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18 - STANDARD HANGAR LEASE - COX FIELDItem No. 18 memorandum TO: Mayor & City Council FROM: John Godwin, City Manager SUBJECT: STANDARD HANGAR LEASE DATE: February 17, 2017 BACKGROUND: We have no consistent standard lease for city -owned hangars at Cox Field, and the airport advisory board set as one of their goals to create one and consistently enforce it. The board and city council previously adopted the use of a new standard ground lease for privately -built hangars, and since then I also drafted a new one for city -owned facilities. The board reviewed a first draft at its January 19 meeting. I made revisions based on their feedback, and also made changes based on input from our FBO and the city attorney. The board met again on February 16 and recommended approval by the council of the attached new lease. STATUS OF ISSUE: The new lease provides for a more specific default process in the case of renters not paying in a timely manner, governs what may and may not be done in and around the hangars and the maintenance thereof, covers insurance requirements, etc. We will base rental rates on the final actual cost of the new city hangar now under construction by TXDOT, so that all costs will be recouped over the life of the structure. BUDGET: NA. RECOMMENDATION: Approve attached standard lease and authorize its use for all future leases of city -owned hangars at Cox Field. I AIRPORT HANGAR LEASE AGREEMENT THE STATE OF TEXAS § COUNTY OF LAMAR § KNOW ALL MEN BY THESE PRESENTS This Hangar Lease Agreement (Lease) is made by and between the City of Paris, Texas, a home rule municipal corporation (LESSOR), and (LESSEE). For and in consideration of the payment of monthly hangar rental paid to LESSOR, LESSOR does hereby lease, rent, and let unto LESEE that portion of Cox Field real property known as Hangar , and as described in Exhibit A, attached hereto and made a part hereof for all legal purposes. LESSEE hereby leases said real property from LESSOR subject to the terms, covenants, and conditions stated below, and shall have the right and privilege to construct and maintain certain improvements of said property. LESSEE accepts property "as is." Except to the extent provided herein and subject to the provisions hereof, LESSEE shall have and hold the leased premises, together with all rights, privileges, easements, appurtenances, and immunities belonging to or in any way appertaining to said leased premises, including, but not limited to, any and all easements, rights, title and privileges of LESSOR now or hereafter existing in, to, or under said leased premises, and additionally LESSEE shall be permitted to use in common with others all streets and other rights of ingress and egress and all runways, taxiways and designated aprons which are or may hereafter be provided at the Airport. LEASE TERMS: 1. Subject to the provisions contained herein, LESSEE shall pay to LESSOR a monthly hangar payment of $ per month, to be paid on or before the 1st day of each month, beginning on the commencement date of this lease and continuing regularly thereafter during the term of this lease and any extensions thereof. At its sole option, LESSEE may prepay any of the rental installments. 2. Rental rates established herein shall be subject to increase annually, on the first day of the month in which lease begins, in an amount equal to the percentage increase in the local Consumer Price Index (CPI) for Dallas -Fort Worth, Texas, or other rates prevailing in the Paris 2 area for similar facilities, or at such other rate that shall be mutually agreed upon. In determining the annual rate increase, if any, LESSEE shall, by or before sixty (60) days before the anniversary date, provide written notice to LESSOR of the amount of the CPI increase (including appropriate documentation thereof) and LESSEE's calculation of the new monthly rental based on said increase. If LESSOR does not object to LESSEE's calculation of the rate adjustment as provided herein, the rate adjustment provided by LESSEE shall be deemed approved. However, if LESSOR disagrees with LESSEE's determination of said adjustment, LESSOR shall, within thirty (30) days of receiving LESSEE's calculations, recalculate the rate increase appropriately and notify LESSEE in writing, of the appropriate adjusted monthly rental rate. In any event, LESSEE shall pay the adjusted monthly rate effective on the anniversary date. If, for any reason, the CPI adjustment would result in a decrease in the monthly rental due, the previous year's rental shall remain in effect. In no event shall the monthly rental rate be decreased. 3. LESSEE shall pay to LESSOR at the City Hall in the City of Paris, the agreed rental in advance, promptly and without neglect, default, or delay. Should LESSEE fail to make payments in a timely manner, a late penalty of 10% shall be assessed beginning on the tenth calendar day after the due date. Should payments remain past due for more than thirty (30) days, Lease is in default and may be terminated, as provided herein below. 