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ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS TERMINATING THAT CERTAIN
AIRPORT LEASE DATED APRIL 20, 2004, BY AND BETWEEN THE CITY OF DENTON,
TEXAS AND JANUARY AVIATION, L.L.C.; AUTHORIZING THE CITY ATTORNEY OR
HIS DESIGNEE TO TAKE APPROPRIATE LEGAL ACTION, IF NECESSARY, TO
EFFECTUATE THE TERMINATION; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Denton, Texas (the "City") and JVC Real Estate, L.L.C. ("JVC")
entered into that certain Airport Lease Agreement dated April 20, 2004 (the "Lease Agreement")
whereby the City leased to JVC for aviation purposes an approximately 90 feet by 180 feet,
16,200 square feet or 0.372 acres of land more particularly described in the Lease Agreement
which is incorporated herein by reference (the "Leased Property"); and
WHEREAS, on May 3, 2005 the Lease Agreement was assigned from JVC as Assignor
to January Aviation, L.L.C. ("January") as Assignee; and
WHEREAS, pursuant to the Lease Agreement, January has the duty and obligation to
construct a hangar/office facility of not less than 8,000 square feet with taxiway access and
appropriate culverts or drainage ("Lessee's Improvements") to be completed not more than 720
days from April 20, 2004, the effective date of the Lease Agreement; and
WHEREAS, January's obligation to complete the Lessee's Improvements within this
time period is a material obligation of January under the Lease Agreement; and
WHEREAS, on or about May 4, 2006, the City gave January and JVC notice ("Notice")
that the 720 days had elapsed without the required Lessee's Improvements being completed, a
copy of which is attached hereto as Exhibit "A" and incorporated herein by reference; and
WHEREAS, despite the May 4, 2006 Notice, January failed or refused to complete the
Lessee's Improvements within the required time; and
WHEREAS, the May 4, 2006 Notice informs January that if the Lessee's Improvements
are not completed within 30 days of the Notice, the City will terminate the Lease Agreement;
and
WHEREAS, to date, which is over 30 days since the Notice was received by January and
JVC, January has failed to complete the construction of the Lessee's Improvements for the
Leased Property; and
WHEREAS, the Airport Advisory Board at its meeting of July 12, 2006 recommended
that the City Council terminate the Lease Agreement and give a leasing preference to the first
person contacting the City Manager, or his designee who desires to lease the property under
terms deemed beneficial by the City Manager; and
SAOur Documents\0rdinanees\06Vanuary Termination.doc
WHEREAS, the City Council finds that terminating the Lease Agreement in accordance
with the Airport Advisory Board's recommendation would be in the public interest; NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings and recitations contained in the preamble of this Ordinance
are incorporated herein by reference.
SECTION 2. The City Council hereby terminates the Lease Agreement due to
nonperformance of a material obligation of January under the Lease Agreement. Should legal
action be required to effectuate the termination of the Lease Agreement and/or if it should
become necessary to file legal action to remove January from the Leased Property or to
determine the rights and obligations of the parties under the Lease Agreement, the City Attorney,
or his designee is hereby authorized to file such legal actions or lawsuits on behalf of the City.
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of , 2006.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY'
BY:
APPROV D AS T LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
Page 2
-- -- - RECEIVED
aty �1- Exhibit A MAY 0 5 2006
CITY OF DENTON
I E N T O N LEGAL DEPT.
DENTON MUNICIPAL AIRPORT, TERMINAL BUILDING, 5000 AIRPORT RD.
DENTON, TEXAS 76207 (940) 349-7736 - (940) 349-7744 - Fax (940) 349-7289
May 4, 2006
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED #7004 2890 0003 5971 1217
AND FIRST CLASS MAIL
Mr. Jim Lancaster, President
January Aviation, LLC
365 Miron, Suite A
Southlake, Texas 76092
RE: Airport Lease Agreement dated April 20, 2004 between the City of Denton, Texas
and JVC Real Estate LLC. (the "Lease Agreement')
Dear Mr. Lancaster:
Please let this letter service as a follow up to your email correspondence dated April 24,
2006 concerning the Commercial Airport Operator Lease Agreement between JVC Real
Estate, LLC (JVC) and the City of Denton dated April 20, 2005 and assigned to January
Aviation, LLC on May 3, 2005.
As stated in Article II C of the lease, January Aviation is required to begin construction
of the hangar/office facility within 720 days from the date of the agreement. I have
attached a copy of this section to this document for your reference. This letter shall serve
as written notification that January Aviation is in default of the agreement for failing to
commence construction of the hangar/office facilities required by the Lease Agreement.
