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<br />~ TERMS OF LEASES <br /> <br />A. Background <br /> <br />The City of Paris based this policy on recommendations of the Airport Advisory Board and the <br />results of a study of other airports conducted by the Legal Department and presented in August <br />2001. The lease terms and rate termination methods have been adopted through a public vote of the <br />City Council of the City of Paris and are herein incorporated. <br /> <br />The term of Ground Leases on which the tenant intends to construct improvements begins at 25 <br />years and may be negotiable depending on the size of the hangar. These terms were adopted to <br />encourage development of the Airport and provide sufficient time for investors to amortize their <br />investment. <br /> <br />As a practical matter and good business for the City, Lessees and lenders have a reasonable length <br />of time to realize an acceptable rate of return on the project prior to the potential reversion of the <br />improvement to the City. <br /> <br />B. Ground Lease Terms <br /> <br />Term <br /> <br />New Investment <br /> <br />25 years <br /> <br />Less than 5,000 square feet. of new hangar, office, <br />and shop space construction <br /> <br />30 years <br /> <br />5,001 to 20,000 square feet of new hangar, office, <br />and shop space construction <br /> <br />Negotiable <br /> <br />In excess of 20,000 square feet of new hangar, <br />office, and shop space construction <br /> <br />All construction should contribute to furthering the City of Paris's Airport Master Plan or Airport <br />development objectives. <br /> <br />VI. GROUNDLEASESRATES <br /> <br />The following is the ground lease rate to each new privately built hangar located at Cox Field <br />Airport: <br /> <br />$0.12 per sq. ft. per year, adjusted every five (5) years by an amount equal to the Consumer <br />Price Index (CPI) for the previous five (5) years. <br /> <br />All leases shall have a five (5) year CPI clause. <br /> <br />VIL MAINTENANCE: GOOD CONDITION & REPAIR <br /> <br />Requiring a tenant to maintain property and facilities in good condition and repair, while always <br />important, becomes critical as end of long-term leases approaches. Securing title to leasehold <br /> <br />Cox Field Airport <br /> <br />Page 2 <br /> <br />Lease Policy <br />