Loading...
HomeMy WebLinkAboutMINUTES - 09172013 - C.03RECOMMENDATION(S): APPROVE and AUTHORIZE the Director of Airports, or designee, to execute, on behalf of the County, a lease amendment that modifies the assignment and subleasing provisions of a 1982 lease between the County, as lessor, and Hofmann Holdings, LP, as tenant, for property located at Buchanan Field Airport. FISCAL IMPACT: There is no negative impact on the General Fund. The Airport Enterprise Fund will continue to receive lease and other revenues provided for in the Lease. The County General Fund will continue to receive property, sales and possessory interest tax revenues from the Lease. BACKGROUND: Under a ground lease dated May 25, 1982 (Lease), the tenant leases the subject property for the purpose of providing a Fixed Base Operation at Buchanan Field Airport. Since entering into the Lease, the Board has authorized two additional leases to Fixed Base Operators (FBOs) at Buchanan Field Airport, one in 2006 and the other in 2008. The newer FBO leases contain assignment and sublease language that APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 09/17/2013 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact: Beth Lee, (925) 646-5722 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: September 17, 2013 David Twa, County Administrator and Clerk of the Board of Supervisors By: Stacey M. Boyd, Deputy cc: C. 3 To:Board of Supervisors From:Keith Freitas, Airports Director Date:September 17, 2013 Contra Costa County Subject:Approve and Authorize Sixth Amendment to Lease for Hofmann Holdings, LP for the property located at 500 Sally Ride Drive, Concord. BACKGROUND: (CONT'D) is more appropriate for a lease of property for use by an FBO. The purpose of the proposed amendment is to make the assignment and sublease provision of the Lease consistent with the assignment and sublease provisions of the other FBO leases that are in effect at Buchanan Field Airport. CONSEQUENCE OF NEGATIVE ACTION: The County will not consent to the lease amendment and Hofmann Holdings, LP will continue to be required to use a more cumbersome process to obtain County approval of any assignment or sublease needed as part of the tenant’s operations. CHILDREN'S IMPACT STATEMENT: Not Applicable ATTACHMENTS Concord Jet Sixth Lease Amendment SIXTH AMENDMENT TO LEASE This sixth amendment is dated ______________, 2013 and is between the County of Contra Costa, a political subdivision of the State of California (“Lessor”), and Hofmann Holdings, LP, a California limited partnership (“Lessee”). Recitals A. Lessor owns and operates Buchanan Field Airport, a public airport located at Concord, California (the “Airport”). B. On May 25, 1982, Lessor entered into a lease with Pacific States Aviation, Inc., a California corporation (the “Lease”) for a portion of the Airport known as 500 Sally Ride Drive, as more fully described in the Lease (the “leased premises”). C. On December 30, 1994, Pacific States Aviation, Inc. assigned all of its rights, title, and interests in the Lease to Buchanan Field Properties, a California general partnership, which assignment was consented to by Lessor on February 7, 1995. D. On May 1, 1999, Buchanan Field Properties assigned all of its rights, title, and interests in the Lease to Concord Jet Service, Inc., which assignment was consented to by Lessor on August 17, 1999. E. On January 1, 2013, Concord Jet Services, Inc. assigned all of its rights, title, and interests in the Lease to Hofmann Holdings, LP, which assignment was consented to by Lessor on December 4, 2012. F. The parties desire to amend the Lease to modify the assignment and subletting provisions therein to make provision consistent with other Fixed Base Operator leases at Buchanan Field Airport. The parties therefore agree as follows: 1. Section 22. Assignment or Subletting is deleted in its entirety and replaced with the following: Section 22. Assignment and Subleasing A. Assignment 1) Except as provided in this Section 22, Lessee may not voluntarily sell, assign, transfer or encumber (each, a “Transfer”), its interest in this lease or in the leased premises, or allow any other person or entity (except Lessee’s authorized representatives) to occupy or use all or any part of the leased premises, without first obtaining Lessor’s written consent, which may not be unreasonably withheld. Notwithstanding the foregoing sentence, Lessor has the right to require financial and other information from a proposed assignee, purchaser, transferee or other encumbering party (each, a “Transferee”), to make its decision, and Lessee shall assist Lessor in obtaining such information from any proposed Transferee. Any Transfer without Lessor’s prior written consent is voidable and, at Lessor’s election, constitutes a Default. Any consent to a Transfer does not constitute a further waiver of the provisions of this Section. 2) If Lessee is a corporation or a limited liability company, any (i) dissolution, merger, consolidation, or other reorganization of Lessee, or (ii) sale or other transfer of a controlling percentage of the capital stock or membership interests, as the case may be, of Lessee, or (iii) sale of fifty percent (50%) of the value of the assets of Lessee, will be deemed a voluntary assignment. The phrase “controlling percentage” means (a) in the case of a corporation, the ownership of, and the right to vote, stock possessing more than fifty percent (50%) of the total combined voting power of all classes of Lessee’s capital stock issued, outstanding, and entitled to vote for the election of directors and (b) in the case of a limited liability compan y, ownership of, and the right to vote, membership interests possessing more than fifty percent (50%) of the total combined voting interests of Lessee. 