HomeMy WebLinkAbout10245ORDINANCE NO. 10245
AN ORDINANCE APPROVING THE ASSIGNMENT OF A
HANGAR GROUND LEASE BY AND BETWEEN THE CITY OF
PUEBLO, A MUNICIPAL CORPORATION, SAM C. BROWN, AND
TRAVELAIRE SERVICES, INC., AND AUTHORIZING THE
MAYOR TO EXECUTE SAME
WHEREAS, City Council approved a Hangar Ground Lease dated September 8,
2003, with Sam Brown and TravelAire Services, Inc., evidenced by Resolution No. 9951
for the property commonly known as 439 Skyway Street, Pueblo, Colorado 81001; and
WHEREAS, Sam Brown seeks to fully assign his interest in the Lease to TravelAire
Services, Inc; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1:
The Assignment of Hangar Ground Lease (“Assignment”) between the City of Pueblo, a
Municipal Corporation, Sam C. Brown, and TravelAire Services, Inc., 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, is hereby approved.
SECTION 2:
The Mayor is hereby authorized to execute the Assignment on behalf of the City of Pueblo,
and the City Clerk shall affix the Seal of the City thereto and attest same.
SECTION 3:
The officers and staff of the City are authorized to perform any and all acts consistent with
the intent of this Ordinance and the attached Assignment to implement the transactions, policies,
and procedures described herein.
SECTION 4:
This Ordinance shall become effective on the date of final action by the Mayor and City
Council.
Action by City Council:
Introduced and initial adoption of Ordinance by City Council on July 25, 2022 .
Final adoption of Ordinance by City Council on August 8, 2022 .
President of City Council
Action by the Mayor:
☒ Approved on August 9, 2022 .
□ Disapproved on based on the following objections:
_
Mayor
Action by City Council After Disapproval by the Mayor:
□ Council did not act to override the Mayor's veto.
□ Ordinance re-adopted on a vote of , on
□ Council action on _______ failed to override the Mayor’s veto.
President of City Council
ATTEST
City Clerk
City Clerk’s Office Item # R-12
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: July 25, 2022
TO: President Heather Graham and Members of City Council
CC: Nicholas A. Gradisar, Mayor
VIA: Marisa Stoller, City Clerk
FROM: Greg Pedroza, Director of Aviation
SUBJECT: AN ORDINANCE APPROVING THE ASSIGNMENT OF A HANGAR
GROUND LEASE BY AND BETWEEN THE CITY OF PUEBLO, A
MUNICIPAL CORPORATION, SAM C. BROWN, AND TRAVELAIRE
SERVICES, INC., AND AUTHORIZING THE MAYOR TO EXECUTE SAME
SUMMARY:
This Ordinance will approve the Assignment of Hangar Ground Lease between the City
of Pueblo, Sam C. Brown, and TravelAire Services, Inc., for the property commonly
known as 439 Skyway Street, Pueblo, Colorado 81001.
PREVIOUS COUNCIL ACTION:
Council approved a Hangar Ground Lease dated September 8, 2003, with Sam Brown,
and TravelAire Services, Inc., evidenced by Resolution No. 9951 for the property
commonly known as 439 Skyway Street, Pueblo, Colorado 81001.
BACKGROUND:
This Ordinance will approve the Assignment of Hangar Ground Lease between the City
of Pueblo, Sam C. Brown, and TravelAire Services, Inc., for the property commonly
known as 439 Skyway Street, Pueblo, Colorado 81001. Both Sam C. Brown and
TravelAire Services, Inc. are lessees under the Lease. With this assignment, Mr. Brown’s
interest in the Hangar Ground Lease will be assigned to TravelAire Services, Inc., making
TravelAire the sole lessee.
FINANCIAL IMPLICATIONS:
Not applicable to this Ordinance.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Ordinance.
STAKEHOLDER PROCESS:
Not applicable to this Ordinance.
ALTERNATIVES:
If this Ordinance is not approved, the sale of the hangar at 439 Skyway Street will be
stopped.
RECOMMENDATION:
Approval of the Ordinance.
