HomeMy WebLinkAbout11224Docusign Envelope ID: 1 F40EDAF-41 C1-8E07-8044-4490C1 CE3C5F
ORDINANCE NO. 11224
AN ORDINANCE APPROVING A HANGAR GROUND LEASE
AGREEMENT BETWEEN THE CITY OF PUEBLO, A
COLORADO HOME RULE MUNICIPAL CORPORATION, AND
PEARSON PROPERTIES, LLC, A COLORADO LIMITED
LIABILITY COMPANY, FOR PROPERTY LOCATED AT 351
SKYWAY STREET AT PUEBLO MEMORIAL AIRPORT, AND
SUPERSEDING THE PRIOR HANGAR GROUND LEASE
APPROVED BY RESOLUTION NO. 9828
WHEREAS, the City of Pueblo, Colorado, a home rule municipal corporation organized
and existing under Article XX of the Colorado Constitution and the Charter of the City of Pueblo,
owns and operates Pueblo Memorial Airport; and
WHEREAS, under Section 3-9 of the Charter, the Council may enter into contracts and
leases on behalf of the Municipal Government by ordinance only, and all written contracts to
which the Municipal Government is a party shall be approved as to form by the City Attorney;
and
WHEREAS, under Section 1-11-3(b)(2) of the Pueblo Municipal Code, the City Council
has the power, by ordinance, to lease any real property owned by the City; and
WHEREAS, on April 14, 2003, by Resolution No. 9828, the City Council approved a
Hangar Ground Lease between the City and Archer Aero, LLC for the ground parcel commonly
known as 351 Skyway Street at Pueblo Memorial Airport, containing approximately 14,375
square feet (the "Prior Lease"); andthe Prior Lease was thereafter assigned to Robert S.
Hamilton, consented to by Resolution No. 10259, amended by Amendment No. 1 (Resolution
No. 10354), and assigned to Pearson Properties, LLC, a Colorado limited liability company, by
an Assignment of Hangar Ground Lease dated August 16, 2021; and
WHEREAS, the Prior Lease was thereafter assigned to Robert S. Hamilton, consented
to by Resolution No. 10259, amended by Amendment No. 1 (Resolution No. 10354), and
assigned to Pearson Properties, LLC, a Colorado limited liability company, by an Assignment of
Hangar Ground Lease dated August 16, 2021; and
WHEREAS, the Prior Lease has expired by its terms, the hangar and improvements on
the ground parcel are owned by Pearson Properties, LLC, and the City and Pearson Properties,
LLC desire to enter into a new Hangar Ground Lease Agreement, attached to this Ordinance, to
govern the continued occupancy of the ground parcel on the terms set forth therein,
superseding the Prior Lease; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Hangar Ground Lease Agreement ("Lease") between the City of Pueblo, a home rule
municipal corporation, and Pearson Properties, LLC, a Colorado limited liability company, dated
as of the date of execution, a copy of which is attached hereto, having been approved as to
form by the City Attorney, is hereby approved. The Lease supersedes the prior Hangar Ground
Lease between the City and Archer Aero, LLC dated April 14, 2003, approved by Resolution No.
9828, as assigned and amended.
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SECTION 2.
The Mayor is authorized to execute the Lease in the name of the City, 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 authorized to perform any and all acts consistent with the
intent of this Ordinance and the attached Lease to effectuate the policies and procedures
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 June 22, 2026.
Final adoption of Ordinance by City Council on July 13, 2026. Signedby: Docu
auff
President of City Council
Action by the Mayor:
[)� Approved on
❑ Disapproved on
07/15/2026
based on the following objections:
Mayor
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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 Sqgoed by:
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Deputy City Clerk
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City Clerk's Office Item # S14
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Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: July 13, 2026
TO: President Mark Aliff and Members of City Council
CC: Mayor Heather Graham
VIA: Clyde Bishop, City Clerk
FROM: Greg Pedroza, Director Aviation
SUBJECT: AN ORDINANCE APPROVING A HANGAR GROUND LEASE
AGREEMENT BETWEEN THE CITY OF PUEBLO, A COLORADO
HOME RULE MUNICIPAL CORPORATION, AND PEARSON
PROPERTIES, LLC, A COLORADO LIMITED LIABILITY COMPANY,
FOR PROPERTY LOCATED AT 351 SKYWAY STREET AT PUEBLO
MEMORIAL AIRPORT, AND SUPERSEDING THE PRIOR HANGAR
GROUND LEASE APPROVED BY RESOLUTION NO. 9828
RIIMMORY•
Attached is an Ordinance approving a new Hangar Ground Lease Agreement between
the City of Pueblo and Pearson Properties, LLC for the ground parcel commonly known
as 351 Skyway Street at Pueblo Memorial Airport, consisting of approximately 14,375
square feet. The new Lease supersedes the prior Hangar Ground Lease dated April 14,
2003, which expired by its terms on April 14, 2023. Pearson Properties, LLC owns the
hangar improvements situated on the ground parcel and will continue to occupy the
ground parcel for aeronautical purposes under the new Lease.
The new Lease provides a ten (10) year initial term with one ten (10) year renewal term
exercisable at the City's option, ground rent reset to fair market value determined by
independent appraisal with subsequent appraisal resets every five (5) years, a two
percent (2%) commission on the Lessee's gross revenues from sales, operations,
subletting, and services, a change of control provision treating any transfer of more than
fifty percent (50%) of the Lessee's membership interests as a deemed assignment
requiring City consent, and a requirement that the Lessee remove the hangar and
restore the ground parcel to its original condition at the end of the term, with the City
retaining the option to waive removal or restoration in whole or in part.
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PREVIOUS COUNCIL ACTION:
On April 14, 2003, City Council approved Resolution No. 9828 authorizing the original
Hangar Ground Lease between the City and Archer Aero, LLC for the same ground
parcel.
On November 8, 2004, City Council approved Resolution No. 10259 consenting to the
assignment of the Hangar Ground Lease from Archer Aero, LLC to Robert S. Hamilton.
On March 28, 2005, City Council approved Resolution No. 10354 authorizing
Amendment No. 1 to the Hangar Ground Lease, which amended the legal description of
the leased premises.
On August 16, 2021, the City consented to the assignment of the Hangar Ground Lease
from Robert S. Hamilton to Pearson Properties, LLC by an Assignment of Hangar
Ground Lease executed by Mayor Nicholas A. Gradisar on behalf of the City. The
Assignment also modified the use and commission provisions of the Lease.
BACKGROUND:
The City owns and operates Pueblo Memorial Airport. In 2003, the City entered into a
twenty (20) year Hangar Ground Lease with Archer Aero, LLC for an approximately
14,375 square foot ground parcel located at 351 Skyway Street, on which the Lessee
constructed a hangar. The Lease, as amended in 2005, provided that the hangar would
remain the property of the Lessee as a removable trade fixture during the term, with two
(2) consecutive ten (10) year renewal options exercisable at the Lessee's option.
The Lease was assigned to Robert S. Hamilton in 2004 and to Pearson Properties, LLC
in 2021. The original twenty (20) year term expired on April 14, 2023, and no renewal
option was exercised. Since that date, Pearson Properties, LLC has continued to
occupy the ground parcel under the holdover provisions of the Lease while the City and
the Lessee negotiated a new instrument.
The attached Hangar Ground Lease Agreement supersedes the prior Lease and
refreshes the terms under which the Lessee occupies the ground parcel. The principal
terms include: (a) a ten (10) year initial term with one ten (10) year renewal exercisable
at the City's option; (b) ground rent reset to fair market rental value determined by
independent appraisal, with subsequent appraisal resets every five (5) years and annual
CPI-U adjustments between resets; (c) a two percent (2%) commission on the Lessee's
monthly gross revenues from sales, operations, subletting, and services, carrying
forward the commission provision established by the 2021 Assignment; (d) a change of
control provision under which any transfer of more than fifty percent (50%) of the
Lessee's membership interests is a deemed assignment requiring the City's prior written
consent; (e) preservation of the Lessee's right to obtain leasehold financing, subject to
the City's notice and cure rights; and (f) at the end of the term, the Lessee removes the
hangar and restores the ground parcel to its original condition, with the City retaining the
sole option to waive removal or restoration in whole or in part.
