C. Lessee, at its sole cost and expense, may cause to be constructed and
installed upon the Leased Premises additional improvements in
accordance with plans and specification approved by Lessor, including
architectural approval, which consent will not be unreasonably withheld or
arbitrarily delayed. The improvements shall be constructed in a good and
workmanlike manner in accordance with the applicable laws, ordinances
and building codes and pursuant to a building permit issued by the
Regional Building Department. Lessee will not modify, alter, or improve
any improvements upon the Leased Premises whether now existing or
hereafter constructed without the prior written approval of Lessor, which
approval shall not be unreasonably or arbitrarily denied or withheld.
Lessee may paint any improvements upon the Leased Premises and the
Fuels Tanks with the prior approval of Lessor.
D. Lessee grants to Lessor the right to enter the Leased Premises to do what
is necessary for the purposes of repairing, replacing, and/or maintaining
any and all utility lines under the Leased Premises which serve other uses
at the Airport, it being understood that Lessor will repair, in a good and
workmanlike fashion, any and all damage done to the Leased Premises as
the result of utility work done hereunder.
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E. During the term of this Lease, Lessee shall on a regular and continuous
basis provide aircraft fueling services upon the Leased Premises and, if
necessary, the Ramp premises. In the event that Lessor, during the term of
this Lease, adopts or has in effect any rules, regulations or minimum
standards for airport aeronautical services, which require tenants at the
Airport to provide one or more services to their customers, Lessee may
only be required to provide, on a regular and continuous basis thereunder,
aircraft fueling. Provided, however, in the event the Lessee becomes the
sole entity at the Airport with the ability to perform the services of a fixed
base operator and is requested by the City's Director of Aviation to
perform those services customarily provided by a fixed base operator,
Lessee agrees to provide such services, either independently or through
the use of subcontractors approved by Lessor.
Nothing contained in this Section or anywhere else in this Lease shall be
construed to prohibit Lessee from providing on the Leased Premises any
fixed-based operation activities, including sale of aviation fuels, fueling
aircraft, aircraft maintenance, repairs, charter services, flight instruction,
aircraft rental, aircraft sales and other activities normally associated with
or incidental to a fixed-base operation. Lessee, with the consent of the
City Manager of Lessor, which consent shall not be unreasonably
withheld, may provide upon the Leased Premises any lawful, fixed-based
operation activities which do not interfere with the safety of the operation
of Airport.
F. Lessee acknowledges and agrees that Lessor's primary obligation is to
operate the Airport for the use and benefit of the public and that the
Leased Premises and Ramp are prime locations for fixed-based operations
at the Airport. Therefore, in view of the foregoing and long-term nature of
this Lease, Lessee and Lessor shall meet at least annually to discuss
Lessee's plans for the development and use of the Leased Premises and
Ramp, the types, kinds and classes of aeronautical activities then
reasonably anticipated to be provided in the future, and Lessee's planned
additions to and/or modifications of the Leased Premises.
5. Maintenance Obligation:
Lessee, at its expense, shall keep the Leased Premises, including utilities extended
to the Leased Premises, in good repair and condition, and in a safe, sanitary,
orderly, and sightly condition, ordinary wear and tear excepted.
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6. Title to Improvements:
The structures leased to Lessee hereunder and any improvements constructed or
erected hereunder by Lessee, excluding movable trade fixtures, shall constitute a
part of the Leased Premises and therefore such structures and improvements
cannot be removed from the land. Fee simple title to the structures are in the
Lessor and fee simple title to subsequently constructed improvements shall vest
with Lessor upon completion of construction of same, free of liens and
encumbrances. Notwithstanding that title is in or vests in Lessor, Lessor shall not
be responsible for any defects in the Leased Premises or structures and shall have
no obligation or responsibility to maintain, repair, or restore the structures and
other improvements on the Leased Premises; all such obligation and responsibility
shall be that of Lessee.
7. Ramp:
A. Lessee's use of the ramp is non-exclusive and the ramp may be used by the
Airport, other tenants, users and occupants of the Airport ("Ramp
Users"), Use of the ramp shall be limited to the movement of aircraft, fueling
of aircraft,movement and parking of aircraft service vehicles, temporary parking
of aircraft,servicing and tie-down of aircraft.
