HomeMy WebLinkAboutContract 42807 (2)CITY SECRETARY CONTRACT NO, Zil?)C 4
FORT WORTH SPINKS AIRPORT
GROUND LEASE AGREEMENT
WITH MANDATORY IMPROVEMENTS
LEASE SITE NW-3
This GROUND LEASE AGREEMENT WITH MANDATORY IMPROVEMENTS
("Lease") is made and entered into by and between the CITY OF FORT WORTH ("Lessor"),
a home rule municipal corporation organized under the laws of the State of Texas and acting by
and through Fernando Costa, its duly authorized Assistant City Manager, and FWS REALTY,
LTD. ("Lessee"), a limited liability partnership, acting by and through its General Partner,
Harrison Realty Investments, LLC, acting by and through its President, Haydn Cutler, Jr.
RECITALS
The following introductory provisions are true and correct and form the basis of this
Agreement;
WHEREAS, the number of aircraft based at Fort Worth Spinks Airport ("Spinks") has
increased approximately twenty-five percent over the last five years; and
WHEREAS, the number of transient aircraft at Spinks has increased approximately
thirty percent over the last five years; and
WHEREAS, these increases in aircraft result in an increased need for hangar space; and
WHEREAS, aircraft hangar development stimulates and benefits both the local economy
and the city in which it is located by increasing the demand for both services and products, both
aviation- and non -aviation related; and
WHEREAS, such increase in demand results in additional employment opportunities;
NOW, THEREFORE, in consideration of the mutual covenants, promises and
obligations contained herein, the parties agree as follows:
1. PROPERTY LEASED,
1.1 Leased Premises
Lessor hereby demises to Lessee, and Lessee hereby demises fi•om Lessor, in
accordance with the terms and conditions contained herein, a tract of land
consisting of approximately 17,600 square feet known as Lease Site NW-3, at
Spinks Airport, as depicted on Exhibit "A" attached hereto (the "Premises").
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OFFICIAL RECOR
2. TERM OF LEASE.
2.1 Initial Term.
The "Initial Term" of this Lease shall commence at 12:01 a.m. on the date the
last of the parties hereto executes this Lease ("Effective Date") and shall expire
at 11959 p.m. on September 1, 2041, unless terminated earlier as provided herein.
2.2 Renewals.
If Lessee performs and abides by all provisions and conditions of this Lease, upon
expiration of the Initial Term of this Lease, Lessee shall have two (2) options to
renew for five (5) years each (each a "Renewal Term"). In order to exercise an
option to renew, Lessee shall notify Lessor in writing of its desire to renew this
Lease no less than ninety (90) days and no more than one hundred eighty (180)
days prior to the expiration of the Initial Term or the first Renewal Term, as
applicable. Lessor shall provide notice to Lessee one hundred fifty (150) days
prior to the expiration of the term then in effect (the "Reminder Notice"). In the
event that the ninety (90) day deadline passes without Lessee exercising its
renewal option, then Lessor shall notify Lessee in writing via certified mail, return
receipt requested, of the passing of the ninety (90) day deadline (the "Second
Notice"), and Lessee shall have an opportunity to exercise such option within
thirty (30) days of the receipt of the Second Notice. Failure to timely exercise
such option(s) shall be deemed a waiver of such renewal right by Lessee.
2.3 Holdover.
If Lessee holds over after the expiration of the Initial Term or any Renewal Term,
this action will create a month -to -month tenancy. In this event, for and during the
holdover period, Lessee agrees to pay on a monthly basis 110% of the then
appraised rental rate for improved property for the Premises, as reasonably
determined by Lessor.
3. RENT.
3.1 Rates and Adjustments.
3.1.1 Rates
Lease Site NW-3
Commencing on the date the first certificate of occupancy is issued for a
hangar constructed on Lease Site NW-3 pursuant to Section 4.1 of this
Lease (the "Occupancy Date") and continuing through September 30,
2012, Lessee promises and agrees to pay Lessor, as annual rent for Lease
Site NW-3, the lesser of (i) $0.27 per square foot, for a total of $7,848.90,
payable in monthly installments of $654.08, or (ii) the rent amount per
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square foot of the "Schedule of Rated and Charges" as promulgated by the
Lessor for Spinks.
ROFR Tract
Commencing on the date of the Execution of this Lease, Lessee shall pay a
Right of First Refusal ("ROFR") fee for the ROFR Tract (as hereinafter
defined) at an annual fee equal to one cent ($0.01) per square foot in
exchange for this ROFR, as detailed in Exhibits "B" and "B-V, attached
hereto.
3.1.2 Adjustments
On the first October 1, and on October 1st of each year thereafter during
both the Initial Term and any Renewal Term, Lessee's rental rate for the
Premises shall be subject to increase by Lessor to reflect the upward
percentage change, if any, in the Consumer Price Index for the Dallas/Fort
Worth Metropolitan Area, as announced by the United States Department
of Labor or successor agency (i) for the first increase, since the Effective
Date, and (ii) for each subsequent increase, since the effective date of the
last increase; provided, however, that Lessee's rental rate shall not (A) be
increased in any given year by more than ten percent (10%) over the rental
rate paid by Lessee during the immediately preceding twelve (12) months,
or (B) exceed the then -current rates prescribed by Lessor's published
Schedule of Rates and Charges for the type or types of property at Spinks
similar to the type or types of property that comprise the Premises. Should
Lessor, at some future date, classify property as "Improved" or
"Unimproved" for rental rate purposes, this lease shall be classified as
"Unimproved".
3.2. Payment Dates and Late Fees.
Monthly rent payments are due on or before the first (1 St) day of each
month. Payments must be received during normal working hours by the
due date at the location for Lessor's Aviation Department set forth in
Section 15. Rent shall be considered past due if Lessor has not received
full payment on or before the tenth (IOth) day of the month for which
payment is due. Without limiting Lessor's termination rights as provided
by this Lease, Lessor will assess a late penalty charge of ten percent (10%)
per month on the entire balance of any overdue rent.
4. CONSTRUCTION AND IMPROVEMENTS.
4.1 Mandatory Improvements
Lessee covenants and agrees that it shall improve Lease Site NW-3 with a hangar
building containing at least 14,000 square feet (such improvements shall
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hereinafter be referred to as the "Mandatory Improvements," and are described
in Exhibit "C" attached hereto and made a part of this Lease for all purposes).
Lessee shall begin construction of such Mandatory Improvements within six (6)
months following the later of (a) receipt of written FAA Airspace Study approval
on the design of same, (b) receipt of Lessor's approval of plans as set forth in
Section 4.3, and (c) issuance of a building permit, with the completion and
issuance of the Certificate of Occupancy to be no later than twelve (12) months
after construction commences. Lessee agrees to use its commercially reasonable
good faith and diligent efforts to obtain the items in clauses (a) — (c) of the
preceding sentence as soon as possible. Lessee shall fully comply with all
provisions of this Section 4 in the construction of such Mandatory Improvements.
Upon the first to occur of issuance of the Certificate of Occupancy or the
termination of this Lease, Lessor shall take full title to any Mandatory
Improvements on the Premises.
4.2 Discretionary Improvements.
Lessee may, at its sole discretion, perform modifications, renovations,
improvements or other construction work on the Premises. Any modifications,
renovations, improvements or other construction work on the Premises that do not
constitute Mandatory Improvements shall be referred to hereafter as
"Discretionary Improvements." Lessee may not initiate any Discretionary
Improvement on or to the Premises unless it first submits all plans, specifications
and estimates for the costs of same to Lessor in writing, and also requests and
receives in writing approval from Lessor's Director of Airport Systems or
authorized representative ("Director"). Lessee covenants and agrees that it shall
fully comply with all provisions of this Section 4 in the construction of any such
Discretionary Improvements. Lessor shall promptly review, consider and make a
decision on approval of such plans, specifications and estimates. Upon
completion of any such Discretionary Improvements or the termination of this
Lease, whichever occurs first, Lessor shall take full title to any Discretionary
Improvements on the Premises.
4.3 Process for Approval of Plans.
Lessee's plans for construction of the Mandatory Improvements and any
Discretionary Improvements shall conform to Spinks' architectural standards and
must also be approved in writing by Lessor's Planning and Development
Department. All plans, specifications and work shall conform to all federal, state
and local laws, ordinances, rules and regulations in force at the time that the plans
are presented for review. Lessor covenants and agrees that Lessor shall handle
any and all such plans for construction and improvement in a manner consistent
with the provisions of Section 4.2 above.
