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2010-193codadWepartmentsVegahour documents\ordinances110\airport sykes vaughan second amendment.doe ORDINANCE NO. 2010-193 AN ORDINANCE AUTHORIZING THE CITY MANAGER TO APPROVE A SECOND AMENDMENT TO A FIXED BASE OPERATOR LEASE AGREEMENT APPROVED BY ORDINANCE 2009-018 DATED JANUARY 6, 2009 AND AMENDED BY ORDINANCE 2009-323 DATED DECEMBER 15, 2009, BETWEEN THE CITY OF DENTON, TEXAS AND SYKES-VAUGHAN INVESTMENTS LLC. WHICH INCLUDES AMONG OTHER PROVISIONS THE RIGHT TO SELL AVIATION FUEL TO THE PUBLIC FOR A FIVE- PERCENT FUEL FLOWAGE FEE AND PROVIDE COMMERCIAL HANGAR AND TIE- DOWN SERVICE AT THE DENTON MUNCIPAL AIRPORT; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Manager or his designee is hereby authorized to execute a Second Amendment to a Fixed Base Operator Lease agreement between the City of Denton and Sykes- Vaughan Investments LLC for the right to sell aviation fuel and provide hangar and tie-down space at the Denton Municipal Airport, in substantially the form of the Second Amendment to the Fixed Base Operator Lease Agreement which is attached to and made a part of this ordinance for all purposes and to exercise all rights and duties of the City of Denton under the Fixed Base Operator Lease Agreement. SECTION 2. This ordinance shall become effective immediately upon its passage and approval. 4 PASSED AND APPROVED this the day of 2010. M RK A. BU _ U S, YOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: ~1~4n l~ APPR(WED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: SECOND AMENDMENT TO THE AIRPORT LEASE AGREEMENT WITH SYKES-VAUGHAN INVESTMENTS STATE OF TEXAS COUNTY OF DENTON KNOW ALL MEN BY THESE PRESENTS: This Second Amendment is made executed to be effective as of the 17th day of August, 2010 to that certain Airport Lease Agreement between the City of Denton, Texas, a municipal corporation, hereinafter referred to as "Lessor" and SYKES-VAUGHAN INVESTMENTS LLC, hereinafter referred to as "Lessee" which was executed to be effective as of the First day of March 2009, hereinafter referred to as "Base Lease". WITNES SETH: WHEREAS, the Lessor and Lessee wish to amend the Base Lease to add approximately 25,000 square feet to the Base Lease as Parcel H and make certain other changes to the Base Lease; NOW, THEREFORE, for and in consideration of the promises and the mutual covenants contained in this Agreement, the parties agree to amend the Base Lease as follows: SECTION 1. Section II. A., B., and C., "Leased Premises", Section IV. A "Payments, Rentals and Fees," and Section VIII. A. and C. "Leasehold Improvements" are hereby amended so as to add the following thereto: II. LEASED PREMISES Lessor, for and in consideration of the covenants and agreements herein contained, to be kept by Lessee, and subject to the conditions contained herein, does hereby demise and lease unto Lessee, and Lessee does hereby lease from Lessor, for the lease term described in Article III, the following described land situated in the City of Denton, Denton County, Texas as shown on Attachment A hereto: A. LAND. The same .78 acre (34,000 square feet) tract or parcel of land leased to Lessee under the Existing Lease identified as Parcel A, together with improvements thereon, which property is more particularly described in Attachment "B", attached hereto and incorporated herein by reference (the `Existing Parcel"), and an additional approximate 168,208 square feet of land identified as Parcel B (13,448 square feet), Parcel C (7,760 square feet), Parcel D (90,000 square feet), Parcel E (50,000 square feet) and Parcel F (2,000 square feet) on Attachment "C" (the "Leased Premises"), and, Parcel H (25,000 square feet) with improvements thereon as described in Section II. B of this Agreement. 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, Page 1 of 6 patrons and invitees. For purposes of this Agreement, the term "Leased Premises" shall include leasehold improvements constructed by the Lessee, but not including certain easements or property owned and/or controlled by the Lessor A legal description of Parcels B, C, D, E, F and H is not currently attached to this Lease Agreement. Lessee shall deliver to Lessor no later than 30 days after the Effective Date of this Agreement a legal description of Parcels B through H accurately describing same that is acceptable to Lessor. If Lessee fails to do so, Lessor at its option may terminate this Agreement as to Parcels A through H, in which case it will have no further force and effect. The approved legal description will be attached to this Agreement as Attachment "C". B. IMPROVEMENTS PROVIDED BY LESSOR: The improvements provided by Lessor, except as set forth in Article II.E. "Access to Utilities" below, shall be as follows: Lessor shall improve the current drainage structure along the east side of the expanded aircraft apron proposed for Parcel E. Lessor shall relocate existing open drainage feature (ditch) from the southeast corner of the existing ramp (existing wash rack) to the existing drainage ditch flowing west from John Carrell. The relocated flow line shall be approximately twenty feet (20) east of the east edge of the proposed apron. Lessor shall install approximately 160 linear feet of reinforced concrete pipe (RCP) connecting the relocated drainage flow line to the existing 48 inch RCP that is routed generally to the west. Lessor shall provide on Parcecl H one 15,000 square foot hangar foundation with electric, water and sewer utility connections installed, 6,000 square feet of concrete paved parking and 8,400 square feet of concrete ramp connection to an existing taxiway, all of which are constructed and in place on the effective date of this Agreement. Lessor, at its discretion, may elect to direct drainage directly south utilizing an open ditch to carry the water south past Taxiway L at the Taxiway Bravo intersection. The 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. 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. IMPROVEMENTS PROVIDED BY LESSEE. 6. Construction of Parcel H Improvements. The following improvements are currently located on Parcel H: One 15,000 square foot concrete hangar foundation with electric, water and sewer utility connections installed, 6,000 square feet of concrete paved parking and 8,400 square feet of concrete ramp connection to an existing taxiway. The Lessee shall make the following improvements and renovations to the Existing Improvements on Parcel G at an estimated cost of $250,000.00: Construction of a hangar to be used for storage of aircraft associated with the normal operation of an FBO service. Construction of the Upgrades shall be commenced no later than 120 days after the Effective Date of this Agreement and be completed no later than 270 days after the Effective Date ("Construction Period for the Upgrades"). Construction of the Upgrades are considered commenced upon issuance of a building permit and commencement of construction of any portion of the Upgrades. Construction of the Upgrades are considered complete when all of the Upgrades are actually completed in full with a Certificate of Occupancy. IV. PAYMENTS, RENTALS AND FEES A. LAND RENTAL. Land rental shall be due and payable to Lessor in twelve (12) equal monthly installments in the sums set forth below, on or before the 1st day of each and every month during the term of this Lease Agreement. Lessee has the option to pay annual rentals and fees in whole on or before the 1st day of October, at the beginning of the City's fiscal year, each and every year of this Lease Agreement. 4. Parcel H. Base annual rent shall be a sum of $6,000 for the land area and improvements as described in Section Il, B. of this Agreement (the "Original Rent"). Monthly rental shall be 1/12 1h of the annual rent. However, beginning March 1, 2013 the Original Rent will be adjusted in accordance with Section N.C. of this Agreement. In addition to the Base Annual rent for Parcel H, Lessee shall pay Lessor a percentage of all hangar and tie-down fees collected by Lessee from persons renting facilities on Parcel H. Such fees shall be equal to: a. 10% of all hangar and tie-down fees through November 30, 2009. b. 11% of all hangar and tie-down fees through November 30, 2019. C. 12% of all hangar and tie-down fees through the end of the Lease Term. All such fees shall be paid monthly to Lessor on or before the 15th day of each month during the Lease Term. The fees shall be accompanied by records showing the date and location on the Airport where the aircraft was hangared or parked and the tail number, or side number, of the aircraft. VIII. LEASEHOLD IMPROVEMENTS A. REQUIREMENTS: Before commencing the construction of any additional improvements on the Leased Premises including the Parcel A, B,C, E, F and H Improvements (the " Additional Lease Improvements"), Lessee shall submit: 1. Documentation, specifications, or design work, to be approved by the Lessor, which shall establish that the improvements to be built or constructed upon the Leased Premises are in conformance with the overall size, shape, color, quality and design, in appearance and structure of the program established by Lessor on the Airport. 2. All plans and specifications showing the location upon the Leased Premises of the proposed construction and improvements; 3. The estimated cost of such construction. No construction may commence until Lessor has approved the plans and specifications and the location of the Lease Improvements, and the estimated costs of such construction. Approval by the Lessor shall not be unreasonably withheld. Documentary evidence of the actual cost of construction on public areas only (such as taxiways, aprons or parking lots) shall be delivered by Lessee to Lessor's City Manager from time to time as such costs are paid by Lessee, and Lessor's City Manager or designee is hereby authorized to endorse upon a copy of this Lease Agreement filed with the City Secretary of Lessor such actual amounts as he shall have found