3) If Lessee is in default of monetary obligations to Lessor pursuant to this lease, Lessee immediately and irrevocably assigns to Lessor, as security for Lessee’s monetary obligations under this lease, all rent from any subletting of all or part of the leased premises as permitted by this lease. A receiver for Lessee appointed on Lessor’s application, may collect such rent and apply it toward Lessee’s obligations under this lease. B. Subleases 1) Lessee’s Conditional Right. If Lessee satisfies all of the following conditions in this subsection B, Lessee may (i) sublease portions of the leased premises to a sublessee, and (ii) may permit the sublessee to sub-sublease portions of its interest in the leased premises to a sub- sublessee. For purposes of this Section 22, Sublessees and sub- sublessees are “subtenants”): a. Lessee may not transfer any interest in the leased premises, or in any improvement, that is greater than an interest for a term of years. b. Lessee shall cause all subleases and sub-subleases (each, a “sublease”), to be (i) in a form approved by the Director of Airports or his designeee, and (ii) subject and subordinate to this lease. c. Lessee shall cause all subtenants to confirm in writing that (i) they have received and read this lease, and (ii) they agree to be bound by the terms of this lease. 2) Additional Terms Applicable to All Subleases. All subleases are subject to the following terms: a. Notwithstanding Lessee’s exercise of its right to enter into a sublease, Lessee is and will remain responsible for the full performance of this lease and is not released from any obligations under this lease as a result of a sublease. b. All subleases and subtenants are subject to the rules and regulations adopted from time to time by Lessor. c. No commercial aviation operations are permitted without the prior written consent of the Director of Airports. (1) If a subtenant is found to be conducting any commercial aviation activity in the leased premises without the consent of the Director of Airports, Lessee shall immediately serve the subtenant with a thirty (30) day cure or quit notice and concurrently serve the Director of Airports with a copy of such notice. If the offending subtenant fails to cause the cessation of such commercial activity within thirty (30) days of the cure or quit notice, Lessee shall terminate the subtenant’s sublease. (2) Lessee shall cause a provision that is in substantial conformity with the following to be included in all sublease agreements: “Commercial Operations; License Agreements. Subtenant understands that the underlying leased premises are owned in fee by County and that the Lessee has entered into a lease with County that includes the area that is subject to the sublease. As further consideration of this sublease, if subtenant desires to engage in commercial operations on the leased premises at any time during the term of this sublease, subtenant must first enter into a license agreement with County pursuant to the license provisions of the lease and subject to terms and conditions established between County and subtenant for the privilege of conducting its business at the Airport and in consideration for the impacts such commercial operations may have on the Airport property (a “License Agreement”). Subtenant may not operate any commercial operations under this sublease until a License Agreement has been executed by County and subtenant. Subtenant shall provide Lessee with a copy of any such executed License Agreement and shall immediately inform Lessee of the termination of any such License Agreement. In the event (i) subtenant engages in commercial operations on the leased premises without having first entered into a License Agreement, (ii) of a default or breach by subtenant of his or her License Agreement with the County, or (iii) the License Agreement is terminated for any reason and subtenant nevertheless continues to engage in commercial operations on the leased premises, Lessee may terminate this sublease by giving subtenant (10) days’ written notice of its intention to do so. (3) If Lessor enters into a license agreement with a subtenant and subsequently gives Lessee written notice of a default under the license agreement or the termination of the license agreement by Lessor, within ten (10) days of receipt of such written notice, Lessee shall either (i) cancel or otherwise terminate the sublease, or (ii) cure the default under the license agreement. Lessee’s failure to either terminate the sublease or cure the default under the License Agreement is a default under this lease. (4) Lessee is responsible for all materials stored in the Hangars, whether the materials are stored by Lessee or by Lessee’s agents, employees, subtenants or any other persons. All materials stored in hangars must comply with all of the requirements of all local, State, County, Federal and all other governmental agency having jurisdiction over the leased premises. The Director of Airports shall determine, in his or her sole reasonable discretion, what items may be stored in a hangar, and may, in making such determination, consult with authorized representatives of any governmental agency having jurisdiction over the leased premises. Lessee shall inspect all hangars no less than once each year to determine if materials that violate any applicable codes, or that have not been authorized by the Director of Airports (“Unauthorized Materials”), are being stored in a hangar. If a subtenant is found to be storing any Unauthorized Materials in a hangar or office space, Lessee shall immediately serve the subtenant of such hangar or office space with a fifteen (15) day cure or quit notice and concurrently serve the Director of Airports with a copy of such notice. If the offending subtenant fails to remove or cause the removal of all of the Unauthorized Materials within fifteen (15) days of service of the cure or quit notice, Lessee shall terminate such subtenant’s sublease. All other terms of the lease, as amended, remain unchanged. The parties are signing this sixth amendment as of the date stated in the introductory clause. LESSOR LESSEE CONTRA COSTA COUNTY, Hofmann Holdings, LP, a a political subdivision of the a California limited partnership State of California By: __________________________ By: __________________________ Keith Freitas Name Director of Airports Title By: __________________________ RECOMMENDED FOR APPROVAL: Name Title By: ___________________________ Beth Lee Assistant Director of Airports RECOMMENDED FOR APPROVAL: By: ___________________________ Karen Laws Principal Real Property Agent APPROVED AS TO FORM: Silvano B. Marchesi, County Counsel By: ___________________________ Kathleen M. Andrus Deputy County Counsel