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HomeMy WebLinkAboutAgenda Bill 5A 12/07/2009CITY OF PETALUMA, CALIFORNIA ~e~ AGElOTI)A SILL ~ ®ecember 7, 2009 Agenda Title: Discussion and Introduction (First Reading) of an Ordinance 1VIeetin~ Date: Dec. 7, 2009 Approving Amendment No. Two to the Mangon Aircraft, Inc. Lease Agreement and Authorizing its Execution by the City Manager ~ Meeting Time: 7:00 P1VI Category: ^ Presentation ^ Appointments ^ Consent ^ Public Hearing ^ Unfinished Business ®New Business Department: Dire or: Contact Person: Phone Number: Public Works Vinc nt ~engo Bob Patterson 707-778-4404 Total Cost of`Proposal or Proiect: Name of Fund: Real Property Lease Amount Budgeted: N/A Account Number: 6100-61100-43120 Current Fund Balance: $38,996.00 Recommendation: It is recommended that the City Council take the following action: Approve Amendment No. Two to the Mangon Aircraft, Inc. Lease Agreement and authorize its execution by the City Manager. 1. ^ First reading of Ordinance approved unanimously, or with unanimous vote to allow posting prior to second reading 2. ^ First reading of Ordinance approved without unanimous vote: Ordinance has been published/posted prior to second reading; see Attachment 3. ^ Other action requiring special notice: Notice has been given, see Attachment Summary Statement: On September 6, 1988, Walter R. Mangon entered into a ground lease agreement with the City of Petaluma to lease property at the Petaluma Municipal Airport. On March 18, .20.05, Amendment No. One assigned this lease to Mangon Aircraft, Inc. The original agreement allowed Mr. Mangon to lease the property fora "limited service commercial. operation" consisting of aircraft maintenance and related. services, retail aircraft parts sales, and retail sales of used aircraft. Mangon Aircraft, Inc. is requesting that the lease be amended to include aircraft rental and flight instruction in the definition of its limited service commercial operation. At its October 1, 2009 meeting, the Petaluma Airport Commission approved this amendment and is recommending City Council authorization. Attachments to Agenda Packet Item: 1. Ordinance, including a. Attachment A to Ordinance -Amendment No. Two ,to Lease Agreement 2. Mangon Lease Agreement, dated September 6, 1988, and Amendment No. One to Lease Agreement Reviewed by.Finance Director: Reviewed by City Attorney: A roved ana er: ~~~ ~ _._.,.~ Date: /~ ~ ~ Date: Date: ~~'~-~' a d Rev. # Date Last Revised: ~ File: s:`:Airpon Diti~ision Fi~Ider~CC A~~cnda ~ Grants Folder:?9er K (~. f ~ ~-taneon L.~ase amendmc»ts;.~tan~orr:~9ana~~n Amendmcm No. 2'•.FINAL, r { r(V :1B \9ai~~~on Amendment Nc~ 2.doc.Dl)C CITE OF PETALUMA, CALIF®RNIA • DECEMBER 7, 2009 AGENDA .REPORT FOR DISCUSSION AND INTRODUCTION (FIRST READING OF AN ORDINANCE APPROVING AMENDMENT NO. TWO TO THE MANGON AIRCRAFT, INC. LEASE AGREEMENT, AND AUTHORIZING ITS' EXECUTION BY THE CITY MANAGER L RECOMMENDATION: Approve Amendment No. Two to the Mangon Aircraft; Inc. Lease Agreement and authorize its execution by the City Manager. 2. BACKGROUND: Mangon Aircraft, Inc., which is located in the Commercial Aviation Subzone at the Petaluma Municipal Airport, desires to expand its limited service commercial operation to include aircraft rental and flight instruction. It is requesting an amendment to its ground lease to allow this additional type of service. 3. DISCUSSION: The addition of this service would increase aviation business at the Airport and subsequently add to the Airport's revenue stream. 4. FINANCIAL IMPACTS: This action poses no additional cost. to the Airport budget. The addition of this business would provide a stimulus to Airport operations. . 2 S''•,Airpi}rt I:)ivisiun Fc~iderlCC Agenda X Grants Fulder.':29er ~ Mangon Lea3e.4mendmcn(s':'vtangoit~.~•fangnn Amendment Nct'_'~.E=1UA1.. AB ~9an~un Ameirdmeni No 2.d«c.L~OC ~-TTAC~IMENT 1 ORDINANCE APPROVING AMENDMENT NO. TWO TO THE MANGON AIRCRAFT, INC. LEASE AGREEMENT AND AUTHORIZING ITS EXECUTION BY THE CITY MANAGER WHEREAS, on September 6, 1988, the City of Petaluma, as Lessor, and Walter R. Mangon, as Lessee, entered into a Lease Agreement ("Lease"), for the ground lease of 1.45 acres, more or less, of property, located in the Aviation Commercial Subzone at the Petaluma Municipal Airport; and WHEREAS, on March 18, 2005, upon request from Walter Mangon, Amendment No. One to the Lease was entered into to assign his interest as Lessee in the Lease to Mangon Aircraft, Inc.; and WHEREAS, Mangon Aircraft, Inc. has requested a second amendment to the Lease to include aircraft rental and flight instruction within the definition of permitted limited service commercial operation. NOW, THEREFORE BE IT ORDAINED by the City Council of the City of Petaluma: Section 1. Amendment No. Two to the Ground Lease Agreement between the City of Petaluma and Mangon Aircraft, Inc., attached hereto as Attachment A to Ordinance, which is incorporated herein by reference, is approved. Section 2. The City Manager is authorized to execute Amendment No. Two. Section 3. If any section, subsection, sentence, clause or phrase or word of this ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of Petaluma hereby declares that it would have passed and adopted this ordinance and each and all provisions thereof irrespective of the fact that any one or more of said provisions be declared unconstitutional, unlawful or otherwise invalid. Section 4. This ordinance shall become effective thirty (30) days after the date of its adoption by the Petaluma City Council. Section 5. The City Clerk is hereby directed to post this ordinance for the period and in the manner required by the City Charter. S:!.Aiipon Division FolderK:C Agenda X Grants }=older~.29er &Mangon 1,ease Amcndments`•.~-langon`~•tangon Anrendment No.'''