The new Lease aligns the City's ground lease practices at the Airport with current
standards. It is intended to serve as the template form for similar ground leases at
Pueblo Memorial Airport for hangars owned by private parties on City ground.
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FINANCIAL IMPLICATIONS:
The initial annual ground rent under the new Lease will be the fair market rental value of
the ground parcel as established by an independent appraisal commissioned by the City
and accepted by City Council. The initial rent rate will be $5,031.25 annually. The rent
will be reset to current fair market value at each five (5) year anniversary of the
Commencement Date and at any Renewal Term, with annual CPI-U adjustments
between resets, and in no event shall a reset reduce the rent below the then current
annual ground rent.
In addition to ground rent, the Lessee will pay as additional rent two percent (2%) of
monthly gross revenues from sales, operations, subletting, and services on or from the
leased premises, paid monthly on or before the tenth (10th) day of the following month.
Late charges of One Hundred Dollars ($100.00) and interest at eight percent (8%) per
annum accrue on any delinquent payment. All rent, fees, and charges paid under the
Lease will be remitted to the City as Airport revenue.
The new Lease contains a non -appropriation clause consistent with the Taxpayer's Bill
of Rights, Article X, Section 20 of the Colorado Constitution.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Ordinance.
STAKEHOLDER PROCESS:
Not applicable to this Ordinance
ALTERNATIVES:
If this Ordinance is not approved, the Hangar Ground Lease Agreement will not be
executed and Pearson Properties, LLC will continue to occupy the ground parcel under
the holdover terms of the expired prior Lease, terminable by either party on thirty (30)
days' written notice, or the City may direct the Lessee to remove the hangar and restore
the ground parcel to its original condition under the prior Lease.
RECOMMENDATION:
Approval of the Ordinance.
ATTACHMENTS:
1.
351 Skyway 2026 07 13 LEASE FINAL READY TO SIGN
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LESSOR:
City of Pueblo, Colorado, a home rule municipal corporation
LESSEE:
Pearson Properties, LLC, a Colorado limited liability company
ADDRESS:
118 E 29th St. Ste. H, Loveland, CO 80538
PREMISES:
351 Skyway Street, Pueblo, Colorado 81001 (ground parcel of
approximately 14,375 square feet)
COMMENCEMENT:
July 13, 2026
RECITALS
WHEREAS, the City of Pueblo, Colorado ("City" or "Lessor") is a home rule municipal corporation
organized and existing under Article XX of the Colorado Constitution and the City Charter of the
City of Pueblo ("Charter"), and owns and operates Pueblo Memorial Airport, a public -use airport
located in Pueblo County, Colorado, designated by the Federal Aviation Administration ("FAA")
as KPUB ("Airport"); and
WHEREAS, the City has received federal Airport Improvement Program ("AIP") grants from the
FAA and has executed FAA Airport Sponsor Assurances that impose continuing obligations on
the City as airport sponsor; and
WHEREAS, the Airport is subject to the rules, regulations, and procedures promulgated by the
Airport Manager (Director of Aviation) pursuant to Pueblo Municipal Code § 3-1-2(b), and all
Airport users are governed thereby; and
WHEREAS, the City affords aircraft owners the opportunity to lease Airport land for the
construction or continued ownership of hangar improvements under a long-term ground lease;
and
WHEREAS, the City and Archer Aero, LLC entered into a Hangar Ground Lease dated April 14,
2003, approved by Resolution No. 9828, for the ground parcel commonly known as 351 Skyway
Street (the "Prior Lease"); the Prior Lease was assigned to Robert S. Hamilton (consented to by
Resolution No. 10259), amended by Amendment No. 1 (Resolution No. 10354), and thereafter
assigned to Lessee, Pearson Properties, LLC, by an Assignment of Hangar Ground Lease dated
August 16, 2021; and
WHEREAS, the Prior Lease has expired by its terms, the hangar and improvements on the ground
parcel are owned by Lessee, and the City and Lessee desire to enter into this new Hangar Ground
Lease Agreement to govern Lessee's continued occupancy of the ground parcel on the terms set
forth herein, superseding the Prior Lease as provided in Section 23.8; and
WHEREAS, Lessee owns the hangar and improvements situated on the ground parcel and
desires to lease the underlying ground from the City for aeronautical purposes; and
WHEREAS, the City Council of the City of Pueblo has, by ordinance and consistent with Charter
§ 3-9, approved this Lease and authorized the Mayor to execute it on behalf of the City;
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NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein,
the parties agree as follows:
ARTICLE 1 — LEASED PREMISES
Section 1.1 Leased Premises.
The City hereby leases to Lessee, and Lessee hereby leases from the City, the ground parcel
described and depicted on Exhibit A, attached hereto and incorporated herein by reference (the
"Leased Premises"), located at Pueblo Memorial Airport, Pueblo, Colorado, consisting of
approximately 14,375 square feet of land, together with the non-exclusive right of ingress and
egress over Airport roads, taxiways, and taxilanes as designated by the Director of Aviation. The
term "Leased Premises" means the ground parcel only. Title to the ground at all times remains in
the City; the hangar and other improvements located on the ground parcel are owned by Lessee
during the term of this Lease as provided in Section 1.2.
Section 1.2 Ownership of Improvements During Term.
The hangar and other improvements constructed on the Leased Premises by Lessee or Lessee's
predecessors in interest (collectively, the "Improvements") are owned by Lessee during the term
of this Lease and shall be treated as Lessee's removable trade fixtures, which Lessee shall
remove at the end of the term as provided in Article 19. This Lease conveys no fee interest in the
ground to Lessee, and no Improvement shall be construed to convey any fee interest in the
ground. Lessee's ownership of the Improvements is at all times subordinate to the City's fee title
in the ground and to the City's rights under this Lease.
Section 1.3 Acceptance — AS -IS.
Lessee accepts the Leased Premises and the existing Improvements in their "AS -IS, WHERE -IS"
condition as of the Commencement Date, with all faults. The City makes no representation or
warranty regarding the condition, fitness, or suitability of the Leased Premises or the
Improvements for any particular purpose, except as expressly set forth in Article 7
(Environmental) with respect to the City's baseline disclosure obligation.
ARTICLE 2 — TERM AND RENEWAL
Section 2.1 Initial Term.
This Lease shall commence on July 13, 2026, ("Commencement Date") and shall terminate ten
(10) years thereafter on June 30, 2036 ("Initial Term"), unless sooner terminated pursuant to this
Lease.
Section 2.2 Renewal Option — City's Option.
The City, at its sole option, may renew this Lease for one (1) additional term of ten (10) years
("Renewal Term") on the same terms and conditions as this Lease except as to rent, which shall
be reset as provided in Section 3.1. The City may exercise the Renewal Term option only if Lessee
is not then in default and has not been in repeated or uncured default during the Initial Term. The
City shall give Lessee written notice of its election to renew not later than one hundred eighty
(180) days before expiration of the Initial Term. If the City does not exercise the option, this Lease
shall terminate at the end of the Initial Term and Article 19 (Surrender, Removal, and Restoration)
shall govern.
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Section 2.3 Holdover.
If Lessee remains in possession after expiration of this Lease without the City's written consent
to a renewal or extension, such holding over shall create a tenancy from month to month only,
terminable by either party upon thirty (30) days' written notice, upon the same terms as this Lease
except that rent during any holdover period shall be one hundred twenty-five percent (125%) of
the most recent annual rent, prorated monthly. Holdover shall not be deemed a renewal or
extension and shall not affect the City's right to terminate for any default existing at expiration or
to enforce its rights under Article 19.
ARTICLE 3 — RENT, FEES, AND CHARGES
Section 3.1 Ground Rent.
Lessee shall pay to the City annual ground rent for the Leased Premises. The initial annual ground
rent shall be the fair market rental value of the ground parcel as established by an independent
appraisal commissioned by the City and accepted by City Council, expressed on a per -square -
foot basis and multiplied by the square footage of the Leased Premises set forth in Exhibit A. As
of the Commencement Date, the initial annual ground rent is:
Per -Square -Foot Annual Rate: $0.35 per sq. ft. X Leased Premises: 14,375 sq. ft. = Annual
Ground Rent: $5,031.25.
