HomeMy WebLinkAbout2/2/2005 - STAFF REPORTS (16) DATE: February 2, 2005
TO: City Council
FROM: Director of Aviation
AMENDMENT NO. 2 TO PALM SPRINGS AIR MUSEUM, INC., A3613
RECOMMENDATION:
It is recommended that the City Council approve Amendment No. 2 to Palm Springs Air
Museum A3613 modifying the lease to add parcels 134 and 135 providing approximately
9 additional acres to the current 10.44 acre leasehold for the purpose of constructing
additional customer vehicle parking and a new educational facility in support of its non-
profit operation in a form acceptable to the City Attorney and subject to final approval of
the Federal Aviation Administration (FAA).
BACKGROUND:
The Palm Springs Air Museum is a stellar, nationally known non-profit aviation museum
which has seen a continual increase in visitor activity since its inception. The Air
Museum has outgrown its current facilities and available parking space and has, on
occasion, had to turn away visitors on busy program days.
The expansion of the Palm Springs Air Museum is being proposed as a two-stage
project:
1. The first stage is to increase parking area for visitors. This is projected
to increase overall attendance by 20%. Approximately 80% of visitors to
the Air Museum are from out of the desert area and an estimated 50%
of these visitors stay in local hotels/condos. These visitors also help the
local economy by patronizing restaurants and retail businesses. This
equates to substantial income for the City of Palm Springs from sales
and TOT tax.
2. The second stage involves the construction of an educational
facility/aircraft hangar in an effort to continue the Air Museum's
educational focus on our patriotic history and to continue its mission to
honor our Veterans.
Historically, aviation museums promote and encourage the development of civil
aeronautics. This is especially true for the Palm Springs Air Museum since it is not
merely a static-display museum, but actually has a full complement of fully operational
aircraft. Additionally, special events promoted by the Air Museum help generate
additional general aviation traffic which, in turn, means additional revenue to the fixed
base operators on the Airport.
Recent surveys conducted by the Air Museum indicated that the demographics of
visitors is changing. Currently, the average age of visitors to the Air Museum ranges
between 55 and 70 years of age. Additional space, provided for under this amendment,
will allow the Air Museum to add contemporary aircraft, which will move the
Amendment No. 2 Air Museum
February 2, 2005
Page 2
exhibits/displays into the Korea and Viet Nam era. This alone will attract a younger
audience and add to annual revenue streams. Below is a summary of the Air Museums
Use Tax Rental paid to the City/Airport:
Palm Springs Air Museum
City of Palm Springs Use Tax/Rental
Fiscal Year Total
1996 $0.00
1997 $23,693.14
1998 $20,020.51
1999 $24,952.83
2000 $27,489.74
2001 $28,604.87
2002 $29,941.54
2003 $27,746.58
2004 $28,641.96
Total $211,091.17
It is important to note that this revenue source is consistent with appropriate land use
development which supports the Airport's ability to be self-sustaining. With record
passenger levels occurring in 2004 and anticipated in 2005, the Palm Springs
International Airport is working diligentlyto promote tourism forthe City of Palm Springs
and other Desert Resort communities. Through these partnerships, and through the
development of tourist related attractions,the desert resort communities will continue to
reap direct and indirect economic benefits to the local economy.
The FAA's policy concerning the use of airport revenue permits airport operators to
charge reduced rental rates and fees, including nominal rates, to non-profit aviation
museums, to the extent that the reduction is reasonably justified by the tangible and
intangible benefits to the airport or civil aviation. Response from the FAA in a letter
(attached) dated October 19, 1994 verifies the Airport's efforts to ensure lease
compliance with FAA standards during the implementation process. Resolution 93-01
Findings of Benefits were previously shown to be consistent with FAA policy concerning
the use of airport revenue. These FAA approved provisions confirmed reasonable and
consistent benefits that were to be, and have been, derived from this aeronautical use
in regard to airport land.
Amendment No. 2 (attached) hereby amends A3613 to allow inclusion of Parcels 134
and 135 as they appear on the Palm Springs International Airport East Landside
Drawing (Sheet 10 of 12 attached) prepared by Coffman Associates and dated July 2,
2003. Parcel dimensions are as follows: `
PARCEL #134 = 4 Acre parcel (174,240 sq. ft.) ��
Amendment No. 2 Air Museum
February 2, 2005
Page 3
PARCEL #135 = 5 Acre parcel (217,800 sq. ft.)
The Palm Springs Airport Commission is in support of the Air Museum's expansion, and
recommends approval of Amendment No. 2 to lease agreement A3613.
