HomeMy WebLinkAboutResolution - 2018-R0028 - General Aviation Leasing Rents And Fees Policy - 01/25/2018Resolution No. 2018-R0028
Item No. 6.14
January 25, 2018
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the City Council approves and adopts on behalf of the City of Lubbock, the Lubbock
Preston Smith International Airport General Aviation Leasing/Rents and Fees Policy. Said General
Aviation Leasing/Rents and Fees Policy is attached hereto and incorporated in this resolution as if
fully set forth herein and shall be included in the minutes of the City Council.
Passed by the City Council on January 25, 2018
DANIEL M. POPE, MAYOR
ATTEST:
Rebe ca Garza, City Secretary
T U
APPROVED AS TO CONTENT:
Kelly CaFnpbell, AAE, Executive Director of Aviation
APPROVED FORM:
Vik-&ll- tte ite, FAT'Assistant City Attorney
ccdocs/RES.Lubbock Preston Smith International Airport General Aviation Leasing Rents and Fees Policy
12.06.2017
Lubbock Preston Smith
International Airport
5401 N. Martin Luther King Boulevard
Lubbock, Texas 79403
(806) 775-3126
General Aviation
Leasing/Rents and Fees
Policy
City of Lubbock
Lubbock Preston Smith International Airport
(LBB)
December 22, 2017
Lubbock Preston Smith
International Airport
TABLE OF CONTENTS
INTRODUCTION...................................................................................................... 1
1.1. Purpose..........................................................................................................1
1.2. General Provisions....................................................................................... 1
1.3. Applicability...................................................................................................1
2. LEASING AIRPORT LAND AND/OR IMPROVEMENTS ........................................ 2
2.1.
Application.....................................................................................................2
2.2.
Approval Process.......................................................................................... 2
2.3.
Competitive Process..................................................................................... 3
2.4.
Demonstrating Immediate Need.................................................................. 4
2.5.
Public Disclosure.......................................................................................... 5
2.6.
City Improvement Leasing........................................................................... 5
3. AGREEMENTS........................................................................................................6
3.1. Introduction................................................................................................... 6
3.2. Key Terms and Conditions........................................................................... 6
3.3. Other (General) Terms and Conditions......................................................17
4. RENTS AND FEES................................................................................................ 19
4.1. Introduction..................................................................................................19
4.2. Establishment of Market Rent.....................................................................19
4.3. Adjustment of Rents....................................................................................21
4.4. Establishment and Adjustment of Fees.....................................................21
4.5. Payment of Rents, Fees, or Other Charges...............................................23
5. APPENDIX.............................................................................................................24
5.1.
RFI, RFQ, and/or RFP Document Guidelines.............................................24
5.2.
Advertising Guidelines................................................................................24
5.3.
City Improvement Leasing Policy...............................................................25
5.4.
Standard Sublease Form Requirements....................................................27
5.5.
Establishment of Market Value...................................................................27
5.6.
Appraiser Qualifications..............................................................................28
5.7.
Appraisal Requirements..............................................................................29
5.8.
Dispute Resolution......................................................................................32
General Aviation Leasing/Rents and Fees Policy
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
INTRODUCTION
1. INTRODUCTION
1.1. Purpose
This General Aviation Leasing/Rents and Fees Policy (Policy) sets forth the parameters
that shall be used by the City of Lubbock (City) and Airport management for leasing land
and/or Improvements for Commercial or Non -Commercial General Aviation purposes at
the Lubbock Preston Smith International Airport (Airport). In addition, this Policy outlines
the process that shall be used by the City to establish and adjust General Aviation rents,
fees, and/or other charges associated with leasing, occupying, and/or using Airport land
and/or Improvements for Commercial or Non -Commercial General Aviation purposes.
Entities shall not occupy Airport land and/or Improvements for any purpose unless the
entity has an Agreement or Sublease. In addition, entities shall not conduct Commercial
General Aviation Aeronautical Activities (Activities) at the Airport unless the entity has a
Commercial Operator Permit (Permit) authorizing such Activities and is in compliance
with the Minimum Standards.