Upon any Renewal Term, and at each five (5) year anniversary of the Commencement Date, the
ground rent shall be reset to then -current fair market rental value as determined by a new
independent appraisal commissioned by the City, applied uniformly to comparable ground leases
at the Airport. In no event shall a reset reduce the rent below the then -current annual ground rent.
This appraisal -based reset mechanism is the template standard for all ground leases at the
Airport.
Section 3.2 Annual Prepayment.
Annual ground rent shall be paid in advance, without notice, offset, or deduction. The first annual
payment is due on or before the Commencement Date; each subsequent annual payment is due
on or before the first (1st) day of the anniversary month of the Commencement Date. Rent shall
be prorated only for a partial first lease year on the basis of a thirty (30) day month.
Section 3.3 Annual CPI-U Adjustment.
Between appraisal resets, the annual ground rent shall be adjusted on each anniversary of the
Commencement Date by the percentage change in the Consumer Price Index for All Urban
Consumers (CPI-U) for the twelve-month period ending in the prior calendar year. No annual
adjustment shall reduce the rent below the then -current annual ground rent. If the CPI-U is
discontinued or substantially altered, the City shall substitute a comparable index published by
the U.S. Bureau of Labor Statistics.
Section 3.4 Additional Rent — Commission on Gross Revenues.
For any services and activities authorized to be conducted on the Leased Premises, and for any
subletting of all or any portion of the Leased Premises, Lessee shall pay as additional rent two
percent (2%) of the monthly gross revenues derived from all sales, operations, subletting, and
services made, furnished, or conducted on or from the Leased Premises. Such additional rent
shall be paid monthly, without notice, offset, or deduction, on or before the tenth (10th) day of the
following month, at the office of the Director of Aviation, accompanied by such reporting forms as
the Director of Aviation shall determine. The City shall have the right to examine and audit the
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books and records of Lessee and its subtenants to determine the accuracy of the additional rent.
This Section carries forward, and states in full, the commission obligation established by Section
5 of the August 16, 2021 Assignment of Hangar Ground Lease; the two percent (2%) rate and the
scope (sales, operations, subletting, and services) are both intended to continue under this Lease
without diminution.
Section 3.5 Late Charge and Interest.
Any rent, fee, or other charge due under this Lease that is not received by the City on or before
the tenth (10th) day of the month in which it is due is delinquent. Each delinquent payment shall
incur a late charge of One Hundred Dollars ($100.00) and shall accrue interest at the rate of eight
percent (8%) per annum from the due date until paid in full. Late charges and interest are
additional rent.
Section 3.6 Place of Payment.
All payments shall be made payable to the City of Pueblo and delivered to: City of Pueblo, Director
of Aviation, Pueblo Memorial Airport, 31201 Bryan Circle, Suite 200, Pueblo, Colorado 81001, or
such other place as the City may designate in writing.
Section 3.7 Airport Revenue.
All rent, fees, late charges, interest, and other payments made by Lessee under this Lease shall
be paid to the City as Airport revenue.
Section 3.8 Taxes and Assessments.
Lessee shall pay promptly all taxes, assessments, and governmental charges of any nature
assessed against the Leased Premises, the Improvements, Lessee's possessory interest, or
Lessee's operations. Lessee shall not permit any tax lien to attach to the Leased Premises and
shall confirm the tax status of its possessory interest with the Pueblo County Assessor. Failure to
timely pay any such tax shall constitute a default under this Lease.
Section 3.9 Pay Now, Dispute Later.
Lessee shall pay all rent, fees, and charges free of any set-off or claim, in the amount and at the
times specified in this Lease. If Lessee desires to contest the validity or amount of any charge,
Lessee shall first pay the charge and may then dispute it as provided herein.
ARTICLE 4 — USE OF LEASED PREMISES
Section 4.1 Primary Aeronautical Purpose.
The Leased Premises and the Improvements shall be used primarily for aeronautical purposes,
including: (a) storage of airworthy or actively maintained aircraft; (b) shelter for maintenance,
repair, or refurbishment of aircraft, but not the indefinite storage of non -operational aircraft; (c)
Non-commercial construction of amateur -built or kit -built aircraft, with the prior written consent of
the Director of Aviation and submission of a written construction plan with periodic progress
updates as required by the Director; (d) storage of aircraft handling equipment and materials used
to service aircraft; and (e) storage of materials directly related to an aeronautical activity
conducted at the Airport.
Section 4.2 Incidental Non -Aeronautical Storage.
Provided the Improvements are used primarily for an aeronautical purpose, Lessee may store
non -aeronautical items without separate FAA approval only if such items do not: (a) displace the
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aeronautical contents; (b) impede access to aircraft or aeronautical contents; (c) constitute
inventory or equipment used in a non -aeronautical business; (d) violate applicable building codes,
Airport Rules and Regulations, or this Lease; or (e) include fuel (other than fuel in an aircraft's
integral tanks), explosives, or Hazardous Materials not authorized under Article 7.
Section 4.3 Non -Aeronautical Use Requiring FAA Approval.
Any use beyond incidental non -aeronautical storage requires, in addition to the City's prior written
consent: (a) prior written approval from the FAA Office of Airports (Denver Airports District Office);
(b) payment of fair market value rent for any non -aeronautical use period, as determined by the
City; and (c) confirmation that the proposed use is consistent with the Airport's then -current FAA -
approved Airport Layout Plan ("ALP").
Section 4.4 Prohibited Uses.
The following are prohibited at all times and shall be an Event of Default under Section 18.1: (a)
use as a residence or for overnight accommodation beyond one night of aircraft crew rest; (b)
commercial aeronautical services (flight instruction, charter, sales, or maintenance for hire)
without a separate Airport Commercial Activity Permit and compliance with Airport Minimum
Standards; (c) non -aeronautical business operations, including storage of inventory or equipment
supporting such operations; (d) storage of household items that could be stored in a commercial
storage facility; (e) storage of fuel in any container other than an aircraft's integral fuel tanks; (f)
storage of explosives or Hazardous Materials not authorized under Article 7; (g) operation of any
aircraft engine inside the hangar; (h) fueling or defueling of aircraft inside the hangar; and (i) any
use that creates electromagnetic or electronic interference with navigational signals or radio
communications, impairs pilot visibility of the airfield, or otherwise endangers aircraft operations.
Section 4.5 Commercial Activities.
Lessee shall not conduct commercial aeronautical activity within the Leased Premises or the
Improvements unless separately licensed by the Director of Aviation in compliance with the
Airport's Minimum Standards and Airport Rules and Regulations; any unauthorized commercial
use shall be an Event of Default. Lessee may allow a certificated mechanic to perform preventive
and owner -performed maintenance on Lessee's own aircraft consistent with 14 C.F.R. Part 43.
Any mechanic not employed by Lessee and not leasing space at the Airport who performs work
for compensation shall first register with the Director of Aviation and provide proof of insurance.
Consistent with Pueblo Municipal Code § 3-1-12, Lessee shall disclose in writing any financial
interest in another Airport commercial operation within thirty (30) days of acquiring such interest.
Section 4.6 Operational Aircraft Requirement.
Lessee shall keep an active, operational aircraft based at the Leased Premises. "Active and
operational aircraft" means an aircraft that is currently licensed, airworthy, and flyable, with a
current FAA airworthiness certificate, flown to and from the Airport periodically during the year.
All aircraft based at the Leased Premises shall comply with the noise standards of 14 C.F.R. Part
36, as amended. If the based aircraft is sold or removed, Lessee shall notify the Director of
Aviation in writing within five (5) business days and base a replacement within ninety (90) days,
subject to one (1) additional ninety (90) day extension for good cause.
Section 4.7 Signs.
No signs or advertising visible from outside the Improvements may be erected without the City's
prior written consent. Any approved signs shall comply with Pueblo Municipal Code Title XVI I and
Airport Rules and Regulations.
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Section 4.8 Noise and Jet Blast.
