HomeMy WebLinkAbout11292Docusign Envelope ID: E85A92DD-82B4-8C84-82DC-EACB658E31 F6
City Clerk's Office Item # S6
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PUEBLO
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Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: October 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
MUNICIPAL CORPORATION, AND DONALD E. STARUH FOR
PROPERTY LOCATED AT 309 SKYWAY STREET AT PUEBLO
MEMORIAL AIRPORT, AND SUPERSEDING THE PRIOR HANGAR
GROUND LEASE APPROVED BY RESOLUTION NO. 10362
SUMMARY:
Attached is an Ordinance approving a new Hangar Ground Lease Agreement between
the City of Pueblo and Donald E. Staruh for the ground parcel commonly known as 309
Skyway Street at Pueblo Memorial Airport, consisting of approximately 6,045 square
feet. The new Lease supersedes the prior Hangar Ground Lease dated April 11, 2005,
which expired by its terms on April 10, 2025. Donald E. Staruh 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 thirty five cents ($0.35) per square
foot per year with subsequent appraisal resets every five (5) years, 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.
PREVIOUS COUNCIL ACTION:
On April 11, 2005, City Council approved Resolution No. 10362 authorizing the original
Hangar Ground Lease between the City and Bongirno Family Trust for the same ground
parcel.
On August 26, 2013, City Council approved Resolution No. 12761 consenting to the
assignment of the Hangar Ground Lease from Bongirno Family Trust to Donald E.
Staruh.
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BACKGROUND:
The City owns and operates Pueblo Memorial Airport. In 2005, the City entered into a
twenty (20) year Hangar Ground Lease with Bongirno Family Trust for an approximately
6,045 square foot ground parcel located at 309 Skyway Street, on which the Lessee
constructed a hangar. The Lease, as amended in 2013, 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 Donald E. Staruh by an Assignment dated August 6, 2013,
to which the City Council consented on August 26, 2013, by Resolution No. 12761. The
original twenty (20) year term expired on April 10, 2025, and no renewal option was
exercised. Section 14 of the prior Lease provides that a Lessee holding over after
termination occupies under a tenancy for successive monthly terms on the same
conditions as the Lease, terminable on thirty (30) days' prior written notice. Mr. Staruh
has occupied the ground parcel under that provision since April 11, 2025, while the City
and the Lessee negotiated a new instrument. The City has notified Mr. Staruh that the
month -to -month tenancy will be terminated and that a new Ground Lease is required for
his continued occupancy.
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 set at thirty five cent ($0.35) per square foot per year
with subsequent appraisal resets to fair market rental value determined by independent
appraisal, every five (5) years and annual CPI -U adjustments between resets; (c) 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; (d) preservation of the Lessee's right to obtain leasehold financing,
subject to the City's notice and cure rights; and (e) 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.
FINANCIAL IMPLICATIONS:
The initial annual ground rent under the new Lease will be $0.35 (thirty-five cents) per
square foot per year calculated below:
Per -Square -Foot Annual Rate: $0.35 per sq. ft. x Leased Premises: 6,045 sq. ft. _
Annual Ground Rent: $2,115.75.
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.
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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 the month -to -month tenancy under Section 14 of the prior Lease will
terminate on the date stated in the City's thirty (30) day notice. Section 7 of the prior
Lease then requires Mr. Staruh to remove the hangar and restore the ground parcel to
its original condition.
RECOMMENDATION:
Approval of the Ordinance.
ATTACHMENTS:
1. 309 Skyway 2026 10 13 Hangar Ground Lease
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ORDINANCE NO. 11292
AN ORDINANCE APPROVING A HANGAR GROUND LEASE
AGREEMENT BETWEEN THE CITY OF PUEBLO, A
COLORADO MUNICIPAL CORPORATION, AND DONALD E.
STARUH FOR PROPERTY LOCATED AT 309 SKYWAY
STREET AT PUEBLO MEMORIAL AIRPORT, AND
SUPERSEDING THE PRIOR HANGAR GROUND LEASE
APPROVED BY RESOLUTION NO. 10362
WHEREAS, the City of Pueblo, a Colorado 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 11, 2005, by Resolution No. 10362, the City Council approved a
Hangar Ground Lease between the City and Bongirno Family Trust for the ground parcel
commonly known as 309 Skyway Street at Pueblo Memorial Airport, containing approximately
6,045 square feet (the "Prior Lease"); and
WHEREAS, the Prior Lease was thereafter assigned to Donald E. Staruh on August 26,
2013, consented to by Resolution No. 12761; and
WHEREAS, the Prior Lease has expired by its terms, the hangar and improvements on
the ground parcel are owned by Donald E. Staruh, and the City and Mr. Staruh 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 Colorado
Municipal Corporation, and Donald E. Staruh 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 Bongirno Family
Trust dated April 11, 2005, approved by Resolution No. 10362, as assigned and amended.
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.
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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 September 28, 2026.
Final adoption of Ordinance by City Council on October 13, 2026. DocuSignedby:
President of City Council
Action by the Mayor:
E Approved on
❑ Disapproved on
10/14/2026
based on the following objections:
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
Signed by:
Mayor
❑ Council action on failed to override the Mayor's veto.
President of City Council
ATTEST Docusigned by:
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City Clerk