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City Council |
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Agenda Request |
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Agenda Of: |
May 20, 2008 |
Agenda Request No: |
V-F |
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Initiated By: |
Adam Scott airport business manager |
Responsible Department: |
aviation |
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Presented By: |
phillip w. savko director of aviation |
Department Head: |
phillip w. savko director of aviation |
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Additional Department. Head (s): |
n/a |
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Subject / Proceeding: |
lease of northwest i hangar to western airways |
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Exhibits: |
northwest i hangar lease |
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Clearances |
Approval |
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Legal: |
meredith wilganowksi, assistant city attorney |
Executive Director: |
joe esch bus & intergov
relations |
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Purchasing: |
Linda Symank Director of Fiscal Services |
Asst. City Manager: |
n/a |
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Budget: |
Jennifer brown assistant fiscal services director |
City Manager: |
Allen Bogard |
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Budget |
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Expenditure Required: $ |
N/A |
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Current Budget:
$ |
N/A |
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Additional Funding:
$ |
N/A |
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Recommended Action |
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Authorize the City Manager to execute the lease between City of Sugar Land and Western Airways. |
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Executive Summary |
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The City acquired
the Northwest hangar complex in 2005 for $250,762 as part of a lease
termination agreement with the Friedkin companies. Since that time, the two hangars have been
leased to a number of aircraft on a month-to-month basis until a long-term
tenant could be identified. Last
summer, Western Airways expressed an interest in leasing both hangars in
order to expand its operations. Despite
the fact that an aircraft owned by the Shaw Group was damaged upon landing at
the airport in November and is still undergoing repairs in the Northwest II
hangar, Western desires to execute a lease of the Northwest I hangar and
offices at this time. Western would
also like to lease the Northwest II hangar when it becomes available. Western Airways,
an aircraft charter and management company, is a long-time tenant of the
airport. The company currently owns
two large hangars constructed on land leased from the airport; and its annual
fuel purchases are the highest among based tenants. Airport management
met with the Western’s president, Mr. George Dodge, to work out details of a
possible lease agreement. This
information was presented to the Business Incentives Committee, which expressed
approval of the lease agreement. Details of the lease include the following:
Western’s monthly lease rate for the entire Northwest Complex (once Northwest II becomes available) will be $8,795 per month. Airport management anticipates this lease rate coupled with additional fuel sales will exceed the original $123,541 in revenues projected when the hangars were purchased. |
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Exhibits |
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CITY OF SUGAR LAND
WESTERN AIRWAYS
TERM LEASE
FOR IMPROVED AIRPORT PROPERTY
(NW I)
This Lease is made between the CITY OF SUGAR LAND, (the City), a municipal corporation of the State of Texas, and Lessee. In consideration of the mutual covenants contained in this Lease, the parties agree as follows:
1. Definitions and Exhibits.
1.1. Definitions. The following words as used in this Lease have the following meanings unless the context clearly indicates otherwise:
Airport means the Sugar Land Regional Airport.
Aviation Director means the City's Aviation Director or the person, by whatever title, designated by the City to be responsible for operation of the Airport.
City
means the City of Sugar Land, Texas.
City Council or Council means the City Council of the City.
City Manager means the City Manager for the City.
F.A.A. means the United States Federal Aviation Administration or its successor agency.
Initial Improvements mean the initial air conditioning, electrical, water, and other associated repairs to serve the building on the Premises undertaken by Lessee as provided for in this Lease.
Lease means this agreement.
Lessee
means Western Airways, Inc.
Premises means the improved real property described in Exhibit A, located at the Airport.
1.2. Exhibits. This Lease includes the following exhibits, attached to and incorporated into this Lease by reference. Any amendment of any Exhibit to this Lease approved by the City Council shall be attached to this Lease as a modification of this Lease. The amendment to the Exhibit is effective when the City gives Lessee written notice of the amendment.
Exhibit A is a drawing of the Premises.
Exhibit B is the Sugar Land Regional Airport Minimum Requirements and Standards as approved by and amended from time-to-time by the City Council (Minimum Requirements and Standards).