4. The term of this lease shall be seven (7) years. This lease may be extended by LESSEE for an additional three (3) year period, provided all requirements of this Lease have been met; LESSEE owes no taxes, fees, or penalties to the City of Paris; and LESSEE makes known its desire to extend the lease no later than six months before expiration of the Lease. MAINTENANCE & USE 5. LESSEE shall, at its own cost and expense at all times during the term of Lease: 1) Keep and maintain property and facilities in good condition and repair, and make good to LESSOR any and all injuries and damages to the same caused by LESSEE or those under him and will deliver same to LESSOR at the expiration or termination of this Lease in as good condition as when rented, usual wear and tear alone excepted; 2) Comply with all fire, building, and property maintenance codes and zoning regulations now in force, or that may be hereafter enacted with regard to the use of the airport premises; 3) Maintain roofs and walls free from leaks and damage, painting as necessary to prevent and retard rusting and to enhance appearance as the original finishes deteriorate; and 4) Maintain property clear of clutter, junk, weeds and high grass. 6. LESSEE will, upon the expiration of this Lease, peaceably yield up to LESSOR all and singular the premises and all future erections, additions, or repairs to or upon same, if any, in 3 good repair, including but not limited to the hangar building and any permanent installation of equipment and fixtures. 7. The primary purpose for which the hangar has been leased is the storage of airplanes and related aeronautical equipment and other items of personal property pertaining to that use and owned by the LESSEE. In addition to the provisions and limitations set forth below, LESSEE shall have the right to use the leased premises for lawful purposes of private use only which are related to aviation or the aviation industry, for which LESSEE holds a permit issued by the City of Paris, in conformance with the requirements of the City's master plan, and in such a manner so as not to materially and adversely affect the development and improvement, operation, or maintenance of the airports. This Lease does not constitute the issuance of any permit. 8. LESSEE has the non - exclusive right to use, in common with others, all public airport facilities and improvements of a public nature, including, but not limited to, landing, taxiing, parking areas, and other common -use facilities. LESSEE shall not cause or permit any use or activity that would create a hazardous condition for aircraft operating at the airport, or which is determined dangerous or hazardous to airport operation. This includes interference from such items as electrical or electronic equipment, creation of smoke or dust, or glaring or misleading lights. 9. No hangar shall be used as a residence or shall be used for residential purposes. 10. LESSEE may only perform repair and maintenance that does not require a licensed airframe /aircraft power plant mechanic. 11. No commercial activity is authorized unless it is first approved by LESSOR. 12. LESSEE shall conduct its operation and maintain the leasehold in such a manner as to be free of environmental contamination, and shall neither store fuel nor defuel any aircraft inside any hangar. 13. LESSEE shall not store inoperable aircraft for which there are no immediate rehabilitation or repair plans. 14. LESSEE shall not leave hangar doors open after use. LESSEE shall keep hangar locked, and shall provide LESSOR a key or combination thereto. 15. LESSEE shall not modify any part of the hangar without written permission of LESSOR, including modifying existing electrical wiring or equipment in or about the hangar. LESSEE 4 shall not attach any hoist or holding mechanism to any part of the hangar structure, or pass any such mechanism over the struts or braces therein. 16. LESSEE shall not park or leave aircraft or motor vehicles on the taxiway or on the pavement adjacent to the hangar door in a manner that would unduly interfere with or obstruct access to any hangar. LESSEE shall not operate or permit the operation of motor vehicles on any unauthorized area of the ramp, hangar, or aircraft operation locations. 17. LESSEE shall at no time use or permit the use of leased premises in a manner contrary to federal, state, or local laws, ordinances, rules, regulations, or TXDOT or FAA Grant Agreements pertaining to the use of the airport located at Cox Field, including but not limited to the City of Paris Airport Manual and Federal Aviation Administration rules and regulations pertaining to Cox Field. 18. Nothing herein contained shall be construed to grant or authorize the granting of an exclusive right forbidden by Section 308(a) of the Federal Aviation Act of 1958 or for aeronautical activities such as, but not limited to: a) charter operations, b) pilot training, c) aircraft rental, d) aerial photography, e) crop dusting, f) sale of aviation petroleum products, g) air carrier operations, h) aircraft sales and service incidental thereto, or i) any other activity which, because of its direct relationship to the operation of aircraft, can be regarded as an aeronautical activity. 