Attachments:
Ordinance
Assignment of Hangar Ground Lease
ASSIGNMENT OF
HANGAR GROUND LEASE
THIS ASSIGNMENT AGREEMENT ("Agreement") is entered into as of this 8th day of
August, 2022 ("Effective Date") by and between the City of Pueblo, a Municipal Corporation,
with an address of One City Hall Place, Pueblo, Colorado 81003 ("Lessor"), and Sam C. Brown
with an address of 4425 Porta Fina Drive, Pueblo, Colorado 8100I(-Assignor"), and TravelAire
Services, Inc., a Colorado corporation, with an address of 439 Skyway Street, Pueblo, Colorado
81001 ("Assignee").
WHEREAS, Lessor entered into a certain Hangar Ground Lease dated September 8, 2003
("Lease") with Assignor and Assignee; and
WHEREAS, Assignor now wishes to assign its interest in the Lease to Assignee, and for Assignor
to be removed from the Lease; and
WHEREAS, Lessor consents to said assignment and Assignee's assumption of the Lease in
accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the terms, conditions and
mutual promises set forth in this agreement, the parties agree as follows:
1. Assignment. Assignor hereby transfers, sells, and assigns to Assignee, Assignor's
right, title, and interest in and to the amended Lease.
2. Assumption. Assignee accepts the assignment of the amended Lease and hereby
assumes and agrees to observe, perform, and otherwise discharge when due all
obligations of the amended Lease,a copy of which is attached hereto as Exhibit"A"
and incorporated herein by reference. This shall include, but is not limited to, the
making of all payments and the performance of all covenants and duties.
3. Consent. Lessor hereby consents to the foregoing assignment and assumption of
the amended Lease in consideration for the terms of this Agreement, and Lessor
agrees to afford Assignee the same rights under the amended Lease as previously
enjoyed by Assignor. No further assignment of the Lease, or any part thereof, shall
be made without the prior written consent of Lessor. Any assignment or transfer
without Lessor's prior written consent shall be void.
4. Disclaim. Assignor hereby disclaims any further interest in the Lease and
Assignor's name shall be removed from the Lease, such that Assignee will be the
sole Lessee under the Lease.
5. Use of Hangar. Assignee acknowledges and agrees that the leased premises shall
only be used for the storage of aircraft and minor incidental materials. The leased
premises shall not be used for the storage of non-aeronautical personal property,
living accommodations, or in any other way inconsistent with the Lease. Failure to
abide by this provision shall constitute a material breach of the Lease and subject it
to immediate termination.
6. Indemnification. Assignor and Assignee shall indemnify, defend, and hold
harmless the Lessor, its officers, directors, employees, representatives, agents, and
attorneys from any claims,causes of action, or liability of any nature relating in any
way to this Agreement or the Lease.
7. Effective Date. This Agreement shall become effective on the Effective Date set
forth above.
IN WITNESS WHEREOF, the parties have executed this assignment as of the Effective Date.
SAM C. BROWN CITY OF PUEBLO,
A MUNICIPAL CORPORATION
S
, f ) Sit ' '(e.gg,�i/ rt'
By: (�. .._t3t-' By: Nicholas A. Gradisar
M 0V'
Title: Title: Mayor
TRAVELAIRE SERVICES, INC. ATTEST: 4-e-cl—t
NisClerk
(--) 1110 By: G, 1 �. l ,v , +(
Title:P 1 br .
STATE OF COLORADO, COUNTY OF PUEBLO
This instrument was acknowledged before me on this 14th day of July, 2022 by
Sam Brown.
MARSHA R LITTAU 0
l NOTARY PUBLIC A<7
� STATE OF COLORADO AD-aiii- —dil
NOTARY ID 19994018560 �� N tar PUb1ic
MY COMMISSION EXPIRES JUNE 19,2023 Y
STATE OF COLORADO, COUNTY OF PUEBLO l
This instrument was acknowledged before me on this /# day of joty ,
2
020xby Roc i. D /
De. Yen.r�n.^97 • I
odeita, ,
MARSHA R LITTAU jial -ii_ A
NOTARY PUBLIC N tart' Public
STATE OF COLORADO
NOTARY ID 19994016580
MY COMMISSION EXPIRES JUNE 19,2023
EXHIBIT A
HANGAR GROUND'LEASE
THIS LEASE made and entered into as of September 8. 2003 A.D. between the City of Pueblo, a
municipal corporation, "Lessor", and Sam Brown and Travelaire Services, Inc.,"Lessee".
