HomeMy WebLinkAbout11235Docusign Envelope ID: E91 FA0BE-051 B-84B6-82D7-0B9CC6105987
ORDINANCE NO. 11235
AN ORDINANCE APPROVING A LEASE EXTENSION
AGREEMENT BETWEEN THE CITY OF PUEBLO, A
COLORADO MUNICIPAL CORPORATION, AND LOCKHEED
MARTIN CORPORATION, A MARYLAND CORPORATION,
EXTENDING THE TERM OF THE LEASE OF PREMISES AT
THE PUEBLO MEMORIAL AIRPORT, AND AUTHORIZING THE
MAYOR TO EXECUTE THE AGREEMENT
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Lease Extension Agreement ("Agreement") between the City of Pueblo, a Colorado
municipal corporation, and Lockheed Martin Corporation, a Maryland corporation, a copy of
which is attached hereto, having been approved as to form by the City Attorney, is hereby
approved.
SECTION 2
The Mayor is authorized to execute the Agreement 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 Agreement 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 July 13, 2026.
Final adoption of Ordinance by City Council on July 27, 2026. DocuSignedby:
President of City Council
Docusign Envelope ID: E91 FA0BE-051 B-84B6-82D7-0B9CC6105987
Action by the Mayor:
R Approved on 07/29/2026
❑ 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 DocuSigned by:
City Clerk
Docusign Envelope ID: E91 FA0BE-051 B-84B6-82D7-0B9CC6105987
City Clerk's Office Item # R5
Ciify of
PUEBLO
m;µ
...w
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: July 27, 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 LEASE EXTENSION AGREEMENT
BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL
CORPORATION, AND LOCKHEED MARTIN CORPORATION, A
MARYLAND CORPORATION, EXTENDING THE TERM OF THE LEASE
OF PREMISES AT THE PUEBLO MEMORIAL AIRPORT, AND
AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT
SUMMARY:
Attached is an Ordinance approving a Lease Extension Agreement between the City of
Pueblo and Lockheed Martin Corporation for the hangar premises that Lockheed leases
at the Pueblo Memorial Airport. The Agreement extends the term of the existing Lease
for ninety (90) days, from July 24, 2026 through October 21, 2026, and continues the
tenancy on a month -to -month basis thereafter, at the Non -Signatory Rate of $5.52 per
rentable square foot, which equals $12,006.00 per month. The extension allows the City
and Lockheed additional time to negotiate a renewal of the Lease while the City pursues
fair market value for the premises.
PREVIOUS COUNCIL ACTION:
On September 26, 2022, City Council adopted Ordinance No. 10290, approving
Amendment No. 2 to the Lease, which expanded the leased premises to approximately
26,100 rentable square feet.
On August 24, 2020, City Council approved Amendment No. 1 to the Lease.
In 2017, City Council adopted Resolution No. 13734, approving the original Lease
BACKGROUND:
Lockheed Martin Corporation leases approximately 26,100 rentable square feet of
hangar space at the Pueblo Memorial Airport, located at 32501 Walt Bassett Ave.,
under a Lease dated July 24, 2017, as amended. The current term of the Lease expires
July 23, 2026.
Docusign Envelope ID: E91 FA0BE-051 B-84B6-82D7-0B9CC6105987
The City and Lockheed are negotiating the terms of a renewal of the Lease. To allow
time to complete that negotiation, and to allow the City to establish fair market value for
the premises, the parties have agreed to a ninety (90) day extension of the Lease on
the terms set forth in the attached Agreement. The Agreement does not obligate either
party to enter into a renewal of the Lease.
During the extension and any month -to -month continuation, Lockheed will pay Base
Rent at the Non -Signatory Rate of $5.52 per rentable square foot, which equals
$12,006.00 per month, an increase over the current rate of $8,000.00 per month. After
the ninety (90) day extension, the tenancy continues from month to month at the same
rate, terminable by either party on thirty (30) days written notice. Because the premises
house specialized hardware managed by Lockheed Martin Space that requires
extended time to relocate, the Agreement allows Lockheed up to twelve (12) months
following a termination notice to vacate and surrender the premises, with Base Rent
continuing to accrue at the Non -Signatory Rate until Lockheed fully surrenders the
premises. All other terms and conditions of the existing Lease continue in effect during
the extension and any month -to -month continuation.
FINANCIAL IMPLICATIONS:
The City will receive Base Rent of $12,006.00 per month during the extension and any
month -to -month continuation, compared to $8,000.00 per month under the current
Lease term. Revenue flows to the City. The Agreement imposes no new financial
obligation on the City.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Ordinance.
STAKEHOLDER PROCESS:
Not applicable to this Ordinance.
ALTERNATIVES:
If this Ordinance is not approved, the Lease will expire on July 23, 2026 without the
negotiated extension terms. Lockheed's continued occupancy would then proceed
under the holdover provision of the existing Lease at one hundred fifty percent (150%)
of the prior Base Rent, on a month -to -month basis, without the defined ninety (90) day
term, the Non -Signatory Rate, or the twelve (12) month surrender provisions set forth in
the Agreement.
RECOMMENDATION:
Approve the Ordinance.
ATTACHMENTS:
1. 32501 Walt Bassett 2026 07 27 LEASE EXTENSION AGREEMENT
Docusign Envelope ID: 4C299B95-E2A6-8FFB-80C3-2CF9A5D85E57
LEASE EXTENSION AGREEMENT
THIS LEASE EXTENSION AGREEMENT ("Extension Agreement") is entered into this
27 day of July, 2026, between the City of Pueblo, a Colorado home rule municipal corporation
("Lessor" or the "City"), and Lockheed Martin Corporation, a Maryland corporation ("Lessee").
