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Home My WebLink About10290ORDINANCE NO. 10290 AN ORDINANCE APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE AMENDMENT NO. 2 TO A HANGAR LEASE BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND LOCKHEED MARTIN CORPORATION, A MARYLAND CORPORATION, RELATING TO LAND AND A HANGAR BUILDING LOCATED AT THE PUEBLO MEMORIAL AIRPORT BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Amendment No. 2 to Hangar Lease (“Amendment No. 2”) between the City of Pueblo, a Colorado municipal corporation and Lockheed Martin Corporation, a Maryland corporation (“Company”) dated September 26, 2022, 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 Mayor is authorized to execute and deliver the Amendment No. 2 in the name of the City and the City Clerk is authorized to 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 this Ordinance and the attached Amendment No. 2 which are necessary or appropriate to implement the transactions described therein. 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 September 12, 2022 . Final adoption of Ordinance by City Council on September 26, 2022 . President of City Council Action by the Mayor: ☒ Approved on September 28, 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-20 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: September 12, 2022 TO: President Heather Graham and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Marisa Stoller, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: AN ORDINANCE APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE AMENDMENT NO. 2 TO A HANGAR LEASE BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND LOCKHEED MARTIN CORPORATION, A MARYLAND CORPORATION, RELATING TO LAND AND A HANGAR BUILDING LOCATED AT THE PUEBLO MEMORIAL AIRPORT SUMMARY: Attached is an Ordinance approving and authorizing the Mayor to sign Amendment No. 2 to a hangar lease between the City and Lockheed Martin Corporation, a Maryland corporation (“Company”) pertaining to land and a hangar building located at the Pueblo Memorial Airport. PREVIOUS COUNCIL ACTION: On July 24, 2017, by Resolution No. 13734, City Council approved the original two year hangar lease between the City and Company. On August 24, 2020, by Ordinance No. 9772, City Council approved an amendment to the original lease agreement (“Amendment No. 1”) which:  Extended term of the lease by two years, with the Company having the option to renew the lease for an additional two terms of one year each.  Company agreed to pay landing fees and further agreed to reimburse the City for snow removal.  Company agreed to lease the hangar and the property on a “triple net” basis with the Company paying all applicable taxes, insurance and utilities. In addition, the Company agreed to pay the City of Pueblo’s combined service fee.  The City agreed to install certain electrical upgrades to the hangar building, in an amount not to exceed Thirty-two Thousand Dollars ($32,000.00) in accordance with specifications agreed to by the parties. BACKGROUND: The City and the Company have negotiated a second extension to the hangar lease containing the following terms and conditions: 1. The lease is extended for an additional two (2) years through July 23, 2024. 2. Company shall pay rent to the City as follows: Dates Amount of Rent per Month 07/24/22 to 07/23/23 $6,500.00 07/24/23 to 07/23/24 $7,000.00 3. The City has agreed to install a new concrete floor in the front office area of the building at a cost not to exceed $70,000. FINANCIAL IMPLICATIONS: As set forth above. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: City Council has the option of not extending the lease or not agreeing to install a new concrete floor in the front office area of the hangar. RECOMMENDATION: The Pueblo Economic Development Corporation recommends approval of this Ordinance. Attachments: Proposed Ordinance Proposed amendment to hangar lease AMENDMENT NO. 2 TO LEASE THIS AMENDMENT NO. 2 TO LEASE ("Amendment No. 2") is entered into this 26th day of September, 2022 between the City of Pueblo, a Colorado municipal corporation ( Lessor") and Lockheed Martin Corporation, a Maryland corporation ("Lessee"). Lessor and Lessee may be individually referred to herein as "Party" or collectively referred to as "Parties." WHEREAS, Lessor and Lessee entered into an original Lease (as amended as set forth below, collectively, the "Lease")dated July 24, 2017 through which Lessor leases approximately 22,500 rentable square feet (the "Leased Premises") located 32501 Walt Bassett Ave., Pueblo, CO 81001 ("Building") and WHEREAS, Lessor and Lessee entered into that certain Lease Commencement Agreement dated September 11, 2017 in which the parties confirmed certain dates related to the Lease Term and corrected the address of the Building; WHEREAS, Lessor and Lessee entered into an Amendment to the Lease dated August 24, 2020 ("Amendment No. 1") in which the Lessor agreed to install certain electrical upgrades to the Leased Premises and Lessor and Lessee agreed to extend the Lease term; and WHEREAS, Lessee has requested that Lessor install a new concrete floor in the front office area of the Building and Lessor has agreed to do so and the Parties desire to expand the Leased Premises and extend the Lease term. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Lessor and Lessee agree as follows: 1. Leased Premises. Section 1.03 of the Lease, as amended by Section 1 of Amendment No. 1 is rescinded and replaced and restated as follows: 1.03 Prior to December 31, 2022, Lessor shall install a new concrete floor in the 3,600 square foot front office area of the Building ("Expansion Space") as shown on Exhibit A attached hereto, at Lessor's sole cost and expense, in an amount not to exceed Seventy Thousand Dollars ($70,000.00). The new concrete slab in the Expansion Space shall be similar in nature to that of the existing concrete slab of the hangar. The Lessee recognizes the new concrete slab is separated by a foundation grade beam at a higher elevation than the new and existing concrete pads. Upon completion of such concrete floor installation and delivery of the Expansion Space to Lessee ("Expansion Space Commencement Date"), the Leased Premises shall be expanded to include both the original 22,500 square foot Leased Premises and the Expansion Space, for a total Leased Premises of 26,100 square feet. Beginning on the Expansion Space Commencement Date and continuing throughout the Lease term, "Leased Premises" shall mean the entire 26,100 square foot Leased Premises for all purposes therein. Promptly following the Expansion Space Commencement Date, Lessor shall prepare a commencement certificate to be executed by Lessor and Lessee; such commencement certificate shall confirm the Expansion Space Commencement Date and the date on which Lessee has the ability to store items on the cured concrete slab in the Expansion Space. 2. Term. Section 2.01 of the Lease, as amended by Section 2 of Amendment No. 1 is rescinded and replaced and restated as follows: 2.01 The term of this Lease is from July 24, 2022 ("Commencement Date") through July 23, 2024. 3. Rent. Section 3.01 of the Lease, as amended by Section 4 of Amendment No. 1 is rescinded and replaced and restated as follows: 3.01 Lessee shall pay to Lessor monthly rent ("Base Rent") in advance, without notice or demand, beginning on the Commencement Date and on the 1st day of each month thereafter during the entire term, as follows: Dates Amount of Base Rent per Month 107/24/22 to Expansion Space Commencement Date $5,603.45 Expansion Space Commencement Date to 07/23/23 $6,500.00 07/24/23 to 07/23/24 $7,000.00 Base Rent for any partial months shall be pro-rated based on the number of days in such month. 4. Renewal Option. Lessee shall have the option to extend the term of the Lease for one (1) period of two (2) years ("Option Term") by providing written notice thereof to Lessor no later than ninety (90) days prior to the expiration of the Lease term. The Option Term shall be under the same terms and conditions as the Lease, except that the Base Rent payable during the Option Term shall be as follows: Dates I Amount of Base Rent ser Month 07/24/24 to 07/23/25 $7,500.00 07/24/25 to 07/23/26 $8,000.00 5. Lessee's Notice Address. Notwithstanding anything in the Lease to the contrary, Lessee's address for notices is hereby amended to the following: 1111 Lockheed Martin Way Mail Stop BB-15S/157-2E7 Sunnyvale, CA 94088 Attn: Facilities Manager With a copy of all invoices and legal notices to: LMC Properties, Inc. 100 South Charles Street Suite 1400 Baltimore, MD 21201 Attn: Lease Administration 6. Ratification of Prior Lease. The Lease between the Parties, which is incorporated herein by this reference, shall remain in full force and effect, except as amended by this Amendment No. 2. [Signature Page Follows] 3 Executed at Pueblo, Colorado, the day and year first above written. LESSOR: CITY OF PUEBLO A Colorado Municipal Corporation [Seal] By: E,.deia'' Attest: r_ 1. 5k7C;---1 Nicholas A. Gra Isar City CI Mayor LESSEE: LOCKHEED MARTIN CORPORATION A Maryland corporation By: LMC Properties, Inc., Attorney in Fact under Irrevocable Power of Attorney effective June 9, 2022 By F�" 8-18-2022 Name: Jed Prossner Title: Real Estate Manager 4 EXHIBIT A (nrte' a, -u, D M // //O CA N � o � o O 0 co Xcn cri Fri _ CD O frl G7 Cr O OD .„ 5