WITNESSETH:
WHEREAS,the Lessor is the owner and operator of the Pueblo Memorial Airport("Airport"),together
with the land on which said Airport is situated, and
WHEREAS, Lessee is desirous of leasing a tract of ground on said Airport property for the purpose of
constructing and occupying a new hangar and aviation fuel farm of approximately 41,075 square feet,
NOW THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as
follows:
1. Land Parcel:
The Lessor hereby leases unto the Lessee and Lessee hereby leases from Lessor for the term and
upon the rental and conditions hereinafter stated, the real property shown on Exhibits "A"and
"B"for hangar and aviation fuel storage facilities purposes,both attached hereto and made a part
hereof, situated in the County of Pueblo, State of Colorado subject to existing easements. The
attached Exhibit"C"consists of a plot plan and diagram of the Hangar and fuel farm.The term
"leased premises" means and includes the real property, Hangar, fuel farm and other
improvements located on the real property described in attached Exhibits "A" and "B".
2. Term:
A. The initial term on this Lease is for a period of twenty (20) years commencing
September 1, 2003 ("commencement date")and ending August 31, 2023 unless sooner
terminated or extended as herein provided.
B. Lessor grants unto Lessee the right and option to extend the lease term for two
consecutive ten (10) year periods immediately following the original twenty(20) year
lease term. Such options may be exercised at any time at the discretion of Lessee;
however,such option to extend shall be exercised no later than one hundred eighty days
before the end of the original term or the first extended term, as the case may be.
Exercise of such options to extend shall be in writing but in no event shall Lessee be
entitled to exercise this option, even though such notice be timely given, unless Lessee
shall have timely performed all of its obligations hereunder and not be in default
hereunder.
C. All conditions and covenants contained herein shall remain in full force and effect during
any and all extension periods.
3. Rental Rate and Other Fees:
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
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advance without notice,offset or deduction,and shall be due quarterly on the first day of
each quarter 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 rent shall be calculated by multiplying the gross leased land area by $.10 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 on the 5th, 10th, 15th,and 20th anniversary of the commencement
date of this lease and each five(5)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 for the preceding 5-year period over the comparable CPI-U for the first month of
said 5-year period. 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. Venue for any such proceeding shall be in Pueblo
County, Colorado.
B. Lessee, as additional rent, shall pay to Lessor a monthly fuel flowage fee equal to 5.5
cents per gallon for the first 40,000 gallons of aviation fuel delivered each month to
Lessee's fuel storage facilities ("fuel farm") or to Lessor's fuel farm if Lessee uses the
Lessor's fuel farm for storage of aviation fuel pursuant to written contract therefor
between Lessor and Lessee and 6.5 cents per gallon for each additional gallon. On
February 1, 2007, the fuel flowage fee shall be increased to 7 cents per gallon for each
gallon of fuel delivered each month to the fuel farm. The amount of the fuel flowage fee
will be adjusted based upon the consumer price index for all urban consumers,CPI-U(all
items 1982-1984=100)on the ls`day of February 2012 and each five(5)years thereafter
in the same manner as ground lease rent is adjusted as set forth in Section 3.A. Said
additional rent shall be paid without notice,offset or deduction on or before the 10th day
of each month for all fuel delivered to the fuel farm during the prior calendar month.
Lessee shall submit with each payment of fuel flowage fee a report of all fuel delivered to
the fuel farm and calculation of the fuel flowage fee on forms to be approved by the
Director of Aviation. The fuel flowage report and payment 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(10)percent of the unpaid
fuel flowage fee. If the CPI-U is modified or no longer published, either the modified
CPI-U or another comparable index,whichever is applicable,shall be used to adjust both
the fuel flowage fee and ground lease rent.