~F1ti.Al.. AB ~9angun Amendment Vo 2.doc.DE)~ ATTACIiIVIENT A T® ®Ia®INANCE AMENDMENT NUMBER TWO TO LEASE AGREEMENT PETALUMA MUNICIPAL AIRPORT This Amendment Number Two to Lease Agreement ("Amendment") is made and entered into this day of , 2009, by and between the CITY OF PETALUMA, a municipal corporation ("Lessor" or "City"), and MANGON AIRCRAFT, INC„ a California corporation ("Lessee"). RECITALS A. Lessor and Walter R. Mangon, Lessee's assignor ("Original Lessee") entered into that certain Lease Agreement ("Lease") as of September 6, 1988, for Original Lessee's ground lease of the property identified therein (the "Premises") fora "Limited Service Commercial Operation" for aircraft maintenance and related services, retail aircraft parts sales, and retail sales of used aircraft. B. On February 23, 2004, the City Council of the City adopted Resolution No. 2004-017A N.C.S., by which it gave City's consent to assignment of Original Lessee's interest in the Lease to Lessee, subject to Original Lessee's execution of a.guaranty of performance of Lessee's obligations under the Lease. C. As of March 18, 2005, Original Lessee executed that certain Lease Guaranty ("Guaranty") in favor of the City and that certain Amendment Number One to the Lease. D. The Guaranty authorizes City, without notice or demand and without affecting Original Lessee's liability under the Guaranty, to consent to any alteration of any covenant, term, or condition of the Lease in any respect. E. Lessor and Lessee desire to further amend the Lease to include flight instruction and aircraft rental among the uses permitted under the Lease. F. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee enter into this Amendment. AGREEMENT 1. This Amendment shall incorporate by this reference all of the Recitals and Exhibits thereto. 2. Capitalized terms used herein within definition shall have the meanings ascribed to them in the Lease. 3. Section 6(a) of the Lease is hereby amended in its entirety to read as follows: (a) Limited Service Commercial Operation 4 S:'.Airpi~rt Divisiun Folder\~'C Agenda K Grants 1=ulder.29cr K M,{neon Lease Ameitdmenls'•~4angon`~.R•1angon Amendment 'Vo. 2\FiN.AL. At3 ~1an~ on rlinendrrtent ~l0 2.doc.Dt)L The Lessee or Sublessee shall conduct Limited Service Commercial Operations on the leased premises which includes, without limitation, the maintenance, repair, refurbishment, construction and reconstruction of any and all types of aircraft, together with all. operations customarily ancillary thereto; at the option of Lessee, the training of personnel in such operations; flight instruction; and aircraft rental. Tie down services may be provided for customers as required, but the rate shall be at least twenty percent (20%) more than that charged by the City for tiedowns. Lessee is authorized to operate retail sales of parts and merchandise related to flight and flying operations. The uses and operations set forth shall not be exclusive. 4. All flight instruction and aircraft rental services permitted under this Lease shall at all times be subject to Lessee's compliance. with .Section VIII. 3., Flight Instruction and Aircraft Rental, of that certain document known as the June 1992 Lease Policy and Standards for Services and Operations at Petaluma Municipal Airport, a copy of which section is attached hereto as Exhibit A and incorporated herein by this reference, as the same may be amended from time to time. Failure to so comply shall constitute an event of default under the Lease. 5. All other provisions of the Lease shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of the date first wri ten above. LESSOR: CITY OF PETALUMA By: John C. Brown City Manager ATTEST: By: Claire Cooper, City Clerk APPROVED AS TO FORM: By: Eric W. Danly, City Attorney 5 S:lAirpari Division Folder`~CC A~euda X Grants Folder29er & lv1angrnt Lease :~mendments`.'~9angonl~•langon .Amendment No. ~'1f=TNAI..:'\L3 ~•tan~on ;lmendmentAlo 2.doc.L~t)C APPROVED: By: Department Director APPROVED: By: Robert Patterson, Airport Manager APPROVED: By: Ron Blanquie, Risk Manager APPROVED: By: Finance Director LESSEE: MANGON AIRCRAFT, INC. By: Walter R. Mangon; President 1310455.1 S~.'•.Airport Di,rision i:olderlCC Age~tda X Grants PakEer.29cr.E Mangon L.easc Amendmems`~~langonlA9angen Amendment No. 21E INA1..AB'vtan~on .lmendment No 2.doc.DOC 6 l EX~I~IT' A .LASE PO~IC`~ AND STAND S EOI~ -~E:~ICES 14NI) OPE T'l®N,S A7' PET~Z, ~I1V1141t1IJ1VICIPA~ ®I~T' ,Iune9 1992 S:`,Airpi~rt Dig isii~n Folder~CC Agenda A: Grants Fcildert29cr & Mangon lease rlrnendntent~`~.R-langoitl~•tangon Amendnti;nl No. ?U[~lA}_.:1E3 'ti•ian~~on ,•~ntendment \o •2.doc.DOC y d. Hours of Operation: In addition to specifications far personnel outlined above, the airport office shall lie open for business eight (8) hours per day, .seven (7) clays per week during normal airport hours appropriate to season. 3. Flight Instruction and Aircraft Rental a. Qualifications (1) Instruction for private, commercial,.. and instrument ratings and a continuing ability to meet FAA requirements for the flight training proposed. (2) Adequate facilities for storing, parking, servicing, and repairing alt aircraft. b. .Personnel (l) At least one (1) full-time (eight (8) hours per day, seven (7j days per week) .properly certified flight instructor for the types and models of aircraft in which instruction is given. (2) A ,properly certified ground scfiool instructor capable of providing ground school instruction sufficient to enable students to pass the FAA written examination for private, commercial, and instrument ratings. (3) There shall he available; at least durinb eight (8) hours of the working day, a properly certifies "pilot capable of checlang out rental aircraft. c. EUUinment and Farts (I) At least one (1) dual equipped single-engine aircraft properly equipped and maintained. for flight instruction and such additional types of aircraft as may be reyuired to give Flight instruction of the kind(s) advertised. E6 8 S:'.Airpi~rt I)i~-isiun Folderit;:C Agenda K Grants Fulder'••29cr~~ Mangon Lcase.4rncudm:n~s\'t~1angon`~~langen Amendir~cnt No.'