The City reserves the right to designate specific Airport land and/or Improvements in
which Commercial and/or Non -Commercial General Aviation Aeronautical Activities may
or may not be conducted. The right to use the Airport and any Airport land and/or
Improvements is non-exclusive with exception of the land and/or Improvements that are
leased exclusively to an entity by the City.
1.2. General Provisions
This Policy incorporates, by reference, the General Provisions document. The terms
identified by use of a capital letter in this Policy are addressed in Section 1.2 and provided
in Section 2 of the General Provisions.
1.3. Applicability
This Policy shall apply to any new Agreement or any new amendment to any existing
Agreement relating to the leasing of land and/or Improvements, including the
establishment or adjusting of rents, fees, and other charges, for Commercial or Non -
Commercial General Aviation Aeronautical Activities.
This Policy shall not affect any Agreement or amendment thereto that is properly
executed prior to the date of adoption of this Policy except as provided for in such
Agreement, in which case, this Policy shall apply to the extent permitted by such
Agreement.
General Aviation Leasing/Rents and Fees Policy
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
LEASING AIRPORT LAND AND/OR IMPROVEMENTS
2. LEASING AIRPORT LAND AND/OR IMPROVEMENTS
2.1. Application
Any entity desirous of leasing Airport land and/or Improvements on a long-term basis
(e.g., greater than one year) shall complete all relevant and applicable sections of the
General Aviation Operator and Lessee Application (Application) and submit the
Application to the Director.
➢ If an existing Lessee desires to enter into a new Agreement, the Lessee shall
notify the City 12 months in advance of the expiration date of the Lessee's
existing Agreement.
The new Agreement shall be subject to all applicable Legal Requirements including
Airport Sponsor Assurances (Assurances); Federal Aviation Administration's (FAA)
regulations, obligations, and guidance; Airport policies, standards, rules, regulations, and
directives including the Primary Management and Compliance Documents (PMCDs); and
City zoning, building, fire, and safety codes; and all other Legal Requirements of any
Agency having jurisdiction.
A non-refundable application fee shall be submitted with the Application, as stipulated in
the Airport's Rents and Fees Schedule.
2.2. Approval Process
Once Applicant has submitted a completed Application, thereafter, Applicant shall submit
any additional information, data, and/or documentation that may be required or requested
by the Director in order to properly and fully evaluate the Application. Incomplete
Applications may be rejected. Applications that do not comply with this Policy and/or the
PMCDs shall be rejected. Additionally, Applications may be rejected by the City in
accordance with Section 1.22 of the General Provisions.
Within 90 calendar days of receiving a completed Application, the Director shall convey
the key terms and conditions (including rents, fees, and other charges) that have been
established by the City for leasing the Airport land and/or Improvements identified by the
Applicant or convey the reason(s) for rejecting the Application in writing to the Applicant.
Within 30 calendar days of receiving the key terms and conditions from the Director, the
Applicant shall indicate if the key terms and conditions established by the City are
acceptable to the Applicant.
➢ If the key terms and conditions established by the City are not acceptable to
the Applicant, the Applicant shall present to the City revised key terms and
conditions that are acceptable to the Applicant within 30 calendar days of
receiving the information from the Director.
➢ The Director may negotiate the revised key terms and conditions with the
Applicant and/or initiate the Competitive Proposal Process described in Section
2.3.
General Aviation Leasing/Rents and Fees Policy 2
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
LEASING AIRPORT LAND AND/OR IMPROVEMENTS
➢ If the Director and the Applicant are unable to reach agreement on the revised
key terms and conditions within 30 calendar days of the time the information is
presented to the City by the Applicant, the City is not obligated to lease Airport
land and/or Improvements to the Applicant.
If the Director and the Applicant reach agreement on key terms and conditions, the
Applicant shall: (a) enter into a Memorandum of Understanding (MOU) with the City
outlining the key terms and conditions and (b) pay an earnest money deposit in cash or
letter of credit to the City in the amount equivalent to the rents, fees, and other charges
(total compensation) for the first month of the Agreement or $1,000 (whichever is greater)
— as evidence of the Applicant's good faith to enter into an Agreement with the City.