Lessee shall conduct operations so as to minimize aircraft engine and other noise to the extent
practicable and shall employ the maximum economically practicable noise -reducing devices, but
in no event less than those required by law. Lessee shall use commercially reasonable efforts to
minimize prop and jet blast interference and shall erect and maintain, at its sole cost and subject
to the City's prior written approval, any structures necessary to prevent jet blast damage.
Section 4.9 Self -Fueling.
Lessee is authorized to conduct self -fueling of Lessee's own aircraft on the Leased Premises,
subject to the Airport's Rules and Regulations and the following minimum standards: (a) bonding
and grounding before fueling; (b) a serviceable dry -chemical fire extinguisher of not less than 20
lbs. (or CO2 equivalent) within immediate reach; (c) no fueling or defueling inside any hangar; (d)
no fueling during an active thunderstorm or when lightning is within five (5) nautical miles; (e)
maintenance of adequate spill -containment materials and immediate reporting and remediation
of any spill at Lessee's expense; and (f) maintenance of a fueling log retained for not less than
two (2) years and available to the Director of Aviation on request.
Section 4.10 Accident Reporting; UAS.
Lessee shall notify the Director of Aviation in writing within twenty-four (24) hours of any aircraft
accident or incident (as defined in 49 C.F.R. Part 830) involving an aircraft based at or operating
from the Leased Premises and shall cooperate with any City, FAA, NTSB, or TSA investigation;
this obligation survives termination. Lessee shall not operate any unmanned aircraft system
(UAS) at the Airport without prior written approval of the Director of Aviation and any required FAA
authorization, and any such operation shall comply with applicable FAA regulations and TSA
security directives.
ARTICLE 5 — IMPROVEMENTS, ALTERATIONS, AND CONSTRUCTION
Section 5.1 Existing Improvements
Lessee owns the existing hangar and Improvements on
maintain the Improvements in good repair as provided ii
Improvements during the term except as permitted under
that the Improvements were constructed under the Prior
under this Lease.
Section 5.2 Alterations.
the Leased Premises. Lessee shall
i Article 6 and shall not remove the
Article 19. The parties acknowledge
Lease and are not new construction
Lessee shall not make any structural alteration, addition, or modification to the Improvements or
the Leased Premises without the City's prior written consent, which shall not be unreasonably
withheld. Any approved work shall comply with applicable building codes, Airport Rules and
Regulations, Part 77, and the ALP. Prior to commencing any structural work, Lessee shall obtain
the Director of Aviation's written confirmation that the work is consistent with the then -current
FAA -approved ALP; if an ALP amendment is required, Lessee shall bear the cost, and the City
shall have sole discretion whether to pursue the amendment.
Section 5.3 Height and Airspace.
Lessee shall not erect or permit any structure, building, object, or tree on the Leased Premises
that exceeds the height permitted by Part 77 or that would constitute an obstruction to air
navigation. In the event of breach, the City may enter the Leased Premises and remove or abate
the offending object at Lessee's expense.
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ARTICLE 6 — LESSEE'S MAINTENANCE OBLIGATIONS
Lessee shall, at its sole cost and expense, keep and maintain the Leased Premises and the
Improvements — including the structure, roof, doors, floor, interior, utilities serving the
Improvements, and the ramp and apron area within the Leased Premises — in good repair and
in a safe, sanitary, orderly, and serviceable condition. Because Lessee owns the Improvements
during the term, the City has no obligation to maintain, repair, or replace the Improvements or any
part of the Leased Premises, and Section 7-tier City maintenance obligations applicable to City -
owned hangars do not apply to this ground lease. Lessee's maintenance obligations include: (a)
removal of debris, waste, and fluids; (b) keeping the premises free of flammable materials and
fuel spills; (c) prompt reporting of any condition affecting Airport safety; (d) compliance with Airport
Rules and Regulations regarding waste oil, which shall be disposed of only in Airport -designated
receptacles or removed from Airport property; (e) placement of drip pans or absorbent material
under any oil or petroleum leak and timely cleanup of spills; and (f) maintenance of the entire
ramp area in a manner safe and clean of debris so as not to endanger taxiing aircraft or Airport
users. If Lessee fails to maintain the premises in a safe condition, the City may, after written
Notice of Violation providing a ten (10) day cure period, perform necessary work and charge all
reasonable costs to Lessee as additional rent.
ARTICLE 7 — ENVIRONMENTAL PROVISIONS
Section 7.1 Definitions.
"Hazardous Materials" means any substance defined or regulated as hazardous, toxic, or a
pollutant under applicable federal, state, or local environmental law, including the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq.;
the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6901 et seq.; the Colorado
Hazardous Waste Act, C.R.S. § 25-15-301 et seq.; and regulations promulgated thereunder,
including aviation fuel, oil, solvents, and paint.
Section 7.2 Lessee's Obligations.
Lessee shall comply with all applicable environmental laws in connection with its use of the
Leased Premises and the Airport and shall not cause or permit any Hazardous Materials to be
stored, used, generated, released, or disposed of on the Leased Premises or the Airport except
in strict compliance with applicable law. Any release or spill shall be reported immediately to the
Airport Operations Center and remediated by Lessee at its sole expense in accordance with
applicable law and the direction of the Director of Aviation.
Section 7.3 Notification.
Lessee shall provide immediate written notice to the City upon receipt of any correspondence,
notice, complaint, or order from any governmental authority asserting a condition at the Leased
Premises that requires or may require environmental remediation and shall promptly advise the
City of any condition Lessee knows or suspects may constitute a violation of environmental law.
Section 7.4 Environmental Indemnification.
Lessee shall indemnify, defend, and hold harmless the City from and against all claims, costs,
fines, penalties, and expenses, including attorney fees and remediation costs, arising out of any
Hazardous Materials release or environmental violation caused by or attributable to Lessee's use
of the Leased Premises. This obligation shall survive termination for a period of six (6) years
following termination or surrender, whichever is later, or for such longer period as required by
applicable law.
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Section 7.5 Baseline Environmental Condition.
Prior to the Commencement Date, the City shall disclose in writing any known existing
environmental contamination at or immediately adjacent to the Leased Premises. Lessee may, at
its expense and before the Commencement Date, conduct a visual baseline inspection and
submit findings to the Director of Aviation within ten (10) days. Lessee's environmental
indemnification shall not extend to contamination disclosed by the City or that Lessee
demonstrates by clear and convincing evidence pre-existed the Commencement Date and was
not caused or worsened by Lessee. If no inspection is conducted, Lessee waives the baseline
defense as to conditions a reasonable visual inspection would have revealed.
ARTICLE 8 — UTILITIES
Lessee shall pay all utility charges attributable to the Leased Premises and the Improvements,
including electricity, gas, water, and wastewater, whether separately metered or equitably
allocated by the City. Only domestic wastewater shall be discharged to the City's sanitary sewer
system, and Lessee shall be subject to the same restrictions, conditions, fees, and charges as
other users of that system. Lessee is responsible for all costs to extend, connect, or improve utility
service to or within the Leased Premises.
ARTICLE 9 — INSURANCE, LIABILITY, AND INDEMNIFICATION
Section 9.1 Liability Insurance.
Lessee shall, at its sole cost, procure and maintain throughout the term, from an insurer
authorized in Colorado and rated not less than A-VII by AM Best: (a) commercial general or
aircraft liability insurance with a premises liability extension providing a combined single limit of
not less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars
($2,000,000) annual aggregate for bodily injury, property damage, and personal injury, naming
the City of Pueblo as an additional insured; and (b) coverage expressly extending to self -fueling
operations conducted by Lessee. The Director of Aviation may require higher per -occurrence
limits not to exceed Two Million Dollars ($2,000,000) where Lessee's aircraft exceeds 12,500 lbs.
maximum gross takeoff weight or is turbine -powered.
Section 9.2 Property Insurance on Improvements.
Because Lessee owns the Improvements during the term, Lessee shall insure the Improvements
against fire and other casualty in an amount equal to their full insurable replacement value and
shall provide the City with proof of such coverage. Lessee assumes all risk of loss or damage to
the Improvements, aircraft, and personal property from any cause, and releases the City, its
officers, agents, and employees from any claim on account of such loss except to the extent
caused by the City's gross negligence or willful misconduct.