Richard Walsh, Director of Aviation
APPROVE
City Manager
Attachments: 1. Minute Order
2. Amendment No. 2
3. FAA Letter
4. Airport East Landside Drawing
CADocuments and Settings\DavidR\Local Settings\Temporary Internet Files\OLK268\Airport Museum_Amendment No
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U.S.Department Western-Pacific Region P.O. Box 92007
ofTransponation WorldwaV Postal Center
Federal Aviation Los Angeles.CA 90009
Administration
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Mr. Allen F. Smoot, A.A.E. DEPARTMENT OF
Director of Aviation AVIATION
City of Palm Springs
P. O. Box 2743
Palm Springs, California 92263-2743
Dear Mr. Smoot:
This is in response to your letter dated September 30, 1994, submitting a
proposal to rent airport land for an Air Museum.
We have reviewed the terms and conditions of Resolution No. 18475 and have
no objections_ to the city entering into a lease aureelent for the
o,��erration of an air nusetmt, subject to those terms and conditions.
tdditionally, the proposed revenue structure and benefits to be derived
appear reasonable and consistent with FAA policy on Aeronautical Use of
airport land.
The lease must contain the provisions contained in the enclosed lease and
Use Agreement Guide.
Please submit a copy of the lease for our review prior to its execution.
Sincerely,
Rob C. ootn "�
Enclosure
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PALM SPRINGS AIR MUSEUM
Fees paid to Airport by Fiscal Year
FY 1999 $21,436
FY 2000 $30,205
FY 2001 $27,006
FY 2002 $29,227
FY 2003 $26,547
FY 2004 $31,542
YTD 2005 $12,280
TOTAL $178,243
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3. RENTAL.
3.1 .Rental/Comcensation. Tenant shall pay to Landlord,or perform on behalf
of Landlord, the rental and other consideration set forth on Exhibit "D". All rentals to be paid
by Tenant to Landlord shall be in lawful money of the United States of America and shall be
paid without deduction or offset, prior notice or demand at the address designated in Section
13.10 hereof.
3.2 Percentage Rental.
(a) In addition to the Monthly Rental hereinabove agreed to be paid
by Tenant,Tenant shall and will pay to Landlord at the time and in the manner herein specified
as additional rental (sometimes referred to herein as "percentage rental") a sum equal to the
following:
(i) The product of three percent(3%)times the gross sales made
in, upon or from the Demised Premises with respect to any gift shop sales.
Oil The product of ten percent(10%)times the gross sales made
in, upon or from the Demised Premises with respect to any food and beverage sales.
(b) Within fifteen(15)days after the end of each calendar month of the
term hereof, commencing with the fifteenth 05th) day of the month following the
Commencement Date, and ending with the fifteenth (15th) day of the month next succeeding
the last month of the Lease term, Tenant shall furnish to Landlord a statement in writing,,
certified by Tenant to be correct, showing the total gross sales made in, upon, or from the
Demised Premises during the preceding calendar month relating to such gift shop and food and
beverage shales (or fractional month at the beginning of the term if the Commencement Date
is other than the first day of a month), and shall accompany each such statement with a
payment to Landlord equal to said percentage of such total monthly gross sales made in, upon, ,
or from the Demised Premises during each calendar month.
(c) The term "gross sales" as used herein means the total gross
receipts,including the actual charges for all services performed by Tenant and fees charged by
Tenant and by anyone including any subtenant, licensee or concessionaire in, at, from, or
arising out of the use of the Demised Premises, whether wholesale or retail, whether for cash
or credit, or otherwise, and including the value of all consideration other than money received
for any of the foregoing, without reserve or deduction for inability or failure to collect,
including, but not limited to sales, related to said gift shop and,any food and beverage-sales
related hereto. Each installment or credit sale shall be treated as a sale for the full price in the
month during which such sale is made, irrespective of whether or when Tenant receives
payment therefor. Gross Sales shall not include sales taxes, so-called luxury taxes, consumers
excise taxes, gross receipts taxes and other similar taxes now or hereafter imposed upon,the
sale of merchandise or services, but only if collected separately from the selling price of
merchandise or services and collected from customers.
(d) The Tenant shall keep at the Demised Premises (and shall require
any permitted subtenant to keep at the Demised Premises) full, complete and proper books,
records and accounts of its daily gross sales, both for cash and on credit, at any time operated
in the Demised Premises. The Landlord and its agents and employees shall have the right at
any and all times, during regular business hours, to examine and inspect all of the books and
records of the Tenant,including any sales tax reports pertaining to the business of the Tenant
conducted in, upon, or from the Demised Premises, for the purpose of investigating and
verifying the accuracy of any statement of gross sales and to cause an audit of the business
of Tenant to be made by a certified public accountant of Landlord's selection. If the statement
of gross sales previously made to Landlord shall be found to be inaccurate, then and in that
event, there shall be an adjustment and one party shall pay to the other on demand such sums
as may be necessary to settle in full the accurate amount of said percentage rental that should
have been paid to Landlord for the period or periods covered by such inaccurate statement or
statements. If said audit shall disclose an inaccuracy of greater then three percent (3%) error
with respect to the amount of gross sales reported by Tenant for the period of said report, then
Palm Springs Air Museum Agreement Page 4
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Rental obligations of the Tenant shall include, but not be limited to the following:
1 Admissions Fee: Tenant shall pay to Landlord 250 per each paid admission to the
Demised Premises; remittance shall be as per Section 12(b). Tenant shall charge
admission tothe Museum located unthe Demised Premises.
