HomeMy WebLinkAbout3/20/2002 - STAFF REPORTS (4) DATE: March 20, 2002
TO: City Council
FROM: Assistant Director via Executive Director of Airports
TDM AIRPORT CONCESSIONS TERMINATION OFLEASE
RECOMMENDATION:
It is recommended that the City Council approve termination of lease agreement No.
3544 with TDM Airport Concessions for operations of a business center at Palm
Springs International Airport be effective April 6, 2002.
SUMMARY:
TDM Airport Concessions has operated a business center at the Airport since June 23,
1995 under lease agreement No. 3544. Due to financial hardships and an inability to
turn a profit forthe last two(2)years,TDM Concessions is requesting to surrender their
lease which is scheduled to expire on June 23, 2003. TDM is offering $2,272 which is
the remaining amount due for office space per the lease. TDM has not made enough
money to pay any additional percentage amounts per the lease requirements.
BACKGROUND:
On January 24, 2002, Airport staff received a letter (attached) from TDM Airport
Concessions requesting termination of lease No. 3544. Financial information was
presented verifying that TDM Airport Concessions was actually losing money and has
not turned a profit in over (2) years. TDM and Airport staff have had subsequent
discussions about a possible sub-lease or assignment of lease to another business
center operator, but to date, all possibilities have been exhausted.
Section 8.2 Surrenderof Lease states:The voluntary or other surrender of this Lease by Tenant,
or a mutual cancellation thereof,shall not work a merger, and shall at the option of the Landlord,
terminate all orany existing subleases orsubtenacies,ormay,at the option ofLandlord,operate
as an assignment to it of any or all of such subleases or subtenancies.
In a good faith gesture, TDM is offering $2,272 which is the remaining amount due for
office space per the lease. TDM has not made enough money to pay any additional
percentage amounts per the lease requirements. While Airport staff is reluctant to
allow tenants out of a lease due to financial hardships and/or other reasons, it is
apparent that this service is no longer capable of sustaining itself at this airport.
The Airport Commission approved this request at its March 6, 2002 meeting and a
minute order is submitted for City Council consideration.
BjFF1TH ALLEN SMOOT, A.A.E.
Assistant � ifector of Aviation
Executive Director of Airports
APPROVED:
City Manager REVIEWED BY DEPT.OF FINANCE
Attachments: Minute Order
a,4
MINUTE ORDER NO.
APPROVING TERMINATION OF LEASE AGREEMENT NO.
3544 WITH TDM AIRPORT CONCESSIONS FOR
OPERATION OF A BUSINESS CENTER AT THE PALM
SPRINGS INTERNATIONAL AIRPORT PER SECTION 8.2
SURRENDER OF LEASE PROVISIONS.
I HEREBY CERTIFY that this Minute Order terminating lease agreement No. 3544 with TDM
Airport Concessions for operation of a business center at the Palm Springs International
Airport per Section 8.2 surrender of lease provisions, was adopted by the City Council of the
City of Palm Springs, California, in a meeting thereof held on the 20th of March, 2002.
PATRICIA A. SANDERS
City Clerk
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