Section 9.3 Certificate and Notice.
On or before the Commencement Date and upon each renewal, Lessee shall provide the City a
certificate of insurance evidencing the required coverage, naming the City as additional insured,
and providing not less than thirty (30) days' advance written notice of cancellation, material
change, or non -renewal. Failure to maintain required insurance is a material breach.
Section 9.4 CGIA — City's Liability Limitation.
The City's liability under this Lease, in tort or otherwise, is subject to and limited by the Colorado
Governmental Immunity Act, C.R.S. §§ 24-10-101 through 24-10-120, as amended. The liability
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limits of C.R.S. § 24-10-114, as adjusted, are incorporated by reference. Nothing in this Lease
waives the City's governmental immunity or expands the City's liability beyond the CGIA limits.
Section 9.5 Indemnification by Lessee.
Lessee shall indemnify, defend, and hold harmless the City, its officers, employees, agents, the
Mayor, and City Council members from and against all claims, damages, losses, and expenses,
including reasonable attorney fees and court costs, arising out of or relating to: (a) Lessee's use
or occupancy of the Leased Premises or the Airport; (b) Lessee's breach of this Lease; (c) any
act or omission of Lessee, its agents, employees, guests, subtenants, or invitees; or (d) any
environmental violation or improper storage or disposal of Hazardous Materials by Lessee. This
obligation survives termination and is in addition to, and not in lieu of, the City's rights under the
CGIA.
ARTICLE 10 —CASUALTY AND DAMAGE
If the Improvements are damaged or destroyed by fire or other casualty, Lessee shall, within one
hundred twenty (120) days of the occurrence, elect in writing to either: (a) repair and restore the
Improvements in compliance with applicable codes, the ALP, and plans approved by the City
(such approval not unreasonably withheld), completing construction within nine (9) months of the
casualty; or (b) demolish the damaged Improvements, restore the Leased Premises to a clean
and safe condition, and terminate this Lease, in which event the net proceeds of the property -
damage insurance required under Section 9.2 shall be retained by Lessee. Because Lessee owns
the Improvements during the term, the proceeds of Lessee's property insurance shall be available
to Lessee for restoration under option (a); the City shall have no claim to such proceeds.
ARTICLE 11 —AIRPORT SECURITY
Section 11.1 Airport Security Program.
Pueblo Memorial Airport holds a 14 C.F.R. Part 139 Airport Operating Certificate and operates
under a TSA-approved Airport Security Program ("ASP") under 49 C.F.R. Part 1542. The City
may modify the ASP as required by the TSA or as the City deems necessary. Lessee shall at all
times comply with the ASP and all Airport security rules, including all requirements applicable to
access to the Air Operations Area ("AOK).
Section 11.2 Lessee's Security Obligations.
Lessee shall: (a) comply with all Airport Rules and Regulations, security procedures, and FAA
and TSA requirements pertaining to security and safety of the Leased Premises, the adjacent
AOA, and ingress and egress; (b) maintain the integrity of the airfield security perimeter, including
ensuring AOA access doors and gates are secured when not in direct use; (c) obtain and maintain
an active Airport ID Badge as required by the ASP, failure of which is a material breach, and if
Lessee cannot obtain a badge due to a TSA security threat assessment disqualification, the City
may terminate this Lease on written notice; (d) ensure all persons admitted by Lessee comply
with the ASP and applicable security requirements; and (e) indemnify the City for any TSA fine or
civil penalty assessed against the City resulting from a violation of the ASP by Lessee, its agents,
guests, employees, or invitees, reimbursable within thirty (30) days of the City's written demand.
Section 11.3 TSA Fine Indemnification.
Lessee shall indemnify and hold harmless the City from any TSA fine or civil penalty assessed
against the City that results directly from a violation of the ASP committed by Lessee, its agents,
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guests, employees, or invitees. Lessee shall reimburse the City for any such fine within thirty (30)
days of the City's written demand.
ARTICLE 12 — INGRESS AND EGRESS
Upon payment of rent and performance of Lessee's obligations, Lessee shall have a non-
exclusive right of ingress and egress to and from the Leased Premises over Airport roads,
taxilanes, and taxiways designated by the Director of Aviation, extending to Lessee's employees,
guests, invitees, and authorized contractors, subject to the ASP and Airport Rules and
Regulations. Aircraft have the right of way over vehicles at all times. The City may modify access
routes and taxilane configurations as necessary for Airport operations, safety, or development,
provided that reasonably comparable access is maintained.
ARTICLE 13 — CONDEMNATION AND AIRPORT DEVELOPMENT
Section 13.1 Total Taking.
If the whole or a material part of the Leased Premises is taken by eminent domain or condemned,
this Lease shall terminate as of the date of taking and rent shall be prorated to that date. The
condemnation award shall be allocated between the City and Lessee in accordance with
applicable Colorado condemnation law, recognizing the City's fee interest in the ground and
Lessee's ownership interest in the Improvements during the term.
Section 13.2 Airport Development.
The City reserves the right, without obligation, to develop, modify, improve, or expand the Airport
as it determines in its sole discretion, regardless of the desires of Lessee and without interference
from Lessee. The City reserves the right to grant or take easements or rights of way in, under,
over, and across the Leased Premises, provided that the City shall be liable only for compensation
for damage to the Improvements thereby destroyed or damaged, and not for loss of use of the
Leased Premises.
ARTICLE 14 — NONDISCRIMINATION
Section 14.1 Lessee's Covenant.
Lessee covenants, as a covenant running with the land, that: (a) no person shall on the grounds
of race, color, national origin, sex, disability, religion, or any other ground prohibited by applicable
federal or state law be excluded from participation in, denied the benefits of, or subjected to
discrimination in the use of the Leased Premises; (b) in the construction of any improvements and
the furnishing of services, no person shall be subjected to such discrimination; and (c) Lessee
shall comply with Title VI of the Civil Rights Act of 1964; 49 C.F.R. Part 21; 14 C.F.R. Part 152,
Subpart E; and the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., as amended.
Section 14.2 Economic Nondiscrimination, City's Right to Enforce.
Lessee shall furnish all services on a fair, equal, and not unjustly discriminatory basis and shall
charge fair, reasonable, and not unjustly discriminatory prices, provided that Lessee may make
reasonable and nondiscriminatory volume discounts. The City reserves the right to take any action
the United States, the State of Colorado, or the FAA may direct to enforce this covenant. A breach
is a material breach authorizing termination.
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Section 14.3 Disadvantaged Business Enterprise.
Lessee shall not discriminate against any business concern on the basis of Disadvantaged
Business Enterprise ("DBE") status and shall cooperate with the City's DBE program as required
under 49 C.F.R. Parts 23 and 26. A violation is a material breach.
ARTICLE 15 —ASSIGNMENT, SUBLETTING, AND LEASEHOLD MORTGAGE
Section 15.1 Assignment and Subletting.
Lessee shall not assign or transfer this Lease, in whole or in part, without the prior written consent
of the City, which consent shall not be unreasonably or arbitrarily withheld, delayed, or denied,
provided the proposed assignee meets the City's tenancy and financial -responsibility
requirements and assumes in writing all obligations under this Lease. Any assignment or transfer
without the City's prior written consent shall be void. No assignment, subletting, or transfer shall
release Lessee from its obligations under this Lease unless the City expressly agrees in writing.
Lessee may sublet portions of the Improvements pursuant to a written sublease that is subject to
and governed by this Lease, requires the subtenant to carry the insurance and indemnification
required of Lessee, and is delivered to the Director of Aviation before becoming effective. All
sublet revenue is subject to the additional rent under Section 3.4.
Section 15.2 Change of Control.
If Lessee is a legal entity (including a limited liability company), any transaction or series of related
transactions resulting in a change of more than fifty percent (50%) of the ownership interests,
membership interests, or voting control of Lessee shall constitute a deemed assignment of this
Lease requiring the City's prior written consent under Section 15.1. Lessee shall notify the City in
writing not less than thirty (30) days before any such change. As a condition to execution of this
Lease and to any consent under this Section, Lessee shall deliver to the City a current operating
agreement and a certificate of authority identifying the members or managers authorized to bind
Pearson Properties, LLC. Failure to obtain consent for a change of control is a material breach
subject to Article 18.