Exhibit C is the Airport Rules as approved by and amended from time-to-time by the City Council (Airport Rules).
Exhibit D is the FAA requirements.
Exhibit E is the City's insurance requirements applicable to Lessee under this Lease (PU-111F-6 Insurance for Airport Fixed Base Operator).
Exhibit F shows the adjusted monthly lease rental payments as they are established for each subsequent five-year term, or portion thereof, of this Lease.
2. Leased Premises and Airport Use.
2.1. The City leases to Lessee and Lessee leases from the City the improved real property describe in Exhibit A.
2.2. Lessee may use the Leased Premises only for the purpose of conducting aviation related operations that comply with the Minimum Standards and Requirements applicable to Commercial Operator Group Two (Exhibit B), and for no other purpose, unless approved by the City's aviation director. Lessee must comply with the Airport Rules (Exhibit C) and the requirements of the Federal Aviation Administration (Exhibit D), and any amendments to Exhibits C or D hereafter made by the City, copies of which are kept on file by the City's Aviation Director.
2.3. Lessee is granted the non-exclusive use of all portions of the Airport that are open for use by the public for the purpose of landings, takeoffs, and taxiing of aircraft, on the same terms and conditions as are applicable to the public.
2.4. Lessee must not store any hazardous materials or toxic substances on the Leased Premises, except those materials and substances necessary and related to the performance of activities permitted on the Leased Premises. If any hazardous material spills or leaks are discharged on or from the Leased Premises arising from the acts or omissions of Lessee or Lessee's invitees or agents, Lessee must immediately make all repairs necessary to prevent further spills, leaks, or discharges and must immediately clean up the spill, remove any contaminated soil and promptly dispose of the same in accordance with the applicable law.
2.5. The Lessee must not place or permit the placement of any sign, banner, flag, placard, or similar advertising devise on the Leased Premises so as to be visible outside of an enclosed building located on the Leased Premises, unless approved in writing in advance by the Aviation Director. Any sign approved by the Aviation Director that is governed by the City's sign regulations must comply with those regulations, including the requirement to obtain a permit from the City.
3. Term, Termination, and Default.
3.1. Subject to the other termination provisions contained in this Lease, this Lease begins on _______________, 2008 and continues for an initial term of five-years. Thereafter, the Lessee may extend the term of this Lease two times, in five-year terms, by giving the City written notice of each five-year extension at least 180 days prior to the date the Lease would otherwise terminate.
3.2. Should Lessee default in the performance of any provision of this Lease, the City will give written notice to Lessee of the default and what must be done to correct the default. If the default is not corrected within 30 days after the City gives the Lessee written notice of the default, the City may immediately terminate this Lease by delivering notice of termination to Lessee.
3.3. The City may terminate this Lease at any time during its term by giving the Lessee written notice of termination at least 120 days prior to the termination date, if:
(a) The City decides to relocate all or part of any building or other improvements located on the Leased Premises to any land not included in the Leased Premises;
(b) Demolish all or part of any building or other improvements located on the Leased Premises;
(c) Lessee terminates or fails to renew any other lease with the City; or
(d) Lessee fails to enter into a lease with the City for Northwest Hangar II within one year from the beginning date of this lease.
3.4. If the improvements on the Leased Premises are so damaged or destroyed so that they may not be used for their intended purpose, as determined by the City, this Lease terminates on the date of the damage or destruction.
3.5. If Lessee remains in possession of the Leased Premises after the termination date of this Lease with the City's consent, the Lessee's holding over will be considered a month-to-month tenancy beginning on the termination date of this Lease, and not a renewal or extension of the term of this Lease, at the monthly rental rate provided in this Lease.
3.6. Upon termination of the Lease, the Lessee must immediately remove all personal property from the Leased Premises and must surrender the Leased Premises in substantially the same condition as existed at the beginning of the Lease, normal wear and tear excepted.