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4.4. Documents.
Lessee shall supply the Director with comprehensive sets of documentation
relative to any Mandatory Improvements or Discretionary Improvements,
including, at a minimum, as -built drawings of each project. As -built drawings
shall be new drawings or redline changes to drawings previously provided to the
Director. Lessee shall supply the textual documentation in computer format as
requested by Lessor.
4.5 Bonds Required of Lessee.
Lessor and Lessee agree and understand that to the extent that the Mandatory or
Discretionary Improvements shall be accomplished by Lessee with financing
provided by Lessor, no bonds shall be required of Lessee for such Mandatory
Improvements or Discretionary Improvements. Lessor and Lessee futher agree
and understand that to the extent that the Mandatory Improvements shall be
accomplished by Lessee with the coopration and support of Lessor, no bonds shall
be required of Lessee for the Mandatory Improvements.
Prior to the commencement of any Discretionary Improvements that are not
financed by Lessor, Lessee shall deliver to Lessor a bond, executed by a corporate
surety in accordance with Texas Government Code, Chapter 2253, as amended, in
the full amount of each construction contract or project. The bonds shall
guarantee (i) satisfactory compliance by Lessee with all requirements, terms and
conditions of this Lease, including, but not limited to, the satisfactory completion
of the Discretionary Improvements, and (ii) full payments to all persons, firms,
corporations or other entities with whom Lessee has a direct relationship for the
performance of such Discretionary Improvements. In lieu of the required bond,
Lessee may provide Lessor with a cash deposit or an assignment of a certificate of
deposit in an amount equal to 100% of the full estimated amount of each such
construction contract or project. If Lessee makes a cash deposit, Lessee shall not
be entitled to any interest earned thereon. Certificates of deposit shall be from a
financial institution in the Dallas -Fort Worth Metropolitan Area which is insured
by the Federal Deposit Insurance Corporation and acceptable to Lessor. The
interest earned on the certificate of deposit shall be the property of Lessee and
Lessor shall have no rights in such interest. If Lessee fails to diligently pursue
construction of or complete such Discretionary Improvement within a reasonable
time after commencement of construction (subject to Section 27 below), or if
claims are filed by third parties on grounds relating to such Discretionary
Improvement, Lessor shall be entitled to draw down the full amount of Lessee's
cash deposit or certificate of deposit and, at Lessor's option, employ such funds to
cause completion of such Discretionary Improvement.
Subject to further written agreement between Lessor and Lessee with respect to
any Discretionary Improvement, Lessor and Lessee agree and understand that if
progress payments are made by Lessee to its contractors on a project or projects
for which a cash deposit or certificate of deposit is provided to Lessor, then and in
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that event, upon the presentation to Lessor of proof of such payment or payments
to such contractor, Lessee shall be entitled to reduce and draw down the amount
of its cash deposit and/or certificate of deposit in an amount equal to such
payment or payments.
4.6 Bonds Required of Lessee's Contractors.
Prior to the commencement of any Mandatory Improvement or Discretionary
Improvement, each of Lessee's contractors shall execute and deliver to Lessee
surety performance and payment bonds in accordance with the Texas Government
Code, Chapter 2253, as amended, to cover the costs of all work performed under
such contractor's contract with Lessee. Lessee shall provide Lessor with copies of
such bonds prior to the commencement of such Mandatory Improvement or
Discretionary Improvement. The bonds shall guarantee (i) the faithful
performance and completion of all construction work in accordance with the final
plans and specifications as approved by Lessor, and (ii) full payinent for all wages
for labor and services and of all bills for materials, supplies and equipment used
in the performance of the construction contract. Such bonds shall name both
Lessor and Lessee as dual obligees. If Lessee serves as its own contractor,
Section 4.5 shall apply.
4.7 Releases by Lessor Upon Completion of Construction Work.
Lessor will allow Lessee adollar-for-dollar reimbursement from its cash deposit
account or reduction of its claim upon Lessor's certificate of deposit to the extent
of construction costs paid through that date upon (i) where Lessee serves as its
own contractor, verification that Lessee has completed the applicable construction
work, or (ii) where Lessee uses a contractor, receipt of the contractor's invoice
and verification that the contractor has completed its work and released Lessee to
the extent of Lessee's payment for such work, including bills paid affidavits and
final waivers of liens. Any unused amounts in the cash deposit account will be
refunded to Lessee upon final completion of the construction work, as evidenced
by the issuance of a Certificate of Occupancy, or if a Certificate of Occupancy is
not appropriate, to the reasonable satisfaction of Lessor.
5. USE OF PREMISES.
Lessee hereby agrees to use the Premises solely for aviation -related purposes and strictly
in accordance with the terms and conditions of this Lease. Lessee shall have the right to
sublease portions of the Premises, including individual hangars constructed as Mandatory
Improvements, to various third parties ("Sublessees") for aviation -related purposes
under terms and conditions acceptable to and determined by Lessee, provided that all
such arrangements shall be in writing. All written agreements executed between Lessee
and any Sublessees for any portion of the Premises shall contain terms and conditions
that (i) do not conflict with Lessee's duties and obligations under this Lease; (ii)
incorporate the terms and provisions of this Lease; (iii) restrict the use of the subleased
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portion of the Premises to aircraft storage or other aviation or aviation -related purposes
acceptable to Lessor; and (iv) treat users of the same or substantially similar facilities in a
fair and non-discriminatory manner. Lessee shall use a standard sublease form for all
Sublessees and shall submit a copy of such standard lease form, not including rental rates,
to the Director prior to Lessee's execution of its first sublease and from time to time
thereafter following any material changes to such sublease form. Lessee shall make the
rental rates for any sublease available for review by Lessor, and shall verbally inform
Lessor of such rental rates upon request. Additionally, Lessee agrees to provide to Lessor
in a timely manner any documentation necessary to respond to any and all requests
submitted to Lessor by the Federal Aviation Administration. Lessee may make non-
material modifications to its standard sublease to the extent that such are not contrary to
Lessor's Sponsor's Assurances (as same currently exist or as same may be amended from
time to time). Lessor shall protect Lessee's financial information to the extent allowed
by federal, state and local laws and regulations.
6. REPORTS, AUDITS AND RECORDKEEPING.
Lessee shall keep and maintain books and records pertaining to Lessee's operations at
Spinks and other obligations hereunder in a manner satisfactory to Lessor's Internal
Auditor and at a location within the City of Fort Worth. Upon Lessor's request and
following reasonable advance notice, Lessee will make such books and records available
for review by Lessor during Lessee's normal business hours. Lessor, at Lessor's sole cost
and expense, shall have the right to audit such books and records in order to ensure
compliance with the terms of this Lease and the Sponsor's Assurances (as such term is
defined in Section 10.5 below) made by Lessor to the Federal Aviation Administration.
7. UTILITIES.
Lessee, at Lessee's sole cost and expense, shall be responsible for the payment of all
utility services to all portions of the Premises and for all other related uty expenses,
including, but not limited to, deposits and expenses required for the installation of meters.
Lessee further covenants and agrees to pay all costs and expenses for any extension,
maintenance or repair of any and all utilities serving the Premises. In addition, Lessee
agrees that all utilities, air conditioning and heating equipment and other electrically.
operated equipment which may be used on the Premises shall fully comply with Lessor's
Mechanical, Electrical, Plumbing, Building and Fire Codes ("Codes"), as they exist or
may hereafter be amended.
8. MAINTENANCE AND REPAIRS.
8.1. Maintenance and Repairs by Lessee.
Lessee agrees to keep and maintain the Premises and all improvements thereon in
a good, clean and sanitary condition at all times. Lessee covenants and agrees
that it will not make or suffer any waste of the Premises. Lessee, at Lessee's sole
cost and expense, will make all repairs necessary to prevent the deterioration in
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condition or value of the Premises and any improvements thereon, including, but
not limited to, doors, windows and roofs for such improvements, and all fixtures,
equipment, and pavement on the Premises. Notwithstanding the foregoing,
Lessee shall not have any obligation or responsibility to accomplish repairs
cumulatively costing in excess of Ten Percent (10%) of the then fair market value
of the improvements to which the repair is contemplated within thirty-six (36)
months of the end of the term then in effect unless otherwise agreed to, in writing,
by the parties (provided that if Lessee elects not to perform such repairs, Lessee
shall have no right to exercise any options for subsequent Renewal Terms).