Section 15.3 Leasehold Mortgage.
The City consents to Lessee's assignment of its leasehold estate and Improvements to an
institutional lender ("Lender") as collateral security for a loan to finance the acquisition,
construction, refinancing, or improvement of the Improvements (a "Leasehold Mortgage"),
provided that: (a) the City's fee title in the ground shall at no time be or become subordinate to
the Leasehold Mortgage; (b) Lessee delivers to the City written notice and a copy of all Leasehold
Mortgage documents; and (c) the Leasehold Mortgage and the indebtedness secured thereby
remain at all times inferior and subordinate to all conditions, covenants, and obligations of this
Lease and to all rights of the City. Provided the City has received such notice, this Lease may not
be voluntarily surrendered or materially modified without the Lender's consent; however, this
Lease may be terminated without the Lender's consent if a default is not cured in accordance with
this Lease. The Lender, or any purchaser at foreclosure, may cure Lessee's defaults and shall be
recognized as an assignee bound by this Lease, but shall acquire no greater right in the Leased
Premises than Lessee held. The City shall provide the Lender with copies of any notice of default
given to Lessee and a reasonable opportunity, not to exceed thirty (30) days beyond Lessee's
cure period, to cure.
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ARTICLE 16 — CITY'S RIGHT OF FIRST REFUSAL
If Lessee desires to sell the Improvements, in whole or in part, during the term, Lessee shall first
offer in writing to sell the Improvements to the City upon the price, terms, and conditions Lessee
would be willing to accept in a good -faith arm's-length sale to a third party (the "Offer"). The City
shall have thirty (30) days after receipt of the Offer to accept it in writing. If the City does not
accept within that period, Lessee may sell the Improvements to a third party free of this right of
first refusal, but not at a price less than, nor on terms more favorable than, those in the Offer, and
subject to the assignment -consent and change -of -control requirements of Article 15. If the City
accepts the Offer, this Lease shall terminate upon the closing of the City's purchase.
ARTICLE 17 — LIENS AND ENCUMBRANCES
Except for a Leasehold Mortgage permitted under Section 15.3, Lessee shall not cause or permit
any lien, encumbrance, security interest, mechanic's lien, mortgage, judgment, or execution to
attach to or be filed against the ground, the Leased Premises, or the City's fee interest. Lessee
shall pay promptly when due all bills, debts, and obligations incurred in connection with its
operations and the Improvements and shall not permit the same to become delinquent. If any lien
is filed against the Leased Premises by reason of Lessee's acts or omissions, Lessee shall cause
the lien to be released, bonded over, or otherwise discharged within thirty (30) days after notice.
Failure to discharge a lien within the thirty -day period is a material breach. This Section restates
and continues the covenant of the Prior Lease against permitting any lien, mortgage, judgment,
or execution against the Leased Premises.
ARTICLE 18 — DEFAULT, CURE, AND TERMINATION
Section 18.1 Events of Default.
Each of the following is an Event of Default: (a) failure to pay annual ground rent, additional rent,
or any other charge within thirty (30) days after written notice and demand; (b) failure to maintain
required insurance under Article 9; (c) failure to obtain or maintain an active Airport ID Badge
under Article 11; (d) the filing of any voluntary or involuntary petition in bankruptcy, or any
assignment for the benefit of creditors, by or against Lessee; (e) failure to base an active,
operational aircraft at the Leased Premises for a continuous period of one hundred twenty (120)
days without the Director of Aviation's written consent, except during an approved replacement
period; (f) a permitted or prohibited transfer in violation of Article 15; (g) failure to discharge a lien
in violation of Article 17; and (h) failure to perform or comply with any other obligation, covenant,
or agreement for a period of thirty (30) days after written notice specifying the failure, except that
if the obligation cannot reasonably be performed within thirty (30) days, Lessee shall not be in
default if Lessee commences performance within the period and thereafter prosecutes it with
diligence and continuity to completion.
Section 18.2 City's Remedies.
Upon a continuing Event of Default, the City may, in addition to all rights and remedies at law or
in equity, including damages and specific performance: (a) terminate this Lease by sixty (60) days'
prior written notice to Lessee specifying the date of termination, whereupon Lessee shall within
the sixty (60) day period vacate the Leased Premises and surrender possession to the City
consistent with Article 19; (b) pursue any other available remedy; or (c) both. Remedies are
cumulative, and exercise of any remedy is not an election barring others.
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Section 18.3 Non -Waiver.
The City's failure to declare a default or enforce any right or remedy shall not be construed as a
waiver of any subsequent default or of the City's right to enforce any provision at any subsequent
time.
Section 18.4 Termination by Lessee.
Lessee may terminate this Lease upon: (a) permanent closure of the Airport for ninety (90) or
more consecutive days; or (b) the City's default in performance of any covenant required of the
City and failure to remedy within sixty (60) days after written notice. If the Airport permanently
closes or relocates, the aeronautical use restrictions in Article 4 shall not apply, and Lessee may
use the Leased Premises for any lawful use permitted by the then -existing Pueblo Municipal Code
or, in the alternative, may terminate this Lease upon thirty (30) days' written notice.
ARTICLE 19 — SURRENDER, REMOVAL, AND RESTORATION
Section 19.1 Removal of Improvements and Restoration.
The hangar and Improvements are Lessee's removable trade fixtures, and title to them remains
in Lessee. Upon the expiration of this Lease at the end of the Initial Term or, if exercised, the
Renewal Term, Lessee shall, at Lessee's sole cost and expense and within one hundred eighty
(180) days after expiration, remove the Improvements and all of Lessee's personal property from
the Leased Premises and restore the Leased Premises to its original condition as a graded,
vacant ground parcel, ordinary wear and tear and any condition disclosed by the City under
Section 7.5 excepted. During said period of time, the holdover period will be considered a month -
to -month tenancy subject to Section 2.3. Lessee shall repair any damage to Airport pavement,
utilities, or adjacent premises caused by the removal. Lessee's removal and restoration
obligations, and its indemnification, environmental, and payment obligations, survive expiration
until performed.
Section 19.2 City's Option to Waive Removal or Restoration.
Notwithstanding Section 19.1, the City may, in its sole discretion, by written notice to Lessee given
not later than ninety (90) days before expiration of the term, elect to waive, in whole or in part,
Lessee's obligation to remove the Improvements and/or to restore the Leased Premises to its
original condition. If the City waives removal of the Improvements, the Improvements (or the
portion specified in the City's notice) shall remain on the Leased Premises and title thereto shall
pass to and vest in the City, at no cost to the City and free and clear of any Leasehold Mortgage
or other encumbrance, upon expiration, and Lessee shall execute any instrument the City
reasonably requests to confirm such vesting. If the City waives only the restoration requirement,
Lessee shall remove the Improvements but shall be relieved of the obligation to restore the ground
to its precise original grade and condition, provided Lessee leaves the Leased Premises in a
clean, safe, and orderly condition. The City's waiver under this Section is at the City's sole option,
is not an obligation, and shall not entitle Lessee to any compensation. Any Leasehold Mortgage
permitted under Section 15.3 shall by its terms be satisfied or released on or before expiration of
the term so as not to impair the City's rights under this Article.
Section 19.3 Surrender on Earlier Termination.
Upon any earlier termination of this Lease for default or otherwise, Lessee shall immediately
surrender possession of the Leased Premises to the City, remove all personal property and
aircraft within thirty (30) days, and return all keys, access cards, and Airport -issued ID badges to
the Director of Aviation. Any personal property remaining after thirty (30) days shall be deemed
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abandoned and may be disposed of at Lessee's expense. Removal of the Improvements and
restoration of the Leased Premises following an earlier termination shall be governed by Sections
19.1 and 19.2 as though the termination date were the expiration date, including the City's waiver
option under Section 19.2. Lessee's indemnification, environmental, and payment obligations
survive surrender.
ARTICLE 20 — FEDERAL SUBORDINATION AND FAA REQUIREMENTS
Section 20.1 Subordination to Federal Agreements.