3.7. Subject to the this paragraph and notwithstanding any other provision of this Lease, Lessee shall be entitled to terminate this Lease early by giving at least one hundred twenty (120) days prior written notice to the City. If the Lessee terminates the Lease under this paragraph:
(a) Lessee will not be entitled to a reimbursement of that portion of Lessee’s expenses for the initial improvements that have not been recovered through a credit against Lessee’s monthly rent under Section 5.1;
(b) If the Lease is terminated within the first three years of the Lease, prior to vacating the Leased Premises Lessee will pay to the City the then unamortized balance of the costs of the repairs made by the Airport within the first three years under Section 5.4;
(c) If the Lease is terminated after the first three years of the Lease, prior to vacating the premises the Lessee will pay to the City the then unamortized cost of the improvements made by the City that otherwise would have been paid by Lessee through the rental charge under Section 5.4; and
(d) Lessee will not be entitled to receive any
reimbursement of the costs of repairs made by Lessee under Section 5.3.
4. Rentals and Payments.
4.1. Lessee will pay to the City each month a rental payment of $7,031.00 for Northwest Hangar I.
4.2. Beginning on the third anniversary date of this Lease, Lessee will pay to the City each month any amortized repair costs per section 5.4 of this lease.
4.3. Beginning on the fifth anniversary date of this Lease and at the beginning of each subsequent five-year anniversary date, the amount of the monthly rent automatically increases by 10%. The adjusted monthly rent established for each subsequent five-year term, or portion thereof, of this Lease will be reduced to writing, signed by each parties' representative, and attached to this Lease as Exhibit F.
4.4. Each monthly rental payment is due on the first City business day of each month without notice or billing from the City and will be delivered to the City's Finance Department, P.O. Box 5029, Sugar Land, Texas 77487-5029, or to the department and address as specified by the City in writing from time-to-time.
4.5. Any monthly rental payment not paid by the 15th day of the month due is delinquent and shall include an additional monetary amount, as a penalty, equal to five percent of the monthly rental due for that month. All rental payments which are past due more than 30 days will accrue simple interest at the rate of 18 percent annually on the overdue amount.
5. Improvements, Repairs, and Maintenance.
5.1. Prior to making or constructing any initial improvements to the Leased Premises, Lessee must submit the improvements to the City Manager for approval. The Lessee must prepare its plans and perform all work to comply with governing statutes, ordinances, regulations, codes and insurance rating boards and apply for and obtain required permits from the City prior to commencement of the improvements. Lessee must complete construction of the initial improvements on or before ____________, 2008, unless the City Manager grants an extension. All costs and expenses related to the construction of the initial improvements will be paid by Lessee. Within 30 days from the completion of the initial improvements, Lessee will submit receipts showing the costs and expenses of the initial improvements to the Aviation Director. The Aviation Director will authorize a credit to Lessee’s next monthly rental payment in an amount equal to the costs and expenses of the approved initial improvements.
5.2. The Lessee must not make any structural or permanent modifications or improvements to the Leased Premises without the prior written consent of the City. The Lessee must obtain required permits from the City prior to commencement of structural or permanent modifications or improvements to the Leased Premises. Any structural or permanent improvements or modifications of the Leased Premises approved by the City become the property of the City upon termination of the Lease.
5.3. After completion of the initial improvements, Lessee must make any repairs to the Leased Premises arising from normal wear and tear that do not cost more than $3000.
5.4. After completion of the initial improvements, Airport will make any necessary repairs to the Leased Premises that exceed $3000. Airport will pay the full cost of these repairs during the first 3 years of this Lease. Costs related to any such repairs required after the first 3 years of this Lease will be amortized over the expected life of the repair at the airport’s investment rate for the period and added to Lessee’s monthly rental charge.
5.5. Lessee must, to the satisfaction of the Aviation Director, keep and maintain the Leased Premises in a clean and sanitary condition. The Lessee must provide or pay for the cost of removing and disposing of solid waste from the Leased Premises. The Aviation Director may issue and Lessee must comply with any written directive regarding the type, location, and screening of trash containers maintained by the Lessee or its contractor outside any building.
6. Taxes,
Utilities, and Insurance.
6.1. Lessee must pay, before they become delinquent, all taxes, assessments, and fees assessed or levied upon Lessee’s property, the Leased Premises, or leasehold interest.
