2006-195
p S:\Our Documents\Ordinanccs\06Vanuary Termination.doc
ORDINANCE NO. -Z{)OG- /t.J/)
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
S:\Our Documents\Ordinanccs\06\Janual)' 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 b~come effective immediately upon its passage and
approval.
PASSED AND APPROVED this the / g -tf. day of 0J hr
,2006.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY"
BY:
APPROV D AS T LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
By~jJJJ~~
Page 2
City Exhibit A
of
DENTON
RECEIVED
MAY 05 2006
CITY OF DENTON
LfGAL DfPT.
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 #7004289000035971 1217
AND FIRST CLASS MAIL
Mr. Jim Lancaster, President
J anuary Aviation, LLC
365 Miron, Suite A
Southlake, Texas 76092
RE: Airport Lease Agreement dated April 20, 2004 between the City of Denton, Texas
and NC 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 (NC) 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. 1 have
attached a copy of this section to this document for your reference. This letter shall serve
as written notification that J anuary 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 ofthe 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 Qualih} Service"
www.cityofdentoll.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,
. // ~
~c-/~
Tim Whitman,
Airport Manager
Attachments
cc: John Vann, President, NC Real Estate LLC
Howard Martin, Acting eity Manager
Herb Prouty, Consulting eity Attorney
relativc to thc operation or maintenance of the Airport.
II I FASPD l'RFMISFS
Lessor, for and in consideration of the covenants and agrecments herein contained, to
he kept by Lessee, does hereby demise ami lease unto Lessee, and Lessee does hereby lease
from Lessor, for the lease term dcscribed ill Aliicle 1fI, the following deseribcdland situated
in Denton County, Texas:
A. Land. A tract of land, being approximately 90 feet by ] 80 feet, 16,200 square feet,
or 0.372 acres, drawn and outlined on Attachment "A", and legally described in Attachment
"B," such attaclU11ents being incOllloratcd 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
cmployees, passengers, patrons and invitecs. For pUllJoses of this agreement, the tel111
"Leased Premises" shall mean all properiy 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 dcscription of the leased premises is not currently attached as Attachment "B".
Lessce shall deliver to Lessor no later then 30 days after the date of this Agreement a legal
description of the leased premises accurately describing the leased premises that is
acccptable to Lessor. 1 f 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. lMPROVFMFNT~ PROVTDFTJ flY T F~SOR: NONE: There will be no
improvements provided by Lessor, except as set forth in Article II.E. "Access to Utilities"
below.
For the pU1llose of this Lease Agreement, the ten11 "Lessor improvements" shall mean
those things on or adjacent to the Leased Premises belonging to, constnrcted by, or to be
constmcted 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
propeliy of Lessor. All Lessor improvements must be desClibed in detail above, or above
referenced and attached to this Agreement in an exhibit approved by Lessor.
C. lMPROVFMFNT,S l'ROVmFD flY T FSSFF On the Leased Premises, Lessee
shall construct a hangar/office facility not less than 8,000 square feet with taxiway access
and appropriate culve11s 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 evidcnced by the issuance of a Certificate of Occupancy (the "Construction Period").
Notwithstanding anything contained in this Lcase Agrcement to the contrary, a
failure to complete the Lessee's Improvemcnts within thc Construction Period may, at
the sole option and discrction of the Lessor, resnJt in thc immcdiate termination aud
cancellation of this Lcase Agreement upon 30 days written notice of cancellation to
Lcssee. In such case Lessec's rights under the Lcase Agreement will immediately
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. FASFMPNT,C:;. Lessor and Lessee by mutual agreemcnt may establish, on the
Leased Premises, easements for public access on roads and taxiways.
E. A(TFSS TO llTTllTlPS Lessor represents that there are water, sewer and 3-
phase electricity lines within close proximity to the Leased Premises available to "tap-in" by
Lessce, and that the same are sufficient for usual and customary service on the Lcased
Premises.
HT. ']:PRi\1
The term of this Lease Agrecmcnt shall be for a period of thirty (30) years, com-
mcncing on thc 1st clay of May, 2004 and continuing through the last day of April of2034,
unless earlier terminated undcr the provisions of the Lease Agreement (the "Lease Term").