Lessee shall be responsible for all damages caused by Lessee, its agents, servants,
employees, contractors, subcontractors, licensees or invitees, and Lessee agrees to
fully and promptly repair or otherwise cure all such damages at Lessee's sole cost
and expense.
Lessee agrees that all improvements, trade fixtures, furnishings, equipment and
other personal property of every kind or description which may at any time be
located on the Premises shall be at Lessee's sole risk or at the sole risk of those
claiming under Lessee. Lessor shall not be liable for any damage to such property
or loss suffered by Lessee's business or business operations which may be caused
by the bursting, overflowing or leaking of sewer or steam pipes, from water from
any source whatsoever, or from any heating fixtures, plumbing fixtures, electric
wires, noise, gas or odors, or from causes of any other matter.
Upon expiration or termination of this Lease, the Premises and all improvements
thereon shall be delivered back to the Lessor in good and operable condition as
required hereunder.
8.2. Compliance with ADA.
Lessee, at its sole cost and expense, agrees to keep and maintain the Premises in
full compliance at all times with the Americans with Disabilities Act of 1990, as
amended ("ADA"). In addition, Lessee agrees that all improvements it
constructs at Spinks shall comply with all ADA requirements.
8.3. Inspections.
8.3.1 Lessor shall have the right and privilege, through its officers, agents,
servants or employees, to inspect the Premises. Except in the event of an
emergency, Lessor shall conduct such inspections during Lessee's ordinary
business hours and shall use its best efforts to provide Lessee at least four
(4) hours notice prior to any inspection.
8.3.2 If Lessor determines during an inspection of the Premises that Lessee is
responsible for any necessary maintenance or repairs, Lessor shall notify
Lessee in writing. Lessee agrees to begin such maintenance or repair
work within thirty (30) calendar days following receipt of such notice and
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to complete such maintenance or repair work within a reasonable time,
considering the nature of the work to be done. If Lessee fails to begin the
recommended maintenance or repairs within such time or fails to complete
the maintenance or repairs within a reasonable time, Lessor may, in its
discretion, perform such maintenance or repairs on behalf of Lessee. In
this event, Lessee shall reimburse Lessor for the cost of the maintenance
or repairs, and such reimbursement will be due on the date of Lessee's
next monthly rent payment following Lessor's delivery to Lessee of a
written invoice (and reasonable supporting documentation) of such cost.
Notwithstanding the foregoing, Lessee shall not have any obligation or
responsibility to accomplish repairs cumulatively costing in excess of Ten
Percent (10%) of the then fair market value of the improvements to which
the repair is contemplated within thirty-six (36) months of the end of the
term then in effect unless otherwise agreed to, in writing, by the parties
(provided that if Lessee elects not to perform such repairs, Lessee shall
have no right to exercise any options for subsequent Renewal Terms).
8.3.3 During any inspection, Lessor may perform any obligations that Lessor is
authorized or required to perform under the terms of this Lease or pursuant
to its governmental duties under federal state or local laws, rules or
regulations.
8.3.4 Lessee shall permit Lessor's Fire Marshal or his or her authorized agents
to inspect the Premises. Lessee will comply with all requirements of the
Fire Marshal or his or her authorized agents that are necessary to bring the
Premises into compliance with the City of Fort Worth Fire Code and
Building Code provisions regarding fire safety, as such provisions exist or
may hereafter be amended, but only in the event that such provisions
require changes when the Premises are not subject to substantial
remodeling, construction or renovation. To the extent that third parties or
entities (other than Lessor and its various departments), e.g. the Federal
Aviation Administration, the United States Department of Transportation,
etc., impose new obligations and/or requirements on Lessor through
amendments to regulations or implementation of new standards, Lessee
shall determine the most efficient means and/or methods of compliance
and accomplish same, if required by law. Lessee shall maintain in proper
condition accessible fire extinguishers of a number and type approved by
the Fire Marshal or his or her authorized agents for the particular hazard
involved.
8.4. Environmental Remediation.
To the best of Lessor's actual knowledge, and based solely on certain
environmental reports listed on Exhibit "D" attached hereto and incorporated
herein by reference (copies of which are on file with Lessor's Environmental
Department and provided to Lessee on April 5, 2011 by computer disc) the
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Premises comply with all applicable federal, state and local environmental
regulations or standards. Lessee agrees that it has inspected the Premises and is
fully advised of its own rights without reliance upon any representation made by
Lessor concerning the environmental condition of the Premises. LESSEE, AT
ITS SOLE COST AND EXPENSE, AGREES THAT IT SHALL BE FULLY
RESPONSIBLE FOR THE REMEDIATION OF ANY VIOLATION OF ANY
APPLICABLE FEDERAL, STATE OR LOCAL ENVIRONMENTAL
REGULATIONS OR STANDARDS THAT IS CAUSED BY LESSEE, ITS
OFFICERS, AGENTS, SERVANTS, EMPLOYEES, SUBLESSEES,
ASSIGNESS, CONTRACTORS, SUBCONTRACTORS OR INVITEES.
9. SIGNS.
Lessee may, at its sole expense and with the prior written approval of the Director, install
and maintain signs on the Premises related to Lessee's business operations. Such signs,
however, must be in keeping with the size, color, location and manner of display of other
signs at Spinks. Lessee shall maintain all signs in a safe, neat, sightly and physically
good condition.
10. RIGHTS AND RESERVATIONS OF LESSOR.
Lessor hereby retains the following rights and reservations:
10.1 Lessor reserves the right to take any action it considers necessary to protect the
aerial approaches of the Airport against obstruction, including, but not limited to,
the right to prevent Lessee from erecting or permitting to be erected any building
or other structure which, in the opinion of Lessor, would limit the usefulness of
Spinks, constitute a hazard to aircraft, or diminish the capability of existing or
future avigational or navigational aids used at Spinks.
10.2 Lessor reserves the right to develop and improve Spinks as it sees fit, regardless
of the desires or views of Lessee, and without interference or hindrance by or on
behalf of Lessee, except that Lessee's right to express its opinion through the
normal public hearing process shall not be considered as "interference or
hindrance". Accordingly, nothing contained in this Lease shall be construed to
obligate Lessor to relocate Lessee as a result of any such developments or
improvements at Spinks. Notwithstanding the foregoing, Lessor covenants and
agrees not to develop or improve Spinks in a way that would diminish the value
of Lessee's Mandatory Improvements.
10.3 This Lease shall be subordinate to the provisions of any existing or future
agreement between Lessor and the United States Government, which relates to the
operation or maintenance of Spinks and is required as a condition for the
expenditure of federal funds for the development, maintenance or repair of
Spinks' infrastructure. In the event that any such existing or future agreement
directly causes a material restriction, impairment or interference with Lessee's
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primary operations on the Premises ("Limitation") for a period of less than seven
(7) calendar days, this Lease shall continue in full force and effect. If the
Limitation lasts more than seven (7) calendar days, Lessee and Lessor shall
negotiate in good faith to resolve or mitigate the effect of the Limitation. If
Lessee and Lessor are in good faith unable to resolve or mitigate the effect of the
Limitation, and the Limitation lasts between seven (7) and one hundred eighty
(180) days, then for such period (i) Lessee may suspend the payment of any rent
due hereunder (or in the event such Limitation does not require total closure of
Lessee's operations on the Premises, the rent shall be equitably abated), but only
if Lessee first provides reasonable proof to Lessor that the Limitation has directly
caused Lessee a material loss in revenue; (ii) subject to ordinary wear and tear,
Lessor shall maintain and preserve the Premises and its improvements in the same
condition as they existed on the date such Limitation commenced; and (iii) the
term of this Lease shall be extended, at Lessee's option, for a period equal to the
duration of such Limitation. If the Limitation lasts more than one hundred eighty
(180) days, then (i) Lessor and Lessee may, but shall not be required to, (a)
further adjust the payment of rent and other fees or charges, (b) renegotiate
maintenance responsibilities, and (c) extend the term of this Lease, or (ii) Lessee
may terminate this Lease upon thirty (30) days' written notice to Lessor.
