HomeMy WebLinkAboutMINUTES - 01082008 - C.20 C.20
THE BOARD OF SUPERVISORS OF
CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Order on JANUARY 08, 2008 , by the following vote:
AYES: SUPERVISORS GIOIA, UILKEMA, BONILLA, GLOVER AND PIEPHO
ABSENT: NONE
ABSTAIN: NONE
SUBJECT: APPROVE AND TUTHORIZE SECON AMENDMENT TO LEASE WITH CONCORD
JET SERVICE, INC. PACHECO AREA (DISTRICT IV)
R E L I S 1r E D:RELI STED TO A FUTURE DATE TO BE DETERMINED
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: JANUARY 08, 2008
JOIN CULLEN, CLERK OF THE BOARD
Of Supervisors and County Administrator
By: A�
eputy Clerk
TO: BOARD OF SUPERVISORS ��`s °'" on ra
FROM: KEITH FREITAS, DIRECTOR OF AIRPORTS ;, ; s
Costa
DATE: JANUARY 8, 2008 ra----- County
SUBJECT: APPROVE AND AUTHORIZE SECOND AMENDMENT TO LEASE WITH CONCORD JET
SERVICE, INC., PACHECO AREA (DISTRICT IV)
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
I. RECOMMENDED ACTION:
APPROVE and AUTHORIZE the Director of Airports, or designee, to EXECUTE, on behalf of the
County, a second lease amendment between the County, as lessor,and Concord Jet Service,Inc.,as tenant.
H. FINANCIAL IMPACT:
There is no negative impact on the General Fund. The Airport Enterprise Fund will receive lease and other
revenues and the County General Fund will receive property,sales and possessory interest tax revenues from
this development. The Airport Enterprise Fund will receive a minimum of$3,465.85 more per month in
Ground Rent due to this amendment.
Continued on Attachment: X SIGNATURE: i
_LY6ECOMMENDATION OF COUNTY ADMINISTRATOR
_RECOMMENDATION OF BOARD COMMITTEE
_✓APPROVE THER
.s:
SIGNATURE(S):(;
�
ACTION OF BO(�b Old A +ROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS I hereby certify that this is a true and correct copy of an action taken
UNANIMOUS(ABSENT and entered on the minutes of the Board of Supervisors on the date
AYES: NOES:
shown.
ABSENT: ABSTAIN:
ATTESTED: _
JOHN CULLEW,'Clerk of the oard of Supervisors and County
�B•Div: County ami Administrator
Contact: Beth Lee(925)646-5722
cc: County Administrator
Public Warks Director
County Counsel
Federal Aviation Administration By ,Deputy
SUBJECT: APPROVE AND AUTHORIZE SECOND AMENDMENT TO LONG-TERM LEASE WITH
CONCORD JET SERVICE, INC., PACHECO AREA
DATE: January 8, 2008
PAGE: 2
III. REASONS FOR RECOMMENDATION/BACKGROUND:
On April 5, 2005, the Board authorized the Public Works Director to enter into a lease with Concord Jet
Service, Inc. (the "Tenant") for a term of forty years for the purpose of constructing and operating a fixed
base operator hangar and office area at Buchanan Field Airport (the "Lease").
On April 1.0, 2007, the Board approved a First Amendment to Lease which accomplished two goals; it
defined the:Tenant's allowable maintenance activities at the facility for hangar construction and operations
consistent with fire suppression guidelines, and it extended the construction rent period through December
2007 whert the project was expected to be completed.
In November 2007, the Tenant requested that the office component be removed from their project due to
economic concerns within the housing industry(its primary business emphasis).This change would limit the
Tenant's ability to provide the Fixed Base Operator(FBO) services that are required in and were the basis
for the lower ground rent in its Lease. This Second Amendment to Lease would allow the Tenant to delay
completion of the office space until April 5, 2014, and increase the applicable ground rent to a level that is
comparable with other non-FBO tenants at Buchanan Field Airport.