19. LESSEE shall pay or cause to be paid all charges for electricity used on the leased premises throughout the term of Lease, if any shall be assessed against specific units. 20. This Lease is subject to all the terms, provisions, and conditions of the deed of conveyance of such premises from the United States of America to the City of Paris, recorded in Book 308, Page 287, Deed Records of Lamar County, Texas to which reference is made for all purposes. 21. LESSEE, LESSEE's successors or assigns, agrees that, in the event facilities are constructed, maintained, or otherwise operated on the said property described in this Lease for a purpose for which a Department of Transportation program or activity is extended or for another purpose involving the provision of similar services or benefits, LESSEE shall maintain and 5 operate such facilities and services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally- Assisted Programs of the Department of Transportation- Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended. 22. LESSEE, LESSEE's successors or assigns, agrees that (i) no person, on the grounds of race, color, creed, sex, age, national origin, or disability shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities; (ii) that, in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person, on the grounds of race, color, creed, sex, age, national origin, or disability shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination; (iii) that the LESSEE shall use the premises in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally - Assisted Programs of the Department of Transportation Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended. In the event of breach of any of the preceding nondiscrimination covenants, LESSOR shall have the right to terminate this Lease and any aeronautical permits, and to re -enter and repossess said land and the facilities thereon, and hold the same as if said Lease had never been made or issued. 23. LESSOR possesses the right to periodically enter upon and into the leased premises, and every part thereof, at all times for the purpose of inspecting and examining the condition thereof, and to ensure all requirements, including those relating to use, are being met. 24. LESSOR shall adopt and implement security measures, policies, and procedures. 25. LESSOR shall make every reasonable effort to maintain hangar in good repair. 26. LESSEE shall directly and timely pay and discharge all taxes, if any, including without limit ad valorem taxes or other similar taxes, taxes on personal property, and other charges and special assessments of every description which are levied on or assigned against the leased premises and all improvements, or any other equipment or property associated with or stored inside the hangar during the term of this Lease. LESSEE shall have the right in good faith at its own sole cost and expense to contest any such taxes, charges, and assessments, but shall be obligated to pay the contested amount, plus any penalties and interest imposed, if and when finally determined to be due. At any time that the payment of any item of taxes, special assessments, or governmental charges which LESSEE is obligated to pay under the provisions of this paragraph remain unpaid and contested later than fifteen (15) days before the same shall become delinquent, LESSOR 6 may declare this LEASE, and all rights and interest created by it, to be terminated, pursuant to the provisions contained herein below. INDEMNITY & INSURANCE: 27. LESSEE COVENANTS AND AGREES TO INDEMNIFY AND DOES HEREBY INDEMNIFY, HOLD HARMLESS AND DEFEND CITY, ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS FOR PROPERTY DAMAGE OR LOSS AND /OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF WHATSOEVER KIND OR CHARACTER, WHETHER REAL OR ASSERTED (INCLUDING, WITHOUT LIMITATION, REASONABLE FEES AND EXPENSES OF ATTORNEYS, EXPERT WITNESSES AND OTHER CONSULTANTS) ARISING OUT OF OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THE NEGLIGENT OR OTHERWISE WRONGFUL ACTS OR OMISSIONS OF LESSEE, ITS AGENTS, SERVANTS, CONTRACTORS, OR EMPLOYEES IN CONNECTION WITH THIS LEASE, INCLUDING BUT NOT LIMITED TO INJURY OR DAMAGE TO CITY PROPERTY. SUCH INDEMNITY SHALL SURVIVE THE TERM OF THIS LEASE. THERE IS NO JOINT ENTERPRISE BETWEEN LESSOR AND LESSEE. 28. LESSEE shall maintain, during the life of Lease, and any extensions hereof, general liability coverage with minimum limits for damages resulting from bodily injury or death of $250,000 per person and $500,000 per occurrence, and $250,000 per occurrence for property damage, or a combined single limit of $500,000, or in such other amounts mutually agreed upon to fully and reasonably protect both LESSEE and LESSOR. LESSOR shall be named as an additional insured with a waiver of subrogation in favor of LESSOR. All costs of such insurance shall be borne by LESSEE. Such insurance policy or policies must be issued by a reputable provider licensed to write such policies in the State of Texas. 