_1F(VAL AE3 \1an~~un ;~mendmeni ~Io 2.di}c.DC)i (2) Adeyuate mock-ups, pictures, slides, filmstrips, or other visual aids necessary to provide proper ground school instruction. (3) For rental, at least one (l) airworthy aircraft .suitably maintained and certified, which may he used to meet reyuirement (1) above. (4} Any aircraft .utilized to meet the requirements of (1) and/or (3} above which is availarle to the operator on a leaseback agreement must be on an exclusive-use agreement. d. Hours of Operation: In addition to specification for personnel outlined above, the airport. office shall be open for business eight (8) .hours per day, seven (9) Mays per week during normal airport, hours appropriate to season- 4. General Services.and Facilities a: >~NTCQ~i: Advisory services will be provided by qualified personnel during the same period that the fueling system is regularly operated. b. Weather Information: Wind speed and. direction along with current barometric pressure using equipment satisfying the requirements for instrument .operations under'FAR Part 4l shall be provided concurrent with the UNICOM operation. c. Re 'n Anything that affects the safe and efficient operation of the Airport shall he immediately reported to the designated Airport .Manager. d. Tie=Down Fees: Overnight tie-down fees shall he collected and accounted for by .the Airport Managergr his designee- e. L t ize: Normally not less than .130,000 syuare feet of ground area shall be leased from the City at the Airport to provide far: (1) A maintenance hangar and office building as described below. (Z} A minimum of 12 paved automobile parking spaces for customer use. 17 1318644.2 9 S:`•..4irpi~rt 1:)irision FoldertiCC Agenda K Grants rulder•~9er & h1angrnt Lease .amendmems`~\•tangon~~tangon Amendment No. „~FINA1.. AB ~11n~on Ametuimem No 2.dc}c.DOL ~r~~c~~~~r a J ff'~.t /,_.,r /fp,_,7 ~ G~V ~ ,w,/t Q_..C•~.-•. ", !~ Gam'.-~ ~1 f ~a ~ ~_,,__..... (f, J) / /~ LEASE AGREEMENT PETALUMA MUNICIPAL AIRPORT THIS LEASE AGREEMENT, made and entered into as of the (,P'~ day of _~ ~rr1 Q 19~, by and between the CITY OF PETALUMA, a political subdivision of the State of California, hereinafter referred to as rrLessor" and WALTER R. MANGON, hereinafter referred to as "Lessee"; WITNESSETH WHEREAS, the Lessor herein is a political subdivision duly organized and operating under the laws of the State of California, and owns all that certain real property located at the Petaluma Municipal Airport, Petaluma, Galif.~rnia, a cit}- Arport, hereinafter referred to as ".fAl~•.: art"; acid WriI:12EAS: Lessor deems it advantageous tc+ itself and the operation of the Airport to lease unto Lessee a ~_ertain parcel of land described herein, together- with certain privileges, right, uses, and interest therein, as hereinafter set forth; and LNHE1tEAS, Lessee proposes to lease a ground area of one (1) or more acres for a "limited Service Commercial Operation" which shall specifically involve aircraft maintenance. and related services, retail aircraft parts sales, retail sales of used aircraft; and WHEREAS, Lessee has indicated a willingness and ability to properl}~ keep and maintain and improve the leased ground in accordance with standards established by Lessor; and 1 ~~ WHEREAS, Lessee .desires to obtain and avail itself of the privileges, right, uses and interest therein and herein; NOW, THEREFORE, 'IT IS AGREED AS FOLLOWS 1. TERI~4 Lessor, for and in consideration of all the covena-~ts, conditions, and agreements to be set forth hereinafter to be kept and performed by Lessee and by Lessor, does hereby Lease unto Lessee, on all the conditions, covenants, terms and agreements hereinafter set forth, those certain premises described in Exhibit "A", which is attached hereto, marked as such and incorporated herein, for a term of forty (40) years, commencing on _ September 6, 1986 and ending on September 6, 2028 2. RENTAL Lessee shah 1~ay to Lessor a rental ii. accordance .with the `olRcwing provisions (a) The base ground rental for the premises, as described in Exhibit "A" shall be as follows: First Five Years: $.20 per square foot per year Second Five Years: $.25 per square foot per year Third Five Years: $.30 per square foot per year Fourth Five Years: $.35 per square foot per year The rental rate for the four remaining five year periods of the .lease term shall be computed at the commencement of each successive five year period at the rental. rate applicable for the immediately preceding five years adjusted for an increase in the Bureau of Labor Statistics Cost of Living Index -San Francisco - Oakland all items for said preceding five years. In no event 2 shall the rental rate for any five year period be less than the applicable rental rate far the preceding five year period, unless adjustments in the rental rate are made in accordance with the provisions of this Agreement as set forth in Paragraphs 24, 26, 27 and 30. (b} The base ground rent shall be payable, in advance, in equal installments or 1/I2 of the specified annual rental, by tl•? first day of each and every month during the term. of this lease and any extension thereof. In the event such payment is not made withi n five (5) days of the due date, i.e., by the first day of each and every month, there shall be a penalty of six percent (690) of the amount due and owing, which penalty shall become part of that month's rental payment. Furthermore, and in addition thereto, any amount of rental payment and penalties unpaid after thirty (30) days shall have a .:one and one-half Descent (1~$) interest charge on the unpaid ar~iounts, which int%resi shall likewise become part of the rental ;payment. 3. OFF SITE IMPROVEMENT Lessee shall have no responsibility for the construction of .any improvements to any site not contained within the leased premises. Lessor ~I shall set the necessary boundary monuments and grade stakes on the leased premises. Lessor shall provide a paved taxiway, or ramp to the leased premises of adequate width to permit access to said premises by taxiing aircraft . 4. ON SITE IMPROVEMENT REQUIREMENTS The Lessee shall be required to construct on said property a building in conformity with all applicable laws, ordinances, rules and 3 ~2 regulations containing an initial floor area of not less than 6, 000 square feet under one roof, The building shall be a prefabricated metal structure, as~ approved by the SPARC of the City of Petaluma. 