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HomeMy WebLinkAbout13949RESOLUTION NO. 13949 A RESOLUTION APPROVING A SELF-SERVE FUELING OPERATION GROUND LEASE BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND SIBRAN PROPERTIES, LLC, A COLORADO LIMITED LIABILITY CORPORATION, AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, COLORADO THAT: SECTION 1. A certain Ground Lease, 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 Sibran Properties, LLC, a Colorado Limited Liability Corporation, is hereby approved, subject to the conditions as set forth in said Ground Lease. SECTION 2. The President of City Council is hereby authorized to execute the Ground Lease on behalf of the City of Pueblo, a Municipal Corporation, 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 to effectuate the transactions described therein. SECTION 4. This Resolution shall become effective immediately upon final passage and approval. INTRODUCED: April 23, 2018 BY: Ed Brown MEMBER OF CITY COUNCIL APPROVED: PRESIDENT OF CITY COUNCIL ATTESTED BY: ACTING CITY CLERK City Clerk’s Office Item # M-1 Background Paper for Proposed Resolution COUNCIL MEETING DATE: April 23, 2018 TO: President Christopher A. Nicoll and Members of City Council CC: Sam Azad, City Manager VIA: Brenda Armijo, Acting City Clerk FROM: Ian Turner, Director of Aviation SUBJECT: A RESOLUTION APPROVING A SELF-SERVE FUELING OPERATION GROUND LEASE BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND SIBRAN PROPERTIES, LLC, A COLORADO LIMITED LIABILITY CORPORATION, AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME SUMMARY: Attached for consideration is a Self-Serve Fueling Operation Ground Lease (“Ground Lease”) between the City of Pueblo, a Municipal Corporation, and Sibran Properties, LLC, a Colorado Limited Liability Corporation. PREVIOUS COUNCIL ACTION: On February 25, 2002, City Council approved a 10-year lease with Airport Properties, Inc. to construct, install, and operate a self-serve fueling station at the airport. On December 27, 2005, City Council consented to the assignment of the lease to Sibran Properties, LLC. BACKGROUND Airport Properties, Inc., entered into a ground lease to install a 100LL aviation fuel tank and credit card self service dispensing system at the airport. In 2005, Sibran Properties purchased the improvements from Airport Properties and the City consented to the assignment of the lease to Sibran Properties. The assigned lease was for 10 years with an option for an additional 10 years. The initial term ended on February 25, 2012 and Sibran Properties did not exercise its 10-year lease extension. Therefore, Sibran Properties has been operating on a month-to-month basis. The attached Lease supersedes in its entirety the previous lease and is for a 5-year term commencing April 1, 2018 and ending on March 21, 2023. The Lease term may be extended through January 31, 2027 upon the mutual agreement of all parties. FINANCIAL IMPLICATIONS: The following rents and fees will be charged under this lease: $820.98 annually for 5,046 sq. ft. of land at the rate of $0.1627 per sq. ft to be adjusted per CPI-U yearly on the anniversary of the commencement date. $100.92 annually for 2,320 sq. ft. of non-exclusive apron space to be adjusted per CPI-U yearly on the anniversary of the commencement date. A 2% commission of monthly gross revenues derived from all sales, operations, and services made, furnished, or conducted on or from the Leased Premises and Apron, with the exception of revenue derived from the sale and dispensing of aviation fuel. Fuel flow fees for each gallon of fuel delivered to the fuel storage facilities on the leased area will be charged as follows: $0.083 for each gallon up to one million gallons. $0.073 for the next 500,000 gallons up to one million five hundred thousand gallons. $0.063 for each gallon over one million five hundred thousand gallons. The fuel flowage fees will be adjusted per CPI-U yearly on the anniversary of the commencement date. The Combined Service Fee will be $57.91 annually based on .11584 acres at the rate of $499.92 per acre annually. BOARD/COMMISSION RECOMMENDATION: None. STAKEHOLDER PROCESS: None. ALTERNATIVES: The improvements on the land to be leased belong to Sibran Properties. If City Council does not approve the ground lease, Sibran Properties will be required to remove the improvements from the land pursuant to the provisions of the February 25, 2002 lease. RECOMMENDATION The Department of Aviation recommends the approval of this lease. Attachments: Self-Serve Fueling Operation Ground Lease SELF-SERVE FUELING OPERATION GROUND LEASE THIS LEASE made and entered into as of April 23 , 2018 between the City of Pueblo, a Municipal Corporation, "Lessor",and Sibran Properties, LLC, "Lessee." 