HomeMy WebLinkAbout9/5/2001 - STAFF REPORTS (9) DATE: September 5, 2001
TO: City Council
FROM: Deputy Director of Aviation-Administration via Interim Director of Aviation
SKYWEST 5 ACRE PARCEL OPTION AGREEMENT
RECOMMENDATION:
It is recommended that the City Council approve a 5 acre option agreement with Skywest
Airlines for facility expansion.
SUMMARY:
Skywest Airlines operates both United Express and Delta Connection Air Service at Pahn
Springs International Airport (PSP). The Airport Commission unanimously supports the
option agreement with Skywest Airlines.
BACKGROUND:
Skywest Airlines is currently in construction on facility expansion on an additional one acre
parcel. Staff has negotiated terms for an additional five acre option as follows:
5 acres at$1,000 per acre
The above amount would be per year and it is desired to be a term of five years.
Staff would like to point out that Skywest is expanding their aircraft fleet and PSP stands
to benefit greatly if we can demonstrate our ability to work with them. We believe this
option agreement demonstrates this.
APPROVED: wi
RICHARD STRICKLA ALLEN F. SMOOT, A.A.E.
Deputy Director of Aviation-Administration Interim Director of Aviation
APPR ED:
City Manager
Attachments: 1. Minute Order
2. Agreement
REVIEWED BY DEFT,DF FINANCE
BA
OPTION TO LEASE
This Option to Lease ("Agreement") is made this day of September, 2001, by and
between THE CITY OF PALM SPRINGS, a California municipal corporation ("Optionor") and
SKYWEST AIRLINES, INC., a corporation organized under the laws of the State of Utah
("Optionee").
Recitals
WHEREAS, Optionor is the owner of certain real property situated in the City of Palm
Springs,Riverside County, which property is part of the Palm Springs International Airport
("Airport") and more particularly described in Exhibit A attached to this Agreement and
incorporated herein by reference ("Property"); and
WHEREAS, Optionee desires to acquire the exclusive right to lease, without becoming
obligated to lease, the Property at an agreed rental rate and under certain specified terns and
conditions;
Agreement
NOW THEREFORE, in consideration of the covenants and agreements contained herein,
the above recitals, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
I. OPTION.
(a) Grant of Option. Optionor hereby grants to Optionee the exclusive right
to lease the Property at the rental rate and under the terms and conditions
set forth herein(the "Option").
(b) Option Period. This Option shall commence on the date this Agreement is
fully executed and shall remain in effect until 5:00 p.m., September 30,
2006 (the"Option Period").
(c) Option Price. This Option is granted in consideration of Optionee's
payment to Optionors of the sum of FIVE THOUSAND AND 00/100
DOLLARS ($5,000.00) per year payable in advance to the order of
Optionor each year, beginning concurrently with the execution of this
Agreement, receipt of which is hereby acknowledged, and each year
thereafter on or before August 30 for each year of the Option Period. In
the event this Option is not exercised, all sums paid and services rendered
to Optionor by Optionee shall be retained by Optionor in consideration of
the granting of this Option.
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(d) Lease Rate and Terms. Should Optionee exercise the Option within the
Option Period, Optionee shall be entitled to lease the Property from City
for the rental rate payable by Optionee to Optionor under that certain
Indenture of Lease No. 2388 by and between the parties bearing the
effective date of January 15, 1987 ("Lease"), as set forth in Article II,
Section C pertaining to the lease of Parcel 513, as described in Amendment
No.2 to the Lease, dated July 11, 2001, as may be amended from time-to-
time. Prior to the commencement of Optionee's lease of the Property, the
parties shall enter into and execute an amendment to the Lease to
incorporate Optionee's lease of the Property under the terms of the Lease,
as may be amended from time-to-time. Unless mutually agreed by the
parties to the contrary in writing, the lease of the Property shall be subject
to the terms of the Lease, as amended as of the date of Optionee's exercise
of the Option, including,but not limited to, the term of the Lease.
(e) Method of Exercise of Option. If Optionee is not in breach of this
Agreement, it may exercise this Option during the Option Period by
delivery of notice thereof in accordance with Section 3(b).
2. TERMINATION OF OPTION.
(a) Automatic Termination. If Optionee fails to exercise this Option in
accordance with its terns and within the Option Period or any extension
thereof,then this Option and the rights of Optionee shall automatically and
immediately terminate without notice. Thereafter, if requested by
Optionor, Optionee shall properly execute, acknowledge, and deliver to
Optionors within fifteen(15) days of the request therefor, any document
required by Optionors or a title insurance company to verify the
termination of this Agreement.
(b) Termination due to Breach. If either party fails to perform in a timely
manner any payment obligation, duty, or other obligation under this
Agreement, the aggrieved party shall be entitled to the remedies for breach
of contract that are available under applicable law, including the remedy
of specific performance, and this Agreement and the rights of the
breaching parry shall automatically and immediately terminate on twenty
(20) days' notice to the breaching parry. However, the breaching party
shall have the right to cure the default and reinstate such parry's position
under this Agreement if it, within the twenty(20) day period cures the
default.