C. Lessee shall pay combined service fee for services and facilities now furnished by the
Lessor at the Pueblo Memorial Airport,namely:public street maintenance,fire protection
and Street lighting based upon the amount established by Lessor which is currently
$295.00 per acre per year. The Lessor may, from time to time,reduce,alter,or eliminate
any or all of the services or facilities presently being furnished and may modify,increase,
or decrease the annual combined service fee therefore and the manner by which it is
calculated, including making separate charges,therefore,provided(1)such services and
fee shall be nondiscriminatory among other tenants and owners of land at Pueblo
Memorial Airport receiving such services and facilities then being furnished and(2)such
fee shall be reasonable in relation to the Lessor's actual cost and expense of furnishing
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the services and facilities then being furnished. The Lessor's cost may include the cost
of capital improvements amortized over the useful life of the improvements. Only
domestic wastewater shall be discharged from the leased premises to Lessor's sanitary
sewer system. Lessee shall be subject to the same restrictions, conditions, fees and
charges as other users of Lessor's sanitary sewer system.
D. For services and activities authorized to be performed within the Hangar on the leased
premises including aircraft charters pursuant to Section 4.I., Lessee shall pay as
additional rent one percent (1%) of the monthly gross revenues derived from all sales,
operations and services made, furnished or conducted on or from the leased premises
except revenues from Hangar rentals. Such additional rent shall be paid monthly without
notice, offset or deduction on or before the tenth (10`h) of the following month at the
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
additional rent. Additionally,only revenue from aircraft charters that load passengers at
the Pueblo Memorial Airport will be considered as revenues derived under the terms of
this paragraph. Lessee operates sales office and leases hangars outside of the Pueblo
Memorial Airport, therefore, revenues derived from sales, operations and services
conducted on those locations will not be included as revenue under the terms of this
paragraph.
E. All unpaid rent and other charges shall accrue interest at the rate of ten(10)percent per
annum.
4. Improvements and Use:
A. Lessee,at its sole cost and expense,shall cause to be constructed and installed upon the
leased premises the Hangar and other improvements in accordance with plans and
specifications approved by Lessor including architectural approval, which consent will
not be unreasonably withheld or arbitrarily delayed.The Hangar and other improvements
shall be constructed in a good and workmanlike manner in accordance with the
applicable laws, ordinances and building and environmental codes and pursuant to a
building permit issued by the Regional Building Department.Lessee shall diligently take
all action reasonably required and appropriate to (1) commence construction and
installation of the Hangar and other improvements within six (6) months from
commencement date,and(2)complete such construction and installation within nine(9)
months from commencement date. The fuel farm may be constructed at a later date
mutually agreed upon by Lessor and Lessee. If by reason of delays in obtaining
construction permits or approvals from the Federal Aviation Administration or other
governmental authorities after Lessee's diligent and good faith efforts to obtain such
permits or approvals, Lessee is prevented from commencement or completion of
construction within the time limits herein specified,such time limits shall be extended by
a period equal to such delays, but in no event longer than ninety(90)days.
B. In addition to constructing the Hangar and improvements,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 and the Lessee shall be responsible
for constructing and maintaining a concrete ramp area in front of the Hangar in
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accordance with plans and specifications approved by Lessor. This concrete ramp area
must be designed for a minimum weight bearing capacity of 12,500 pounds for single
wheel aircraft and must be built to the width of the Hangar door opening, less the area
required for the Hangar.Should development take place adjacent to the leased premises,
the Director of Aviation at his sole discretion may require Lessee to pave sections of the
leased premises to the full width of the leased premises.This concrete area must be built
so as to connect onto any adjacent ramp, taxiway, or other paved areas in order that a
continuous and safe pavement section results. It is the responsibility of the Lessee to
maintain the entire ramp area in a manner,which is safe and clean of debris so as not to
cause danger or unsafe conditions for taxiing aircraft and airport users.
C. The leased premises shall be used and occupied by Lessee or its subtenants as a Hangar
facility for the storage of aircraft, aircraft charters, and for such incidental purposes
directly related to such use including storage of aircraft equipment and office space.
Lessee shall have no right to utilize the leased premises, or any improvement thereon,
other than as specifically allowed under this subsection, and it is specifically understood
that the leased premises shall not be used for an aviation fixed base operation or for the
sale or dispensing of aviation fuel for aircraft other than aircraft owned or leased by
Lessee or its subtenants.