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 apron space on said Airport property for the purpose of storage, selling, and dispensing of aviation fuel; and WHEREAS, Lessor and Airport Properties, Inc., a Texas Corporation, entered into a prior Credit Card Self-Serve Fueling Operation Ground Lease dated February 25, 2002 ("Prior Lease"), as amended, which was effectively assigned to Lessee on December 19, 2005; and WHEREAS, the Prior Lease expired on February 25, 2012 and is superseded in its entirety by this Lease. 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 of5,046 square feet shown on Exhibit "A", attached hereto and made a part hereof, situated in the County of Pueblo, State of Colorado. The term "Leased Premises", as used in this Lease, means and includes the real property described above as well as any improvements hereafter constructed or added thereto. Subject to Section 7, Lessor hereby leases to Lessee 2,320 square feet of apron space, marked"Apron"on the plot plan for its non-exclusive use. The term"Apron" means and includes the area marked "Apron" on attached Exhibit "A." The parties agree that the Apron area is commensurate with the amount of space needed for a single aircraft to be fueled. The Leased Premises and Apron 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 five (5) years commencing April 1, 2018 ("Commencement Date")and ending on March 21, 2023, unless sooner terminated as herein provided. The term of this Lease may be extended through January 31, -1- 2027 upon the mutual agreement of the parties evidenced by a signed written agreement. This Lease may only otherwise be extended upon express written agreement of the parties. All conditions and covenants contained herein shall remain in full force and effect during any extension period. 3. Fee and Other Charges: A. Lessee shall pay rent to the Lessor for the ground lease herein granted a sum per month equal to one-twelfth (1/12) of the initial annual rent during the original term, payable in advance without notice, offset or deduction, and shall be due monthly on the first day of each month at the Director of Aviation's Office. The commencement date of this Lease, as set forth in paragraph 2, Term, shall be the date upon which rent begins. The initial annual amount is eight hundred twenty dollars and ninety-eight cents ($820.98), calculated by multiplying the gross leased land area by $0.1627 per square foot. The amount of rent the Lessee pays will be adjusted based upon the consumer price index for all urban consumers, CPI-U (all items 1982-1984 = 100). The rent shall be adjusted yearly on the anniversary of the commencement date of this Lease and each year increment of any extended term. The rent will be increased or decreased by a percentage equal to the percentage increase or decrease in the CPI-U published for February of the then current year over the comparable CPI-U published for February of the preceding year. The new rent rate shall be rounded to the nearest ten-thousandth of a dollar. Any rent overdue for more than thirty (30) days will have an additional fee added to cover extra administrative costs. The additional fee will equal ten percent (10%) of the gross amount of all overdue rents. In the event the Lessor initiates any proceedings to collect any unpaid rent from Lessee or to enforce any other provision of this Lease, Lessee shall pay all of the Lessor's expenses in connection therewith, including reasonable attorney's fees. B. Lessee shall pay to Lessor monthly rent for the non-exclusive commercial use of the Apron in the sum of eight dollars and forty-one cents ($8.41)per month. The apron use fee shall be adjusted based on the CPI-U in the same manner as rent is adjusted under paragraph 3(A) above. 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 Apron, with the exception of revenue derived from the sale and dispensing of aviation fuel. -2- C. 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 eighty-three thousandths of a dollar($0.083), starting with the Commencement Date and each month thereafter for each gallon of aviation fuel delivered, or caused to be delivered by Lessee to Lessee's fuel storage facilities on the Leased Premises. The fuel flowage fee shall be adjusted based upon the volume of aviation fuel delivered each calendar year as follows: Eighty-three thousandths of a dollar ($0.083) for each gallon up to one million(1,000,000) gallons; Seventy-three thousandths of a dollar ($0.073) for the next five hundred thousand gallons (500,000), up to one million five hundred thousand (1,500,000) gallons; Sixty-three thousandths of a dollar($0.063)for each gallon over one million five hundred thousand (1,500,000) gallons; Lessee shall submit with each payment of the fuel flowage fee a report of all fuel delivered and calculation of the fuel flowage fee on forms to be approved by the Director of Aviation. The fuel flowage report shall be delivered to the office of the Director of Aviation. If the fuel flowage fee is not timely paid and/or the report not timely filed, Lessee shall pay a late fee equal to ten percent (10%)of the unpaid fuel flowage fee. The fuel