6.2. Lessor must provide, maintain, and repair the facilities necessary to provide water and wastewater services to the rest room facilities within the Leased Premises. During the Lease term Lessor has the right to construct and install lines and equipment on the Lease Premises for the purpose of providing water supply and wastewater services to the Leased Premises from the Lessor's public water and wastewater systems. If the Lessor does provide those services to the Leased Premises, the Lessee must, within 30 days of the Lessor making the connection to the Leased Premises water supply and plumbing systems, begin receiving and paying for water and wastewater services in accordance with the rates, rules, and regulations applicable to other customers of the Lessor's water and wastewater system, including any deposits required for new customers.
6.3. Lessee must pay for all telephone, electric, cable television, gas and other telecommunication or utility services for the use and enjoyment of the Leased Premises. The City has the right, without charge by Lessee, to connect to power, gas, and communication lines or equipment as are now or later installed upon the Leased Premises and has the right of access to construct and maintain the connections. Lessee, however, is not liable for any additional service fees or charges imposed by the utility provider as a result of the connection.
6.4. Lessee must obtain and maintain during this Lease, at Lessee's expense, insurance for an Airport Fixed Base Operator (FBO) as set forth in PU-111F-6, attached as Exhibit E to this Lease.
7. Miscellaneous Provisions.
7.1. Entire Agreements and Amendments. This Lease sets forth all of the understandings of the parties. Any modification of this Lease must be written.
7.2. Unlawful Use. Lessee and its employees and agents must not use or knowingly allow any other person to use the Leased Premises in violation of any federal, state, county, or local regulation, order, law, or ordinance that applies to the Leased Premises.
7.3. Notices. Any notice given under this Lease must be in writing and may be sent by mail; be delivered in person to the Lessee, its officers, employees, or agents; be posted on the Leased Premises; or be sent by telecopier; addressed as follows, or as the City or Lessee may hereafter designate by written notice:
To the City: Director of Aviation
City of Sugar Land
12888 Highway 6 South
Sugar Land, Texas 77487
To Lessee: Western Airways, Inc.
200 Jim Davidson Drive
Sugar Land, Texas 77478-5706
Attn: George A. Dodge, President
7.4. Assignment and Subleases. Lessee must not assign this Lease or sublease any portion of the Leased Premises to any other person without the prior written consent of the City.
7.5. Right of Entry. The City has the right at any time to enter onto the Leased Premises for the purpose of inspecting the Leased Premises, making necessary repairs, additions or alterations as may be necessary for the safety, improvement, or preservation of the Leased Premises.
LESSEE
By:____________________________
Title: __________________________
Date:_________________________
CITY OF SUGAR LAND, TEXAS
By: ___________________________
Date:__________________________
ATTEST: Reviewed for legal compliance:
____________________________
Glenda Gundermann, City Secretary
EXHIBIT
A
Northwest
I Hangar
400
Hull Lane
Offices
400-A Hull Lane
Sugar
Land, TX 77478
EXHIBIT B
SUGAR LAND MUNICIPAL AIRPORT
MINIMUM STANDARDS AND REQUIREMENTS
(As Amended August
17, 1999 by Resolution No. 99-42)
The following minimum standards and requirements have been established by the City of Sugar Land, owner of the Sugar Land Municipal Airport, for aeronautical activities on the Airport. The purposes of these standards and requirements is to protect the public interest in the safe and efficient operation of the Airport; to enhance its orderly growth; to establish development guidelines; and to insure compliance with all federal, state, and local laws and regulations.
I. DEFINITIONS
A. AERONAUTICAL ACTIVITY means any activity relating to the operation of aircraft or which contributes to the safety of such operations.
B. AIRCRAFT means any airplane, glider, airship, balloon, helicopter or other device licensed by the Federal Aviation Administration for flight through the air.
C. Persons who want to make regular use of the Airport for commercial or non-commercial aeronautical activity under a permit or written agreement are classified as follows:
1. COMMERCIAL OPERATOR, GROUP ONE -- Any person providing goods or services to the public relating to authorized aeronautical activity, except those activities reserved to the City, from permanent improvements meeting the Standards and Requirements for a commercial operator, group one.