10.4. During any war or national emergency, Lessor shall have the right to lease any
part of Spinks, including its landing area, to the United States Government. In
this event, any provisions of this instrument which are inconsistent with the
provisions of the lease to the Government shall be suspended. Lessor shall not be
liable for any loss or damage alleged by Lessee as a result of this action.
However, nothing in this Lease shall prevent Lessee from pursuing any rights it
may have for reimbursement from the United States Government. If any lease
between Lessor and the United States Government executed pursuant to this
Section 10.4 directly causes a Limitation for a period of less than seven (7)
calendar days, this Lease shall continue in full force and effect. If the Limitation
lasts more than seven (7) calendar days, Lessee and Lessor shall negotiate in good
faith to resolve or mitigate the effect of the Limitation. If Lessee and Lessor are
in good faith unable to resolve or mitigate the effect of the Limitation, and the
Limitation lasts between seven (7) and one hundred eighty (180) days, then for
such period (i) Lessee may suspend the payment of any rent due hereunder (or in
the event such Limitation does not require total closure of Lessee's operations on
the Premises, the rent shall be equitably abated), but only if Lessee first provides
reasonable proof to Lessor that the Limitation has directly caused Lessee a
material loss in revenue; (ii) subject to ordinary wear and tear, Lessor shall
maintain and preserve the Premises and its improvements in the same condition as
they existed on the date such Limitation commenced; and (iii) the term of this
Lease shall be extended, at Lessee's option, for a period equal to the duration of
such Limitation. If the Limitation lasts more than one hundred eighty (180) days,
then (i) Lessor and Lessee may, but shall not be required to, (a) further adjust the
payment of rent and other fees or charges, (b) renegotiate maintenance
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responsibilities, and (c) extend the term of this Lease, or (ii) Lessee may terminate
this Lease upon thirty (30) days' written notice to Lessor.
10.5. Lessor covenants and agrees that during the term of this Lease it will operate and
maintain Spinks and its facilities as a public airport consistent with and pursuant
to the Sponsor's Assurances given by Lessor to the United States Government
through the Federal Airport Act; and Lessee agrees that this Lease and Lessee's
rights and privileges hereunder shall be subordinate to the Sponsor's Assurances,
Lessee's rights hereunder shall be subject to all existing and future utility and
drainage easements and rights -of -way granted by Lessor for the installation,
maintenance, inspection, repair or removal of facilities owned or operated by
electric, gas, water, sewer, communication or other utility companies. Lessee's
rights shall additionally be subject to all rights granted by any ordinance or statute
which allows utility companies to use publicly -owned property for the provision
of utility services.
10.7 Lessor agrees Lessee shall have the right of ingress and egress to and from the
Premises by means of roadways for automobiles and taxiways for aircraft
including access during the construction phase of Mandatory or Discretionary
Improvements, unless otherwise agreed to in writing by both parties. Such rights
shall be consistent with the rules and regulations with respect to the occupancy
and use of airport premises as adopted from time to time by Lessor and by the
Federal Aviation Administration or any other state, federal or local authority.
11. INSURANCE.
11.1 Tvpes of Coverage and Limits.
Lessee shall procure and maintain at all times, in full force and effect, a policy or
policies of insurance as specified in this Section 11, naming Lessor as an
additional insured and covering all risks related to the leasing, use, occupancy,
maintenance, existence or location of the Premises. Lessee shall obtain the
foRowing insurance coverage at the limits specified herein.
Fire and Extended Coverage on all improvements at full replacement cost
limit; and
• Commercial General Liability:
$1,000,000.00 per occurrence; $2,000,000.00 aggregate
including products and completed operations; and
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• Automobile Liability:
$1,000,000 per accident, including, but not limited to, coverage on any
automobile used in Lessee's operations on the Premises.
In addition, Lessee shall be responsible for obtaining (or causing its contractors to
obtain) builder's risk insurance in amounts reasonably acceptable to Lessor during
construction of the Mandatory Improvements and any Discretionary
Improvements, and for obtaining personal property insurance on any personalty of
its own or in its care, custody or control.
11.2 Adjustments to Required Coverage and Limits.
Insurance requirements, including additional types of coverage and increased
limits on existing coverages, are subject to reasonable changes at Lessor's option
and as necessary to cover Lessee's and any Sublessees' operations at Spinks,
provided such changes shall be within normal, reasonable business practices for
similar operations. Lessee will comply with such new requirements within thirty
(30) days following notice to Lessee.
11.3 Certificates.
As a condition precedent to the effectiveness of this Lease, Lessee shall furnish
Lessor with appropriate certificates of insurance signed by the respective
insurance companies as proof that Lessee has obtained the types and amounts of
insurance coverage required herein. Lessee hereby covenants and agrees that not
less than thirty (30) days prior to the expiration of any insurance policy required
hereunder, it shall provide Lessor with a new or renewal certificate of insurance.
In addition, Lessee shall, at Lessor's request, provide Lessor with evidence that it
has maintained such coverage in full force and effect.
11.4 Additional Requirements.
Lessee shall maintain its insurance with underwriters authorized to do business in
the State of Texas and which are satisfactory to Lessor. The policy or policies of
insurance shall be endorsed to cover all of Lessee's operations at Spinks and to
provide that no material changes in coverage, including, but not limited to,
cancellation, termination, or non -renewal, shall be made without thirty (30) days
prior written notice to and the consent of Lessor.
12. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Lessee shall operate as an independent
contractor as to all rights and privileges granted herein, and not as an agent,
representative or employee of Lessor. Lessee shall have the exclusive right to control the
details of its operations and activities on the Premises and shall be solely responsible for
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the acts and omissions of its officers, agents, servants, employees, contractors,
subcontractors, patrons, licensees and invitees. Lessee acknowledges that the doctrine of
respondeat superior shall not apply as between Lessor and Lessee, its officers, agents,
employees, contractors and subcontractors. Lessee further agrees that nothing herein
shall be construed as the creation of a partnership or joint enterprise between Lessor and
Lessee.
13. INDEMNIFICATION.
LESSEE HEREBY ASSUMES ALL LIABILITY AND RESPONSIBILITY FOR
PROPERTY LOSS, PROPERTY DAMAGE AND/OR PERSONAL INJURY OF ANY
KIND, INCL UDING DEA TH, TO ANY AND ALL PERSONS, OF ANY KIND OR
CHARACTER, WHETHER REAL OR ASSERTED, ARISING OUT OF OR IN
CONNECTION WITH ITS USE OF OR OPERATIONS AT SPINKS UNDER THIS
LEASE OR WITH THE LEASING, MAINTENANCE, USE, OCCUPANCY,
EXISTENCE OR LOCATION OF THE PREMISES OR ANY IMPROVEMENTS
THEREON, EXCEPT TO THE EXTENT CA USED BY THE GROSS NEGLIGENCE
OR INTENTIONAL MISCONDUCT OF LESSOR, ITS OFFICERS, AGENTS,
SERVANTS OR EMPLOYEES,
LESSEE COVENANTS AND AGREES TO, AND DOES HEREBY, INDEMNIFY,
HOLD HARMLESS AND DEFEND LESSOR, ITS OFFICERS, A GENTS,
SERVANTS AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS
OR LAWSUITS FOR EITHER PROPERTY DAMAGE OR LOSS (INCLUDING
ALLEGED DAMAGE OR LOSS TO LESSEE'S BUSINESS AND ANY RESULTING
LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY
AND ALL PERSONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR
ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THE USE,
LEASING, MAINTENANCE, OCCUPANCY, EXISTENCE OR LOCATION OF THE
PREMISES OR ANY IMPROVEMENTS THEREON, EXCEPT TO THE EXTENT
CAUSED BY THE GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT OF
LESSOR, ITS OFFICERS AGENTS, SERVANTS OR EMPLOYEES,
LESSEE ASS UMES ALL RESPONSIBILITY AND A GREES TO PA Y LESSOR FOR
ANYAND ALL INJURIES OR DAMAGES TO LESSOR'S PROPERTYAT SPINKS,
THE PREMISES OR ANY IMPROVEMENTS THEREON WHICH ARISE OUT OF
OR IN CONNECTION WITH ANY AND ALL ACTS OR OMISSIONS OF LESSEE,
ITS OFFICERS, AGENTS, EMPLOYEES, CONTRACTORS, SUBCONTRACTORS,
SUBLESSEES, ASSIGNEES, LICENSEES OR INVITEES, EXCEPT TO THE
EXTENT CAUSED BY THE GROSS NEGLIGENCE OR INTENTIONAL
MISCONDUCT OF LESSOR, ITS OFFICERS, AGENTS, SERVANTS OR
EMPLOYEES.