B. Lessee and Ramp Users shall use the ramp in compliance with Lessor's
ground traffic and aircraft parking plans and regulations which will
reasonably accommodate Lessee's current and future use for the purposes
set forth In A. above, as determined by the City Manager of City in
consultation with Lessee, Lessor shall take reasonable steps to inform
Ramp Users of the ground traffic and aircraft parking plans and
regulations enforce the requirements thereof.
C. Lessee acknowledges that the ramp is currently in need of repairs and
resurfacing and accepts the ramp in its present condition "AS IS" "WITH
ALL ITS FAULTS", without warranty or representation, express or
implied, Including, without limitation, any warranties of merchantability
or fitness for a particular purpose or condition or usability in their present
condition. Lessee agrees that Lessor shell have no obligation to upgrade,
repair, re-surface or maintain the ramp.
D. Notwithstanding C, above, Lessee shall maintain the surface of the ramp
free end clear of debris, snow, sand and ice and shall be responsible to
remove same from the ramp as soon as reasonably possible in order for the
ramp to be continuously available for use.
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8. Fuel Tanks:
A. The Fuel Tanks and accessory equipment, including, but not limited to,
pump, motor and fuel meter calibration for each tank, are being leased
"AS IS" "WITH ALL ITS FAULTS," without warranty or representation,
express or implied, including, but not limited to, any warranties of
merchantability or fitness for a particular purpose or condition or usability
in their present condition.
B. Lessor has registered the above ground storage tanks located in its Fuel
Farm with the Director of the Colorado Division of Oil and Public Safety
pursuant to C.R.S. 8-20-.5-105 and updated its Spill Prevention Control
and Countermeasure (SPCC) Plan as required by law. Lessor shall
continue to maintain compliance with those requirements.
C. Lessee shall be responsible for quality control of fuel, loading and
unloading fuel to and from the Fuel Tanks and compliance with the SPCC
Plan for the Fuel Farm and leased Fuel Tanks. Lessee shall properly train
its employees in the use of the Fuel Farm, Fuel Tanks and the SPCC Plan.
D. Except for structural repairs not caused by the acts or omissions of Lessee,
its officers, agents, employees, contractors, or fuel suppliers, Lessee shall
be responsible to maintain and keep in good and safe repair and working
condition the Fuel Tanks and accessory equipment, ordinary wear and tear
excepted. Lessee will not be responsible for any reconstruction,
remodeling, alteration or modification of the Fuel Tanks of the Fuel Farm
required to meet environmental standards not currently satisfied unless
caused by the acts or omissions of Lessee, its officers, agents, employees,
contractors or fuel suppliers. If any such activity is required by the Lessor
or if Lessor is required to make structural or other repairs to or replace the
Fuel Tanks or any other fuel tanks located at the Fuel Farm for any reason,
including fire or other casualty, or if Lessor is required to remediate or
remove any contamination or hazardous materials (including petroleum
products) at or from the Fuel Farm, Lessor may, at its sole option, either
(1) complete, at its cost, the required activities, replacement, or repairs, (2)
negotiate a cost-sharing arrangement with Lessee to complete the required
activities, replacement, and repairs, or (3) upon thirty (30) days prior
written notice, terminate the Fuel Tanks lease and Lessee's right to store
aviation fuel in the Fuel Tanks. In the event the Lessor terminates the
Fuel Tanks lease as provided in (3) above, Lessor will, at the request of
Lessee, negotiate in good faith with Lessee to lease sufficient land to
construct and operate Lessee's own fuel farm storage facilities for
Lessee's own use at a location mutually agreeable to Lessor and Lessee.
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E. Lessee shall:
(1) maintain fuel meter calibration on the Fuel Tanks and provide
semi-annual testing and copies thereof to the Lessor;
(2) provide filters, hoses and nozzles required for the Fuel Tanks; and
(3) immediately notify the Lessor of any fuel release or spills during
the loading or unloading of the fuel storage tanks or 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,
contractors, or fuel suppliers.
F. Lessor shall maintain storage tank pollution liability insurance covering
the Fuel Tanks located within its Fuel Farm which are being used by
Lessor, Lessee and other parties. Lessee shall be named as an additional
insured with respect to the Fuel Tanks it leases under this Lease. Such
insurance shall be in limits of $1 million each incident, $1 million
aggregate, with a$10,000 deductible.