29. With regard to all insurance required under this Lease, it is expressly provided that such insurance policy or policies shall and must be written and issued by a reputable insurance company or companies, with LESSOR as an additional insured, subject to approval by the City Attorney of the City of Paris; and LESSEE or LESSEE's insurance carrier or carriers shall deliver a copy of any such policies to the City Clerk of the City of Paris prior to occupation of leased premises, evidencing the fact that such insurance is in full force and effect at all times during this Lease, and any extension hereof, and specifically noting thereon that LESSOR is an additional insured. All such policies shall be written so that the LESSOR will be notified of cancellation or of any restrictive amendment of the policies at least thirty (30) days prior to the effective date of such cancellation or amendment. Notice shall be by certified mail, return receipt requested. LESSEE agrees that if LESSEE does not keep all insurance required under 7 this Lease in full force and effect, LESSOR may declare this Lease, and all rights and interest created by it, to be terminated. DEFAULT & TERMINATION: 30. Should LESSEE default in the performance of any covenant or condition in Lease, and such default is not corrected within thirty (30) days after receipt of written notice from LESSOR to LESSEE, LESSOR may declare Lease, and all rights and interest created by it, to be terminated. Upon LESSOR electing to terminate, Lease shall cease and come to an end as if that were the day originally fixed herein for the expiration of the term hereof. LESSOR, its agent or attorney, shall be entitled to the immediate possession of the premises. LESSEE agrees that it will not interfere with LESSOR's possession of the premises in any way if LESSOR takes possession under this paragraph. 31. Any termination of this lease as herein provided shall not relieve LESSEE from the payment of any sum or sums that shall then be due and payable to LESSOR hereunder, or any claim or damages then or theretofore accruing against LESSEE hereunder, and any such termination shall not prevent LESSOR from enforcing the payment of any such sum or sums or claim damages by any remedy provided for by law or from recovering damages from LESSEE for any default thereunder. No termination shall relieve LESSEE of the obligation to deliver and perform on all outstanding obligations and requirements prior to the effective date of the termination. 32. In the event of the failure on the part of LESSEE upon termination of Lease to immediately remove from the leased premises all property owned by it, LESSOR may effect such removal and store such property at LESSEE's expense. 33. LESSEE shall pay and discharge all reasonable costs, attorney's fees, and expenses that may be incurred by LESSOR in enforcing the covenants and conditions of Lease. 34. Notwithstanding the foregoing, no failure to perform or delay in performance which is caused by any war, civil disorder, or other national emergency or which is due to an intervening act of God shall be deemed an event of default during the pending force majeure event. RESERVED TO LESSOR: 35. Nothing herein contained shall be construed to grant or authorize the granting of an exclusive right except as to the premises leased herein. 8 36. LESSOR reserves the right to further develop or improve the landing area of the airport as it sees fit, regardless of the desires or view of LESSEE, including the temporary closing of the airport, and the granting of an exclusive right. 37. The parties agree that LESSOR has not waived its sovereign immunity by entering into and performing its obligations under this Lease. 38. LESSOR will maintain and keep in repair the landing area of the airport and all publicly owned facilities of the airport, together with the right to direct and control all activities of LESSEE in this regard. LESSOR has the right to temporarily close the airport or any of the facilities thereon for maintenance, improvements, or for the safety of the public. 39. During a time of war or national emergency, LESSOR shall have the right to lease the landing area or any part thereof to the United States Government for military use, and, if such lease is executed, the provisions of this instrument insofar as they are inconsistent with the provisions of the lease to the Government shall be suspended. 40. LESSOR reserves the right to take any action it considers necessary to protect the aerial approaches of the airport against obstruction, together with the right to prevent LESSEE from erecting, or permitting to be erected, any building or other structure on or adjacent to the airport which, in the opinion of the LESSOR, would limit the usefulness of the airport or constitute a hazard to aircraft. 41. During the final 180 days of the term of Lease, LESSOR shall have the right to erect and maintain on or about the leased premises customary signs advertising the premises for lease. 42. This lease shall be subordinate to the provisions of any existing or future agreement between LESSOR and the United States, relative to the operation or maintenance of the airport, the execution of which has been or may be required as a condition precedent to the expenditure of Federal funds for the development of the airport. 