LESSOR DOES NOT GUARANTEE POLICE PROTECTION TO LESSEE, ANY
SUBLESSEES OR THEIR PROPERTY. LESSOR IS OBLIGATED ONLY TO
PROVIDE SECURITY ADEQUATE TO MAINTAIN LESSOR'S CERTIFICATION
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UNDER FAA REGULATIONS. LESSEE SHALL COMPLY WITH ALL
APPLICABLE REGULATIONS OF THE FAA RELATING TO AIRPORT
SECURITY. LESSEE SHALL PAY ALL FINES IMPOSED BY THE FAA ON
LESSOR OR LESSEE RESULTING FROM LESSEE'S OR ANY SUBLESSEES'
FAILURE TO COMPLY WITH SUCH FAA REGULATIONS OR TO PREVENT
UNAUTHORIZED PERSONS OR PARTIES FROM OBTAINING ACCESS TO THE
AIR OPERATIONS AREA OF SPINKS FROM THE PREMISES.
Lessor and Lessee acknowledge and agree that Lessorsovereign as contemplated
by the Texas Tort Claims Act, Texas Civil Practice and Remedies Code Sec. 101.001, et
seq. As such, liability is waived in only limited circumstances. Lessor and Lessee
acknowledge and agree that nothing contained in this Section 13 is intended to nor
does it operate to extend any liability of Lessor or the indemnification obligation to
Lessor of Lessee beyond the provisions of the Texas Tort Claims Act.
14. TERMINATION.
In addition to termination rights contained elsewhere in this Lease, Lessor• shall have the
right to terminate this Lease as follows:
14.1 Failure by Lessee to Pay Rent or Other Charles.
If Lessee fails to pay any rent, ROFR Fee or other charge due under this Lease, or
under that certain Advance Promissory Note dated , 2011,
executed by Lessee and payable to Lessor (the "Note)" or that certain
Construction Loan Agreement executed by and between Lessor and Lessee dated
of even date with the Note (the "Loan Agreement'), Lessor shall deliver to
Lessee a written invoice and Lessee shall pay the invoice within ten (10) calendar
days from the date of such notice (provided Lessor shall only be required to
deliver two such written notices per calendar year). If Lessee fails to pay the
balance outstanding within such 10-day period (or, after two such notices in any
calendar year, if Lessee fails to make any payment of rent, ROFR Fees, or other
charges due hereunder on or prior to the date same is due), Lessor shall after the
expiration of fifteen (15) days from the receipt of the notice, have the right to
terminate this Lease.
14.2 Breach or Default by Lessee.
If Lessee commits any breach or default under this Lease, the Note or the Loan
Agreement other than a failure to pay any sum of money as set out in Section 14.1
above, Lessor shall deliver written notice to Lessee specifying the nature of such
breach or default. Lessee shall have thirty (30) calendar days from the date of
such written notice to cure such breach or default. If Lessee fails to cure the
breach or default within such time period, Lessor shall have the right to
immediately terminate this. Notwithstanding the foregoing, in the event the
alleged breach or default cannot be cured within thirty (30) days, and Lessee
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commences such cure during such 30-day period and diligently pursues such cure,
Lessor and Lessee agree to extend such time to allow Lessee to accomplish the
cure in a time reasonably necessary to do so, as determined by Lessor.
14.3 Abandonment or Non -Use of the Premises.
Lessee's abandonment or non-use of any tract of the Premises for any reason, "Al
without Lessor's concurrence, which shall not be unreasonably withheld, for more
than thirty (30) consecutive calendar days shall constitute grounds for immediate
termination of this Lease by Lessor as to such abandoned tract.
14.4 Bankruptcy, Insolvency, and Dissolution.
In the event Lessee files for or is placed in bankruptcy, or declares itself insolvent,
or dissolves, then Lessor shall have the immediate right to terminate this Lease.
14.5 Lessee's Financial Obligations to Lessor upon Termination, Breach or
Default.
If Lessor terminates this Lease for any breach or default as provided in Sections
14.1, 14.25 14.3 or 14.4 of this Lease, Lessee shall be liable for and shall pay to
Lessor all arrearages of rent and any other charges payable hereunder. In no
event shall a reentry onto or reletting of the Premises by Lessor be construed as an
election by Lessor to forfeit any of its rights under this Lease. Recognizing the
financial investments made to the Premises and in consideration for same and all
the other duties and obligations of Lessee set forth herein, Lessee shall have no
further financial obligations to Lessor for future rent or other charges payable
under the Lease as of the effective date of the termination of the Lease.
Notwithstanding the foregoing, Termination of the Lease shall not terminate
Lessee's obligations under the Advance Promissory Note or Construction Loan
Agreement executed contemporaneously with this Lease, provided, however,
upon, termination of the Lease under Sections 14.1, 14.2, 14.3 or 14.4 hereof, the
Fair Market Value of all improvements made on the Premises shall be
determined, by an appraiser chosen for this purpose by Lessor and Lessee, and
such value shall be allocated as follows: (i) first, to the payment of all expenses
incurred by the Lessor arising out of such termination, (ii) second, to the payment
of Lessee's obligations under the Advance Promissory Note or Construction Loan
Agreement.
14.6 Lessor's Financial Obligations to Lessee upon Termination, Breach or
Default.
If this Lease is terminated for any reason other than a default by Lessee before the
expiration of the Initial Term, and subject to Lessor's City Council approving
such action and appropriating funds to cover any matters related to this provision,
Lessor shall be obligated to compensate Lessee for Lessee's financial investments
in the improvements made on the Premises. Specifically, and by way of example
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only as this provision relates to the Mandatory Improvements, in the event that the
capital costs for the Mandatory Improvements is One Million Dollars
($1,000,000) and Lessee contributes Seven Hundred Thousand Dollars
($700,000), then and in that event, upon Termination of this Lease, and subject to
Lessor's City Council approving such action and appropriating funds to cover any
matters related to this provision, Lessor shall be obligated and will pay to Lessee
Seventy Percent (70%) of the Fair Market Value as determined by an appraiser
chosen for this purpose by Lessor and Lessee of the Mandatory Improvements as
of the date of the Termination. Insofar as other improvements made to the
Premises solely by Lessee, and subject to Lessor's City Council approving such
action and appropriating funds to cover any matters related this provision, Lessor
shall be obligated and will pay to Lessee One Hundred Percent (100%) of the Fair
Market Value as determined by an appraiser chosen for this purpose by Lessor
and Lessee, of the said improvements. Notwithstanding any other portions of this
Section 14.6, all of Lessor's obligations under this provision for which current
revenue is not available will be contingent on Lessor's City Council appropriating
funding.
14.7 Rights of Lessor Upon Termination or Expiration.
Within twenty (20) days following the effective date of termination or expiration
of this Lease Lessee shall remove from the Premises all trade fixtures, tools,
signs, machinery, equipment, materials and supplies placed thereon by Lessee,
unless Lessor elects in writing to retain any fixtures or other items attached to any
structure on the Premises. After such time, Lessor shall have the right to take full
possession of the Premises, by force if necessary, and to remove any and all
parties and property remaining on the Premises. Lessee agrees that it will assert
no claim of any kind against Lessor, its agents, servants, employees or
representatives, which may stem from Lessor's lawful termination of this Lease or
any act incident to Lessor's assertion of its lawful right to terminate or Lessor's
exercise of any rights granted hereunder.
15. NOTICES.
Notices required pursuant to the provisions of this Lease shall be conclusively determined
to have been delivered when (i) hand -delivered to the other party, its agents, employees,
servants or representatives, or (ii) three (3) business days after being deposited in the
United States Mail, postage prepaid, addressed as follows.
To LESSOR:
City of Fort Worth
Aviation Department
4201 North Main Street, Suite 200
Fort Worth, Texas 76106-2749
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To LESSEE:
S RealtyLtd.