G. Lessee's mobile refuelers (fuel trucks) and Lessee's use thereof shall meet
and comply with all applicable EPA spill prevention control and
countermeasure regulations including, if required, implementing the SPCC
Plan therefore.
9. Signs:
Lessee shall be permitted to update all existing signage on the Leased
Premises,and Ramp subject to written approval, in advance, by Lessor, which
approval shall not be unreasonably withheld or conditioned. Any such signs shall
comply with all ordinances and regulations of Lessor or standards which might be
developed by the Lessor's Department of Aviation..Lessee shall not erect,paint or
maintain any other signs whatsoever upon the Leased Premises without first
securing the written consent of Lessor, which shall not be unreasonably withheld.
Lessee shall not erect, paint or maintain any signs whatsoever upon the Fuel Farm
or the Fuel Tanks.
10. Right of Inspection:
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Lessor reserves and retains for its officers, employees and authorized
representatives the right to enter the Leased Premises during reasonable business
hours, and after prior notice, for the purpose of inspecting and protecting the
Leased Premises, and of doing any and all things which Lessor may deem
necessary for the proper general conduct and operation of the Airport, and in the
exercise of Lessor's police power.
11. Taxes and Licenses:
During the term of this lease agreement, 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 or Fuel Tanks or Lessee or
Lessee's property or operations thereon including, but not limited to, sales and
use taxes and possessory interest real estate taxes. Lessee also covenants and
agrees not to permit any mechanic's or material man's lien to be filed against the
Leased Premises, Ramp or Fuel Tanks, 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. If Lessee fails to do so, Lessor may
pay the amount or take such other action as Lessor deems necessary to remove
such claim, lien or encumbrance, without being responsible for investigating the
validity thereof. The amount so paid and costs incurred by the Lessor will be
deemed additional rent under this Lease payable upon demand, without
limitation as to other remedies available to Lessor. 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, Ramp and Fuel Tanks,
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, Ramp or Fuel
Tanks which will be in any way an impairment of the rights of Lessor under this
Lease Agreement.
12. Indemnification:
Lessee assumes the risk of loss or damage to the Leased Premises and property
thereon during the term of this lease, and on the Ramp and Fuel Farm, whether
from windstorm, fire, earthquake, snow, water run-off, or any other causes
whatsoever. Lessee covenants and agrees that it will indemnify and save
harmless Lessor, its officers, agents and employees from all demands, claims,
costs, causes of action or judgments, and from all expenses incurred by Lessor, in
investigating or resisting the same, including reasonable attorney fees, arising
from or growing out of the negligent acts or omissions of Lessee, its contractors,
agents, members, stockholders, employees, invitees, servants, subtenants, fuel
suppliers, successors or assigns in connection with its use or occupancy or their
use or occupancy of any portion of the Airport, including the Leased Premises,
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Ramp and Fuel Tanks. The terms and provisions of this Section shall survive the
termination of this Lease.
13. 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 commercial liability insurance which
includes personal injury, products liability, hangar keepers 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, except the Fuel Tanks, 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.
Lessor shall provide and keep in force airport commercial general liability
insurance which covers the Fuel Farm, with a combined single limit of not
less than one million dollars ($1,000,000.00). Lessor shall provide Lessee
with copies showing proof of such insurance and subsequent renewals or
changes as might occur during the term of this lease.
B. Such polices must include a special endorsement that the policies will 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 mail 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"), except the
Fuel Tanks, 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
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Lease, in which event the net proceeds of the property damage insurance
required to be provided by Lessee pursuant to Section 13.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
13.A. shall be released by Lessor 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.
E. Nothing in this Section 13 or any other section of this Lease Agreement
shall be construed or interpreted as a waiver of any rights or protections
afforded to the Lessor under the Colorado Governmental Immunity Act,
C.R.S. 24-10-101, et seq. which rights and protections are expressly
reserved.
14. Waivers:
No provision of this Lease may be waived except by an agreement signed by the
waiving party. A waiver of any term or provision shall not be construed as a
waiver of any other term or provision. Should Lessee hold over the use of or
continue to occupy the leased premises after the termination or cancellation of this
Lease, such holding over shall be deemed merely a tenancy for successive
monthly terms upon the same conditions as provided in this Lease subject to
termination upon thirty (30) days prior written notice.