5. UTILITIES Lessee shall pay for all water, sanitary sewage, gas service, electric power, telephone service, and all other services supplied to the said premises by Lessor, or any public utility, and shall pay all costs for the installation and connection and such services from the site or boundary line thereof. Lessor agrees to make available utilities, electric, gas, water. sewer, telephone to the site or boundary line of the leased premises within a reasonable time following execution of this Agreement. b. USE OF PREMISES The leased premises shall be used as follows (a) Limited services C_'omme.rcial Operat;cui The Lessee o~ Sublessee shall conduct Limited Service Commercial Operations on the leased premises which includes, without limitation, the maintenance, repair, .refurbishment, construction and reconstruction of any and all types of aircraft, together with all operations customarily ancillary thereto and, at the option of lessee the training of personnel in such operations. Tie down services may be provided for customers as required, but the rate shall be at least twenty percent (20$) more than that charged by the City for tiedowns. Lessee is authorized to operate retail sales of parts and merchandise related to flight and flying operations. The uses and operation set forth shall not be exclusive. 4 13 {b) Frohibitions Lessee and/or any Sublessee is prohibited from engaging in the following (1) The sale of food to or the consumption thereof by the public, provided, however, that "snack foods", sandwiches and candy may be sold. from mechanical dispensers. (2} The sale or. consumption of alcoholic beverage, provided that coffee and soft drinks may be sold from mechanical dispensers as provided above; (c) Common Facilities Lessee and/or Sublessee shall have the right to access to and use of facilities at Aixport designed far common use, such as landing area, aprons, taxiways, flood lights, landing light, beacons, navigational ands, tower communication,. public address syster:~s, and other common use facilities supplied by Lessor for convenience and accommodation in operation, landings, and take of€ Hof aircraft. The rights herein extended to Lessee shall be inclusive of the .rights to land, take off, taxi, tow, Ioad, or unload aircraft.. ?. OF_ERATION OF AVIATION BUSINESS BY LESSEE Conditions (a) This lease shall be subordinate .and subject to the Grant Agreement, by and between the United States of America, Federal Aviation Agency, and Lessor, and subsequent grants and agreements. (b) The Lessee agrees to make their services available to the public 5 ~~ without unjust discrimination and to refrain from imposing or levying excessive discriminatory or otherwise unreasonable charges or .fees for us of said facilities, provided, however, the Lessee may refuse service to any person or persons for justifiable cause, without discrimination by virtue of race, color., sex, age or creed. (c) Public Services Lessee shall provide comprehensive public services, including, but not limited to, aircraft maintenance and overhaul, used aircraft and aircraft parts, new parts and merchandise sales, service and inspections, aircraft storage. (d) Hours of Operation Lessee shall publish a schedule setting forth his hours of operation . (e) The airport manager shall investigate all cumplain;a against Lessee by members of the public. If he finds that the complaint is justified,, he may direct Lessee to take such reasonable action as he believes necessary to rectify the complaint or prevent its recurrence. If Lessee is aggrieved by any such directive, he may appeal therefrom to the City of Petaluma Aviation Commission, whose decision .shall be appealable to the Petaluma City Council, whose decision shall be final. 8. SURETY BOND Prior to the commencement of construction hereunder, Lessee, at its sole cost and expense, shall furnish the Lessor a surety bond of an admitted surety company licensed to transact business in the State of California satisfactory to Lessee, in a sum not less than one hundred 6 l~ percent (100$) of the. total estimated cost-of the construction contract, guaranteeing the payment for all labor, material, provision, supplies and. equipment used in, upon, for, or about the performance of any construction work or labor done thereon of any kind whatsoever as proposed by Lessee and protecting Lessor, its officers, boards, commissions, employees, and agents from any liability, losses, or damages arising therefrom. Lessee shall also. provide Lessor .a similar surety bond in an amount equal to the estimated cost of the said construction of the improvements, guaranteeing faithful performance of said construction contracts. If Les"see obtains from its contractor or contractors such bond or bonds in like amount which are satisfactory to the Lessor, the Lessor, upon application by Lessee's principal and upon naming the Lessor as an additional obligee of Lessee's principal and surety under such bond or bonds, will release Lessee from and consent to the cancellation of the bond or bonds originally furnished by Lessee. . 9. MAINTENANCE AND REPAIRS .L~sse~-~ shall, at his sole cost and expense, keep and ~raintain paid premieF;; and appurtenances, and every part thereof, in good and sanitary order, condition and repair, and hereby waives all right to make repairs at tho expense of Lessor as provided in ~Sectian 1942, et seq. , of the Civil Code of the State of California.. Any failure to maintain or make said repairs upon being notified by Lessor shall constitute a default by Lessee. 10. ALTERATIONS AND ADDITIONS Subsequent to completion of the improvements and facilities as herein agreed to, Lessee shall not make any alterations to the exterior thereof or erect any additional structures or improvements on the Ieased premises without prior written consent of Lessor. Any such exteriar alterations or additions approved by Lessor shall be constructed at the 7 l~ sole expense of Lessee . 11. SIGNS Lessee shall be.privileged to erect such signs and advertising media as comply with applicable City of Petaluma ordinances and to place the same upon the improvement to be erected .pursuant hereto. The text, color, and design of all sins shall be subject to the prior approval of Lessor. 12. UNLAWFUL USE No building, structure, or improvement of any kind shall be erected, placed upon, operated, or maintained on the leased premises, nor shall any business or operation be conducted. or carried on therein or thereon in violation of any ordinance, law, statute, order, or rule of any governmental agency having jurisdiction thereover, nor shall any use be made ~f the Ieased Premises which has not been specifically allowed . 