FW,
ATTN: Haydn Cutler
3825 Camp Bowie Blvd.
Fort Worth, Texas 76107
16. ASSIGNMENT AND SUBLETTING.
16.1 In General.
Lessee shall have the right to sublease portions of the Premises US provided by
and in accordance with Section 5 of this Lease. Otherwise, Lessee shall not
assign, sell, convey, sublease or transfer the entirety of its rights, privileges, duties
or interests granted by this Lease without the advance written consent of Lessor,
which shall not be unreasonably withheld.
16.2 Conditions of Approved Assignments and Subleases.
If Lessor consents to any assignment or sublease, all terms, covenants and
agreements set forth in this Lease shall apply to the assignee or sublessee, and
such assignee or sublessee shall be bound by the terms and conditions of this
Lease the same as if it had originally executed this Lease. The failure or refusal
of Lessor to approve a requested assignment or sublease shall not relieve Lessee
of its obligations hereunder, including payment of rentals, fees and charges.
Lessee shall remain fully liable for all of its obligations hereunder following any
subletting or assignment unless and until Lessor releases Lessee in writing.
17. LIENS BY LESSEE.
Lessee acknowledges that it has no authority to engage in any act or to make any contract
which may create or be the foundation for any lien upon the Premises or interest in the
property of Lessor. If any such purported lien is created or filed, Lessee, at its sole cost
and expense, shall liquidate and discharge the same within thirty (30) days of such
creation or filing. Lessee may, at its sole option, post a bond protecting the property on
which the lien is purportedly attached in an amount equal to at least one hundred twenty-
five percent (125%) of the lien amount, and litigate, mediate or arbitrate the validity of
the lien for so long as necessary with the understanding that the Lessor's interest in said
property is adequately protected. Lessee's failure to discharge any such purported lien (or
adequately protect Lessor's interests by bond as described herein) shall constitute a
breach of this Lease and Lessor may terminate this Lease upon thirty (30) days' written
notice. However, Lessee's financial obligation to Lessor to liquidate and discharge such
lien shall continue in effect following termination of this Lease and until such time as the
lien is discharged.
18. TAXES AND ASSESSMENTS.
Lessee agrees to pay any and all federal, state or local taxes, or assessments which may
lawfully be levied against Lessee due to Lessee's use or occupancy of the Premises or any
improvements or property placed on the Premises by Lessee as a result of its occupancy.
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19. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS.
Lessee covenants and agrees that it shall not engage in any unlawful use of the Premises.
Lessee further agrees that it shall not permit its officers, agents, servants, sublessees,
assignees, employees, contractors, subcontractors, patrons, licensees or invitees to engage
in any unlawful use of the Premises and Lessee immediately shall remove from the
Premises any person engaging in such unlawful activities. Unlawful use of the Premises
by Lessee itself shall constitute an immediate breach of this Lease.
Lessee agrees to comply with all federal, state and local laws; all ordinances, rules and
regulations of Lessor; all rules and regulations established by the Director; and all rules
and regulations adopted by the City Council pertaining to the conduct required at airports
owned and operated by Lessor, including the Minimum Standards for Fixed Base
Operators and Other Airport Tenants, a public document dated June 16, 1992, on file in
Lessor's City Secretary's Office and incorporated herein as part of this Lease for all
purposes, as such laws, ordinances, rules and regulations exist or may hereafter be
amended or adopted. If Lessor notifies Lessee or any of its officers, agents, employees,
contractors, sublessees, assignees, subcontractors, licensees or invitees of any violation of
such laws, ordinances, rules or regulations, Lessee shall immediately desist from and
correct the violation (or cause same to be desisted from or corrected).
20. NON-DISCRIMINATION COVENANT.
Lessee, for itself, its personal representatives, successors in interest, sublessees, and
assigns, as part of the consideration herein, agrees as a covenant running with the land
that no person shall be excluded from participation in or denied the benefits of Lessee's
use of the Premises on the basis of age, race, color, national origin, religion, handicap,
sex, sexual orientation, transgender, gender identity or gender expression. Lessee further
agrees for itself, its personal representatives, successors in interest, sublessees, and
assigns that no person shall be excluded from the provision of any services on or in the
construction of any improvements or alterations to the Premises on grounds of age, race,
color, national origin, religion, handicap, sex, sexual orientation, transgender, gender
identity or gender expression.
Lessee agrees to furnish its accommodations and to price its goods and services on a fair
and equal basis to all persons. In addition, Lessee covenants and agrees that it will at all
times comply with any requirements imposed by or pursuant to Title 49 of the Code of
Federal Regulations, Part 21, Non -Discrimination in Federally Assisted Programs of the
Department of Transportation and with any amendments to this regulation which may
hereafter be enacted.
If any claim arises from an alleged violation of this non-discrimination covenant by
Lessee, its personal representatives, successors in interest, sublessees, or assigns, Lessee
agrees to indemnify and defend Lessor and hold Lessor harmless from and against any
and all claims and damages related thereto.
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21. LICENSES AND PERMITS.
Lessee shall, at its sole expense, obtain and keep in effect all licenses and permits
necessary for the operation of its operations at Spinks.
22. GOVERNMENTAL POWERS.
It is understood and agreed that by execution of this Lease, Lessor does not waive or
surrender any of its governmental powers.
23. NO WAIVER.
The failure of Lessor to insist upon the performance of any term or provision of this
Lease or to exercise any right granted herein shall not constitute a waiver of Lessor's right
to insist upon appropriate performance or to assert any such right on any future occasion.
24. VENUE AND JURISDICTION.
If any action, whether real or asserted, at law or in equity, arises on the basis of any
provision of this Lease or of Lessee's operations on the Premises, venue for such action
shall lie in state courts located in Tarrant County, Texas or the United States District
Court for the Northern District of Texas, Fort Worth Division. This Lease shall be
construed in accordance with the laws of the State of Texas.
25. ATTORNEYS' FEES.
In the event there should be a breach or default under any provision of this Lease and
either party should retain attorneys or incur other expenses for the collection of rent, fees
or charges, or the enforcement of performance or observances of any covenant, obligation
or agreement, Lessor and Lessee agree that each party shall be responsible for its own
attorneys' fees.
26. SEVERABILITY.
If any provision of this Lease shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in any way be
affected or impaired.
27. FORCE MAJEURE.
Lessor and Lessee shall exercise every reasonable effort to meet their respective
obligations as set forth in this Lease, but shall not be held liable for any delay in or
omission of performance (other than the payment of money) due to force majeure or
other causes beyond their reasonable control, including, but not limited to, compliance
with any government law, ordinance or regulation, acts of God, acts of omission, fires,
strikes, lockouts, national disasters, wars, riots, material or labor restrictions,
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transportation problems and/or any other cause beyond the reasonable control of Lessor
or Lessee.
28. HEADINGS NOT CONTROLLING.
Headings and titles used in this Lease are for reference purposes only and shall not be
deemed a part of this Lease.
29. ENTIRETY OF AGREEMENT.
This written instrument, including any documents attached hereto or incorporated herein
by reference, contains the entire understanding and agreement between Lessor and
Lessee, its assigns and successors in interest, as to the matters contained herein. Any
prior or contemporaneous oral or written agreement is hereby declared null and void to
the extent in conflict with any provisions of this Lease. The terms and conditions of this
Lease shall not be amended unless agreed to in writing by both parties and approved by
the City Council of Lessor.
30. ESTOPPEL CERTIFICATES.
From time to time during the term of this Lease, and within ten (10) business days of its
receipt of written request therefore, Lessee shall execute and return to Lessor an estoppel
certificate stating whether it is aware of any defaults by Lessor hereunder and including
any other statements of a factual nature reasonably requested by Lessor.
31. LESSOR'S EXPENSES
Upon receipt of written invoice from Lessor, Lessee agrees to pay the reasonable outside
attorneys fees incurred by Lessor in the preparation and negotiation of this Lease, the
Executive Terminal and W2 Lease, the Note and the Loan Agreement, which fees shall
not exceed $12,500,00,
[signature pages follows]
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Page 21 of 23
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
multiples on the date next to their respective signatures, with the Effective Date being defined in
Section 2.1 of this Lease.
CITY OF FORT WORTH:
By: ;r�....,.rc L:wL--•
�)
Fernando
Costa
Assistant City Manager
Date: /�J/ 2
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas,
on this day personally appeared Fernando Costa, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that the same was the act of the
City of Fort Worth and that he executed the same as the act of the City of Fort Worth for the
purposes and consideration therein expressed and in the capacity therein stated.