15. Inconvenience During Construction:
Lessee recognizes that from time to time it will be necessary for Lessor to initiate
and carry forward programs of construction, reconstruction, expansion, relocation,
maintenance and repair at and to the Airport in order that the Airport and its
facilities may be suitable for the volume and character of air traffic and flight
activity which will require accommodation, and that such construction,
reconstruction, expansion, relocation, maintenance, and repair may inconvenience
-11-
e
or interrupt Lessee's operations at the Airport. Lessor shall ensure that Lessee's
access to Parcel C on the attached Exhibit A shall not be impeded, and if Lessor's
activities impede Lessee's use of the Ramp premises, Lessor shall provide a
comparable area for Lessee to conduct its business. Lessee agrees that no liability
shall attach to Lessor, its officers, agents, employees, contractors, subcontractors
and representatives by reason of such inconvenience or interruption, and for and
in further consideration of the premises, Lessee waives any right to claim
damages or other consideration therefore, provided, however, that this waiver
shall not extend to, or be construed to be a waiver of, any claim for physical
damage to property resulting from negligence or willful misconduct of Lessor, its
officers, agents, employees, contractors, subcontractors and representatives.
16. Place and Manner of Payments:
In all cases where Lessee is required by this Lease Agreement to pay any rentals,
rates, fees or other charges or to make other payments to Lessor, such payments
shall be made at the office of the Director of Finance of the City of Pueblo, or at
such other place as Lessor may hereafter designate by notice in writing to Lessee
and shall be made in legal tender of the United States and any check shall be
received by Lessor subject to collection. Lessee agrees to pay any bank charges
made for the collection of any such checks.
17. Subletting:
A. Lessee, with the prior written consent of Lessor, the consent of which may
be granted or denied in Lessor's sole and absolute discretion, may sublet a
portion of, or the entire Leased Premises space in the structures on the
Leased Premises to a Subtenant or Subtenants pursuant to a written
sublease, which shall contain among other provisions the following:
(1) The sublease must be subject to and governed by all of the
covenants and provisions of this Lease. Subtenant must abide by
all of the terms and conditions thereof applicable to the Leased
Premises and use thereof. The sublease may only be for a lesser
term than specified in Section 2 and for a rental greater than that
specified in Section 3.
(2) The Subtenant shall maintain and keep in force commercial
liability insurance as described in Section 13.A. with a combined
single limit not less than one million dollars ($1,000,000). Such
insurance requirement may be complied with by Subtenant's
coverage under Lessee's master liability insurance policy.
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• r
(3) The sublease must contain an Indemnification provision,
substantially the same as set forth in Section 12 hereof.
(4) The sublease shall not become effective until an executed copy
thereof is delivered to Lessor's Department of Aviation.
B. In its absolute and sole discretion, Lessor may deny its consent to any
sublease if Lessor in its sole discretion determines based upon written
information supplied to Lessor by Lessee at least sixty (60) days prior to
the effective date of such sublease that the proposed subtenant has failed
to demonstrate the ability to perform the proposed sublease in a competent
and financially responsible manner. Failure of Lessee to provide adequate
written information concerning the subtenant sufficient for Lessor to make
such determination shall be, in and of itself, a sufficient basis for the
Lessor to deny its consent to any proposed sublease. Lessor shall inform
Lessee in writing whether it grants or denies its consent to the proposed
sublease. Consent to subletting for use by any other person shall not be
deemed consent to any subsequent subletting.
18. Assignment
A. Internal Assignments. Notwithstanding anything in this Lease to the
contrary, Lessee has the right to assign this Lease, without Lessor's
consent, to a parent, subsidiary, or affiliate of Lessee, to a company that
has been merged or consolidated with Lessee, or to a company acquiring
all or substantially all of Lessee's physical assets at the Leased Premises,
provided Lessee (or the resulting entity of any merger or consolidation)
remains fully liable hereunder.
B. Outside Assignment Requirements. It shall be necessary for Lessee to
obtain Lessor's prior, written consent to any other proposed assignment of
this Lease. However, Lessor's consent must not be unreasonably or unduly
withheld, conditioned, or delayed, provided, however, that Lessor may
withhold consent thereto if in the exercise of its sole judgment it
determines that:
(1) Financial Condition. The financial condition of the proposed
assignee is not consistent with the extent of the obligations
undertaken by the proposed assignment; or
(2) Proposed Use. The proposed use of the Leased Premises is not
appropriate for the Airport or in keeping with the character of the
existing tenancies at the Airport.