➢ If an MOU is not executed by the City and the Applicant within 30 calendar days
of reaching agreement on key terms and conditions, the City is not obligated to
lease Airport land and/or Improvements to the Applicant.
Once the MOU is executed by the Applicant and City, an Agreement shall be prepared
by the City for review by the Applicant. Once the Applicant executes the Agreement, the
Agreement shall be presented to the City for execution.
➢ If the Applicant does not execute the Agreement within 15 calendar days of
receiving the Agreement, the earnest money deposit shall be forfeited by the
Applicant to the City.
When the Director indicates intent to execute the Agreement, the Applicant shall pay a
security deposit in the form of cash or a letter of credit — in the amount equal to 25% of
the rents, fees, and other charges (total compensation) for the first year of the Agreement
or $1,500 (whichever is greater) — to the City.
➢ If the Applicant does not pay the security deposit to the City, the Agreement
shall not be executed by the City and the earnest money shall be forfeited by
the Applicant to the City.
➢ If the City does not execute the Agreement, the earnest money and the security
deposit shall be returned to the Applicant, without interest, within 30 calendar
days.
2.3. Competitive Process
City Initiative — If Airport land and/or Improvements exist or become available, in the
Director's sole discretion, the City may issue a Request for Interest (RFI), Request for
Qualifications (RFQ), and/or a Request for Proposal (RFP) to entities that may be
interested in leasing Airport land and/or Improvements.
➢ Guidelines for the development of the RFI/RFQ/RFP document are provided in
Appendix 5.1.
➢ The City shall advertise the RFI/RFQ/RFP opportunity. Advertising Guidelines
are provided in Appendix 5.2.
General Aviation Leasing/Rents and Fees Policy 3
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
LEASING AIRPORT LAND AND/OR IMPROVEMENTS
The Director may, in its sole discretion, hold a pre -proposal meeting to: (a) discuss the
RFI/RFQ/RFP opportunity, document, and/or related processes, (b) give a tour of the
Airport and/or the subject land and Improvements, and (c) provide prospective
respondents with the opportunity to ask questions.
After the stated deadline, the City shall review the submittals for compliance with the
RFI/RFQ/RFP specifications and criteria and shall rank the submittals.
Submittals received after the stated deadline shall not be considered and shall
be returned unopened.
The City may, in its sole discretion, interview respondents.
The City has the right to reject any or all submittals, to advertise for new
submittals, and/or to modify any or all RFI/RFQ/RFP processes.
The City shall be under no obligation to make an award.
The City shall be under no obligation to make an award to the respondent
specifying the highest level of compensation to the City.
Upon completion of an RFI process (if utilized), the City may, in its sole discretion, invite
respondents to reply to an RFQ or RFP. Upon completion of an RFQ process (if utilized),
the City may, in its sole discretion, invite the most qualified respondents to reply to an
RFP.
Upon completion of an RFP process (if utilized), the City may select the best respondent
in the City's sole discretion. Once selected, the City and the best respondent shall utilize
the MOU and Agreement process outlined in Section 2.2. If the City and the best
respondent are unable to reach agreement on an MOU or Agreement, at the sole
discretion of the City, the City may negotiate with the next best respondent and so on.
Initiative of Others — If, during an Application process occurring outside of an
RFI/RFQ/RFP process, another qualified entity expresses interest in leasing and
demonstrates an immediate need for the subject land or Improvements (as outlined in
Section 2.4), the City may, in its sole discretion, negotiate with the entity(ies) and/or issue
an RFQ/RFP in which case, the Competitive Proposal Process described in Section 2.3
shall be followed.
However, once the MOU (as discussed in Section 2.2) is: (a) executed by the Applicant
and City, and (b) the earnest money deposit has been provided, the City is under no
obligation to negotiate with any entity other than the Applicant or issue an RFQ/RFP.
