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09 Municipal Airport Property - taxes MASTER LEASE AGREEMENT COUNTY OF LAMAR ) ) STATE OF TEXAS ) KNOW ALL MEN BY THESE PRESENTS: THIS LEASE AGREEMENT is made this [] day of [], 20[], by and between the CITY OF PARIS, PARIS, TEXAS, a municipal corporation, acting by and through its City Manager, Michael E. Malone, duly authorized, hereinafter referred to as LESSOR, and [NAME], [ADDRESS], [CITY], [COUNTY] County, Texas, hereinafter referred to as LESSEE. WITNESSETH For and in consideration of the construction of a hangar and the payment of the monthly ground lease payment, due on or before the 1 st day of each month, to the LESSOR, and each month thereafter, as follows: $[] per month, said LESSOR does lease, rent, and let unto LESSEE that portion of Cox Field property described in Exhibit "A," attached hereto and made a part hereof for all legal purposes, hereinafter referred to as the property or leased premises. The first such monthly payment shall be due and payable on or before the first day of [], 20[], with successive monthly payments being due and payable on the first day of each month thereafter during the term hereof. LESSEE hereby leases the leased premises from LESSOR subject to the terms, covenants and conditions stated below, and shall have the right and privilege to construct and maintain certain improvements as described herein on the leased premises. LESSEE has inspected the leased premises and accepts it in its present (as-is) condition unless expressly noted otherwise in this Lease. LESSOR and any agent have made no express or implied warranties as to the condition or permitted use ofthe leased premises. LESSEE must satisfy itself that the leased premises may be used as LESSEE intends by independently investigating all Master Lease Al!:reement - page 1 r" commence or complete Restoration after LESSOR has given LESSEE thirty (30) days prior written notice requesting the commencement of Restoration or that LESSEE diligently proceeds to the completion of same if LESSEE during such thirty (30) day period does not so commence or proceed to diligently complete Restoration. In such event, LESSOR shall retain the insurance proceeds, and LESSEE shall pay any deficiency if such proceeds are not sufficient for Restoration. 28. That LESSEE shall not rent the leased premises, or any part thereof, for aircraft storage unless a permit under Article II, Chapter 6 of the Code of Ordinances of the City of Paris, has been issued to LESSEE for that specific purpose. 29. That LESSOR has 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 the Airport which, in the opinion ofthe LESSOR, would limit the usefulness of the Airport or constitute a hazard to aircraft. '" ...~ ( 30. That LESSEE shall pay and discharge all taxes, including without limit sales, use, and J excise taxes, ad valorem taxes, taxes on personal property, general and special assessments, and other charges of every description which are levied on or assessed against the leased premises and all interests in the leased premises and all improvements and other property on the leased premises during the term ofthis Lease, whether belonging to LESSOR or to LESSEE. LESSEE shall pay all such taxes, charges, and assessments directly to the public officer charged with their collection not less than fifteen (15) days before the same shall become delinquent. LESSEE shall at no time permit the foreclosure of any tax liens to LESSEE's leasehold interest in the leased premises or the buildings, fixtures, or other improvements on the leased premises. LESSEE shall have the right in good faith at its own sole cost and expense to contest any such taxes, charges, and assessments, and Master Lease Al!reement - page 18 r". shall be obligated to pay the contested amount, plus any penalties and interest imposed, only 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 ofthis paragraph remain unpaid and uncontested later than fifteen (15) days before the same shall become delinquent, LESSOR may declare this LEASE, and all rights and interest created by it, to be terminated. 31. That nothing herein shall be deemed to relieve LESSEE and its tenants, sublessees, patrons, invitees and others from Airport use charges, including fuel flowage fees paid on fuel purchased by LESSEE, as are levied generally by the LESSOR directly upon the operation of aircraft, or from automobile parking permit fees for parking areas that are not included within the leased premises, or from security fees. 32. That, if at any time a release of hazardous materials is discovered on, at, or in the leased premises, the Airport, the LESSOR's sewage or storm drainage system, soil, air, groundwater, or any improvements, which was caused or permitted by LESSEE, LESSEE's officers, agents, employees, contractors, permittees, invitees, or subtentants, or there is the danger of such release of hazardous materials, LESSEE, at LESSEE's sole cost and expense, shall ensure removal of such hazardous materials from the leased premises, the Airport, the underlying groundwater, the LESSOR's soil, air, storm drainage, and the sewage system, in accordance with requirements of all appropriate governmental authorities. LESSEE shall immediately notify LESSOR of any release of hazardous materials. Upon discovery of any hazardous materials on, in, under, or emanating from the leased premises, any release or threat of release of a hazardous materials, and/or any illness caused by Master Lease Al!:reement - page 19 .' 'is located. The City Attorney advised that the only compensation that the city receives is the hangar itselfwhen the lease expires. He said that almost all of the cities require the payment of ground lease payments for private hangars, and also indicated from TxDot that future leases should include the requirement for ground lease payments. City Attorney Schenk told the City Council that the survey shows the ground lease charge anywhere from a nickle per square foot per year to being based on the appraised value. He further advised that the Board recommendation was for a ground lease payment of$0.12 per square foot per year adjusted every five years from the Consumer Price Index adjustment, and advised this is for future leases only. A motion was made by Councilman Bell, seconded by Mayor Pro Tern Manning, to accept the recommendation of the Airport Advisory Board. The motion carried 7 ayes, 0 nays. ,t,.... City Attorney Schenk told the City Council that the next issue for consideration was whether the lease should place the burden for taxes, if any taxes are due, on the hangar tenant. He advised that the current policy is silent on the issue of who would be responsible for taxes, if any taxes are determined to be due. The City Attorney advised that other cities said, if there are ever taxes to be paid, the tenant pays the taxes, and the Board made no recommendation. City Attorney Schenk advised that it was his recommendation that this needs to be a provision of the lease. After discussion, a motion was made by Mayor Pro Tern Manning that, in accordance with the results of the survey, that if there are ever taxes to be paid, the tenant pays the taxes. The motion was seconded by Councilman Bell and carried 7 ayes, 0 nays. City Attorney Schenk advised that the next question was on insurance, stating that the current lease requires $250,000.00 personal injury, $500,000.00 event, $100,000.00 property damage coverage in each policy. The question is whether or not more extensive insurance coverage, including fire and casualty insurance. on the actual hangar, should be an obligation of the tenant. He said at this time MINUTES CITY COUNCIL MEETING AUGUST 13, 2001 410 ~ r"