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• ,
19. Agreement with United States:
This Lease is subject and subordinate to the terms, reservations, restrictions,
provisions, and conditions of the deed of conveyance from the United States
Government to Lessor and of any other existing or future agreement between
Lessor and the United States, relative to the use, operation or maintenance of the
Airport and its appurtenant facilities, the execution of which has been or may be
required as a condition precedent to the participation by any Federal Agency in
the extensions, expansions, maintenance or development of said Airport and
facilities.
20. Lessee's Default:
A. Any one of the following shall constitute an event of default by Lessee
hereunder:
(1) Failure of Lessee to pay in full all delinquent installments of fees,
rent, additional rent, or pro rata portion of Fuel Farm insurance for
a period of thirty (30) days after written notice and demand
therefore are given by Lessor to Lessee.
(2) Failure of Lessee to perform or comply with any obligation,
covenant or agreement of Lessee hereunder, other than the
payment of money, for a period of thirty (30) days after written
notice specifying such failure is given by Lessee to Lessor.
B. In the case of the event of default by Lessee, Lessor shall have the
following remedies in addition to all other rights and remedies provided
by law or in equity including without limitation, damages and specific
performance:
(1) Terminate this Lease by thirty (30) days prior written notice given
to Lessee specifying the date of termination and Lessee shall
within said thirty (30) day period vacate the Leased Premises and
surrender possession thereof to Lessor.
(2) Without terminating this Lease, retake possession of the Leased
Premises and relet the Leased Premises or any part thereof for such
term or terms and upon such other conditions as Lessee in its
reasonable judgment shall determine. If the rent, fees and other
charges are less than those provided for herein, Lessee shall be
responsible and liable for any deficiency between the amount of
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0
the rent, fees and charges provided for herein and those received
through such reletting. Lessor shall not be responsible or liable for
any failure to relet the Leased Premises or any part thereof, or
failure to collect any rent, fees or other charges due upon such
reletting. No notices from Lessor hereunder or under a forcible
entry and detainer statute or similar law shall constitute an election
by Lessor to terminate this Lease unless such notice specifically so
states. Lessor reserves the right following any such reentry and/or
reletting to exercise its right to terminate this Lease as provided in
(1) above.
21. Notices:
All notices, required to be given to Lessor hereunder, shall be in writing and be
sent by certified mail to City Manager, 1 City Hall Place, 2nd Floor, Pueblo,
Colorado, 81003, and to Airport Administration Office, 31201 Bryan Circle,
Pueblo, Colorado 81001, with a copy to City Attorney, 1 City Hall Place, 3"1
Floor, Pueblo, Colorado 81003. All notices required to be given to Lessee
hereunder shall be in writing and sent by certified mail, addressed to Sam C.
Brown, Jr., Member/Manager, 27350 E. Hwy 96, Pueblo, CO 81001 provided,
that the parties, or either of them, may designate in writing from time to time
subsequent or supplementary persons or address in connection with said notices.
The effective date or service of any such notice shall be the date such notice is
mailed by Lessee or Lessor.
22. Law, Rules and Regulations:
A. Lessee, its officers, agents and employees shall faithfully observe and
comply with all applicable federal, state and local laws, rules, regulations
and ordinances now existing or hereafter adopted relating to the use and
occupancy of the Airport or Leased Premises, Ramp or Fuel Farm,
including without limitation Chapter 1 of Title III of the Pueblo Municipal
Code.
B. Lessee, its officers, agents and employees shall faithfully observe and
comply with all minimum standards and rules regulating operations and
activities from and upon the Airport adopted from time to time by Lessor;
provided, however, that Lessee shall not be required under any
circumstances to provide more services or products than are required of it
pursuant to Section 4 E hereof. Such minimum standards and rules shall
not be applied arbitrarily, discriminatorily, or unreasonably. Except with
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0 e
respect to matters of public health and safety, if any provision of this
Lease shall conflict with any provision of the minimum standards and
rules adopted or amended by Lessor after the Commencement Date, the
conflicting provision of this Lease shall control.
23. F.A.A. Lease Requirements:
A. Lessor reserves the right, without any obligation on its part to do so, to
develop, modify, change, improve or abandon the Airport or any part
thereof, as it may determine in its sole discretion, at any time, regardless
of the desires or views of Lessee, and without interference or hindrance
from Lessee or liability to Lessee.