flowage fee shall be adjusted based on the CPI-U in the same manner as rent is adjusted under paragraph 3(A) above. D. Lessee shall pay a 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 forty-one dollars and sixty-six cents ($41.66) per acre per month. The Lessor may, from time to time and in its sole discretion, 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, in compliance with the Pueblo Municipal Code. Only domestic waste-water 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. -3- E. Rent, fees, and other charges shall be paid monthly without notice, offset or deduction on or before the tenth(10th) of the following month at the City of Pueblo's Director of Aviation's office and shall be accompanied with such reporting forms as the Director of Aviation 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. F. All unpaid rent, fees, or other charges shall accrue interest at the rate of ten percent (10%) per annum. 4. Improvements and Use: A. The Leased Premises shall be used and occupied by Lessee solely for the storage, sale, and dispensing of self-serve aviation fuel. B. Lessee shall maintain the Leased Premises, and any improvements thereon, 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 Airport 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 Airport 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 improvements in accordance with plans and specification approved by Lessor, 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 -4- denied or withheld. Lessee may paint any improvements upon the Leased Premises and the fuels tanks with the prior approval of Lessor. D. Lessee shall cause all utilities to be used by Lessee to be extended underground to the Leased Premises within easements and locations to be designated by Lessor. 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. E. The Leased Premises shall be used and occupied by Lessee as a self-serve fueling and storage facility. Lessee shall have no right to utilize the leased premises, or any improvement thereon, other than as specifically allowed under this subsection. Except for the operation of a self-serve fueling and storage facility, no aircraft service or maintenance shall be performed on the leased premises. F. Lessee shall not park or leave, or allow to be parked or left, aircraft on the taxiways or on pavement adjacent to the public apron area or the leased premises in a manner which interferes with or obstructs access to adjacent property or the public apron area. Parking of automobiles will be permitted only in paved designated parking areas. 5. Maintenance Obligation: Lessee, at its expense, shall keep the Leased Premises, improvements, and utilities extended to the Leased Premises, in good repair and condition, and in a safe, sanitary, orderly, and sightly condition. 6. Title to Improvements: The existing improvements located upon the Leased Premises,and later constructed or erected hereunder by Lessee shall be deemed movable trade fixtures. Upon completion of future improvements, fee simple title to such improvements shall vest with the Lessee. If, during the term of this Lease and any extension, Lessee desires to sell, assign or convey all the improvements located upon the Leased Premises, or if Lessee desires to terminate or otherwise discontinue the Lease, Lessee shall first offer in writing to sell, convey or assign the same to Lessor upon the price, terms and conditions -5- Lessee would be willing to accept in a good faith arms-length sale to a third party ("Offer"). Lessor shall have thirty(30) days after receipt of the Offer to accept the Offer. If Lessor does not accept the Offer in writing within said thirty (30) day period, Lessee may sell the improvements to a third party free of Lessor's right of first refusal granted by this section, but not at a price less than, nor upon terms and conditions more favorable than those contained in the Offer. If Lessee sells all the improvements to Lessor, this Lease shall terminate. If Lessee sells all the improvements to a third party, Lessee shall remain obligated and liable under this Lease. 7. Apron: A. Lessee shall use the leased Apron in compliance with Lessor's ground traffic and aircraft parking plans and regulations. Lessee shall not use common area apron space for temporary parking of aircraft, except on designated tie-downs, nor shall Lessee perform servicing of aircraft on common area apron. Fueling of aircraft shall be conducted within that portion of non-exclusive Apron area described in Section 1 and depicted on Exhibit A. Any other use of common area apron space shall only be allowed by the express written consent of the Lessor. B. Lessee accepts the Apron 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 shall have no obligation to upgrade, repair, re- surface or maintain the Apron. C. For the portion of the Apron leased for its non-exclusive use, Lessee shall maintain the surface of the Apron free and clear of debris, snow, sand and ice and shall be responsible to remove same from the Apron as soon as reasonably possible in order for the Apron to be continuously available for use. 8. Signs: Lessee shall not erect, paint or maintain any signs whatsoever upon the Leased Premises without first securing the written consent of Lessor,which may be granted or denied in the sole and absolute discretion of the Lessor. 