Any attempt by Lessee to rcnegotiate this Lease Agreement shall be in writing addressed to
the Ci ty Managcr or his designee at least one hundred eighty (180) days before the
expiration of the Lease Term, and at least] 80 days before the expiration of any additional
renegotiated pcriod. Lessee has the option to renew for two (2) additional ten (10) year
ten11S. The rental and terms to be negotiated shall be reasonable and consistent with the
then value, rentals and terms of similar property on the Airport.
IV. PAYMPNTS RPNTAI S A't\'D PHS
Lessee covenants and agrees to pay Lessor, as consideration for this Lease Agreement,
the foJlowing pa)111ents, rentals and fees:
A. T AND RFNTAT shall be due and payable in the sum ofSO.17 per square foot or
52,754 per year (the "Original Rent"), payable in twelve (12) equal monthly installments in
the sum of Two Hundred and Twenty Nine and fifty cents (5229.50) in advance, on or
before the I st day of each and every month during the teml of this Lease Agreement.
Lessee has the option to pay aJUlual rentals and fees in whole on or before the 1 st day of
April, at the begilUling of the City's fiscal year, each and evelY year of this Lease
Agreement.
Notwithstanding the foregoing, the aJUluallease rental will be reduced by the current lease
rate per square foot, as adjusted by the CPl-U referenced in Section IV.C., times the number
AIRPORT LEASE AGREEMEt\T J\'C LLC - Page 4
C:\nOCUME_I\lJrcodloUOCAlS-I\I a>;>\JVC !1p.GU11> Auip>>tl<J>l.Ooc:
LEASE ASSIGNMENT OF PAD SITE AT DENTON
MUNICIP AL AIRPORT
DATE:
May 3, 2005
ASSIGNOR: NC Real Estate LLC
ASSIGNEE: January Aviation, LLC
LEASE:
Date:
Landlord:
Tenant:
Premises:
April 20, 2004
City of Denton, Texas
JVC Real Estate LLC
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.
B. Assignor agrees that:
1. Assignor will remain liable on the Lease should Assignee default on the Lease.
PREVIOUS ASSIGNMENTS: None
'.
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c.~~\\IJr.~S-I\T=FJVC~p>n><lMligall>",,~4oc
Attest:
Jennifer Walters, City Secretary
B1%nI1; t' klr, 0*" ~ ;
Approved as to Legal Form:
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Michael A. Conduff, Ci
STATE OF TEXAS
COUNTY OF DENTON
This instrument was acknowledged before me on the ~ day of frpvi/ ,
2005, by John a. Vann, President of JVC Real Estate, LLC, a Texas Limited Liab'ility Company,
on behalf of said Company.
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[SEAL] _Y" ).1
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BRANDT HEITZMAN
Notary Public, State orrexas
My Commission Expires
May 12, 200B
STATE OF TEXAS
COUNTY OF DENTON
This instrument was acknowledged before me on the (Jlb day at:
2005, by Jim Lancaster, President of January Aviation, LLC, a Texas Limited
on behalf of said Company.
uJ.-
otary Public, State of Texas
My Commission Expires /l7/''J... J O{o
(or Notary Stamp) I I
Page 2 on
,
C,IDOCI.JMl!-!'<lr....:y.LOCAl.S-I\T.IDl>WC~p.aIU.I AJEiF"'l<1l.do>c
STATE OF TEXAS
COUNTY OF DENTON
,
This instrumenl was acknowledged before me on the _1"tlday of"- 'lieu
2005, by Michael A Conduff, City Manager on behalf the City of Denton, Texa, a,
corporation.
",,":'''Je:-'; r ~ANE E. RICHARDSON
.i~~~~NQ1ary Public, S~ate of ~ exas
~ \~/..~ Mv Commission Expires
~~~ion,t~~i' ' .June 27, 2005
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Ng.tary Public, Slale of Texas . _'
My Commission Expires (t/;r!/{.",)
(or Notary Slamp) I
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