43. Holding over by LESSEE of the airport premises after the expiration of this Lease shall operate and be construed as a tenancy from day to day at a rental rate computed from the rental rate then prevailing under this lease. 44. LESSOR may, at its option, and following a ninety (90) day written notice period, terminate Lease, or any parts thereof, which may be necessary in the event LESSOR desires to use the property, or any portion thereof, for any governmental purpose as determined by LESSOR, such as but not limited to, extension of runways or taxiways, utility or drainage improvements, or the expansion of existing buildings or the erection of other airport facilities. 9 45. Nothing herein contained shall be construed to deny LESSOR its right to condemn the leased property through its power of eminent domain. In the event of condemnation of all or any portion of the leased premises, the leasehold interest of LESSEE shall be deemed to include all rights under this lease including, but not limited to, the right to occupy the improvements placed on the leased premises. MISCELLANEOUS 46. The undersigned officers and /or agents of the parties hereto are the properly authorized officials and have the necessary authority to execute this Lease on behalf of the parties hereto, and each party hereby certifies to the other that any necessary resolutions or other acts extending such authority have been duly passed and are now in full force and effect. 47. This Lease represents the entire and integrated agreement between LESSOR and LESSEE and supersedes all prior negotiations, representations and /or agreements, either written or oral. This Lease may be amended, modified, or altered only by written instrument signed by both LESSOR and LESSEE, dated subsequent to the date of this Lease, and duly executed by the parties hereto. 48. If any clause, paragraph, section or portion of this Lease shall be found to be illegal, unlawful, unconstitutional or void for any reason, the balance of the Lease shall remain in full force and effect and the parties shall be deemed to have contracted as if said clause, section, paragraph or portion had not been in the Lease initially. 49. This Lease is executed by the parties hereto without coercion or duress and for substantial consideration, the sufficiency of which is hereby acknowledged. 50. This Lease shall be drafted equally by all parties hereto. The language of all parts of this Lease shall be construed as a whole according to its fair meaning, and any presumption or principle that the language herein is to be construed against any party shall not apply. Headings in this Lease are for the convenience of the parties and are not intended to be used in construing this document. 51. This Lease may be executed in a number of identical counterparts, each of which shall be deemed an original for all purposes. 52. This Lease shall not be assigned or sublet. 10 53. The rights and remedies provided by the Lease are cumulative, and the use of any one right or remedy by LESSOR, or waiver by either party of any breach of this Lease, or the failure of either party to enforce any of the provisions of this Lease, at any time, shall not in any way affect, limit or waive such party's right to use any or all remedies thereafter to enforce and compel strict compliance of the Lease. These rights and remedies are given in addition to any other rights LESSOR may have by law, statute, ordinance, or otherwise. 54. Where the terms of this Lease require that notice in writing be provided, such notice shall be deemed delivered three (3) days following the deposit of the notice in the United States mail, postage prepaid, and sent by certified mail, return receipt requested and properly addressed as follows: Lessor: City of Paris P. O. Box 9037 Paris, TX 75461 -9037 Lessee: 55. This Lease shall be binding upon, and inure to the benefit of, the parties of this Lease and their respective heirs, executors, administrators, legal representatives, successors, and assigns when permitted by this Lease. 56. This Lease shall be construed under, and in accordance with the laws of the State of Texas, and all obligations of the parties created by this Lease are performable in Lamar County, Texas. EXECUTED ON the dates shown in acknowledgments below. ATTEST: City Clerk 0 11 CITY OF PARIS, LESSOR: City Manager APPROVED AS TO FORM: City Attorney LESSEE Name: STATE OF TEXAS ) COUNTY OF LAMAR ) BEFORE ME, the undersigned authority, on this day personally appeared , City Manager of the City of Paris, Texas, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of , 20 Notary Public, State of Texas STATE OF TEXAS ) COUNTY OF LAMAR ) BEFORE ME, the undersigned authority, on this day personally appeared , known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he /she executed the same for the purposes and consideration therein expressed. 12 GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of -20 . Notary Public, State of Texas 13