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. -6- 9. Right of Inspection: 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 for 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. 10. 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, improvements, Lessee, or Lessee's property or operations thereon. Lessee also covenants and agrees not to permit any mechanic's or material man's lien to be filed against the Leased Premises, Apron or improvements, 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, Apron and improvements, 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, Apron or improvements which will be in any way an impairment of the rights of Lessor under this Lease Agreement. 11. Indemnification: Lessee assumes the risk of loss or damage to the Leased Premises and property thereon, including improvements, and on the Apron, 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, -7- including the Leased Premises, Apron and improvements. The provision of this Section shall survive the termination of this Lease. 12. 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 and property damage with a combined single limit of not less than one million dollars ($1,000,000.00), endorsed to add as additional insureds the Lessor and its officers, employees and agents. Such policy shall state that the insurance is primary in coverage to any other insurance which may be available to Lessor. Lessee shall insure the structures and other improvements,in an amount equal to their full insurable value. 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 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. Lessee shall not violate the terms or prohibitions of any insurance policy herein required to be furnished. D. If the structures or other 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; 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 -8- with applicable laws and codes, and in accordance with plans and specifications therefore approved by Lessor, which approval will not be unreasonably withheld. E. Nothing in this Lease 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. F. So long as Lessee uses fuel tanks for storage of aviation fuel, Lessee shall be responsible for adequate storage tank pollution liability insurance. 13. 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. 14. 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 or interrupt Lessee's operations at the Airport. 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. 15. Place and Manner of Payments: -9- In all cases where Lessee is required by this Lease 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 Aviation at the Airport, 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. 16. Assignments and Subletting: Lessee shall not assign, sublet, or transfer this Lease or the Leased Premises in whole or in part without the prior written consent of Lessor, which consent shall not be unreasonably or arbitrarily withheld, delayed, or denied. Any assignment or transfer without the prior written consent of Lessor shall be void. No assignment, subletting or transfer of this Lease or the leased premises shall release or discharge Lessee from any of its obligations under this Lease. 17. 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. 18. 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, or other charges 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. -10- B. In the case ofthe 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. In the event of such termination, Lessee shall either: a. Remove any improvements from the Leased Premises and restore the Leased Premises to its original condition as soon as possible; or b. Provided Lessee has first complied with the provisions of Section 6 hereof, sell the improvements and assign this Lease to a third person with the prior written consent of Lessor, which consent will not be unreasonably withheld,contingent upon such third person: (i) curing and correcting all existing events of default by Lessee, and (ii) assuming and agreeing to comply with and perform all obligations, covenants and agreements of Lessee under this Lease. (2) If Lessee fails to complete either 1(a) or (b) above within a timely manner, Lessee shall vacate the Leased Premises and other Lessee improvements thereon and surrender possession of same to Lessor, and, at the option of the Lessor, all Lessee improvements shall remain on the leased premises as the property of Lessor, or Lessor may, at the expense of Lessee, cause the improvements to be removed and the leased premises restored to their original condition. 