D. No aircraft service or maintenance shall be performed on the leased premises on any
aircraft not owned or leased by the Lessee or Sub-tenant of the Lessee, provided,
however, in no event shall Lessee or any Sub-tenant of Lessee conduct or operate an
aircraft service or maintenance business on the leased premises.
E. Lessee grants to the 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 Pueblo Memorial Airport, it being
understood that the Lessor will repair, in a good and workmanlike fashion, any and all
damage done to the leased premises as the result of work done hereunder.
F. Lessee shall maintain the leased premises in accordance with the requirements and
regulations of the Lessor and Lessor's fire code. The 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 or under the leased premises which is caused by the Lessee, its officers, agents,or
employees. It is understood that the Lessee is not responsible for any conditions,which
may be determined to have existed prior to the commencement date of this lease. The
storage and accumulation of aviation fuel, flammables, explosive liquids, or solids,
waste,debris or other hazardous materials within or on the leased premises shall be in an
environmentally sound manner and comply with all Federal, State and Local laws and
regulations.
G. Lessee will not modify,alter,paint or improve the completed Hangar except to the extent
required to maintain its original state. Any additional modification, painting or
improvements to the Hangar, fuel farm or leased premises must receive prior written
approval from the Lessor,which approval shall not be unreasonably or arbitrarily denied
or withheld.
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H. Lessee shall not park or leave or allow to be parked or left aircraft on the taxiways or on
pavement adjacent to the Hangar in a manner which interferes with or obstructs access to
adjacent hangars or public ramp area. Parking of automobiles will be permitted only in
paved designated parking areas or within the Hangar.
I. Notwithstanding the limitations set forth in subsections C and D above, with the prior
written approval of Lessor's Director of Aviation, the following activities may be
conducted within the Hangars located on the leased premises, provided that no such
activity will unreasonably interfere as determined by the Director of Aviation with the
use of taxiways and aprons or the activities of other tenants of land within the Airport:
aircraft sales and office, aircraft engine and overhaul shop, flight training, aircraft parts
sales, aircraft charter services, air photography, aircraft interior repair shop, aircraft
inspection, and aircraft general maintenance. Subject to the foregoing, the approval of
the Director of Aviation will not be arbitrarily or unreasonably withheld, delayed, or
denied.
5. Maintenance Obligations:
Lessee, at its expense, shall keep the leased premises 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 Hangars and fuel farm to be constructed or erected on the leased premises by Lessee shall be
deemed to be removable trade fixtures and title to same shall remain in the Lessee while this
lease is in effect. Upon termination of this lease,Lessee shall remove the Hangar and fuel farm
and restore the leased premises to their original condition.
7. Signs:
Lessee shall not erect,paint or maintain any signs whatsoever upon the leased premises without
first securing the written consent of the Lessor.Any such signs shall comply with all ordinances
and regulations of the Lessor or standards that might be developed by the Department of
Aviation. Only one identification sign, logo, or name may be permitted on the exterior of the
Hangar.
8. Right of Inspection:
The 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
the Lessor may deem necessary for the proper general conduct and operation of the Pueblo
Memorial Airport, and in the exercise of the Lessor's police power.
9. 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 or Lessee or Lessee's
property or operations on the leased premises.Lessee also covenants and agrees not to permit any
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mechanic's or material man's lien to be filed against the leased premises or any part or parcel
thereof by reason of any work or labor performed or materials furnished by any contractor,
subcontractor, mechanic or material man. Lessee further covenants and agrees to pay promptly
when due all bills, debts and obligations incurred by it in connection with its operations on the
leased premises, and not to permit the same to become delinquent and to suffer no lien,
mortgage,judgment or execution to be filed against the leased premises.
10. Indemnification:
Lessee assumes the risk of loss or damage to the leased premises and property thereon,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, successors or assigns in
connection with its use or occupancy or their use or occupancy of any portion of the Pueblo
Memorial Airport, including the leased premises. The provisions of this Paragraph 10and
Paragraph 4(F)shall survive the termination of this Lease Agreement.