This Lease is subject and subordinate to the terms, reservations, restrictions, and conditions of
any existing or future agreement between the City and the United States relative to the operation,
maintenance, or development of the Airport, the execution of which has been or may be required
as a condition of federal funding for the Airport. This Lease and any amendment are subject to
prior approval of the FAA to the extent required.
Section 20.2 Right of Flight.
The City 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 that
airspace any noise inherent in the operation of aircraft, consistent with the public right of transit
through the navigable airspace under 49 U.S.C. § 40103.
Section 20.3 No Exclusive Right.
Nothing in this Lease shall be construed to grant or authorize the granting of an exclusive right
within the meaning of 49 U.S.C. § 40103(e).
Section 20.4 Part 77 and Airspace.
Lessee shall comply with the notice and review requirements of 14 C.F.R. Part 77 with respect to
the construction or alteration of any structure or object on the Leased Premises and shall not
make use of the Leased Premises in any manner that might interfere with the landing and taking
off of aircraft or otherwise constitute a hazard to air navigation. In the event of breach, the City
may enter and abate the interference at Lessee's expense.
Section 20.5 Government and Military Use.
This Lease is subordinate to the right of the United States, during time of war or national
emergency, to use any part of the Airport.
Section 20.6 Subordination of Improvements.
Lessee's ownership of and interest in the Improvements, and any Leasehold Mortgage, are at all
times subordinate to the City's fee title in the ground and to the federal obligations described in
this Article.
Section 20.7 No Incorporation of Grant Assurances or FAA Guidance.
The City's FAA Airport Sponsor Assurances, and any FAA Order, Advisory Circular, or other FAA
policy or guidance, are obligations and matters solely between the City and the United States.
They are not incorporated into this Lease. Nothing in this Lease shall be construed to make the
City's compliance with any Grant Assurance or FAA guidance a contractual covenant of the City
to Lessee, to create any contractual obligation of the City or Lessee to comply with the Grant
Assurances or FAA guidance, or to confer upon Lessee or any third party any right to enforce the
Grant Assurances or FAA guidance against the City. The obligations of the parties under this
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Lease are solely those expressly stated herein. This Section does not diminish the subordination
of this Lease to federal agreements under Section 20.1, which the parties intend to operate as a
subordination of this Lease only and not as an affirmative covenant of FAA compliance running
to Lessee.
ARTICLE 21 — CITY'S RIGHT OF ENTRY AND INSPECTION
The City, through its authorized officers, agents, and representatives, reserves the right to enter
the Leased Premises for purposes of: (a) emergency response; (b) inspection for fire protection,
safety, environmental compliance, or lease compliance; (c) verification of aeronautical use
consistent with Article 4; (d) repair or maintenance of utility infrastructure serving other Airport
users; and (e) enforcement of this Lease or Airport Rules and Regulations. For non -emergency
inspections, the City shall endeavor to provide reasonable advance notice. The City may conduct
an annual inspection of the Leased Premises consistent with FAA guidance on sponsor
monitoring of hangar use. The City shall repair, in a good and workmanlike manner, any damage
to the Leased Premises resulting from work the City performs under this Article.
ARTICLE 22 — NOTICES
All notices shall be in writing and deemed delivered: (a) upon personal delivery; (b) one (1)
business day after deposit with a nationally recognized overnight courier; or (c) three (3) business
days after deposit in the U.S. Mail, certified, return receipt requested, postage prepaid, addressed
as follows:
To the City (Lessor):
City of Pueblo, Director of Aviation
Pueblo Memorial Airport, 31201 Bryan Circle, Suite 200
Pueblo, Colorado 81001
With copy to: City Attorney, 101 W. Riverwalk, Fourth Floor, Pueblo, Colorado 81003
To Lessee:
Pearson Properties, LLC
118 E 29th St. Ste. H Loveland, CO 80538
Either party may change its notice address by written notice. Lessee shall notify the City in writing
within five (5) business days of any change in Lessee's contact information.
ARTICLE 23 — MISCELLANEOUS PROVISIONS
Section 23.1 Inconvenience During Construction.
Lessee acknowledges that from time to time during the term of this Lease, the City may initiate
programs of construction, reconstruction, expansion, relocation, maintenance, and repair of the
Airport and its facilities. Such activities may inconvenience or temporarily interrupt Lessee's
operations. No liability shall attach to the City, its officers, agents, employees, or contractors by
reason of such inconvenience or interruption, and Lessee waives any right to claim damages
arising therefrom, provided that this waiver shall not extend to claims for physical damage to
property caused by the City's negligence or willful misconduct.
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Section 23.2 Temporary Closure of Access Routes.
The City may temporarily close, restrict, or reroute vehicular or pedestrian access routes serving
the Airport, including roadways, drop-off areas, and pedestrian walkways, for construction,
maintenance, security, emergency response, or other operational purposes. The City shall
provide Lessee with not less than seven (7) days' prior written notice of any planned closure or
restriction that is reasonably expected to materially affect access to the Leased Premises,
except that no advance notice is required in the event of an emergency or matter of security.
Temporary closure or restriction of access routes shall not constitute a default by the City. The
City shall use reasonable efforts to minimize disruption to Lessee's operations during any
planned closure.
Section 23.3 TABOR Non -Appropriation.
This Lease is subject to the City's annual appropriation of funds. If the City Council fails to
appropriate funds sufficient to support the City's obligations in any fiscal year, the City may
terminate this Lease without penalty upon sixty (60) days' written notice, which shall not constitute
a default or give rise to any claim for damages. This provision is required by Article X, Section 20
of the Colorado Constitution ("TABOR") and the Charter. The City shall refund any prepaid rent
attributable to the period after the effective termination date, prorated daily, within thirty (30) days.
Section 23.4 Non -Appropriation Not Applicable to Lessee.
The non -appropriation clause in Section 23.1 applies exclusively to the City's obligations and shall
not relieve Lessee of any payment or performance obligation.
Section 23.5 Governing Law and Venue.
This Lease shall be governed by the laws of the State of Colorado, without regard to conflict -of -
law principles. Any dispute shall be resolved in the District Court for Pueblo County, Colorado, to
whose jurisdiction and venue Lessee consents.
Section 23.6 Mediation.
Prior to filing any lawsuit arising from this Lease (other than an action for emergency injunctive
relief, an unlawful detainer or eviction action, or an action to collect undisputed amounts), the
parties shall attempt to resolve the dispute through non -binding mediation before a mutually
agreed mediator, with mediator costs shared equally and mediation completed within thirty (30)
days of mediator selection unless extended by written agreement. This Section does not toll any
statute of limitations.
Section 23.7 Force Majeure.
Neither party shall be in default for failure to perform any obligation (other than a payment
obligation) to the extent caused by a Force Majeure Event — an event beyond the reasonable
control of the affected party, including acts of God, natural disasters, declared emergencies,
pandemics, governmental orders not resulting from the affected party's acts, third -party labor
actions, or acts of terrorism — provided the affected party gives written notice within ten (10) days.
Force Majeure does not excuse any payment obligation. If a Force Majeure Event prevents
Lessee's aeronautical use for more than one hundred twenty (120) consecutive days, either party
may terminate on thirty (30) days' written notice with prepaid rent refunded pro rata.
Section 23.8 Entire Agreement; Supersession; Amendments.
This Lease, together with all Exhibits, constitutes the entire agreement of the parties with respect
to the Leased Premises and supersedes the Prior Lease and all prior negotiations,
Hangar Ground Lease — City of Pueblo / Pearson Properties, LLC — Page 16
Docusign Envelope ID: 2C7CB3DF-8763-8E6A-8031 -FE65D81 DEC31
representations, and agreements, whether oral or written. No amendment, modification, or waiver
shall be valid unless in writing and duly executed by the Mayor on behalf of the City and by
Lessee. No provision may be waived except by a writing signed by the waiving party, and a waiver
of any provision shall not be a waiver of any other.
Section 23.9 Severability.
If any provision is held invalid or unenforceable, that provision shall be deemed deleted and the
remainder shall continue in full force and effect, provided the deletion does not materially
prejudice either party's rights or obligations.