13. WASTE, QUIET CONDUCT Lessee shall not commit, or suffer to be committed, any waste upon said premises, or any nuisance or other act or thing which may disturb the quiet enjoyment of the use of the surrounding airport property. 14.. RULES AND REGULATIONS Lessee agrees to observe and obey all rules and regulations promulgated and enforced by Lessor or any other appropriate authority having jurisdiction over the Airport .during the term of this lease. 15. INSURANCE Lessee agrees [o procure and maintain at its own cost and expense, B 11 and at .all times during the term of this lease,. comprehensive liability insurance naming. Lessor, its officers, `boards, commissions,. employees and. agents as additional insureds in the following amounts; property damage, $25Q, 000.00; Bodily Injury, $1, OOQ, 000.00 per person, and $1,QQ0,000.00 per occurrence. Evidence of such insurance shall be provided. by Lessee by filing with the Lessor a copy of the policy or policies, together with a duly executed certificate of the insurer to the effect. -that the insurance required by this ].ease is in force and effect. Said policy or policies or ,certificates. shall contain a provision. that written notice of cancellation or any material change shall be delivered to the Lessor ten (10) days in advance of the effective date thereof. Lessee shall also secure and maintain fire and extended coverage insurance on the buildings ar-d str-uetures to be erected by Lessee as a part of the aviation operation created by this Lease Agreement. Said insurance coverage shall be to the full insurable value of the structures and buildings and contents a:; erected and placed upon the Ie;~sed premises, and shall .name Lessor as an additional insured. Lessee further agrees that in the eve7it of any fire or partial or complete des ruction of the- structures erected by Lessee, any proceeds of insurance received by Lessee shall be held in trust and utilized solely in the replacement, recanstrucfion, or repair of the damaged or destroyed improvements. 16 . TAXES Lessee agrees to pay promptly all taxes and assessments related to items of property including both real. and personal praperty within the purview of this Lease, which may be levied or assessed upon said properties Jeased or owned by Lessee, as Lessee's interest may appear when `the said taxes and assessments- become due and payable during the occupancy of the leased premises under any .levy or assessment by County, City or other legally authorized governmental authority, 9 l~ 17. INSPECTION AND NOTICE Insofar as it may be necessary for the protection of the Lessor's rights, the Lessor or its agents shall at any and all reasonable times, and upon reasonable notice to Lessee, have the right to go upon and inspect the land and premises hereby leased and any structure or improvement erected or constructed, or in the course of being erected or constructed, repaired, added to, rebuilt, or restored thereon. 18. ASSIGNMENT OR SUBLETTING It is agreed that Lessee is authorized to sublet the leased premises to a Sublessee, subject to the terms and conditions of this lease. Any such sublease shall be subject to the written approval of Lessor, which approval shall not be unreasonably withheld, It is further agreed that Lessee is authorized to sublet a portion of the premises to an independent contractor for the purpose of assisting Lessee in the full utilization of the Limited Service Commercial Operation as described herfein; provided, however, that upon Lessee's electing to sublet to any independent contractor for such allowed usr or usej, Lessee shall notify Lessor of such subletting and shall specify in such sublease and other agreements entered into by Lessee and the independent contractor that they shall be subject to the terms and conditions of this lease. Signed ,copies of all such subleases and/or agreements shall be furnished to Lessor upon execution . 19. IMPROVEMENTS ;~ ~ ~ It is agreed that all improvements constructed by Lessee shall be ~~~ _~ deemed personal property during the term of this lease, and that during the term oI this lease and any extension thereto lessee shall at all times have legal title to said improvements, but Lessor shall have a lien thereon to secure the faithful performance of Lessee's obligations under the approval of Lessor. Lessor's lien shall be subordinate to a security instrument, approved by Lessor, and held by any recognized lending institution but shall not be subordinate to any other 10 I encumbrance of any kind. Said security instrument shall not provide for remoual of said improvements. 20. INSOLVENCY, ETC. If the Lessee- be adjudicated as bankrupt or become insolvent, or if possession of any interest in the leased premises shall be taken by virtue of any attachment, execution, or receivership, the Lessor may, at its election., unless such bankruptcy proceedings be terminated in favor of its election, unless such bankruptcy proceedings be terminated in favor of Lessee and such insolvency he cured or, such possession regained within ninety (90) d'ays' thereafter, immediately terminate this Lease by service of notice to such effect upon Lessee in any manner provided by law. 21. LENDER. SECURITY Notwithstanding anything to the contrary contained in this Lease, it i~s understoa~3 and agreed that Lessee may,.. without the consent of ~._ Lessoj-, assign, transfer, mortgage or encumber Lessee's interest under tl.,is Lease :and leasehold estate. created. to a lender on the security of the leasehold estate for the sole purpose of providing security for the repayment of a loan or loans made and used to finance the construction. of substantial improvements by Lessee upon the leased premises and Lessee may execute any and all .instruments in connection therewith, :necessary and proper to complete any such loan and perfect the security therefor as may be required by such Iender. Any such Iender shall have the right at any time during the term hereof and while this lease is in full force and effect; (a) To do any act or thing required of Lessee hereunder and all such acts or- things done hereunder shall be as effective to prevent a forfeiture of Lessee's rights hereunder as if done by Lessee; {b } To realize on the. security of the leasehold estate and to acquire and succeed to the interest of the Lessee hereunder by I1 2~ foreclosure or by a deed of assignment .given in lieu of foreclosure and thereafter at such lender's option to convey or assign the interest or title to this leasehold estate to any other person subject to the terms, conditions and covenants of this lease; and (c) To cure, within sixty (60) days after notice of default by Lessee under the terms of this Lease . A copy of any .and security devices or other instruments shall be filed with Lessor prior to the effective date thereof and the Lessee shall give Lessor prior written notice of changes thereto. 