11. 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 cost and expense,provide and keep in force
commercial liability insurance which includes personal injury, property damage and
products liability with a combined single limit not less than $1,000,000. Lessee shall
insure the Hangar, fuel farm and other improvements in an amount equal to their full
insurable value naming the Lessor as a loss payee. 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 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 policies shall provide that they may not be materially changed,altered,or canceled
by the insurer during its terms without first giving ten (10) days written notice by
certified or registered United States mail to the Lessor.
C. Lessee shall not violate the terms or prohibitions of any insurance policy herein required
to be furnished by Lessee.
D. If the Hangar, fuel farm or other improvements (the "Improvements") are damaged or
destroyed by fire or other casualty, Lessee shall within one hundred twenty(120) days
from the occurrence of such casualty either (1) repair and restore the damaged or
destroyed Improvements,(2)demolish the damaged or destroyed Improvements,restore
the leased premises to their original condition,and terminate this Lease,in which event
the net proceeds of the property damage insurance required to be provided by Lessee
pursuant to Section 11.A. shall be retained by Lessee, or (3) demolish the damaged or
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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 therefor 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 11.A. shall be
released by City and paid to Lessee for the purpose of Lessee repairing, restoring or
replacing improvements damaged or destroyed by such insured fire or other casualty.
12. 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 Agreement,such holding over shall be deemed merely a
tenancy for successive monthly terms upon the same conditions as provided in this Lease
Agreement subject to termination upon thirty(30) days prior written notice.
13. Inconveniences DurinE Construction:
Lessee recognizes that from time to time it will be necessary for the Lessor to initiate and carry
forward programs of construction,reconstruction,expansion,relocation,maintenance and repair
at and to the Pueblo Memorial Airport in order that the Pueblo Memorial 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 Pueblo Memorial 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 therefor,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 the Lessor, its officers, agents, employees, contractors, subcontractors and
representatives.
14. 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 Aviation at the Pueblo Memorial 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.
15. Assignments and Subletting:
A. Lessee shall not assign or transfer this Lease 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
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Lessor shall be void. No assignment, subletting or transfer of this Lease or the leased
premises shall release or discharge Lessee from its obligations under this Lease.
B. Lessee may sublet space in the Hangar to a Subtenant pursuant to a written sublease,
which shall contain among other provisions the following:
(1) The sublease shall be subject to and governed by the basic covenants and
provisions of this Hangar Ground Lease.Subtenant shall abide by all of the other
terms and conditions thereof applicable to the leased premises and use thereof.
The sublease may 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
with a combined single limit not less than $1,000,000. Such insurance
requirement may be complied with by Subtenant's coverage under Lessee's
Master liability insurance policy.
(3) An indemnification provision,substantially the same as set forth in paragraph 10
hereto.
(4) The sublease shall not become effective until an executed copy thereof is
delivered to the Lessor's Department of Aviation.
C. Lessor consents to Lessee assigning its leasehold estate created hereby(the"Leasehold
Estate")to a financial institution(the"Lender")as collateral security for the repayment
of a construction and/or permanent loan from Lender to Lessee for the sole and only
purpose of financing the original acquisition,construction and installation of the Hangar,
fuel farm and other improvements(the"Improvements") (the "Loan"). For purposes of
such Loan, Lessor further consents to Lessee mortgaging or otherwise encumbering its
right, title and interest in the Improvements as security for the Loan (the"Mortgage"),
provided, however, that at no time shall Lessor's interest and title in and to the leased
premises and Improvements, if any, be or become subordinate or subject to such Loan
and Mortgage. If Lessee so assigns its Leasehold Estate and mortgages or otherwise
encumbers its interest in the Improvements, the Lender or any subsequent holder of the
Loan may cause the Mortgage to be foreclosed in any lawful manner,or by instrument of
conveyance in lieu of foreclosure, acquire Lessee's title and interest in and to the
Leasehold Estate and Improvements subject to the terms, covenants and provisions of
this Lease.
Lessor hereby further agrees to recognize the leasehold mortgagee or any purchaser of the
mortgaged leasehold at foreclosure in the same manner as an"assignee"under this Lease.