Lessor and Lessee may be referred to individually as a "Party" or collectively as the "Parties."
WHEREAS, Lessor and Lessee are parties to that certain Lease dated July 24, 2017, as
amended by a Lease Commencement Agreement dated September 11, 2017, an Amendment to
Lease (Amendment No. 1) dated August 24, 2020, an Amendment No. 2 to Lease dated September
26, 2022, and an Expansion Space Commencement Date Agreement dated November 21, 2022
(collectively, the "Lease"), for approximately 26,100 rentable square feet located at 32501 Walt
Bassett Ave., Pueblo, CO 81001 (the "Leased Premises");
WHEREAS, the current term of the Lease expires July 23, 2026;
WHEREAS, the Parties desire to extend the term of the Lease for a period of ninety (90)
days, and to continue the tenancy on a month -to -month basis thereafter unless otherwise amended
by the Parties, in order to allow the Parties additional time to negotiate the terms of a potential
Amendment No. 3 to the Lease (provided that nothing in this Extension Agreement shall require
either Party to enter into such an amendment); and
WHEREAS, the Parties intend that the rate payable during the extended term and any
month -to -month continuation be the Non -Signatory Rate defined below, and that such rate not be
characterized as a holdover rate.
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
are hereby acknowledged, the Parties agree as follows:
1. Extension of Term. The term of the Lease is extended for a period of ninety (90)
days, commencing July 24, 2026 (the day immediately following the expiration of the current
term) and expiring October 21, 2026 (the "Extension Term"), subject to Section 3 below.
2. Non -Signatory Effective July 24, 2026 and continuing through the Extension
Term, Lessee shall pay Base Rent at the annual rate of Five and 52/100 Dollars ($5.52) per rentable
square foot (the "Non -Signatory Rate"), which for the 26,100 -square -foot Leased Premises equals
Twelve Thousand Six and 00/100 Dollars ($12,006.00) per month, payable in advance on the first
day of each month in accordance with Article 3 of the Lease. Base Rent for any partial month shall
be pro -rated based on the number of days in such month. The Non -Signatory Rate is not, and shall
not be referred to as, a holdover rate.
1
Docusign Envelope ID: 4C299B95-E2A6-8FFB-80C3-2CF9A5D85E57
3. Month -to -Month Continuation. Upon expiration of the Extension Term, unless the
Parties have executed a further amendment or a successor lease, the tenancy shall continue on a
month -to -month basis at the Non -Signatory Rate and otherwise on all of the terms and conditions
of the Lease. Either Party may terminate the month -to -month tenancy upon not less than thirty (30)
days' prior written notice to the other. Following any termination notice, Lessee shall vacate and
surrender the Leased Premises to Lessor, in the condition required by the Lease, no later than
twelve (12) months after the date of the notice. Lessee shall pay Base Rent at the Non -Signatory
Rate, prorated for any partial month, for each month and partial month that Lessee remains in
possession of the Leased Premises, and such Base Rent shall continue to accrue and be due and
payable until Lessee has fully vacated and surrendered the Leased Premises, notwithstanding the
termination of the month -to -month tenancy or the effective date of any termination notice. For
purposes of clarification, Lessee shall only be obligated to pay Base Rent as described above until
Lessee surrenders the Leased Premises to Lessor in the condition required under the Lease, not
necessarily for the entire twelve (12) month period following a termination notice (e.g. if Lessee
vacates the Leased Premises eight (8) months after the termination notice, Base Rent shall only
accrue during said eight month period). Lessee's insurance and indemnification obligations under
Articles 10 and 11 of the Lease shall remain in full force and effect through the date Lessee fully
vacates and surrenders the Leased Premises. Lessee's failure to fully vacate and surrender the
Leased Premises within the twelve (12) month period shall constitute a holdover under the Lease.
The month -to -month tenancy is not a renewal or extension of the term beyond that expressly
provided in Section 1 and confers no right or option upon Lessee to remain in possession except
as expressly set forth in this Section.
4. Continuation of Lease Terms, Ratification. Except as expressly modified by this
Extension Agreement, all terms and conditions of the Lease remain in full force and effect during
the Extension Term and any month -to -month continuation, and are ratified and confirmed. All
capitalized terms not otherwise defined herein have the meanings set forth in the Lease. In the
event of a conflict between the Lease and this Extension Agreement, this Extension Agreement
controls.
5. Counterparts; Electronic Execution. This Extension Agreement may be executed
in counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same instrument. Electronic transmittal of an executed signature page (including by
PDF or recognized electronic -signature platform) shall have the same effect as delivery of an
original.
[Signature Page Follows]
4
Docusign Envelope ID: 4C299B95-E2A6-8FFB-80C3-2CF9A5D85E57
IN WITNESS WHEREOF, the Parties have executed this Extension Agreement as of the
day and year first above written.
LESSOR:
CITY OF PUEBLO,
a Colorado municipal corporation
--^Signed by:
By: k
Heather Graham, Mayor
LESSEE:
LOCKHEED MARTIN CORPORATION,
a Maryland corporation
By: LMC Properties, Inc., its attorney -in -fact
Signed by:
By: t S
Name:
t rdie
Title: Manager, Real Estate
[Seal]
Docusigned by:
Attest:
City Clerk