HomeMy WebLinkAbout9/19/2001 - STAFF REPORTS (6) DATE: September 19, 2001
TO: City Council
FROM: Deputy Director of Aviation via Interim Director of Aviation
MILLION AIR - PALM SPRINGS FIVE (5) ACRE OPTION TO AGREEMENT NO. 1764
RECOMMENDATION:
It is recommended that City Council approve a five(5) acre option to Lease Agreement No.
1764 between the City of Palm Springs and Million Air - Palm Springs.
SUMMARY:
Million Air- Palm Springs continues to look at Palm Springs International Airport for future
development and has negotiated with airport staff on an additional five (5) acres of land.
The option agreement before you represents a fair and equitable conclusion to airport staff
and Million Air - Palm Springs negotiations.
BACKGROUND:
Million Air- Palm Springs provides many services to the aviation community who use PSP,
and they recently added a 35,000 s.f. hangar for corporate and general aviation aircraft
storage. Million Air -Palm Springs continues to look at Palm Springs International Airport
for future development opportunities.
Staff has been negotiating with Million Air - Palm Springs on the five (5) acre option to
Agreement No. 1764, and it was reviewed and unanimously approved by the Airport
Commission at its regularly scheduled meeting on September 5,2001.
APPROVED: �
RICHARD STRICKLAND ALLEN F. SMOOT, A.A.E.
Deputy Director of Aviation-Administration Interim Director of Aviation
APPRO�
City Manager
Attachments: 1. Option to Lease Agreement No. 1764
2. Minute Order
OPTION TO LEASE
This Option to Lease ("Agreement") is trade and entered into this 19th day of September,
2001, by and between THE CITY OF PALM SPRINGS, a California municipal corporation
("Optionor") and PALM SPRINGS,FBO,LLC dba MILLION AIR-PALM SPRINGS, a
California Limited Liability Company("Optionee").
Recitals
WHEREAS, Optionor is the owner of certain real property situated in the City of Palm
Springs,Riverside County,known as the Palm Springs International Airport ("Airport");
WHEREAS, Optionor and Optionee are parties to that certain Indenture of Lease and
Aeronautical Concession Agreement No. 1764 ("Lease") dated December 15, 1981, as duly
amended by Amendment No. 1 ("Amendment No.I") dated September 18, 1986, and that certain
Settlement Agreement dated September 18, 1986, including any extensions, assignments,
subleases, or permitted modifications thereof, under which Optionee leases a certain portion of
real property within the Airport("Leased Parcel"); and
WHEREAS, Optionee desires to acquire the exclusive right to lease, without becoming
obligated to lease, five (5)additional acres of real property, located immediately to the north-
west of the Leased Parcel, as more particularly described in Exhibit"A" attached hereto and
incorporated herein and depicted on Exhibit"B" as Parcel 4 (herein referred to as "Parcel 4"), at
an agreed rental rate and under certain specified terms and conditions as provided in this
Agreement.
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:
1. OPTION.
(a) Grant of Option. Optionor hereby grants to Optionee the exclusive right to lease
Parcel 4 at the rental rate and under the terns and conditions set forth herein(the
"Option")for the constriction and operation of a City-approved facility for
"aeronautical activities", as that term is defined under FAA AC 150/5190-5
Appendix 1.
(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 19, 2006 (the
"Option Period").
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(c) Option Price. This Option is granted in consideration of Optionee's payment to
Optionor 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 September 19 for each year
of the Option Period. In the event this Option is not exercised, all surns paid and
services rendered to Optionor by Optionee shall be retained by Optionor in
consideration of the granting of this Option.
(d) Lease Rate and Terms. Should Optionee exercise the Option within the Option
Period, Optionee shall be entitled to lease Parcel 4 from City for the rental.rate
payable by Optionee to Optionor under Article II of the Lease, as such Lease shall
be amended under the terms described immediately below. Before the
commencement of Optionee's lease of Parcel 4,the parties shall enter into and
execute an amendment to the Lease to incorporate Optionee's lease of Parcel 4
under the terms of the Lease. Unless mutually agreed by the parties to the
contrary in writing,the lease of Parcel 4 shall be subject to the terms of the
Lease, as amended as of the date of Optionee's exercise of the Option, at Article
It,Paragraph 1 to read as follows:
"Parcel 4: Lessee shall pay Lessor as rental for Parcel 4
described at Exhibit"A"herein and containing approximately 5.0
acres,the surn of Seventy-Seven Thousand Three Hundred
Nineteen and 00/100 Dollars ($77,319.00)per year commencing
upon the date when Optionee exercises the Option to such Parcel 4
("Option Exercise Date"), payable monthly in advance in the
amount of Six Thousand Four Hundred Forty-Three and 25/100
Dollars ($6,443.25).