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3. MISCELLANEOUS PROVISIONS.
(a) Assignment of Agreement. Optionee shall not assign this Agreement. In
the event an attempted assignment is made, in violation of this provision,
then Optionee's rights under this Agreement shall automatically terminate
without notice.
(b) Notice. Unless otherwise provided herein, any notice, tender, or delivery
to be given hereunder by either parry to the other may be effected by
personal delivery in writing or by registered or certified mail, postage
prepaid, return receipt requested, and shall be deemed communicated three
days from mailing. Mailed notices shall be addressed as set forth below,
but each party may change his address by written notice in accordance
with this paragraph.
To Optionors: Palm Springs International Airport
3400 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Attn: Aviation Director
With a copy to: Burke, Williams & Sorensen, LLP
18301 Von Karman Avenue, Suite 1050
Irvine, CA 92612
Attn: David J. Aleshire, Esq.
To Optionee: Skywest Airlines, Inc.
444 South River Road
St. George, Utah 84779
(c) Integration. This instrument and the attached Exhibit constitute the entire
agreement between the parties relating to the Option. Any prior
agreements, promises, negotiations, or representations not expressly set
forth in this Agreement are of no force and effect unless in writing and
signed by the Optionors and Optionee.
(d) Attorneys' Fees. If any legal action or proceeding arising out of or
relating to this Agreement is brought by either party to this Agreement,the
prevailing party shall be entitled to receive from the other party, in
addition to any other relief that may be granted,the reasonable attorney's
fees, costs, and expenses incurred in the action or proceeding by the
prevailing party.
SRV 913058 v2 SA4
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(e) Successors and Assigns. This Agreement shall be binding on and inure to
the benefit of the parties to this Agreement and their heirs, personal
representatives, successors, and assigns, except as otherwise provided in
this Agreement.
IN WITNESS WHEREOF, the parties have executed and entered into this Amendment No. 2 as
of the date first written above.
"Optionor"
CITY OF PALM SPRINGS, a California municipal
corporation
ATTEST:
By
City Clerk City Manager
APPROVED AS TO FORM:
City Attorney
"Optionee"
SKYWEST AIRLINES, INC., a corporation
organized under the laws of the State of Utah
(NOTARIZED) By:
Signature
Print Name and Title
(NOTARIZED)
By:
Signature
Print Name and Title
Mailing Address:
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(Corporations require hvo signatures, one from each of the following: A. Chainnan of Board, President, any
Vice President; AND B. Secretary, assistant Secretary, treasurer, assistant Treasurer, or Chief Financial
Officer)
End of Signatures
IRV 013058 v2 -5-
BAG
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
[To Be Inserted]
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PALM SPRINGS INTERNATIONAL AIRPORT
PALM SPRINGS, CALIFORNIA
SKYWEST AIRLINES, INC.
PARCEL 6
That portion of the North '/2 of Section 18, Township 4 South, Range 5 East, San
Bernardino Base and Meridian, in the City of Palm Springs, County of Riverside, State of
California, being more particularly described as follows:
Commencing at Southeast Corner of said Section 18, said point being the point of
intersection of the centerline of Ramon Road and Gene Autry Trail;
Thence North 00 Degrees 17'49" West a distance of 62.90 feet, along the centerline of
Gene Autry Trail and being the East line of said Section 18, to the beginning of a curve
concave Southwesterly, having a radius of 4,850.00 feet;
Thence Northwesterly along the arc of said curve, through a central angle of 36 Degrees
14'02"a distance of3,067.14 feet;
Thence North 36 Degrees 32'08" West a distance of2,200.10 feet;
Thence leaving said centerline South 53 Degrees 27'47" West a distance of 50.00 feet to
a point on the Southwesterly right-of-way line of said Gene Autry Trail also being the
TRUE POINT OF BEGINNING;
Thence continuing South 53 Degrees 27'47" West a distance of 550.91 feet;
Thence North 36 Degrees 32'13" West a distance of 395.37 feet;
Thence North 53 Degrees 27'47" East a distance of 550.92 feet to a point on the
Southwesterly right-of-way line of Gene Autry Trail;
Thence South 36 Degrees 32'08" East a distance of 395.37 feet along said Southwesterly
right-of-way line to the TRUE POINT OF BEGINNING.
Said Parcel 6 containing 217,815.26 square feet (5.00 acres), more or less.
4944 4B
MINUTE ORDER NO. 6920
APPROVING A FIVE (5) ACRE PARCEL OPTION
AGREEMENT BETWEEN THE CITY OF PALM
SPRINGS AND SKYWEST AIRLINES FOR FACILITY
EXPANSION.
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I HEREBY CERTIFY that this Minute Order, approving a five (5) acre parcel
option agreement between the City of Palm Springs and Skywest Airlines for
facility expansion, was adopted by the City Council of the City of Palm Springs,
California, in a meeting thereof held on the 5th day of September, 2001.
PATRICIA A. SANDERS
City Clerk