2.4. Demonstrating Immediate Need
Any entity seeking to lease Airport land and/or Improvements must demonstrate the entire
land area(s) and/or the entire Improvement(s) seeking to be leased will be Immediately
utilized.
General Aviation Leasing/Rents and Fees Policy 4
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
LEASING AIRPORT LAND AND/OR IMPROVEMENTS
2.5. Public Disclosure
Applicants and RFI/RFQ/RFP respondents should be aware that the City is subject to the
Texas Public Information Act, which gives the public the right to examine documents in
possession of a Texas Agency.
If an Applicant or respondent identifies any proprietary and/or confidential information
submitted to the City and the City receives a request from the public for release of such
information, the City shall comply with State law regarding notification of Applicant.
2.6. City Improvement Leasing
If the City elects to enter into a short-term (i.e., less than one-year) Non -Commercial
Aircraft T-Hangar Agreement, the City shall utilize the process outlined in Appendix 5.3.
General Aviation Leasing/Rents and Fees Policy 5
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
3. AGREEMENTS
3.1. Introduction
The Agreement will outline the terms and conditions under which the entity is authorized
to occupy and/or use Airport land and/or Improvements. This Policy outlines the key terms
and conditions which shall be included, at a minimum, in the Agreement as well as other
terms and conditions which may be included in the Agreement.
This Policy does not represent a complete recitation of the provisions to be included in
the Agreement and the provisions contained in any Agreement shall not be deemed or
construed to modify this Policy.
3.2. Key Terms and Conditions
Recitals
All recitals shall include, at a minimum, the desires of the City and the Lessee. All recitals
shall be incorporated into the Agreement by reference.
Definitions
Consistent with the PMCDs, all defined words are identified in the General Provisions and
shall be incorporated into the Agreement by reference.
All words or phrases defined in the PMCDs, whenever used in the Agreement, shall be
identified by use of a capital letter and the meaning shall be construed as defined therein
or unless a different meaning is specifically defined. Words or phrases that are not defined
shall be construed consistent with common meaning or as generally understood
throughout the aviation industry.
Leased Premises
The Leased Premises shall be clearly defined and described including the square footage
of each land and Improvement component and the address of the Leased Premises. If
a Lessee desires to construct additional Improvements on the Leased Premises, a
statement shall be made to that effect and the process shall be outlined. All Leased
Premises shall be inspected by the Lessee and Lessee's acceptance of (and
responsibilities relating to) the Leased Premises shall be clearly stipulated.
Use
Aeronautical Use (Commercial) — The Agreement shall identify the required
Commercial General Aviation products, services, and/or facilities to be provided by the
Operator. The Agreement may identify optional General Aviation products, services,
and/or facilities that may be provided without the approval of the Director. The Agreement
may also identify additional General Aviation products, services, and/or facilities that may
be provided, subject to obtaining the prior written consent of the Director.
General Aviation Leasing/Rents and Fees Policy 6
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
Aeronautical Use (Non -Commercial) — For Non -Commercial occupancy and/or use of
Airport land and/or Improvements, the Agreement shall stipulate that the entity shall not
offer or provide Commercial General Aviation products, services, or facilities or conduct
Commercial activities at the Airport or from the Leased Premises, unless provided for in
a separate Agreement with the City.
Non -Aeronautical Use — Leasing Airport land and/or Improvements for non -aeronautical
activities is not generally favored by the City or the FAA. The City may, in its sole
discretion, consider such use in the event the non -aeronautical use of Airport land and/or
Improvements does not interfere with the primary aeronautical use of Airport land and/or
Improvements and is not in violation of any Legal Requirements, including the
Assurances.
If such use is contemplated, the Applicant must prove that the subject Airport land and/or
Improvements will not be needed for Aeronautical Activities (or aeronautical uses
including Airport development) during the entire term (including the base term of the
Agreement and option periods, if applicable) of a proposed Agreement. The leasing of
Airport land and/or Improvements for non -aeronautical activities will not be allowed
without the prior written consent of the FAA.