B. Lessor reserves the right, without any obligation on its part to do so, to
maintain and keep in repair the landing area of the Airport and all publicly
owned facilities of the Airport, together with the right to direct and control
all activities of Lessee in this regard.
C. This Lease shall be subordinate to the provisions and requirements of any
existing or future agreement between Lessor and the United States,
relative to the use, development, operation, or maintenance of the Airport.
D. Lessee shall comply with the notification and review requirements
covered in Part 77 of the Federal Aviation Regulations with respect to the
construction of any structure or building on the Leased Premises, or in the
event of any planned modification or alteration of any present or future
building or structure on the Leased Premises.
E. It is understood and agreed that nothing contained in this Lease shall be
construed to grant or authorize the granting of an exclusive right within
the meaning of Section 308 of the Federal Aviation Act.
F. Lessor reserves 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 Leased
Premises and Ramp, 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 or flight in said airspace, and for use of said
airspace for landing on, taking off from, or operations on or over the
Airport.
G. Lessee by accepting this Lease expressly agrees for itself, its successors
and assigns that it will not erect nor permit the erection of any structure,
building or object nor permit the growth of any tree on the Leased
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O k
Premises to a height not to exceed thirty-five (35) feet above ground level.
In the event the aforesaid covenant is breached, Lessor reserves the right
to enter upon the Leased Premises and to remove the offending structure
or object or cut the offending tree, all of which shall be at the expense of
the Lessee.
H. Lessee shall not make use of the Leased Premises, Ramp or Fuel Tanks in
any manner which might interfere with the landing and taking off of
aircraft at the Airport or otherwise constitute a hazard to aviation. In the
event the aforesaid covenant is breached, Lessor reserves the right to enter
upon the Leased Premises, Ramp and Fuel Tanks and cause the abatement
of such interference at the expense of the Lessee.
If during the term of this lease, all or part of the Leased Premises, Ramp or
Fuel Tanks should be taken or threatened to be taken for any public or
quasi-public use under any governmental law or by right of eminent
domain, or sold to the condemning authority under threat of
condemnation, this Lease shall terminate and the proceeds, if any, from
such taking or sale shall be allocated between Lessor and Lessee in
accordance with applicable condemnation law.
J. Lessor reserves the right to grant and to take easements or rights of way
in, under, over and across the Leased Premises and Ramp, in which event,
Lessee shall only be entitled to compensation for damages to
improvements of the Lessee destroyed or damaged thereby, but not to
damages for loss of use of the Leased Premises or Ramp.
K. Lessee agrees to annually complete and submit a Department of
Transportation - Federal Aviation Administration Airport Activity Survey
(FAA Form 1800-31) that documents Lessee's air taxi-commercial
passenger enplanements for each calendar year.
L. Lessee agrees to annually report on certificated air carrier aircraft that it
services. The report shall detail the aircraft registration number,
manufacturer, make and model, and aircraft owner. This information will
be used by the Airport to determine the Airport's eligibility for federal
airport improvement program grants and will be shared with the Federal
Aviation Administration.
24. Nondiscrimination Assurances:
A. The Lessee, for itself, its successors and assigns, as a part of the
consideration hereof, does hereby covenants and agrees as a covenant
-17-
running with the land that in the event facilities are constructed,
maintained, or otherwise operated on the Leased Premises or Ramp, for a
purpose for which Department of Transportation program or activity is
extended or for another purpose involving the provision of similar services
or benefits, the Lessee shall maintain and operate such facilities and
services in compliance with all requirements imposed pursuant to 49 CFR,
Part 21, Nondiscrimination in Federally Assisted Programs of the
Department of Transportation, and as the regulations may be amended.
B. The Lessee, for itself, its successors and assigns, as a part of the
consideration hereof, does hereby covenant and agree as a covenant
running with the land that (i) no person on the grounds of race, color, age,
religion, sex, disability, sexual orientation or national origin shall be
excluded from participation in, denied the benefits of, or be otherwise
subjected to discrimination in the use of the Leased Premises or Ramp; (ii)
that in construction of any improvements on, over or under such land and
the furnishing of services thereon, no person on the grounds of race, color,
religion, age, sex, disability, sexual orientation or national origin shall be
excluded from participation in, denied the benefits of, or otherwise be
subjected to discrimination; and (iii) that the Lessee shall use the Leased
Premises and Ramp in compliance with all other requirements imposed by
or pursuant to 49 CFR, Part 21, Non-discrimination in Federally Assisted
Programs of the Department of Transportation, and as the regulations may
be amended.