to have been paid by Lessee, and the findings of the City Manager when endorsed by him upon said contract shall be conclusive upon all parties for all purposes of this Lease Agreement. No later than 30 days after completion of the Additional Lease Improvements, Lessee shall submit to Lessor detailed as built plans of the Additional Lease Improvements and documentary evidence acceptable to Lessor evidencing the total cost to construct the Lease Improvements ("Cost to Construct Lease Improvements"). C. OWNERSHIP OF IMPROVEMENTS: The Existing Improvements are the property of the Lessor. Lessee shall provide a legal description and survey no later than 30 days from the effective date of this agreement identified as Attachment "B" identifying Existing Parcel and the Existing Improvements in the Existing Parcel. Additional Lease Improvements, when completed by Lessee, (the "Lease Improvements") shall be subject to the following conditions, terms and provisions: 1. Removal of Buildings. No building or permanent fixture may be removed from the Leased Premises. 2. Assumption. The Lease Improvements shall automatically become the property of Lessor absolutely free, without any cost to Lessor, at the end of the Lease Term, or any extension thereof. 3. Failure to Complete Parcel A, B, C, E, F and G Improvements. The Improvements shall immediately become the property of Lessor at no cost, expense, or compensation to Lessee should Lessee fail to complete the Lessee's Improvements within the Construction Period as provided in Section H.C. of this Lease Agreement. 4. Cancellation or Termination. Should this Lease Agreement be cancelled or terminated before the end of the Lease Term, or extension thereof, Lessor shall have the right to purchase all of the Lease Improvements. In the event of a cancellation or termination, other than due to a default by Lessee that has not been cured as provided below, the purchase price shall be equal to the most recent value of the Lease Improvements as determined by the Denton County Central Appraisal District ("Value of the Lease Improvements") reduced by 1/30 for each year of the Lease Term that has expired as of the date of termination (the "Purchase Price"). With regard to Additional Lease Improvements, should the Denton County Central Appraisal District not determine a separate value for the Lease Improvements, or should such separate valuation be older than two years, then the Purchase Price will be determined taking the Cost to Construct the Lease Improvements reduced by 1/30 for each year the Lease Term has expired as of the date of termination. If the termination or cancellation is due to a default by Lessee that has not been cured within 30 days after written notice of default to Lessee, then the Purchase Price as determined above shall be reduced by 50%. However, if Lessee provides written notice to Lessor within said 30 day cure period that it is impossible to cure such default within said time period, then the Lessor may consent to an extension of such time to cure, which consent will not be unreasonably withheld. This clause shall not apply to the Fuel Farm. SECTION 2. Save and except as amended hereby, all the remaining clauses, sentences, paragraphs, sections and subsections of the Base Lease shall remain in full force and effect and shall fully apply to the additional property and improvements and expanded Leased Premises resulting from this Third Amendment of the Base Lease. IN WITNESS WHEREOF, the parties have executed this Lease Agreement as of the effective date first above written. CITY OF DENTON, TEXAS, LESSOR BY: - GEO GE C. CAMPBELL, CITY MANAGER ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPRO D AS LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: SYKES-VAUGHAN INVESTMENTS LLC, a Texas limited liability company JAA- BY: J ROPER~UGUtyl AGING PARTNER ACKNOWLEDGMENTS THE STATE OF TEXAS COUNTY OF DENTON § 1-10 This instrument was acknowledged before me on the day of , 2010, by George C. Campbell, City Manager of the City of Denton, Texas, on behalf of Ad municipality. a,,~pr?fie : JANE E. RICHARDSON Notary Public, State of Texas My Commission Expires June 27, 2013 THE STATE OF TEXAS § COUNTY OF DENTON (IV fi Zn4_wh& N TARY PUBLIC, STATE OF TEXAS This instrument was acknowledged before me on the _Lc2~_ day of ~1 2010 by Roper Vaughn, Managing Partner for Sykes-Vaughan Investments LLC, a Tex limited liability company, on behalf of said company. NOTARY PUBLI , TATE OF TEXAS ~plP-y PANDREA J. ATKINSON Notary Public, State of Texas My Commission Expires March 25, 2014 N J I ! 1 I I ~ J ` 11 1 - - I -I I I I t--,_ _ r- 7 I z I n r ~ `~i, I I~ ~ I ( 1 - = f I W I I t f ~D U7 T I I Ill ~I _ J i ~ - - - _ J1'S~1 Iy I r - u1 l o l I ~ (1 I r I N I }r I ~ j'! _ _ _ 1Jf 1 ti I r 12KY { rf LL y ' ~v)~~ 11~ - - N MM i_J OD MINE 'T II L _4 g +I 1 0 T _F 4 LWL ti LL (n J L, J ' off ~w C) CD 2E O~ C) 0 i NU) r--IS a: ,oo r., i, 4 I I Iv ~ 1 -IRK 04 SO o I ti 11 I I J S .I I I L~ N3 .a" I I I I r I 4 ~ ~