Such assignee shall be bound by the terms of this lease,including,but not limited to,the
curing of any known defaults.Notwithstanding the foregoing,no mortgagee or trustee or
anyone that claims by, through or under a leasehold mortgage shall, by virtue thereof,
acquire any greater right in the leased premises and in any building or improvement
thereon than Lessee then had under this Lease, and provided further that any leasehold
mortgage and the indebtedness secured thereby shall at all time be and remain inferior
and subordinate to all of the conditions,covenants and obligations of this Lease and to all
of the rights of the Lessor hereunder. In no event shall Lessee, its heirs, successors,
-8-
mortgagee or assignees have the right to encumber,subordinate or render inferior in any
manner Lessor's fee simple title in and to the leased premises.
Any such Leasehold Mortgagee or assignee,at its option,at any time before the rights of
Lessee shall have been terminated,may pay any of the rents due hereunder or may do any
other act or thing or make any other payment required of the Lessee by the terms of this
Lease, or may do any act or thing which may be necessary and proper to be done in the
observance of the covenants and conditions of this Lease to prevent the termination of
this Lease so as to prevent a forfeiture of the rights of the Lessee hereunder as the same
would have been if done and performed by the Lessee instead of by such leasehold
mortgagee or assignee.
Provided Lessor has received written notice of a leasehold mortgage and copy of all
leasehold mortgage documents,during such time as Lessee's leasehold estate is subject
to a leasehold mortgage, this Lease may not be modified or voluntarily surrendered
without the prior written consent of the leasehold mortgagee;provided however,that this
Lease may be terminated without the consent of the leasehold mortgagee if a default or
other cause for termination under this lease occurs and is not corrected or satisfied in
accordance with the terms and conditions of the Lease.
16. Agreements with United States:
This Lease Agreement is subject and subordinate to the terms, reservations, restrictions,
provisions,and conditions of the deed of conveyance from the United States Government to the
Lessor and of any other existing or future agreement between the Lessor and the United States,
relative to the use,operation or maintenance of the Pueblo Memorial 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 extension,expansions,or development of said Airport
and facilities.
17. 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 rent and/or
combined service fees for a period of thirty (30) days after written notice and
demand therefor are given by Lessor to Lessee.
(2) Failure of Lessee to perform or comply with any obligation, covenant or
agreement of Lessee hereunder for a period of thirty(30)days after written notice
specifying such failure is given by Lessee to Lessor, except that if such
obligation,covenant or agreement is not capable of being performed within said
thirty (30) day period, Lessee shall not be in default if Lessee shall commence
such performance within said thirty(30)day period and thereafter prosecute the
same with diligence and continuity to completion.
B. In the case of a continuing event of default by Lessee, Lessor shall have the following
remedy in addition to all other rights and remedies provided by law or in equity,
including without limitation, damages and specific performance:
-9-
(1) Terminate this Lease by sixty (60) days prior written notice given to Lessee
specifying the date of termination and Lessee shall within said 60-day period
vacate the leased premises and surrender possession thereof to Lessor.
18. Notices:
All notices, required to be given to Lessor hereunder, shall be in writing and be sent by
certified mail to Pueblo Memorial Airport, Administration Office, 31201 Bryan Circle,
Pueblo,Colorado 81001. All notices required to be given to Lessee hereunder shall be in
writing and sent by certified mail, addressed to Sam Brown,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.
19. Law, Rules and Regulations:
A. Lessee, its officers, agents and employees shall faithfully observe and comply with all
applicable federal, state and local laws, regulations and ordinances now existing or
hereafter adopted relating to the use and occupancy of the Airport or leased premises
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
commencement date, the conflicting provision of this Lease shall control.
20. F.A.A. Lease Requirements:
A. The Lessor reserves the right, without any obligation on its part to do so, to develop,
modify,change,improve or abandon the Pueblo Memorial Airport or any part thereof,as
it may determine in its sole discretion, at any time, regardless of the desires or view of
Lessee, and without interference or hindrance from Lessee or liability to Lessee.
B. The 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 Agreement shall be subordinate to the provisions and requirements of any
existing or future agreement between the 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.