C. The Lessee assures that it will undertake an affirmative action program as
required by 14 CFR, Part 152, Subpart E, to insure that no person shall on
the grounds of race, creed, color, religion, age, disability, national origin,
sexual orientation or sex be excluded from participating in any
contracting, leasing or employment activities covered in 14 CFR, Part 152,
Subpart E. The 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 this subpart. The Lessee assures that it
will require that its covered suborganizations provide assurances to the
Lessee that they similarly will undertake affirmative action programs and
that they will require assurances from their suborganizations, as required
by 14 CFR, Part 152, Subpart E, to the same effect.
D. Lessee agrees to operate the Leased Premises for the use and benefit of the
public and to furnish good, prompt and efficient services adequate to meet
all the demands for its services at the Airport, to furnish service on a fair,
equal and non- discriminatory basis to all users thereof, and to charge fair,
reasonable, and non- discriminatory prices for each unit of service,
-18-
provided that Lessee may be allowed to make reasonable and
nondiscriminatory discounts, rebates or other similar types of price
reductions to volume purchasers.
25. Miscellaneous:
A. This Lease and all of its covenants and provisions shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and approved subtenants.
B. No waiver by Lessor of any failure by Lessee to comply with any term or
condition of this Lease shall be or shall be construed to be a waiver by
Lessor of any other failure by Lessee to comply with any term or
condition of this Lease Agreement.
C. This Lease and any amendments hereto are subject to prior approval of the
Federal Aviation Administration.
D. Lessee is leasing the Leased Premises "AS IS" "WITH ALL ITS
FAULTS" in its present condition. Lessor makes no representation or
warranties with respect to the present or future condition, or suitability for
a particular use of the Leased Premises or the Airport. Lessor shall be
under no obligation to maintain the Airport or any part thereof in a
particular location or condition. If the Airport shall permanently close or
relocate, the use restrictions stated in Section 4 shall not apply, and the
Lessee may use the Leased Premises for any lawful use or purpose
allowed by the then existing Pueblo Municipal Code, or in the alternative,
Lessee may terminate this Lease upon thirty (30) days prior written notice
given to Lessor.
E. In the event of any litigation arising under this lease, the court shall award
the prevailing party its costs and expenses of litigation including without
limitation, reasonable attorney and expert witness fees.
F. In the event of any litigation arising under this Agreement, exclusive
venue for any such litigation shall be Pueblo County, Colorado. All such
litigation shall be filed in the District Court and each party submits to the
jurisdiction of such District Court. Lessor and Lessee hereby waive trial
by jury in any action, proceeding, or counterclaim brought by either
against the other, upon any matters whatsoever arising out of or in any
way connected with this Lease, Lessee's use or occupancy of the
Premises, and/or any claim of injury or damage.
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v
G. If any provision of this Lease or the application thereof to any person or
circumstance is, at any time or to any extent, invalid or unenforceable, the
remainder of this Lease will not be affected thereby, and each such
provision will be valid and will be enforced to the fullest extent permitted
by law.
H. This Lease contains the entire and exclusive agreement between the
parties relating to the Leased Premises, and may not be modified except
by written instrument signed by the party to be bound thereby.
I. Neither Party shall be, or hold itself out as, agent of the other or as joint
venturers or partners under this Agreement.
J. Each Party acknowledges that this Agreement was fully negotiated by the
Parties and, therefore, no provision of this Agreement shall be interpreted
against any Party because such Party or its legal representative drafted
such provision.
K. The provisions of this Agreement are for the exclusive benefit of the
Parties hereto and their successors and permitted assigns, and no third
party shall be a beneficiary, or have any rights by virtue of this
Agreement.
L. This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed for all purposes to be an original, and all
such counterparts shall together constitute but one and the same original.
M. Whether or not specifically noted within any section or provision of this
Lease, any provision of this Lease which must survive termination of this
Lease in order to be effective will so survive such termination.