19. 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, 3rd Floor, Pueblo, Colorado 81003. All notices required to be given to Lessee hereunder shall be in writing and sent by certified mail, addressed to Daniel Olsen, 6442 Sanctuary Dr., Windsor, CO 80550 , 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. -11- 20. 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, Leased Premises, or Apron, 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. Such minimum standards and rules shall not be applied arbitrarily, discriminatorily, or unreasonably. Except with 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. 21. 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. -12- 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, as amended, now codified at 49 U.S.C. § 40103. 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 Apron, 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 Premises. 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 or Apron 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 and Apron 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 or Apron 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 Apron, 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 Apron. K. If applicable, Lessee agrees to annually complete and submit a Department of Transportation - Federal Aviation Administration Airport Activity -13- Survey (FAA Form 1800-31) that documents Lessee's air taxi-commercial passenger enplanements for each calendar year. L. If applicable, 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. 22. 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 running with the land that in the event facilities are constructed,maintained, or otherwise operated on the Leased Premises or Apron, 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 Apron; (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 Apron 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 ensure that no person shall on the grounds of race, creed, color, religion, age, disability, national origin, -14- 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,provided that Lessee may be allowed to make reasonable and nondiscriminatory discounts, rebates or other similar types of price reductions to volume purchasers. 23. 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 -15- 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, 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 Leased Premises, and/or any claim of injury or damage. F. This Lease is expressly made subject to the limitations of the Colorado Constitution. Nothing herein shall constitute, nor be deemed to constitute, the creation of a debt or multi-year fiscal obligation or an obligation of future appropriations by the City Council of Pueblo, contrary to Article X, §20 of the Colorado Constitution or any other constitutional, statutory or charter debt limitation. Notwithstanding any other provision of this Lease, with respect to any financial obligation of Lessor which may arise under this Lease in any fiscal year, in the event the budget or other means of appropriations for any such year fails to provide funds in sufficient amounts to discharge such obligation, such failure shall not constitute a default by or breach of this Lease, including any sub-agreement, attachment, schedule or exhibit thereto, by the Lessor. 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. Neither party shall be, or hold itself out as, agent of the other or as joint venturers or partners under this Lease. J. Each party acknowledges that this Lease was fully negotiated by the parties and, therefore, no provision of this Lease shall be interpreted against any party because such party or its legal representative drafted such provision. K. The provisions of this Lease are for the exclusive benefit of the parties hereto and their successors and permitted assigns, and no third party shall be a -16- beneficiary, or have any rights by virtue of this Lease. L. This Lease 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. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and year first above written. LESSEE: *Dein,'- ( 7/9. #/—7 Signature /06,4- 4- Title 4 -// g', e Date LESSOR: y CITY • ,SUE: O Christop er A. Nicoll, President of City Council [ SEAL ] /) Attes x\d a lel, Brenda Armijo, Acting Clerk Approved as to Form >wiAdij . Daniel C. Kogovsek, City AttornEy -17- Exhibit A ,a t Nat C', :.* f `'F 58 Feet "' 1 . Apron= '0 Feet 2,320 sq.ft. „ ... `t" ti. .. p, *. r5'� t ,.4µ• t ", Y s Amy.Y4 r'" 4 a ➢'.^^'ye 1 .ISP i+u. f r'■y,' .. ,'. RYA j: • T'awt -� '''it!" �` r {• ••..- *i . .. r,�,,� the '▪,dr. $�` ...". •w �t .4'. kLr�*" �'i 1.' :`mfl# • k wt , tfp 87 Feet °* �✓ f f t w 1 `•A 14:1*- t WN, . ni Ground= 5,046 sq.ft. 4 ' s . r 58 F .• t. + eet • i of •A t ,4 •; �7 ,1 k • � ?� t,# " :Airport Electric j .'e• " A y y '* r:';44,41:77,4: ' i r< a," _ . �,. •y,+ .a ,wr �, r t • 4- "tit+ �, ae ra raw , _ • -18-