0
GIVEN UNDER MY HAND AND SEAL OF OFFICE this
20 V* Z�
=��V P"kF;•,
EVONIA D,4NIELS
MY COMMISSION EXPIRES
'�;q July 10, 2013
APPROVED AS TO FORM
AND LEGALITY:
Charlene Sanders
Assistant City Attorney
Approved: /— �0
FWS Realty Ltd.
NW-3 Ground Lease Agreement
Fort Worth Spinks Airport
Page 22 of 21
ary Public in and for the
ATTEST:
By:
ty Secretary
day
of Texas
OFFICIAL RECORD.
CITY SECRETARY II
t'VO
RTH, TX
FWS REALTY, LTD by
Harrison Realty Investments, LLC
Its General Partner
By:
Haydn Cutl
PYP.CI d P.nt
Date
STATE OF TEXAS §
COUNTY OF
ATTEST:
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas,
on this day personally appeared Haydn Cutler, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that the same was the act of
FWS Realty, Ltd. and that he executed the same as the act of FWS Realty, Ltd., for the
purposes and consideration therein expressed and in the capacity therein stated.
UNDER MY HAND AND SEAL OF OFFICE this day
M1.*Z%5; P . 2011.
!�l
FWS Realty Ltd.
NW-3 Ground Lease Agreement
Fort Wot4h Spinks Ai�poit
Page 23 of 23
c in and for �e State of Texas
�'P�YP� RITA SINGLETON
NOTARY PUBLIC
STATE OF TEXAS
MY COMM, EXP 12m16.2012
oFFICIA�. R�cQe�D
CITY SECRETARI(
FT WORTH, TX
id
Exhibit "15-1"
Or Tract - Right of First Refusal
So long as this Lease is in effect and Lessee is not in default hereunder, Lessee shall have
a Right of First Refusal (hereinafter referred to as the "ROM") to lease a tract of land known as
the ROM Tract as identified in Exhibit "B" attached hereto and incorporated by reference
herein for construction of additional executive aircraft storage/office buildings. Lessee shall pay
an annual fee (with the first such installment payable in advance on the date hereof and
subsequent installments due annually on the anniversary date of this Lease until the Lease is
terminated, Lessee exercises the ROFR, or the ROFR is waived or deemed waived by Lessee)
equal to one cent ($.O1) per square foot of the approximate 31,327 square feet in exchange for
this ROFR. If Lessor receives a qualified, firm, written offer with no contingencies from a third
party to lease all or a portion of the ROFR Tract, Lessor shall certify to Lessee that Lessor has
accomplished a due diligence review of such offer and offeror confirming the financial ability
and real estate and construction expertise of the offeror and that Lessor has found such offer and
offeror to be satisfactory. Upon receipt by Lessee of such certification along with the details of
the offer from Lessor, Lessee shall have ninety (90) days from receipt of such certification to
make a thorough written proposal to Lessor for the same land, which proposal must meet or
exceed that provided by the third party. The proposal by Lessee shall relate only to the applicable
portion of the land and shall be compared to the proposal of the third party on the basis of the
land to be rented only and shall not be compared to the third party proposal on the basis of any or
all proposed improvements contemplated or proposed by the third party proposal. If Lessor
timely accepts Lessee's proposal, a new ground lease will be executed by the parties to include
the land affected by the proposal (the "ROFR Lease"). In the event Lessee does not timely
deliver a proposal to Lessor, or if Lessor elects to accept the third party offer instead of Lessee's
proposal, then the ROFR shall terminate and Lessee shall have no further rights under this
Exhibit "B-1."
Lessor and Lessee agree and understand that if the ROFR Lease is entered into, Lessee
shall have the right and sole discretion as to the timing and size of development to be constructed
on the ROFR Tract. Lessor and Lessee specifically agree and understand that Lessor and Lessee
may enter into a series of ground leases with respect to the ROFR Tract. The ground lease or
leases with respect to the ROFR Tract shall have an initial term of thirty (30) years at improved
ground rental rates and include two (2) consecutive rights to renew such lease for two (2)
additional successive terms of five (5) years each.
In order to exercise its renewal rights under the ROFR Lease, Lessee shall notify the City
in writing of its desire to renew same no less than one hundred twenty (120) days and no more
than one hundred eighty (180) days prior to the expiration of the term then in effect. Lessor shall
provide notice of the expiration of the ground lease or leases to Lessee one hundred fifty (150)
days prior to the expiration of the term then in effect (the "Reminder Notice"). In the event that
the one hundred twenty (120) day deadline passes without Lessee exercising its renewal right
with respect to the ground lease or leases contemplated herein, then Lessor shall notify Lessee in
writing via certified mail, return receipt requested, of the passing of the one hundred twenty
(120) deadline (the "Second Notice") within ten (10) days of the passing of the one hundred
Fort Worth Spinks Airport 1
Lease Site NW-2
Exhibit "B-1" Right of First Refusal
twenty (120) day deadline, and Lessee shall have an opportunity to exercise such renewal right
with respect to the ground lease or leases contemplated herein within thirty (30) days after
receipt of the Second Notice. Failure to timely exercise such option(s) shall be deemed a waiver
of such renewal right by Lessee.
Lessor and Lessee agree to cooperate and support each others efforts to gain access to
any and all federal, state, municipal funding or other grants available to accomplish the
development contemplated by this Exhibit " 134 ." Such cooperation and support could include,
but not be limited to, Lessor taking and maintaining title to all improvements in its name from
the outset of the development in a manner similar to the structure set forth in Section 4.1 of this
Lease.
In the event that title has not already vested in Lessor, upon the issuance of the Certificate
of Occupancy, Lessor shall take title to any improvements constructed on the ROFR Tract.
Lessee shall take possession of such improvements upon the issuance of such Certificate of
Occupancy.
Lessee will begin paying rent under the ROFR Lease on the ROFR Tract upon the
issuance of a final Certificate of Occupancy for the first building constructed thereon. Rent from
the date that it first becomes due until the following September 30 will be calculated by
multiplying the square footage rate of the ROFR Tract by the then -current rates prescribed by
Lessor's published Schedule of Rates and Charges for the type or types of property at Spinks
similar to the type or types of property that comprise the Premises. The actual square footage of
the ROFR Tract will be contingent on a ground survey which Lessee shall cause to be
undertaken at Lessee's sole cost and expense prior to execution of the ROM Lease. Rent shall be
subject to increase effective October 1st of each succeeding year to reflect the upward percentage
change, if any, in the Consumer Price Index for the period since the last adjustment with the
understanding that rent shall not exceed Lessor's then current, rates prescribed by Lessor's
published Schedule of Rates and Charges for the type or types of property at Spinks similar to
the type or types of property that comprise the Premises. Should Lessor, at some future date,
classify property as "Improved" or "Unimproved" for rental rate purposes, the ROFR Lease shall
be classified as "Unimproved". Rent during the renewal term shall be calculated by multiplying
the square footage of the ROFR Tract by Lessor's improved ground (not hangar) rental rate then
in effect and will be subject to the then current Lessor policies. Lessor will take title to all
improvements on the ROFR Tract upon the expiration or termination of the ROFR Lease. All
lease terms will be in accordance with Lessor policies.
If the airport management is being handled by an entity other than Lessor, then Lessee
shall have the right to request a market survey be prepared for Spinks Airport and to pay the
lesser of the improved ground rental rate calculated by the market survey rate or the then
applicable improved ground rental rate established by Lessor.
Fort Worth Spinks Airport 2
Lease Site NW-2
Exhibit "B-1" Right 0f IS Refusal
EXHIBIT "C"
MANDATORY IMPROVEMENTS
Approximately 14,000 Square Foot Hangar and Offices
• All mandatory improvements for Lease Site NW- must be completed in accordance with
Section 4 of this Lease and the completed survey set forth in Exhibit "A" attached hereto.
• Lessee shall submit a 7460 Notice of Proposed Construction to the FAA within sixty (60)
calendar days after the Effective Date of this lease.