22. SURRENDER OF POSSESSION At the expiration of the leasehold term, Lessee agrees to yield and deliver to Lessor the possession of the leased premises and all buildings, fixtures, physical improvements and ,appurtenances erected by Lessee pursuant to paragraph 4 hereof, in good condition, normal. wear and tear e~,:ceptecl. 23. DEFAULT In the event of default by Lessee. in the performance of any of the ,: terms, covenants, or conditions hereof, including the failure to pay rent, Lessor shall make written demand by registered mail upon Lessee to remedy said default and, if, thereafter, Lessee. remains in default for sixty (60) days, Lessor, by and through its Airport Manager, shall have the right to take immediate possession of said premises. During said sixty (60) day period Lessee may appeal to the Petaluma City Council and request consideration of any circumstances claimed to cause such default, provided that any such circumstances shall not be deemed. to be a waiver of such default, in the event the City Council extends the aforesaid sixty (60) day period. No waiver of Lessor or default by Lessee of any of the terms, 12 21 covenants, or conditions hereof to be performed, kept, or observed by Lessee shall be construed to be or act as waiver by Lessor of any subsequent default of any of the terms, covenants, and conditions herein contained to be performed, kept, and observed by Lessee. 24. RESERVATION AS TO NAVIGATIONAL AID Lessor reserves the right during the term of this lease, or any renewal and/or extension thereof, to install air navigational aids, .including lighting, in, on, over, under, and across the leased premises. In the exercise of any of the rights hereof, Lessor agrees to give Lessee not less than ninety (90) days written notice of its intention to install such air navigational aids . If the Lessee's enjoyment of the premises under this. Lease is substantially interfered with by any such installation, the Lessee's rent shall be reduced in proportion to such interference . 25. INDEMNITY Lessee hereby covenants anc' agrees to, and shall, indemnify, save harmless and defend, the Lessor, its agents, officers and/or employees against all claims, demands, costs, and liabilities which may be made against Lessor by reason of or arising from anything done, performed, or ommitted to be done or performed on the leased premises by the Lessee or arising out of Lessee's performance of its obligations pursuant to this agreement. However, this indemnity does not extend to any loss, damage or expense arising out of the negligence or willful misconduct of the Lessor, its agents, employees or officers. Z6. EMINENT DOMAIN It is expressly agreed by Lessor and Lessee that in the event eminent domain proceedings are undertaken by any governmental agency affecting the whole of the Airport, or any part thereof, which would adversely affect Lessee's interest hereby Lessee shall be entitled to compensation by virtue thereoi, consistent with current eminent domain 13 22 laws and appraisal procedures . 27. NATIONAL EMERGENCY In the event that a national emergency or a declaration by Federal, State or County Government causes a drastic curtailment of civilian aviation activities, Lessee shall be entitled to submit a request for reduction in the lease rental rate. Lessee shall be entitled to present facts and data to show that such a curtailment has taken place and that the curtailment has seriously affected Lessee's utilization of the Ieased premises. If such facts and data indicate that a reduction in lease rent is warranted, then Lessor and Lessee shall agree to negotiate a reduction in the rental rate during the period of curtailment . 28. NOTICES Any and all notices to be given under this Lease, or otherwise, may be served by enclcsing the same ii1 a sealed envelope addressed to the party intended to receive the same, at its address, and deposited in tlxe United States Post Office as registered mail with postage prepaid. When so given, such notice shall be effective from the date of the mailing of the same. For the purpose thereof, unless otherwise provided in writing by the parties hereto, the address of the Lessor, and the proper party to receive any such notices on its behalf is City Clerk City of Petaluma 11 English Street Petaluma, California 94952 and the adda-ess of the Lessee is: Walter Mangon DBA Mangon Aircraft Repair Services 173b Caulfield Lane Petaluma, California 94952 (Until address is established at airport} 14 2.3 29. INVALID PROVISIONS,. SEVERABILITY It is expressly understood and agreed by and between the parties hereto that in the event any covenant, condition, or provision contained herein is invalidated by a court of competent jurisdiction, the invalidity' of any such covenant, condition or provision shall not invalidate any other covenant, condition, or provision of this Agreement, .provided, however, that the invalidity of any such covenant, condition, or provision. shall not 'materially prejudice either the Lessor or the Lessee in their respective rights and obligations contained in the valid covenants, conditions, and provisions of this Agreement . 30. RENEGOTIATION Lessor reserves the right to enter into other- leases with fixed base operators or other limited service commercial operators on the Airport during this hease or an}~ extansion they. eof , provided, that Lessee shall have the right to renegotia~r~ any term oi~ provision of this Lease whic'r, with respect to the matters specified in Paragraphs 2, 5, 6 and 16, .hereof, uneluly or unreasonaoly restricts Lessee's competitive position in regard to s~.ch other Lessees for fixed base operations or limited service commercial operation, on the airport shall not be deemed in and of itself as sufficient reason to 'renegotiate any term or provision of this Lease. 