2. COMMERCIAL OPERATOR, GROUP TWO -- Any person providing goods or services to the public relating to authorized aeronautical activity, except those activities reserved to Commercial Operator, Group One or the City, from permanent improvements meeting the Standards and Requirements for a commercial operator, group two.
3. SPECIALIZED COMMERCIAL OPERATOR -- Any person authorized by permit to conduct specific commercial aeronautical activity of a limited or part time nature which does not require permanent facilities.
4. AIRPORT TENANT, GROUP ONE -- Any person constructing or leasing airport facilities or land for more than one year for non-commercial aeronautical activity.
5. AIRPORT TENANT, GROUP TWO -- Any person leasing existing airport facilities for one year or less for aircraft tiedown or storage.
II. GENERAL PROVISIONS
A. Permit or Agreement Required. No person shall carry on any aeronautical activity on the Airport without first receiving a written permit or entering into an agreement with the City authorizing the activity. All permits and leases shall comply with these Standards and Requirements.
B. Existing Tenants. Existing airport tenants, commercial operators and flying clubs as of the effective date of these Standards and Requirements shall have one year or until the termination of any existing agreements to comply with these Standards and Requirements.
C. Application. Any person desiring to lease Airport property must complete a standard application and submit the application and required fee to the Airport Director.
D. Activities Reserved to City. The following activities are reserved exclusively to the City and no person shall engage in any of the listed activities on the Airport, except as specifically authorized in writing by the City:
1. The sale of aviation fuel on the Airport or dispensing or supplying aviation fuel for consideration on the Airport.
2. The construction or operation of hangars under 2500 square feet and tiedown aprons for the month-to-month storage of propeller driven based aircraft.
3. The construction and operation of all facilities for airfreight or scheduled air service, including associated service facilities such as restaurants, bars, auto rental agencies and gift shops.
E. Activities Authorized by Permit or Lease. Other persons may by permit or lease engage in one or more of the following aeronautical activities on the airport.
1. Aircraft sales
2. Aircraft rental
3. Flight training
4. Storage or aircraft and parts
5. Routine maintenance, inspection and repair of reciprocating powered aircraft, engines and airframes including gliders
6. Routine maintenance, inspection and repair of turbo prop and turbo jet powered aircraft, engines and airframes
7. Air taxi service
8. Radio, instrument, or propeller repair service
9. Specialized commercial services
10. Flying clubs
11. Storage or tiedown of transient aircraft
12. Storage or tiedown of based aircraft
13. Air Freight
14. Scheduled air service
15. Aircraft Fabrication
III. COMMERCIAL OPERATOR GROUP ONE
A. Aeronautical
Activities Authorized
The Commercial Operator Group One may perform any authorized aeronautical activity not reserved to the City. Aviation activities reserved solely for Commercial Operators, Group One are as follows:
1. Storage or tiedown of transient aircraft; and
2. Routine maintenance, inspection and repair of turbo prop and turbo jet aircraft engines and airframes.
B. Minimum Requirements
1. A lease of a minimum of two acres of land within the area identified for suitable development by the approved airport master plan.
2. The operator shall be staffed with adequate personnel to provide services eight hours each and every weekday.
3. The operator shall perform aircraft arrival and departure guidance on the ramp including transient aircraft parking and tiedown services and transient hangar space.
4. The operator must provide a passenger lounge and a public telephone available to customers during normal business hours.
5. Minimum permanent improvements required are:
(a) 2,000 square feet of combined offices and lobby space.
(b) Onsite auto parking facilities at a rate of one space per every 1,000 square feet of hangar area and 15 spaces per every 1,000 square feet of office/lobby.
(c) Aircraft ramps and automobile parking lots lighted during hours of darkness.
(d) One metal or concrete hangar with a minimum of 10,000 square feet of interior clear space capable of handling a 60,000 pound gross weight aircraft.
(e) A minimum of 20,000 square feet of concrete aircraft parking apron designed and constructed for at least a 60,000 pound gross weight aircraft.