On December 20, 2005, January 10, 2006, February 9 and February 24, 2006, Airport
Staff notified you via phone of the April 20, 2006 construction requirement.
You are hereby given notice that you are in default of the Lease Agreement by failing to
construct the required improvements as provided in Article II C of the Lease Agreement.
If this default continues for thirty (30) days after the receipt of this notice, the City of
Denton will terminate the Lease Agreement. A copy of this letter will also be provided to
Dr. John Vann, President, JVC Real Estate LLC as a condition of the May 3, 2005 Lease
Assignment.
"Dedicated to Quality Service"
eomo.cityofden ton.com
Mr. Jim Lancaster
May 4, 2006
Page 2
Should you have any questions concerning this issue please do not hesitate to contact me
at (940) 349-7744. Thank you for your cooperation on this matter.
Regards,
Tim Whitman,
Airport Manager
Attachments
cc: John Vann, President, JVC Real Estate LLC
Howard Martin, Acting City Manager
Herb Prouty, Consulting City Attorney
relative to the operation or maintenance of the Airport.
Lessor, for and in consideration of the covenants and agreements herein contained, to
be kept by Lessee, does hereby demise and lease unto Lessee, and Lessee does hereby lease
from Lessor, for the ]case term described in Article Ifl, the following described land situated
in Denton County, Texas:
A. Land. A tract of land, being approximately 90 feet by 180 feet, 16,200 square feet,
or 0.372 acres, drawn and outlined on Attachment "A", and legally described in Attachment
"B," such attachments being incorporated herein by reference (the "Leased Premises").
Together with the right of ingress and egress to the Leased Premises; and the right in
common with others so authorized of passage upon the Airport property generally, subject
to reasonable regulations by the City of Denton and such rights shall extend to Lessee's
employees, passengers, patrons and invitees. For purposes of this agreement, the tern
"Leased Premises" shall mean all property located within the metes and bounds described
and identified within Attachment "B", including leasehold improvements constructed by the
Lessee, but not including certain easements or property owned and/or controlled by the
Lessor.
A legal description of the leased premises is not currently attached as Attaclmnent "B".
Lessee shall deliver to Lessor no later then 30 clays after the date of this Agreement a legal
description of the leased premises accurately describing the leased premises that is
acceptable to Lessor. If Lessee fails to do so, Lessor at its option may terminate this
Agreement, in which case it will have no further force and effect. The approved legal
description will be attached to this Agreement as Attachment "B".
B. IMPROVEMENTS PRnViI)Fn RY LESSOR: NONE: There will be no
improvements provided by Lessor, except as set forth in Article H.E. "Access to Utilities"
below.
For the propose of this Lease Agreement, tine term "Lessor improvements" shall mean
those things on or adjacent to the Leased Premises belonging to, constructed by, or to be
constructed by the Lessor, which enhance or increase, the value or quality of the Leased
Premises. Unless otherwise noted herein, all Lessor improvements are and will remain the
property of Lessor. All Lessor improvements must be described in detail above, or above
referenced and attached to this Agreement in an exhibit approved by Lessor.
C. IMPROVFMFNTS PROYMED BY LESSEE On the Leased Premises, Lessee
shall construct a hangar/office facility not less than 8,000 square feet with taxiway access
and appropriate culverts or drainage as required by City ordinances in the utility right of
way south and north of the proposed hangar as well as other improvements as determined
necessary by City ordinances (the "Lessee's Improvements"). The Lessee's Improvements
shall be completed not more than 720 days from the effective date of this Lease Agreement
AIRPORT LEASE AGREEMENT JVC LLC - Page 3
as evidenced by the issuance of a Certificate of Occupancy (the "Construction Period")
Notwithstanding anything contained in this Lease Agreement to the contrary, a
failure to complete the Lessee's Improvements within the Construction Period may, at
the sole option and discretion of the Lessor, result in the immediate termination and
cancellation of this Lease Agreement upon 30 clays written notice of cancellation to
Lessee. In such case Lessee's rights under the Lease Agreement will innuediately
cease and be forfeited, and all of Lessee's Improvements shall immediately become the
property of Lessor at no cost, expense or other compensation paid by Lessor to
Lessee; and Lessee shall immediately vacate the Leased Premises.
D. FASFMFNTS. Lessor and Lessee by mutual agreement may establish, on the
Leased Premises, easements for public access on roads and taxiways.
E. AC'CF.SR TO T JTIf IT1FS Lessor represents that there are water, sewer and 3-
phase electricity lines within close proximity to the Leased Premises available to "Lap -in" by
Lessee, and that the same are sufficient for usual and custonnary service on the Leased
Premises.