IV. CONSEQUENCES OF NEGATIVE ACTION:
If the parties do not execute the Second Amendment to Lease, Concord Jet Service, Inc. will be in default
under the Lease for failing to construct the improvements described in the Lease in accordance with the
terms of the Lease.
SECOND AMENDMENT TO
LEASE BETWEEN CONTRA COSTA COUNTY
AND
CONCORD JET SERVICE, INC.
(Fixed Base Operation—Buchanan Field)
This Second Amendment to Lease between Contra Costa County
and Concord Jet Service, Inc. ("Second Amendment"), by and between the COUNTY.
OF CONTRA COSTA, a political subdivision of the State of California ("Lessor"), and
CONCORD JET SERVICE, INC., a California corporation ("Tenant") is effective
January 1, 2008.
WHEREAS,. on April 5, 2005, Lessor and Tenant entered into a lease (the
"Lease") whereby County leased to Tenant the Ptemises or Leased Premises (as such
terms are defined in the Lease) for the purpose of Tenant's development and use of the
Leased Premises as a Full-Service Fixed Base Operation (as defined in the Lease), and
WHEREAS, Tenant's development of the Leased Premises was originally
delayad due to unforeseen difficulties in obtaining building permits, and
WHEREAS, on April 10, 2007, Lessor and Tenant entered into a First
Amendment to Lease to reflect a modification to the rent provisions necessitated by the
delays, and to reflect a modification in the services to be provided by Tenant at the
Leased Premises, and
WHEREAS, due to Tenant's desire to postpone the full development of the
Leased Premises as a Full-Service Fixed Base Operation, it is necessary to further
amend the Lease, and
WHEREAS, Lessor and Tenant desire to enter into this Second Amendment to
Lease to further amend the rent provisions therein, to modify some of the construction
deadiiines, and to otherwise modify the Lease as more particularly described below,
NOW, THEREFORE, Lessor and Tenant hereby agree to amend the Lease as
follows:
A. DEFINITIONS
Except as otherwise defined herein, capitalized terms used but not otherwise
defined herein are used as defined in the Lease.
B. SPECIFIC AMENDMENTS
1. Section 4.13. EXTENSION. Section 4_13. EXTENSION of the Lease is hereby
amended by deleting the words "thirtieth (30t)" from the second sentence
therein and inserting the words "twenty-ninth (29th)" in their place.
2. Section 6.B. GROUND RENT. The portion of Section 6.B. GROUND RENT
of the Lease from the beginning thereof through and including Subsection
6.B.(1) Consumer Price Index Rent Adjustment, as amended by paragraph
A.2. of the First Amendment, is hereby deleted in its entirety and replaced
with the following:
"B. GROUND RENT: Beginning on January 1, 2008 (the "Ground Rent
Commencement Date"), and ending on the last day of the month during
which both of the following events have occurred: (i) all of the Phase 3
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Improvements described in Section 12. Site Improvements and depicted on
Exhibit F have been constructed and (ii) Tenant has commenced providing all
of the minimum services required under Subsection 8.A. Minimum Services
Required (the "Phase 1 Ground Rent Expiration Date"), Tenant shall pay
ground rent to Lessor in accordance with the schedule labeled Phase 1
Ground Rent below ("Phase 1 Ground Rent")_ Phase 1 Ground Rent for
Years 4 through 9 is detailed on the Phase 1 Ground Rent Schedule below.
Beginning on the first day of the month following the Phase 1 Ground Rent
Expiration Date, Tenant shall pay ground rent to Lessor in the amounts set
forth in the Phase 3 Ground Rent Schedule below ("Phase 3 Ground Rent")
.instead of the amounts set forth in the Phase 1 Ground Rent Schedule.