31. BINDING ON SUCCESSORS The covenants and conditions herein contained shall apply to and bind the heii:s, successors, executor, administrators, and assigns of all the parties hereto. 32. TIME Time ~~ of the essence in this lease. IS 2~ MANGON LEASE DESCRIPTION All that portion of land lying within Parcel "A" as shown upon the map entitled Exhibit "A" airport property map on file with the City of Petaluma. Further described as foIlows: Beginning at a 1/2" iron pipe tagged RCE 11226 located at the most northwesterly corner of Parcel "A" as shown upon said map. Thence, N 35°20'55" E 437. $8 to a point on the westerly boundary of Parcel "B" as shown upon said map. Thence, S 54°33'00" E 1,200.04 feet to an open 3/4" iron pipe set flush with the pavement., marking the west end of a southerly 170.00 foot offset to the center line of the runway. Thence, from said point S 35°27'00" W 437.,88 feet to a point along the northerly line of Parcel "A". Thence, N 54°33'00" W 208,99 to a point. Thence, S 35°27'00" W 88.05 feet t:, an open 3/4" iron wipe marking the northwest corner of the .lease parcel ~i%rein to be deacrit,ed said point to be tcnown as the true point of beginning. Thence, from said paint of beginning .~.~ 54°33'00" E 234.14 feet to an open 3/4" iron pipe. Thence, S 35°27'00" W 270.00 feet to an open 3/4" iron pipe. Thence, N 54°33'00" W 234.14 .feet to an open 3/4" iron pipe. Thence, N 35°27'00" E 270.D0 feet to the true point of beginning. Lease Parcel contains 1.45 acres more or Less. .L ~~~• ~~ fog, ]EXI~iI~IT 27 IN WITNESS' WHEREOF, fhe parties .hereto have set their hand the day and year first above written . mangon .lease LAW 13 CITY OF PETALUMA B iTY MANAGER LESSOR MANGON AIRCRAFT REPAIR s y ;' / / ~~'~.~YyI ~ LL President .~----Q ` Risk iNar~A gop Ib ~~ ~-~--• ~enoe pttl~u.~toc '7 2 605~Q!~Fi;JPiu15" UCE '~!1= ~1'iY i=A~Gi! 11"IE5 riS OF: fl6'C'+i;;1'3 E'S7: lS.~i[~U'.tlCi Ytp: 12_I`=+1.6~ LEFT: JE04?,7 JESh437 I:tJi5~b4 •89t7'S01 IhI©Yq^o 898405 3145 IN0826 890310 IN1800 89©215 IN1600 881228 Ildl01~ BB1216 DATE (=ESCRIPTiOt>! REF-i REF-2 PROJECT @S-~@-89 h1ANG01V AIRCRAFT/AFRPORT LEASE``' St'B7" t74-30-89 11~lVOItEL - ~;'R IfJlS~;-S 8905:10 04- 3u-B5 LUJOEi=GK10L~ ~, 501`l~ LEASE 7-9c: 04-.30-$9 MANGON LEASE t-89 & 4-89 q3-3t-n9 1t~NJ0ICE(! - A: ! @3-t9-$9 ItVVO1CEC! -- NrR 03-14-89 MAIVGONIRENT 02-~8-89 IN'JOICED - A!f`~ @t-27-89 IFJVOICEIJ - A/R 1^c-28-88 INVOICED - A!R' 1 ~-06-8F3 ilytJGl'CED - A/R 1t-04-88 ROY NARRISs!NOV REidT -0.:,-88 AEF+.OVEfVTURI=i N~')U FEO FtEP.T ?q-11-88 F:~1Y Hr'1R!?lc~.'_.':=,'.:T REhJT q-('~4 -98 rFfY.':~Vi•:N ~ !.1Fik=. l: (.Ui3Sl6 h1lilV Gi" : i_?h< 9-C!!3-88 FA's' Hri1~iRIC. Si:PT ART RENT il!~ YOLi h,lSl-` -fG Qt•J~ f`~!C!E 'f:'fV? 57~ 444 1 r;+o4s ~G~~' ~~._':l ~,Ei91.6~- FRCT: 17-r Al-1GU1'JT ~i ~~xm5Z~~~00=~ E77,,8fl . 00- , YI/~. LJ 2.1@4.00- 580.00- 680.0@- ~i ~ 052 .00- 68@.00- ssfl.@@- 680.0@- 680.00- t,;0.00- 550.00- 1-> ~, 00-. J .. ~'q ~ . it @'. iE,`34t ~5- 6053000ggfl:,S:"W1 UEE OI CIT`( FiiCILITIES AS OF : 06!0.1 i 89 EST : 15 ,5q0 .OPT YTU : 18 , 19 f . 6'~ LEFT J Ori~f~E f~t_iCRIPI-IliN 09-07-~88 RO"r HnRRIS!5[F1 R1=flT 08-1.``-8$ l•'1~l_LEY tiVl~~' i!-1NihllItdT ~hIOP R!'•1T 08-D8-88 AEROVEt`)TUREr:t=Ci[t RENT Fi:iR AUG 08-0q-88 R:i1Y k-1AfrRISS!F;!JG i"iENT (J?-0'8-8~' E~G`r` 1-iHRRISS!JUI.I' .APi 0G-10-88 Ril'r' H(yRRISrJ!~NE nPT REIJT 05-1L-tiL' RO'i" FIAREIS,''f`1FtY APT ~EtdT 4'~~1-1 ? -f=ps f--:(~`: 'i:il~f~.RI` ~ %?(hIL F;ii{_T ~i~:+-+a~-~! i+,i~ t9;il~r'e_,.-~Fi h1:i,!j ~! I I c-;= 1;ril 1-iAF•:F'" . , .inlV~ !*.F.i'; -V1T-c; - i=l~'i til=ikfll ~ DE% _, , ! I -OBI-~7 R.u'r Fr1~1Ff-'IS%I,iC1V REh1T 1 @-('tS-8 ~ Ri`r .1.1ARKIG.r tJ!~ f Rrf~! i U'9-~4-~,' :~cCi''t N,t<iR.I`:;'-EFT Rif':? G}B-i~~i-y~"~` Fti=:`i i-Ir~F:F-i`.`:ii_~t~ i;i h-'1 i:ril ~(i~! 4!I=ik~~ Tfi "; [t 1.}'1';`i,_ ;!~"' ;',691.62- PRC1~: 17-;: REF- I REF--~ PROJECT F,t10Ul~t~f 9267 ':;0.0fl- 8'~ t '' .? 10. 37- 8576 550.0@- 857~ i~0.0@- ~1 E~ I ~c~. am- G4~5 t 3q.00- _. ~ ~ ~ 1 :i ~a .1 J -- 1 '~ y6 130. 00- ~~~ 1 ~0. ~~~,- o ~ t, fn l / ~ . t~C4- 27 After recording, please return to: Ci#y Clerk's Office :City of Petaluma 'f 1 English St. Petaluma, CA 94952 Mail Tax Statements: Mangon Aircraft.. Inc. Petaluma Municipal Airport 501 Skv Ranch Drive Petaluma, CA 94954-3908 This Amendment Number One to Lease Agreement Pe alums 1Vlunicipal Airport ("Amendment"} is made and entered -into as of the /~ day of , 2005, by and between the CITY OF PETALL?MA, a political subdivision of the State of California, as Lessor, and MANGON AIRCRAFT, INC., as Lessee. RECITALS A. On or about September 6, 1988, the CITY OF PETALLTMA (hereafter "Lessor") and Walter R. Mangon, as lessee, entered into that certain "Lease Agreement Petaluma Municipal Airport" ("Lease") by which Walter R. Mangon leased approximately 63,120 square feet of reap property at the Petaluma Mtu~icipal Airport as more particularly described in Exhibit A to the Lease. B. Pursuant to paragraph 18 of the Lease, Walter R. Mangon has requested that Lessor consent to his assignment of the Lease to MANGON AIRCRAFT, INC., as Lessee (hereafter "Lessee"), and Lessor has consented to the assignment. C. Lessor is planning a hangar expansion project -and would lilte to include in the expansion a portion of the premises covered by the Lease, hereinafter referred to as "the Surrendered Premises." 2g D. The;parties wish to amend the Lease to provide for (i) return of the Surrendered Premises to Lessor; (ii) reduction of the rent to reflect the reduced size of the premises being leased by Lessee; {iii) a rent credit in consideration for Lessee's achial vacation of the Surrendered Premises prior to execution of this Addendum; (iv) Lessee's ability to assign the Lease with Lessor's consent; and (v) extension of the #enn of the Lease through September 6, ?038. .AGREEMENT Now therefore, the parties hereby amend the Lease as follows: 1. The premises covered by the Lease shall be amended to exclude the Surrendered Premises. The parties agree fliat the Surrendered Premises is approxunately 34,020 square feet, in the area sliown on Exhibit A attached hereto as "Surrendered Premises." Within ninety {90) days following execution of this Amendment; Lessor shall cause to be prepared a. survey to determine .the exact square footage of .the remaining premises subject to the Lease .