Section 23.10 No Third -Party Beneficiaries.
This Lease is for the sole benefit of the City and Lessee (and, to the limited extent provided in
Section 15.3, a Lender), and creates no right in any other third party.
Section 23.11 Attorney's Fees and Costs.
In any action or proceeding to recover payments due, take possession of the Leased Premises
or Improvements, or enforce compliance with this Lease, the prevailing party shall be awarded its
reasonable attorney's fees and costs as determined by the court, subject to the limitations of the
CGIA.
Section 23.12 Binding Effect; Headings; Construction.
This Lease binds and inures to the benefit of the parties and their respective heirs, personal
representatives, successors, subtenants, and approved assigns. Article and Section headings are
for convenience only and do not affect interpretation. This Lease is the product of negotiation and
shall be deemed jointly drafted; no rule construing ambiguities against the drafter shall apply
against either party.
Section 23.13 Authority and Execution.
Each party represents that the person executing this Lease on its behalf is duly authorized to do
so. The City executes this Lease pursuant to ordinance and Charter § 3-9. As a condition to the
City's execution, Lessee shall deliver the operating agreement and certificate of authority required
by Section 15.2.
Remainder of Page Intentionally Left Blank
Hangar Ground Lease — City of Pueblo / Pearson Properties, LLC — Page 17
Docusign Envelope ID: 2C7CB3DF-8763-8E6A-8031 -FE65D81 DEC31
IN WITNESS WHEREOF, the parties have executed this Hangar Ground Lease Agreement as of
the date last signed below.
LESSOR:
CITY OF PUEBLO, COLORADO,
a home rule municipal corporation
Signed by:
By: 6r t "t ac� LTV'"
Mayor
Date: 07/20/2026
'T.F. TgT;d by:
Cly e Is op; City Clerk
AS TO FORM:
ity � orney
LESSEE:
PEARSON PROPERTIES, LLC,
a Colorado limited liability company
QocuSigned by:
By. sEW"AaA e...
Print Name: David G Goldberg
Title: Managing Member of Manager
Date: 06/18/2026
Hangar Ground Lease — City of Pueblo / Pearson Properties, LLC — Page 18
Docusign Envelope ID: 2C7CB3DF-8763-8E6A-8031 -FE65D81 DEC31
EXHIBIT A
LEGAL DESCRIPTION AND SITE PLAN OF LEASED PREMISES
City of Pueblo — Pueblo Memorial Airport (KPUB). Ground parcel commonly known as 351
Skyway Street, containing approximately 14,375 square feet, more particularly described as
follows (Amended Exhibit "A" to the Prior Lease, Resolution No. 10354):
A Leasehold interest of and unto: A Parcel of land located in Section 25, Township 20 South,
Range 64 West of the 6th P.M., located within the County of Pueblo, State of Colorado, being
more particularly described as follows: Beginning at the northwest corner of said Section 25;
thence S75049'09"E, 1666.99 feet to the centerline at the west end of Runway 8L/26R, also known
as Station 0+00; Thence N88016'36"E, a distance of 2712.00 feet along the centerline of said
Runway 8L/26R to a point; Thence S01 043'24"E, a distance of 2438.50 feet, to a point 2438.50
feet right of the centerline of said Runway 8L/26R at Station 27+12, being the True Point of
Beginning; Thence N88016'36"E, a distance of 115.00 feet; Thence S01043'24"E, a distance of
125.00 feet; Thence S88016'36"W, a distance of 115.00 feet; Thence N01 °43'24"W, a distance
of 125.00 feet, to the Point of Beginning. Said parcel contains 14,375 square feet more or less.
Docusign Envelope ID: 2C7CB3DF-8763-8E6A-8031 -FE65D81 DEC31
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Docusign Envelope ID: 2C7CB3DF-8763-8E6A-8031-FE65D81DEC31
EXHIBIT Main File No.25-6595 Page #22of60
DESCRIPTION OF EXISTING IMPROVEMENTS
File No. 25-6595
Subject construction details are summarized as follows:
Classification
Class S Aircraft Storage Hangar / Office Warehouse
Quality
Above Average
Condition
Good
Exterior
Metal Frame Insulated Steel Panel (Wood Frame Office)
Interior
Textured & Painted Drywall / Unfinished Hangar
Ceilings
Textured & Painted Drywall / Unfinished Hangar
Foundation
Concrete Slab on Grade
Roof
Slightly Pitched Insulated Steel Panel
HVAC
Ceiling Mount Forced Air Furnaces (Two), Electric Baseboard
Doors
Metal Framed Metal & Bi-fold Hangar
Lighting
Halogen and LED Fixtures
Flooring
Sealed Concrete, Carpet, Tile
Plumbing / Electrical
Adequate For Aviation Use
Site Improvements
Utility Taps
Site Details
Leased Land (10,000 SF - Building Footprint)
Gross Building Area
10,000 SF GBA
Subject Deferred Maintenance: The subject property appears to be very well maintained
and in good condition in comparison to the improvements within the vicinity. Moreover, no significant
deferred maintenance is applicable at this time. Recall that the subject includes numerous updated
features to include two new gas forced -air heat units, new sealed concrete flooring, new office and
restroom finishes with laundry and electric baseboard heat. Additionally, I do not warrant any of the
components of the subject property whatsoever (strictly a liability disclaimer).
No personal property items (FFE - Furniture, Fixtures & Equipment), trade fixture items or
business venture occupying the premises is included in this real property appraisal report.
Form DCL - "TOTAL" appraisal software by a la mode, inc.-1-800-ALAMODE
Docusign Envelope ID: 2C7CB3DF-8763-8E6A-8031 -FE65D81 DEC31
Main File No. 25-6595 Page # 23 of 60
Building Sketch
Borrower
Not intended for lending purpose use.
Property Address
351 Skyway St
City
Pueblo County Pueblo State Co Zip Code 81001
Lender/Client
City of Pueblo
Form SKT.BLDSKI - "TOTAL" appraisal software by a la mode, inc.-1-800-ALAMODE
Docusign Envelope ID: 2C7CB3DF-8763-8E6A-8031 -FE65D81 DEC31
Main File No. 25-6595 Page # 24 of 60
Subject Photos Page 1 of 3
Borrower
Not intended for lending purpose use.
Property Address
351 Skyway St
City
Pueblo County Pueblo State Co Zip Code 81001
Lender/Client
City of Pueblo
Front
Rear
Front
Rear
Taxiway Taxiway
Form PIC6_LT - "TOTAL" appraisal software by a la mode, inc.-1-800-ALAMODE
Docusign Envelope ID: 2C7CB3DF-8763-8E6A-8031 -FE65D81 DEC31
Main File No. 25-6595
Subject Photos
Borrower
Not intended for lending purpose use.
Property Address
351 Skyway St
City
Pueblo County Pueblo State CO Zip Code 81001
Lender/Client
City of Pueblo
Interior
Interior
Interior
Interior
Office Rest Room
Form PIC6_LT - "TOTAL" appraisal software by a la mode, inc.-1-800-ALAMODE
Docusign Envelope ID: 2C7CB3DF-8763-8E6A-8031 -FE65D81 DEC31 LXHIBIT C
Pueblo Memorial Airport
Emergency Contact Information
FOR OFFICE USE ONLY
BADGE #
ISSUED
EXPIRES
GATES
MOVEMENT YES/ NO
STA
Primary Contact Last Name:
First Name:
Badge #:
Primary Phone:
Alternate Phone:
Email Address:
Secondary Contact Last Name:
First Name:
Badge #:
Secondary Contact Phone:
Alternate Phone:
Aircraft Type & Tail Number:
Aviation Updated 1
PFD Updated El
Revised AUGUST 2022
Docusign Envelope ID: 2C7CB3DF-8763-8E6A-8031 -FE65D81 DEC31
In case of emergency
dial 911.
This address is: 351 Skyway St.
Non -Emergency Contacts
Fire Station 10: 719-553-2759
Airport Operations: 719-320-2710
Airport Administration: 719-553-2760
Pueblo Tower: 719-948-3374
Fuel Spills call Fire Station 10
Revised AUGUST 2022