26. Fuel Tanks Lease:
Notwithstanding any provision of this Lease to the contrary, this Lease and all its
applicable provisions shall become effective upon date hereof with respect to and
for the Fuel Tanks. This Lease with respect to and for the Fuel Tanks may be
terminated by either party upon ninety (90) days prior written notice given to the
other party specifying the date of termination. If either Lessor or Lessee
terminates this Lease with respect to and for the Fuel Tanks, Lessor will, at the
request of Lessee, negotiate in good faith with Lessee to lease sufficient land to
construct and operate its own fuel storage facilities for its own use at a location
mutually agreeable to Lessor and Lessee.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed
as of the day and year first above written.
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LESSEE:
PDC Acquisitiony,hoke
cam- e°13
Signature
By: Sam C. Brown, Jr.
Mer rbei/M Pres ��
arcag�T
Title
tD 26 - I $
Date
LESSOR:
CITY OF
Stephen G.Nawrocki, President of City Council
[ SEAL ]
Attest:
City rk
Approved as to Form
Daniel C. Kogovsek, City Attorn
-21-
ti e^
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of BEGINNING a S 887374'W 3 9.00 Le s erts'rtly aoa'
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• 54'W .1419.00'P0/NT Or COMMENCEMENT 45' posit op
BEGINNING
•
A pared at land located within a portion of`Aarc 1 H of Pueblo Memorial Airport Industrial Pork Subdivision,
located In the SE 1/4of the NE' 1/4 of'Section 25, Township 20 South, Range 84 West, and in a portion of the
SW 1/4 of the NW 1/4 Of Section JO, Towishlp 20 South, Range AU West of the Sixth Principal Meridian, being
more porlicularb described as follows:
&tRO8L rA.
Commenahv at a pok4 from which the',W 1/4 corner of said Section JO beers S 15'46' 5Z.(hoodnncass based on
the contemn, of ifelt Bassett Avenue from its centerline intersection with.Xeoter Parkway to itscentenine
Intersection"with Noes Street, assumed°to bear N.11W26'39 E with of bootlace contained herein being relaM'o
thereto). thence N 88'23'24 a distance of 5.00 feet; thence N 00'36'461f a distance of 215.00 feet to the point
of BEC/WHIAC! thence N 01'36"36'W a distance of 234.00 feat. thence N 88'23'24'1 a distance of 352.00 feet;
thence $ 01'36'36'S"a distance of 160.00 feat. thence" N 88'23'24 a distance of'17.00 feet; thence
$0i'36.1,181' a distance of 74.00 meet; thence 5'196123'24"W a'distance of 36900 tel to the point of BEGINNING.eanzg ;
Co ncA
1np at a.point from which the W 1/4 carnefr of*aid Section JO Deere S ;5'46'25'E (bearings hosed on
the center/!na of Walt Bassett Avenue Nan centerline interaectlan Oh Keeler parkway to Its centerline
inferseotfon with Reyyssa Street, assumed to bear N.88'36'J9'1:; with an bearings contoined-herein being relative
thereto) thence N 01'36'J611 a distance of 198,00 feet; thence S 88!23'24'W 0 distance of 40.00 feet; thence
N 01J6'361V a distance of 71.00 feet; thence S 68'LI24ir a distance of,5,00 to the point of 9E'CINNNO1
thence S 88'23 241e a distance of 208.00 feet! thence $ 01'36'36"1 a'distance of.71.00 teat: thence S 88'.23'231W
a distance a! 1711.00 feet; thence N 01'36'36,#o•dletonce of 251,00 feet; thence N 88'2324"1 a distance of
304.00 feet; thehce S O1'36'361" a distance of 180,00 feet; to point of BEGINNING.
•
mangle; at ant from which.the W 1/4-corner of spid Section'.JO boothS 15'46'2 ( (
5" baadn s based on
the t!ne oft Bassett Avenue from its.centerline Intersection with Reeler Parkway to Itscenterline
Intersectkn with Reyes Stree/, assumed to bear N.88'26J9'Z' with al`beatings contained herein be r latke
thereto)} thence.N 86"2J'24'1'a.distance of 5,00 teat' to Elio point of 01.89rWIn7, thence N 0176'36 a distance of
215,00"fief; thence N 882J14"E a"distance of 380,00 feet; thence S 0176'36' a distance of 215.00 feet;
thence S 882314'W a drsroncb a, 36940 feet b the point of BE'GiNNIN'O