(shown on Exhibit A as "Amended Mangon Lease"), and shall prepare a Iegal description thereof which will be .attached to this Amendment as Exhibit B. Lessee hereby surrenders any and all interest it may have in the. Surrendered Premises under the Lease. 2. The provisions set forth in paragraph 2(a) of the Lease for the base ground rental rate per square foot shall remain unmodified by this Amendment, however, it is acknowledged that the total rental due; shall be reduced as of May .1;.2002, to reflect the reduced square .footage of the leased premises as described in Exhibits A and B to this Amendment. 3. In consideration of Lessee's. actual vacation of the Surrendered Premises on or about April 18, 2002, Lessor 'hereby grants to Lessee a rent credit to compensate Lessee. for excess rental :paid to the City of Petaluma and possessory interest. taxes paid to the County ofSonoma by Lessee from and including May 1, 2002,. through and including the execution. of this Arimendrrment. The total amount of such credit shall be $23;315..85, and shall be credited to Lessee in thirty-six (36) ,successive rental installments in the amount of $647.66 each, commencing with the first rental payment due after execution of this Amendment. /// /// 2 2q 4_ Paragraph 18 of the Lease is hereby amended to-read as follows: It is agreed. that Lessee is authorized to assign this lease with the prior. written approval of Lessor, which approval shall not be unreasonably withheld. It is further agreed that Lessee is authorized to sublet, with the prior written approval of Lessor, a portion of the premises to an independent contractor for the purpose of assisting Lessee in the full utilization 6f the Limited .Service Commercial Operation as described herein; provided, however, that as a condition of receiving Lessor's prior written approval to sublet to any independent contractor for. such allowed use or uses, Lessee shall. provide Lessor with a copy of the proposed sublease for Lessor's approval.. Any such sublease and/or other agreements entered into by .Lessee and the independent contractor shall specify that they shall be Subject to the terms and conditions of this lease. Signed copies of all such subleases and/or agreements shall be furnished to. Lessor upon execution. 5. .The term of the Lease'is extended to September 6; 2038, anal shall become effective upon receipt of personal -lease.. guarantee in a form acceptabhe to the City Manager, signed by Walter R. Mangon. IN WITNESS WHEREOF, the ,parties hereto have executed this Amendment as of the day and year first above written. CITY OF PETALUMA, a political subdivision of the State of California ~n ~.~ ~._ City Manager ATTEST: t City Clerk V IlI /I/ /// SIGNATURES C®NTINUED ®N NEXT PAGE 3 30 MANGON AIRCRAFT; INC. APPROVED A5 TO FORM: ~~. City kttomey APPROVED: ~, ' _N ~~ ~ ~ ~ X00" Departmen hector APPRO D: ,~i~"7_~ i-2V -vim ,~,-~ ~ Rid anager Sr~.,~:1-t-p r=~,~,~;-~ CjJ PR~ AP OVED: ~P~ ~ o ~OQ~ Finan ire for ATTACH N®T'ARIAI. ACKNOWi,EDGMENT agrmt 3/11/5 (fmk) 3t CERTIFICATE (if Corporation) STATE OF CALIFORNIA ss: COUNTY OF ) I HEREBY CERTIFY that a meeting of the Board of Directors of the ~~~ ~~+~-e~~,~n.~N~ a corporation a sting under the laws of the State of ,held on ~`~ , 20 ~~ ,the following resolution was duly passed and adopted: "RESOLVER, that f~~y~t~~ ~ ,~y~,raav.~ , as President of the Corporation, be and is hereby authorized to execute the Amendment Number One to Lease Agreement Petahuna Municipal Airport by and between this Corporation and City of Peta'tuma and that his/her execution thereof, attested by the Secretary of the Corporation, and with the Corporate Seal affixed, shall be the official act and deed of this Corporation." I further certify that said resolution is now in full force and effect. IN WI'T`NESS WHEREOF, I have hereunto set my hand and affixed the official seal of the corporation this ~• fg , day of~i I~9~C/~ , 20 0 ~ . (SE?.L) 32 City of Petaluma 1VIANGON LEASE PARCEL NOTE: ALL LINES ARE PLOTTED'FROM DEED DESCRIPTIONS AND DRAWN ON THE PHOTO. NO FIELD SURVEY WAS PERfORMED. B S 54° 33' E @ 234.1.4' 108.14' 126` 29,197.:8 SQ.FT. z z ~ w ~ 34,020 SQ. FT N V ~' ~ N V N V ~ ® ~ ~SURRENDERE® o N o w O o PREMISES o ~ ~ o ~ ~ 108.14' ~ 126' S 54 ° 33' E @ 234.14' CITY OF PETALUMA CITY 4 R P E T A L U M A ~~ eY ~~°"'~ 12/31 /03 MANGON LEASE PARCEL DsPAm~rr of Pu~.ic F$fAT.OHA AIRPORT FACII.ITI&S AND 6EROICSS IA. GLOSE. N.T.S. ITY AO .~ °°° xontx rc uavmi mva rcruuw, rr,, ocux, na-cros °~ ~ B. ALLEN"' icon AIRPORT PHOTO 33 EX2=IIBIT B LEGAL DESCRIPI'I®N OF I'1tElYIISES EGR Ali~I~MENT N®. 1 'T® LEASE AGR)EEIVIENT W)[~'I3 WADER IZ. MANG®N All that portion of land lying within Parcel "A" as shown upon the map entitled Exhibit "A" airport property map on file with the City of Petaluma. Further described as follows: Beginning at a %" iron pipe tagged RCE l I2261ocated at the most northwesterly comer of Parcel "A' as shown upon said map. Thence, N. 35° 20' 55" E. 437.88 feet to a point on the westerly boundary of Parcel "B" as shown upon said map. Thence, S. 54° 33' 00" E. 1,200.04 feet to an open 3/' iron pipe set flush with the pavement, marlting the west end of a southerly 170.00 foot offset to the center line of the runway. Thence, from said point S. 35° 27' 00" W. 437.88 feet to a point along the northerly line of Parcel "A". Thence, N. 54° 33' 00" W. 208.99 feet to a point. Thence, S. 35° 27' 00" W. 88.05 feet to an open 3/" iron pipe marking the northwest corner of the lease parcel, herein described said point to >je known as the True Point of Beginning. Thence along the most northerly line of'the lease parcel S. 54° 33' 00" E. 1 x8.14 feet. Thence S. 35° 27' 00" W. 270.00 feet. Thence N. 54° 33' 00" W. 108.14 feet. Thence N. 35° 27' 00" E. 270.00 .feet, more or less, to the True Point of Beginning. Parcel contains 29,197.8 square feet more or less.. 3~{