Phase 1 Ground Rent or Phase 3 Ground Rent, whichever is in effect, shall
be revalued for Year 10 in accordance with Subsection 6.B.(2) Revaluation of
Ground Rent. Phase 1 Ground Rent or Phase 3 Ground Rent whichever is in
effect for Year 11 and for each year thereafter shall be increased by the
change in. the Consumer Price Index as described in Subsection 6.B.(1)
Consumer Price Index Rent Adiustment below, except in years 20 and 30
during which the Ground Rent (whether Phase 1 or Phase 3) shall be
revalued in accordance with Subsection 6.B.(2) Revaluation of Ground Rent.
Set forth below are examples of the schedule of adjustments to Phase 1 and
Phase 3 Ground Rent beginning with January 1, 2008.
/ll
111
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PHASE 1 GROUND RENT SCHEDULE FOR YEARS 3-9
Year Monthly Ground Rent
3 $ 5,805.00 (from January 1, 2008—April 4, 2008)
4 $ 9,445.00 (from April 5, 2008—April 4, 2009)
5 $ 11,372.00 (from April 5, 2009—April 4, 2010)
6 $ 13,493.00 (from April 5, 2010—April 4, 2011)
7 $ 15,613.00 (from April 5, 2011 —April 4, 2012)
8 $ 17,733.00 (from April 5, 2012—April 4, 2013)
9 $ 19,661.00 (from April 5, 2013—April 4, 2014)
PHASE 3 GROUND RENT SCHEDULE FOR YEARS 3-9
3 $ 5,805.00 (from January 1, 2008—April 4, 2008)
4 $ 6,008.00 (from April 5, 2008—April 4, 2009)
5 $ 6,218.00 (from April 5, 2009—April 4, 2010)
6 $ 6,436.00 (from April 5, 2010—April 4,2011)
7 $ 6,661.00 (from April 5, 2011 —April 4, 2012)
8 $ 6,895.00 (from April 5, 2012—April 4, 2013)
9 $ 7,136.00 (from April 5, 2013—April 4, 2014)
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GROUND RENT ADJUSTMENTS FOR YEARS 10.40
10 * Adjusted in accordance with Subsection 6.B.(2) below.
11-19 **In accordance with Subsection 6.13.(1) below, each year
Ground Rent will be the product of the prior year Ground
Rent X Annual CPI adjustment.
20 * Adjusted in accordance with Subsection 6.6.(2) below.
21-29 **In accordance with Subsection 6.13.(1) below, each year
Ground Rent will be the' product of the prior year Ground
Rent X Annual CPI adjustment.
30 *Adjusted in accordance with Subsection 6.B.(2) below.
31-40 **In accordance with Subsection 6.13.(1) below, each year
Ground Rent will be the product of the prior year Ground
Rent X Annual CPI adjustment.
* Ground Rent will be re-appraised at the beginning of these lease years in
accordance with Subsection 6.B.(2) below.
** Ground Rent will be increased at the beginning of these lease years by the
annual increase in the CPI as described in Subsection 6.B.(1) below.
Ground Rent shall be payable in advance and without demand on or before
the first day of each month during the Term of this Lease, and any granted
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extension of the Term. Ground Rent for any partial month shall be prorated at
the rate of 1/30th of the applicable monthly Ground Rent per day.
(1) Consumer Price Index Rent Adjustment: Effective upon the first day of
each of the Years 11 through 19, Years 21 through 29, and Years 31 through
40, Tenant's Ground Rent in effect for the preceding year will be increased by
the change in the Consumer Price Index ("CPI") defined below, for the most
recent one year period ending December 31. CPI, as used herein, shall
mean the Consumer Price Index for all Urban Consumers, All Items, for the
San Francisco-Oakland-San Jose (Metropolitan Area (1982-84 = 100), as
published by the Bureau of Labor Statistics of the U.S. Department of Labor,
or its successor. At no time will the Ground Rent be decreased by a CPI
adjustment. For example, if Year 11 of the Lease commences on April 5,
2015, the CPI Index for December 2014 is 210.0, and the CPI Index for
December 2013 is 205.0, then the Phase 1 Ground Rent for Year 11 shall be
increased from $ 20,000.00 (hypothetical Year 10 Phase 1 Ground Rent) to
$20,400.00 per month ($ 20,000.00 X (1+(210.0-205.0/205.0)). Lessor will
notify Tenant of the increase in Ground Rent when Lessor completes the
calculation of the increased rent_ If the notice is after the effective date of the
increase Tenant will pay any increased rent retroactively to the effective
date."