Exhibit "C" Mandatory Improvements
Fort Worth Spinks Airport
Ground Lease Agreement/Mandatory Improvements
Lease Site NW-2
11-16-2011 FWS NW3 Exhibit C Mandatory Improvements (2).DOC
ri
Exhibit "D"
Environmental Reports and Documents
Provided to Lessee on April 5, 2011
1. Interoffice Memo from Chris Breitling to Roger Grantham re: Spinks Airport
Asbestos Assessment
2. Aerials of Spinks Airport from 1942 to 2004
3. Comprehensive Asbestos Survey on Buildings #28, 32, and 33, dated 5-1 M5
4. Comprehensive Asbestos Survey on 12701 Wildcat Way North, dated 5-1 M5
5. Asbestos Chain of Custody dated 9-11-08
6. Lab Report on Asbestos Survey dated 9-1M8
7. Limited Asbestos Survey on Hangar Nos. 29 and 30, SE Restrooms, and 13725
Stone, Fort Worth, dated 9-15-08 (in both Word and PDF formats)
8. Phase I, Environmental Site Assessment on 129.93 acres S. of Abner Lee Dr., Fort
Worth and Burleson, dated 3-25-05
9. Radius Report of Oak Grove Airport Tract, dated 8-20-10
10. Asbestos Survey of Building #23, dated 3-11-09
11. Asbestos Survey Report of Building #24, dated 3-13-09
12. Asbestos Survey Report of Building #25, dated 3-IM9
Exhibit "D"
Fort Worth Spinks Airport
Ground Lease Agreement
Lease Site NW2
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 1/10/2012 = Ordinance Nos. 20037=01-2012 & 20038-01=
2012 and Resolution No. 4056-01=2012
DATE: Tuesday, January 10, 2012 REFERENCE NO.: **C-25389
LOG NAME: 55FWS NWTHREE
SUBJECT:
Authorize Execution of a Ground Lease Agreement with Mandatory Improvements with FWS Realty, Ltd.,
for 17,600 Square Feet of Ground Space Known as Lease Site NW-3, a Right of First Refusal on 31,327
Square Feet of Ground Space Known as Option D, a Construction Loan Agreement and Advance
Promissory Note in the Amount of $600,000.00 at Fort Worth Spinks Airport, Adopt Appropriation
Ordinances and Adopt Resolution Related to Payment of Associated Legal Fees (COUNCIL DISTRICT 8)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize execution of a Ground Lease Agreement with Mandatory Improvements with FWS Realty,
Ltd., for 17,600 square feet of ground space known as Lease Site NW-3;
2. Authorize execution of a Right of First Refusal on 31,327 square feet of ground space known as Option
D at Fort Worth Spinks Airport;
3. Authorize execution of a Construction Loan Agreement and Advance Promissory Note in the amount of
$600,000.00 to stimulate and encourage business development on Lease Site NW-3;
4. Authorize use of revenue derived from mineral leases on City -owned airports in the amount of
$600,000.00 for the construction loan to FWS Realty, Ltd;
5. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
amount of $600,000.00 in the Airports Gas Lease Project Fund from available funds;
6. Authorize transfer of funds from the Airports Gas Lease Project Fund to the Municipal Airports Fund in
the amount of $600,000.00;
7. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Municipal Airports Fund in the amount of $606,082.61, from available funds; and
8. Adopt the attached Resoltuion increasing the maximum amount by $6,082.61 to be paid to the law firm
of Kelly, Hart &Hallman, P.C., for legal services related to the Loan Agreement and Promissory Note
which a portion of the costs are subject to reimbursement by FWS Realty, Ltd. under the proposed
Ground Lease Agreement.
DISCUSSION:
Staff has received a request from FWS Realty, Ltd., to lease approximately 17,600 square feet of ground
Logname: SSFWS NWTHREE Page 1 of 3
space on the west side of Spinks Airport to construct a 14,000 square foot hangar. FWS Realty, Ltd. has
also requested a Right of First Refusal (ROFR) on 31,327 square feet of ground space for future hangar
development.
To aid in the development of the mandatory improvements and as an economic incentive to stimulate and
encourage business development on Lease Site NW-3, FWS Realty, Ltd., has been offered and has
accepted a construction loan in the amount of $600,000.00. As recommended by the City's 2010
Comprehensive Plan, adopted by the City Council pursuant to Ordinance No. 19044-02-2010 and in
accordance with Resolution No. 3716-03-2009, the City has established an economic development
Program pursuant to which the City will, on a case -by -case basis, offer economic development incentives
authorized by Chapter 380 of the Texas Local Government Code that include monetary loans and grants
of public money to businesses and entities that the City determines will promote state or local economic
development and stimulate business and commercial activity in the City in return for verifiable
commitments from such businesses or entities.
By the terms identified in the Advance Promissory Note, the interest rate will be the current 10 year U.S.
Treasury Bill rate plus 1 percent and will reset every 10 years. The loan will be repaid using an
amortization schedule of 20 years with payments of principal and interest made in equal monthly amounts.
The loan repayment schedule will begin on the first day of the month following the Occupancy Date.
Construction of the 14,000 square foot hangar shall begin within six months following the later of (a)
receipt of written Federal Aviation Administration (FAA) Airspace Study approval on the design of same,
(b) receipt of the City of Fort Worth Aviation Department's approval of plans as set forth in the lease and
(c) issuance of a building permit with the completion and issuance of the Certificate of Occupancy to be no
later than 12 months after construction commences. Rental rates are to begin on the date the first
certificate of occupancy is issued.
The initial term for Lease Site NW-3 and the ROFR shall commence on the date of its execution and
expire on September 1, 20413 with two five-year options to renew. At a ground rate of $0.27 per square
foot per year, Lease Site NW-3 will generate estimated revenue of $4,752.00 per year or $396.00 per
month. At a rate of $0.01 per square foot per year, the ROFR will generate estimated revenue of $313.27
per year or $26.11 per month.
Rental rates shall be subject to an increase on October 1 of any given year to reflect the upward
percentage change, if any, in the Consumer Price Index for the period since the last adjustment, as
described in the Schedule of Rates and Charges in effect at the time. All Agreement terms will be in
accordance with established City and Aviation Department policies.
By adoption of M&C G-16923 and Resolution No. 3882-05-2010, the City Council approved Andrew J.
Rogers and the law firm Kelly, Hart and Hallman as legal counsel to assist the City of Fort Worth in
drafting the necessary commercial construction loan documentation and authorized payment to Andrew J.
Rogers and the law firm Kelly, Hart and Hallman for their services in an amount not to exceed $10,000.00.
To date, Andrew J. Rogers and the law firm Kelly, Hart and Hallman have billed the City $16,082.61 for
their services and have been paid that amount. This action both approves the increase of the maximum
amount to be paid and ratifies the payment of $6,082.61. The Ground Lease Agreement provides for
partial reimbursement by FWS Realty, Ltd., of reasonable outside counsel fees, in an amount up to
$12,500.00, related to the preparation and negotiation of the NW3 and related leases and the Chapter 380
Construction Loan Agreement and Advance Promissory Note.
The property is located in COUNCIL DISTRICT 8.
FISCAL INFORMATION /CERTIFICATION:
Logname: SSFWS NWTHREE Page 2 of 3
adoption of the attached appropriation ordinances, funds will be available in the current capital budget, as
appropriated, of the Airports Gas Lease Project Fund. The Aviation Department is responsible for the
collection and deposit of funds due to the City.
FUND CENTERS:
TO Fund/Account/Centers
1)
PE40
491052
0551201
2)
PE40
491472
0551201
5)
P240
446200
551929990100
5)P240
538040
551929990100
6)
PE40
476240
0551002
7)
PE40
539120
0551002
7)PE40
476240
0551002
CERTIFICATIONS:
FROM Fund/ACCOunt/Cquit ters
4 752.00 7) P240 538040 551929990100
313.27 7) PE40 539120 0551002
$600,000.00 9) PE40 539120 0551201
$6001000.00
$600,000600
$6009000,00
$600,000600
Submitted for City Manager's Office bv:
Originating Department Head:
Additional Information Contact:
Fernando Costa (6122)
Kent Penney (5403)
Jonnie Huitt (5409)
ATTACHMENTS
1. 055FWS NWTHREE AVAIL FUNDS INQUIRY.tadf (CFW Internal)
2. 55FWS NWTHREE A012 REVISED (ciean).doc (Public)
3. 55FWS NWTHREE PE40 REVISED A012 (clean).doc (Public)
4. Rogers Amend Resolution.doc (Public)
'•/1 /11 11
•11 oil 11
6 082.61
Logname: SSFWS NWTHREE
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