Prohibited Uses — All prohibited uses of the Leased Premises shall be identified
including any uses contrary to the Airport Layout Plan, Airport Land Use Plan, and/or
Legal Requirements.
Condition — The Agreement shall make no warranty or representation of any kind
concerning the condition of the Leased Premises, or the fitness of the Leased Premises
for the uses and Activities intended.
Compliance — The Agreement shall require compliance with the PMCDs and all
applicable Legal Requirements.
Term
The original term, commencement date, and ending date shall be conveyed in the
Agreement. The term of the Agreement shall be commensurate with the amount of Capital
Investment made by the Lessee in the Leased Premises and/or on the Airport, consistent
with the Capital Investment formulas as specified in the Airport's Capital Investment
Schedule.
General Aviation Leasing/Rents and Fees Policy 7
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
The required Capital Investment shall be based on the type of Activities and the category
of Aircraft being serviced or operated (as applicable). If a Hangar is constructed, the
required Capital Investment shall be based on the highest category of Aircraft the Hangar
is capable of accommodating utilizing the designed door height and width.
Notwithstanding circumstances beyond the control of the Lessee and if the Director
agrees in writing that such circumstances were beyond the control of the Lessee, all
Improvements to the Leased Premises shall be completed and occupied and/or used by
the Lessee within 18 calendar months of the commencement date of the Agreement.
The required Capital Investment identified in this Policy shall be adjusted every five years
(e.g., January 1, 2023, 2028, 2033, etc.) based on the change in the Consumer Price
Index (described in Section 4.3). At the discretion of the Director, the required Capital
Investment may be adjusted to reflect the change in the cost of construction in the market
using a similar mechanism.
When Capital Investment is made, the term of the Agreement shall not be greater than a
30-year base term plus two 5-year option periods (for a total of 40 years) which is pursuant
to Texas Transportation Code Title 3 Sec. 22.021. When no Capital Investment is made,
the term of the Agreement shall be at the discretion of the City, but shall not be greater
than 20% of the term of the previous Agreement (if an existing Lessee) or 5 years,
whichever is less. When a Lessee makes additional Capital Investment in the Leased
Premises and/or on the Airport during the term of the existing Agreement, the term of the
Agreement may be extended by the City based on the level of Capital Investment (plus
5-years) made by the Lessee:
➢ If the term of the Agreement is extended by the City: (a) the Agreement shall
be amended in accordance with this Policy, the PMCDs, and all applicable
Legal Requirements in effect at the time and (b) the remaining term of an
existing Agreement plus the term of any extension thereto shall not be greater
than 40 years.
If Capital Investment is made (at the beginning of or during the Agreement) that does not
result in a minimum of 30-year term (based on the Airport's Capital Investment Schedule),
the City may, in its sole discretion, allow the Lessee to amortize the Capital Investment
over a 30-year period. At the end of the Agreement in which the amortization extends
beyond the term, one of the following options may occur:
➢ the City shall compensate the Lessee for the unamortized portion of the Capital
Investment;
➢ the City can enter into a new Agreement with Lessee providing for continued
amortization of the Capital Investment commensurate with remaining
amortization period; or
General Aviation Leasing/Rents and Fees Policy 8
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
➢ the City can enter into a new Agreement with a new Lessee and require new
Lessee to compensate Lessee for the unamortized portion of the Capital
Investment.
The renewal process, rights, and timeframe for exercising any renewal options shall be
outlined in the Agreement. If Improvements are part of the Leased Premises, certain
maintenance, repairs, and/or restoration may be required of the Lessee prior to renewal.
For Activities, in the event the use and/or occupancy of the Leased Premises is
transitioned from the Lessee to another entity, the cooperation of the Lessee shall be
required and a statement (to this effect) shall be included in the Agreement.
Rents, Fees, Payments, and Late Charges
Rent — The rent to be paid by the Lessee to the City shall be identified in the Agreement
on a square foot basis for each land and Improvement component of the Leased
Premises. All Airport rents shall be established and adjusted in accordance with Section
4.
Fees — The applicable fees to be paid by the Lessee to the City shall be identified in the
Agreement. All Airport fees shall be established and adjusted in accordance with Section
4.