3. Section 6.8.(2) Revaluation of Ground Rent. Section 6.B.(2) Revaluation of
Ground Rent-is hereby amended by deleting the words "tenth anniversary of
the Commencement Date of this Lease, namely on 4/5/2015" from the first
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sentence therein and inserting the words "ninth anniversary of the
Commencement Date of this Lease, namely on 4/5/2014" in their place.
4. Section 6.C. PERCENTAGE RENT. Section 6.C. PERCENTAGE RENT of
the Lease is hereby amended by inserting the following subsection 6.C.(1)O)
to the list of items that are excepted from the term Gross Receipts:
amounts received by Tenant from the sublease or rental of hangar space
on the Leased Premises."
5. Section 6.D. FUEL FLOWAGE FEES. Section 6.D. FUEL FLOWAGE FEES
of the Lease is hereby deleted in its entirety and replaced with the following:
"D.FUEL FLOWAGE FEES: On the first day of each calendar quarter during
the Term, Tenant shall pay to Lessor a fuel flowage fee for the preceding
quarter of$0.08 per gallon,delivered during the preceding quarter, less taxes.
With each quarterly payment of the fuel flowage fee, Tenant shall provide a
delivery tag containing information with respect to the number of gallons
delivered during the preceding quarter. The fuel flowage fee shall be
reviewed and may be revised by Lessor every five (5) years. Lessor shall
give notice to Tenant in writing of any revised fuel flowage fee, which shall be
effective the month after such notice is given. .It is understood that any fuel
flowage fee schedule shall apply uniformly to all Buchanan Field Fixed Base
Operators at the.time of the Tenant's 5-year revision."
6. Section 12.A. CONSTRUCTION OF IMPROVEMENTS. Section 12.A.(2) of
the Lease is hereby deleted in its entirety and replaced by the following:
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"(2) Not more than a maximum of 39,520 square feet of hangar space
capable of handing aircraft."
7. Section 12.A, CONSTRUCTION OF IMPROVEMENTS. Section 12.A.(5) of
the Lease is hereby deleted in its entirety and replaced by the following:
"(5) Not less than 6,000 square feet and not more than 14,780 square
feet of office, shop and service space."
3. Section 12.A. CONSTRUCTION OF IMPROVEMENTS. The unnumbered'
paragraph below Subsection 12.A.(5) is hereby deleted in its entirety and
replaced by the following:
"Said improvements may be constructed in three (3) phases ("Phasing"), as
shown in the phasing improvement plan ("Phasing Improvement Plan")
attached hereto and made a part hereof as Exhibit F. The Phase 1
Improvements, consisting of the aircraft parking ramp and taxi space, the
hangar space and the parking spaces, and the Phase 3 Improvements,
consisting of the office, shop and service space, all as shown on Exhibit F,
must be constructed in accordance with the construction schedule set forth in
Section 12.0 below. The Phase 2 Improvements, consisting of the fuel farm
shown on .Exhibit F, must be constructed within ten (10) years from the
Commencement Date unless prior to the date which is ten (10)years from the
Commencement Date Tenant has caused the services to be provided at the
fuel farm to be provided by others on the Leased Premises, or Tenant, with
Lessor's consent, is providing such services at another location at the
Airport."