-10-
E. It is understood and agreed that nothing contained in this Lease Agreement 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,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 Pueblo Memorial
Airport.
G. Lessee by accepting this Lease Agreement 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 to a height not to exceed 25 feet
above ground level. In the event the aforesaid covenant is breached,the Lessor reserves
the right to enter upon the leased premises and to remove the offending structure or
object and 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 in any manner which might interfere
with the landing and taking off of aircraft at Pueblo Memorial Airport or otherwise
constitute a hazard to aviation. In the event the aforesaid covenant is breached, the
Lessor reserves the right to enter upon the leased premises 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 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, in which event, Lessor shall only be entitled to
compensation for damages to Hangar and other improvements of the Lessee destroyed or
damaged thereby, but not to damages for loss of use of the leased premises.
K. All services to the public shall be furnished by Lessee on a fair, equal, and not unjustly
discriminatory basis to all users thereof;and Lessee shall charge fair,reasonable,and not
unjustly discriminatory prices for each unit of services, provided, that Lessee may be
allowed to make reasonable and nondiscriminatory discounts, rebates, or other similar
types of price reductions to volume purchasers.
21. 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, subtenants and approved assigns.
-11-
B. No waiver by the 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 the 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 AAS IS@ 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 Pueblo Memorial Airport.
Lessor shall be under no obligation to maintain the Pueblo Memorial Airport or any part
thereof in a particular location or condition. If the Pueblo Memorial Airport shall
permanently close or relocate, the use restrictions stated in paragraph 4.C. 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. The Hangar Ground Lease dated March 24, 2003 between Lessor and Lessee is hereby
terminated and cancelled and Lessor and Lessee are released and discharged from all
obligations thereunder.
IN WITNESS WHEREOF,the parties hereto have caused this instrument to be executed as of the day
and year first above written.
LESSOR: LESSEE:
CITY OF PUEBLO
A Municipal C Drab
By - Sam Brown
Bill Soya
Title: President of City Council TRAVELAIRE SER ,ACES, INC.
Attest: -- ;
By r
Rocky DA •, - •
City Cl
Approved as to form:
44,4, !-=-
City Attorney I
-12-
EXHIBIT "A"
LEASE PARCEL
AUGUST 7, 2003
A parcel of land located within the Section 25, Township 20 South, Range 64 West of the
6th Principal Meridian, County of Pueblo, State of Colorado, being more particularly
described as follows.
Beginning at a point within said Section 25, from which a point known as Station 26+50,
Right 1510' of Runway 8L/26R, Pueblo Memorial Airport, bears N 00° 56' 09" E, a
distance of 538.87 feet, said point being on the Westerly edge of Taxiway Al; thence,
S 01°43' 24" E, along said Taxiway Al, a distance of 265.00 feet; thence,
S 88° 16' 36" W, departing said Taxiway Al, a distance of 155.00 feet; thence,
N 01° 43' 24" W, a distance of 265.00 feet; thence,
N 88° 16' 36"E, a distance of 155.00 feet,to the Point of Beginning of this description.
Said Parcel contains 41,075.00 square feet, 0.94 acres, more or less.
Bearings are based upon the centerline of Taxiway Al, Pueblo Memorial Airport, which
is assumed to bear N 01°43' 24" W.
EXHIBIT B
SECTION 25, T2O S., R,64 W., 6TH P.M.
PUEBLO COUNTY, COLORADO
Sto 26+50 Rt. 1510'
(7—R/VI 61./26R
NO SCALE
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P.O.B. se.u600 70471
NEW SAM BROWN LEASE PARCEL Rte AMR
N6696'S61 —-----p-------- --.-_----
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86'16'38
155.00
DRAWN BY: LML CHECKED BY: RM
SCALE: NONE
LOCATION:
PUEBLO COUNTY, COLO. DATE: 8-06-'03
JOB NUMBER SHEET 2
ABEL ENGINEERING PROFESSIONALS. INC.
DESCRIPTION:NEW SAM BROWN 102 S. ONUDA ST. PUEBLO. CO. 81003
LEASE PARCEL PN. (719) 546-2235 /�
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