Payments and Late Charges — The Agreement shall identify the frequency, the due date,
and the acceptable manner for making payments of the rents and fees, including the
delivery address. Additionally, the time at which a payment is considered late shall be
stipulated and the process for applying late charges (and any related interest) shall be
outlined.
Improvements
All Improvements, located on Airport property and within the legal boundaries as identified
on the Airport Layout Plan, shall comply with this Policy, the PMCDs, and all applicable
Legal Requirements. Lessee shall procure all necessary permits including, but not limited
to, all City building, fire, safety, and other required permits for Improvements located on
Airport property and within the legal boundaries as identified on the Airport Layout Plan.
Upon expiration of the term of the Agreement, at the option of the City, ownership of the
permanent Improvements that have been made to the Leased Premises by the Lessee
shall revert to the City, or the permanent Improvements identified by the City shall be
demolished and/or removed by the Lessee and the Lessee shall return the Leased
Premises to its original condition and character, normal wear and tear excepted.
General Aviation Leasing/Rents and Fees Policy 9
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
Lessee's Rights and Privileges
The right of use, location, and hours of ingress and egress shall be identified in the
Agreement. The Lessee shall be permitted to use the Airport and its appurtenances
together will all public areas and facilities in common with all Airport users. Additionally,
the Lessee shall be solely liable for and shall reimburse the City for any expenses incurred
by the City for repair of any damage caused by the Lessee and Lessee's employees,
visitors, customers, and vendors at the Airport.
Subject to compliance with the Agreement, the Lessee shall be permitted to peacefully
and quietly have, hold, and enjoy the Leased Premises for the term of the Agreement.
Lessee shall be permitted to install fixtures on the Leased Premises and use equipment,
tools, machinery, or other personal property in support of the authorized uses of the
Leased Premises at the sole risk of the Lessee. The Agreement shall clearly state that all
fixtures, equipment, tools, machinery, and personal property shall be removed from the
Leased Premises upon termination of the Agreement.
Lessor's Rights and Privileges
In addition to the rights and privileges outlined in the PMCDs, the Agreement may convey
any additional rights and privileges of the City pertaining to the Leased Premises
including, but not limited to, access to the Leased Premises and performance of official
acts by the City (or a designated representative of the City).
Lessee's Obligations
For Commercial Aeronautical Activities, the Lessee shall be responsible for maintaining
an on -going business at the Airport and complying with the PMCDs throughout the term
of the Agreement. Additionally, any modifications to the business or corporate structure
of the Lessee shall be communicated in advance to the Director.
Lessee shall be responsible for the conduct, demeanor, and appearance of the Lessee's
representatives, officers, officials, employees, agents, and volunteers at the Airport and
on the Leased Premises. Lessee shall be responsible for conducting Lessee's authorized
activities in a manner that does not interfere with or disturb others while also complying
with applicable Legal Requirements.
Lessee shall be responsible for promptly paying when due and owing all:
➢ taxes, assessments, and other fees, without offset or abatement, charged by
any Agency relating to the Leased Premises, Improvements, and Lessee's
activities;
➢ utilities (which shall be arranged for by Lessee if separately metered); and
➢ all costs, expenses, and other charges relating to the Leased Premises,
Improvements, and/or Lessee's activities.
General Aviation Leasing/Rents and Fees Policy 10
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
Lessee shall be responsible for maintaining, repairing, restoring, and cleaning the Leased
Premises including all structural components, all exterior and interior maintenance and
repair, landscaping, janitorial, trash removal, snow removal, and sweeping. The
Agreement shall outline the process in the event the Lessee fails to diligently, properly,
and promptly maintain, repair, restore, or clean the Leased Premises.
If Based Aircraft are located on the Leased Premises, the Lessee shall provide an annual
Based Aircraft report to the Director in compliance with the PMCDs.
The Agreement shall include the provisions required by the FAA which shall, at a
minimum, include non-exclusive use of the Airport and non-discrimination clauses.