'
2. Volunteer Work: Museum and Civil Air Patrol volunteers shall provide25Onoanhounoper
year of volunteer work for the Airport. Said work to be approved ahead of time. Work
completed shall be accounted for ono quarterly basis and reported tu the Landlord un
mutually agreeable reporting forms.
'
3. Airport Beacon: The Tenant shall-be responsible for providing suitable mounting for the
Airport's beacon unthe museum` rouf, and ohuU provide appropriate conduit runs and
electrical capacity in the electric panel to operate the beacon. Landlord shall have the
right to relocate the beacon tu the museum roof at Landlord's sole cost and expense.
If and when the Landlord relocates the beacon to the museum roof, the Tenant shall
thereafter pay all electrical charges tn operate the beacon.
4. Brochure Advertising: All advertising material distributed shall include Airport
uokno*/iad8ew000t, advertising and Lond|n,d/o logo. Said acknowledgment, and
advertising and logo shall be approved by the Director of Aviation prior to usage. This
shall also include mailing of airport information, provided by the Airport, along with
regular Museum mailings, oolong uu postage ia not adversely affected.
5. Filming Fees: Should commercial filming occur on the museum site, the Tenant shall
guarantee that all filming fees due the Landlord, as listed in the City'uComprehensive
Fee Schedule, shall be paid. Tenant shall use its best efforts tn market the Demised
Premises and the Airport asa filming destination.
G. Frontage Maintenance: Tenant shall be required to maintain the landscaped frontage
road area along the entire width of the Demised Premises including water and electricity.
' Said maintenance shall meet the same quality standard as the loop road area of the main
Airport Terminal. `
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AMENDMENT NO. 2
AGREEMENT NO. A3613 —AIR MUSEUM LEASE
RECITALS
A. The Palm Springs Air Museum desires to expand available parking for visitors to
the Museum and to construct an educational facility and hanger and requires additional
property to accommodate these additional facilities.
B. The City of Palm Springs is willing to include additional real property to the
existing leasehold property to facilitate the expansion of the Palm Springs Air Museum
operation.
AGREEMENT
THIS SECOND AMENDMENT ("Amendment") to Lease Agreement No. A3613, as
amended, ("Agreement") is made and entered into on this _ day of January, 2005, by
and between the City of Palm Springs ("Landlord") and the Palm Springs Air Museum,
Inc. ("Tenant"), as follows:
1. Section 1.1 of the Agreement, incorrectly numbered therein as Section "18.1" and
correctly labeled as "Demised Premises," is amended to read:
1.1 Demised Premises. The "Demised Premises" shall refer to that
certain real property located in the County of Riverside, State of California, as
more particularly described in Exhibit `B" and Exhibit `B-l" hereof and as
depicted on the Plot Plan attached as Exhibit"C"hereof.
2. Exhibit"13-1," attached to this Amendment, is made a part of the Agreement.
3. Exhibit "C" is amended as shown on the document labeled "Exhibit "C" to this
Amendment.
4. Except as specifically amended in this Amendment, all of the terms and
conditions of the Agreement shall remain in full force and effect.
5. This Amendment No. 2 shall become operative and in full force and effect upon
City receipt of the Federal Aviation Administration approval of this Amendment No. 2.
IN WITNESS WHEREOF, the parties have executed and entered into this Amendment as
of the date provided above.
ATTEST: CITY OF PALM SPRINGS
A California Charter City
City Clerk City Manager
Approved as to Form:
City Attorney
PALM SPRINGS AIR MUSEUM, INC.
A California Non-Profit Corporation
Signature
PrintName and Title
Signature
Print Name and Title
MINUTE ORDER NO: '7
APPROVING AMENDMENT NO. 2 TO AGREEMENT NO. A3613
WITH THE PALM SPRINGS AIR MUSEUM FOR PARCEL NO.'S 134
AND 135 ADDING 9 ACRES TO THE LEASEHOLD IN A FORM
ACCEPTABLE TO THE CITY ATTORNEY AND SUBJECT TO FINAL
APPROVAL BY THE FEDERAL AVIATION ADMINISTRATION.
I HEREBY CERTIFY that this Minute Order, approving Amendment No. 2 to
Agreement No. A3613 with the Palm Springs Air Museum for Parcel No.'s 134
and 135 adding 9 acres to the leasehold in a form acceptable to the City
Attorney and subject to final approval by the Federal Aviation Administration,
was adopted by the City Council of the City of Palm Springs, California, in a
meeting thereof held on the 2n' day of February, 2005.
JAMES THOMPSON
City Clerk
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