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9. Section 12.C. CONSTRUCTION SCHEDULE. The second paragraph of
Section 12.C. CONSTRUCTION SCHEDULE is hereby deleted in its entirety
and replaced with the following:
"Tenant shall commence construction of the Phase 1 Improvements within
forty-five (45) days after receiving a grading permit for the Phase 1
Improvements from the Contra Costa County Building Inspection Department,
and shall complete the construction of the Phase 1 Improvements within
twelve (12) months after receiving the grading permit and the Director of
Airports' approval. Prior to submitting any Plans for the Phase 3
Improvements to the Contra Costa County Building Inspection Department,
Tenant shall submit three (3) sets of Plans for the Phase 3 improvements and
a detailed construction schedule to the Director of Airports for review and
approval in accordance with the preceding paragraph. Tenant shall not
submit Plans to the Contra Costa County Building Inspection Department
without the Director of Airports' approval. Tenant shall commence
construction of the Phase 3 Improvements within forty-five (45) days after
receiving a building permit for the Phase 3 Improvements from the Contra
Costa County Building Inspection Department, and shall complete the
construction of the Phase 3 Improvements on or before the ninth (91h)
anniversary of the Commencement Date. Tenant shall provide Lessor with a
Notice of Intent to Construct the Improvements at least sixty (60) days prior to
the construction of the Improvements or delivery of materials."
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10. Section 28.A. DEFINITION OF DEFAULT. Section 28.A.(11) is hereby
renumbered as Subsection 28.A.(13).
11. Section 28.A.. DEFINITION OF DEFAULT. The following Subsection
28.A.(11) is hereby added.
"(11) Failure to commence construction of the Phase 3 Improvements
within forty-five (45) days following receipt of a building permit, or, if such
deadline has been extended in accordance with Subsection 12.C. above, the
failure to commence construction of the Phase 3 Improvements by the
extended deadline."
112. Section 28.A. DEFINITION OF DEFAULT. The following Subsection
28.A.(12) is hereby added.
"(12) Failure to complete construction of the Phase 3 Improvements on
or before the ninth (9'h) anniversary of the Commencement Date, or, if such
deadline has been extended in accordance with Subsection 12.C. above, the
failure to complete construction of the Phase 3 Improvements by the
extended deadline."
13. Exhibit V, Exhibit "Fn to the Lease is hereby deleted and replaced by the
attached Exhibit "F,"which is hereby incorporated into and made a part of the
Lease.
C. EFFECT
Except for the amendments agreed to herein and in the First Amendment, the
Lease remains in full force and effect with no other amendments or modifications.
D. REPRESENTATION BY COUNSEL
The parties hereto each acknowledge that they have been represented in the
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negotiations for, and in the preparation of, this Second Amendment by counsel of
their own choosing; that.they have read this Second Amendment or have had it
read to them by their counsel; and that they are fully aware of and understand its
contents and its legal effect. Accordingly, this Second Amendment shall not be
construed.against any parry, and the usual rule of construction that an agreement
is construed against the party that drafted it shall not apply.
E. APPROVAL
This Amendment is subject to approval by the County Board of Supervisors.
F. GOVERNING LAW AND VENUE
This Second Amendment will be governed and construed in accordance with
California law. The venue of any litigation pertaining to this Second Amendment
will be Contra Costa County, California.
IN WITNESS WHEREOF, the parties have executed this Second Amendment
effective as of the date first set forth above.
LESSOR TENANT
CONTRA COSTA COUNTY, CONCORD JET SERVICE, INC.,
a political subdivision of a California corporation
the State of California
By: By:
Keith Freitas Kenneth Hofmann
Director of Airports President
By:
Name:
Secretary
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RECOMMENDED FOR APPROVAL:
By:
Karen Laws
Principal Real Property Agent
APPROVED AS TO FORM:
Silvano B. Marchesi,
County Counsel
By:
Deputy County Counsel
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EXHIBIT F
PHASING IMPROVEMENT PLAN
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PHASE 2 IMPROVEMENTS
FUEL FARM {Provided at Another Location) .
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PHASE JIMPROVEMENTS
Office (Conceptual Location Only.
PHASE 1 IMPROVEMENTS
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