Consumer Price Index. The rent payable beginning the fourth
(4th)year following the Option Exercise Date through the
remainder of this Lease shall be revised, effective the beginning of
the fourth(4th),ninth(9th), fourteenth(14th), and every five(5)
years thereafter after the Option Exercise Date based on the change
in Cost of Living Index. For the purposes of this computation, it is
agreed that the Consumer Price Index for the month of March
[insert year of Option Exercise Date] is the base or one hundred
percent(100%). The Cost of Living Index to be used is that
reflected by the Consumer Price Index, all items, Los Angeles-
Riverside-Orange County, (1967 equal 100) published by the
Bureau of Labor Statistics of the U.S. Department of Labor. If, for
any reason whatsoever,there is any change in the method of
calculation or formulation of said price index, or if that index shall
be no longer published,then another index generally recognized as
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authoritative shall be substituted by agreement. In any event, the
base used by the new index shall be reconciled to the 1967 index.
The rentals set out hereinabove shall be payable on the first day of
each and every month throughout the term of this Agreement."
(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 Tennination. 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 Optionor within fifteen(15) days of the
request therefor, any document required by Optionor or a title insurance company
to verify the termination of this Agreement.
(b) Termination due to Breach. If either parry 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 party shall automatically and
immediately terminate on twenty(20) days' notice to the breaching party.
However, the breaching party shall have the right to cure the default and reinstate
such party's position under this Agreement if it, within the twenty(20) day period
cures the default.
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 party 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.
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To Optionor: Palm Springs International Airport
3400 E. Tahquitz Canyon Way
Patin Springs, CA 92262
Attn: Aviation Director
With a copy to: Burke, Williams & Sorensen,LLP
18301 Von Kannan Avenue, Suite 1050
Irvine, CA 92612
Attn: David J. Aleshire,Esq.
To Optionee: Million Air—Pahn Springs
(c) Integration. This instrument and the attached Exhibits 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 Optionor
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.
(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.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties have executed and entered into this Agreement 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"
PALM SPRINGS, FBO, LLC dba MILLION AIR -
PALM SPRINGS, a California Limited Liability
Company
(NOTARIZED) By:
Signature
Print Name and Title
(NOTARIZED)
By:
Signature
Print Name and Title
(Corporations require two signatures; one from each of the following: A. Chairman of Board,President,any
Vice President, AND B. Secretary, assistant Secretary, treasurer, assistant Treasurer, or Chief Financial
Officer).
End of Signatures
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EXHIBIT 66A"
LEGAL DESCRIPTION OF PARCEL 4
[To Be Inserted]
f *47
EXHIBIT "A"
PALM SPRINGS INTERNATIONAL AIRPORT
PALM SPRINGS, CALIFORNIA
MILLIONAIRE AIR
PARCEL 4
That portion of the Northeast 1/4 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 are of said curve, through a central angle of 36 Degrees
14'02" a distance of 3,067.14 feet;
Thence North 36 Degrees 32'08" West a distance of 1,249.36 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 550.89 feet;
Thence North 36 Degrees 32'13" West a distance of 395.37 feet;
Thence North 53 Degrees 27'47" East a distance of 550.90 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 4 containing 217,807.36 square feet (5.00 acres), more or less.
5,283.78' ]
N 00'17'49" W ie o
/ PARCEL 6 \
\ ye \
Q QP�U' 395.3T
5 36'32'08" E
PARCEL 5
g0 G, 50.00'
S 53'27'47" W
a/ PARCEL 4
T.P.O.B.
PARCEL 3 Fyn
9G
TP P 1,249.36'
\< 9P N 36'32'08" W
3
n M
ry �
\ PARCEL 1 z
\ PARCEL 2
3,067.14
RECORD CURVE DATA
0= 36'14'02" I
R = 4,850'
L = 3,067.14'
T = 1,586.81'
400 0 400 800
SCALE IN FEET 62,90'
N 00'17'49" W
0 t]
----RAMON ROAD------------ i a- ---
PARCEL 4
LEASE PLAT d
MINUTE ORDER NO.
APPROVING A FIVE (5)ACRE OPTION TO LEASE
AGREEMENT NO. 1764 BETWEEN THE CITY OF
PALM SPRINGS AND MILLION AIR - PALM
SPRINGS.
I HEREBY CERTIFY that this Minute Order approving a five (5) acre option to
Lease Agreement No. 1764 between the City of Palm Springs and Million Air -
Palm Springs, was adopted by the City Council of the City of Palm Springs,
California in a meeting thereof held on the 191h day of September 2001.
PATRICIA A. SANDERS
City Clerk