The term of this Lease Agreement shall be for a period of thirty (30) years, coo
mencing on the 1 st clay of May, 2004 and continuing through the last day of April of 2034,
unless earlier terminates] under the provisions of the Lease Agreement (the "Lease Term").
Any attempt by Lessee to renegotiate this Lease Agreement shall be in writing addressed to
the City Manager or his designee at least one hundred eighty (180) days before the
expiration of the Lease Term, and at least ISO clays before the expiration Of any additional
renegotiated period. Lessee has the option to renew for two (2) additional ten (10) year
terms. The rental and terms to be negotiated shall be reasonable and consistent with the
then value, rentals and terms of similar property on tine Airport.
I��A7\'�`hi� ITS. : ► a ► �
Lessee covenants and agrees to pay Lessor, as consideration for this Lease Agreement,
the following payments, rentals and fees:
A. LAND RFNTAT shall be, due and payable in the sum of SO.17 per square foot or
S2,754 per year (the "Original Rent"), payable in twelve (12) equal monthly installments in
the SUIT) of Two Hundred and Twenty Nine and fifty cents (S229.50) in advance, on or
before the 1st day of each and every month during the tenn of this Lease Agreement.
Lessee has the option to pay annual rentals and fees in whole on or before the 1st day of
April, at the beginning- of the City's fiscal year, each and every year of this Lease
Agreement.
Notwithstanding the foregoing, the annual lease rental will be reduced by the current lease
rate per square foot, as adjusted by the CPI-U referenced in Section N.C., times the number
AIRPORT LEASE AGREEMENT JwC LLC - Page 4
CU` CCUHE-I Wi�Wy.IOC.VS-1\SmpUVC SSmm.mP^e�6z
LEASE ASSIGNMENT OF PAD SITE AT DENTON
MUNICIPAL AIRPORT
DATE: May 3, 2005
ASSIGNOR: JVC Real Estate LLC
ASSIGNEE: January Aviation, LLC
LEASE: Date:
April 20, 2004
Landlord:
City of Denton, Texas
Tenant:
JVC Real Estate LLC
Premises:
The property located at 4705 Spartan Drive, Denton, Texas 76207
and more fully described in the attached Exhibit A which is made a
part of this Assignment for all purposes.
Assignor assigns to Assignee Tenant's interest in the lease.
A. Assignee Agrees To:
1. Assume Tenant's Obligations under the Lease.
2. Accept the premises in their present "as is" condition.
3. Complete all obligations of purchase from Assignor prior to this Assignment
becoming effective.
Landlord consents to this assignment. Landlord agrees to notify Assignor within 30 days of any
Assignee default.
13. Assignor agrees that:
1. Assignor will remain liable on the Lease should Assignee default on the Lease.
PREVIOUS ASSIGNMENTS: None
LLC, John A_ Vann, Manager, Assignor
GvpGM1p-IV4erG/.I.CGL.f I\T®yJVC Spann Avpmmt4z
i:—
Michael A. Conduff, Ci ager
Attest:
Jennifer Walters, City Secretary
1 1 �
By:
i
Approved as to Legal Form:
Edwin M. Snyder, Interim City Attorney
By
STATE OF TEXAS
COUNTY OF DENTON
This instrument was acknowledged before me on the H day of f rllf
2005, by John a. Vann, President of JVC Real Estate, LLC, a Texas Limited Liability Company,
on behalf of said Company.
BRANDT HEITZMAN
�. .w
?��' `^w Notary Public, State of Texas
[SEAL] a + My Commission Expires
3
May 12, 2008
STATE OF TEXAS
COUNTY OF DENTON
Ntatt ry Public, rStai6 of T�
My Commission Expires
(or Notary Stamp)
This instrument was acknowledged before me on the ! vA day of
2005, by Jim Lancaster, President of January Aviation, LLC, a Texas Limited LVability Company,
on behalf of said Company.
Mai ufiwkkA—. THOMFSON
���Notary Fubc
�zSTATE OF TEXAS
E.. �r:t`�.E tt172, 2Q0''i
U11-
AaLx
QtaryPublic, State of Texas
My Commission Expires
(or Notary Stamp)
Page 2 of 3
G�WClP6 �Y4aMl� WS-I�t�mpV VCSpanu Ad9ean,.Y�
STATE OF TEXAS
COUNTY OF DENTON
This instrument was acknowledged before me on the. �' . day of f l r
2005, by Michael A. Conduff, City Manager on behalf the City of Denton, Texa , a, unicipal
corporation.
JANE E. RICHARDSON
?� Diary Public, State of Texas
' My Commission Expires
June 27, 2005
Notary Public, State of Texas
My Commission Expires
(or Notary Stamp)
Page 3 of 3