The Agreement shall stipulate that any default or breach of the Agreement by Lessee
shall constitute a default or breach of all Agreements between the City and Lessee. The
City shall consider any of the following a default or breach under the Agreement:
➢ failure to comply with Legal Requirements;
➢ failure to comply with the Assurances;
➢ failure to comply with the PMCDs;
➢ failure to comply with the Airport's policies, standards, rules, regulations, and
directives;
➢ failure to perform any condition, obligation, or privilege contained in the
Agreement;
➢ failure of a Lessee engaged in Activities to obtain prior written consent from the
Director before conducting additional Activities;
➢ failure to obtain prior written consent from the Director before making any
Improvements to the Leased Premises and/or at the Airport;
➢ failure of a Non -Commercial Lessee to refrain from engaging in Commercial
activities at the Airport unless provided for in a separate Agreement with the
City;
➢ subleasing (or attempting to Sublease) any portion of the Leased Premises
without the prior written consent of the Director;
➢ any sale or assignment of the Leased Premises or Agreement made (or
attempted to be made) without the prior written consent of the Director;
➢ any change in controlling ownership of Lessee made (or attempted to be made)
without the prior written consent of the Director;
➢ any encumbrance of the Leased Premises or Improvements on the Leased
Premised made (or attempted to be made) without the prior written consent of
the Director;
➢ the failure to properly maintain the Leased Premises or promptly pay all utilities,
insurance, and taxes when due and owing;
➢ the filing of bankruptcy and/or assignment of substantially all Lessee's assets
for the benefit of Lessee's creditors;
➢ the filing of a lien against the Leased Premises;
General Aviation Leasing/Rents and Fees Policy 11
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
➢ the voluntary abandonment of the Leased Premises;
➢ falsification of any record so as to deprive the City of any rights, privileges,
rents, fees, or other charges under the Agreement; or
➢ failure to remain Current or in Good Standing.
The failure of Lessee to observe or perform any of the terms and conditions of the
Agreement or any other agreement with the City in any material respect where such
failure shall continue for a specific period of time after written notice from Director and
process to cure such default.
Termination by Lessee
The Lessee may, at the Lessee's option and provided the Lessee is Current and in Good
Standing, terminate the Agreement due to permanent abandonment or closure of the
Airport, the lawful assumption by the United States Government or any authorized
Agency, or a default or breach of the Agreement (that is not cured or remedied) by the
City.
If Current, in Good Standing, and Leased Premises and Improvements are in good
condition, the Lessee may terminate Agreement if permanent abandonment or closure of
the Airport; lawful assumption by United States Government or any authorized Agency of
the operation, control, use or occupancy of the Airport; default or breach by Lessor, or
substantial Condemnation or eminent domain which prevents or substantially impairs the
conduct of Lessee's Activities and equates to fifty percent (50%) or more of the total
Leased Premises.
Condemnation or Eminent Domain
In the event of acquisition by Condemnation or the exercise of the power of eminent
domain (by any Agency permitted to take property for public use) of any land or
Improvements associated with Lessee's Leased Premises, Lessee shall not institute any
action or proceeding or assert any claim against the City for Compensation or
consideration of any nature. All Compensation or consideration awarded or paid to City
upon a total or partial acquisition of the Leased Premises (which for these purposes shall
not include any Compensation or consideration from the City) shall belong to the City
without any participation of the Lessee.
Lessee may recover directly from the condemning Agency the value of any claim,
provided that no such claim shall diminish or otherwise adversely affect the City's award.
Total — In the event of an acquisition by Condemnation or eminent domain of all interest
in the Leased Premises, Lessee's obligation to pay rent shall cease and all leasehold
interest created shall cease.
Substantial and Partial — In the event of an acquisition by Condemnation or eminent
domain of a portion of interest in the Leased Premises, Lessee's obligation to pay rent
shall cease as it pertains to the specific portion of the Leased Premises acquired.
General Aviation Leasing/Rents and Fees Policy 12
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
If the Condemnation or eminent domain substantially impairs the conduct of the Lessee's
activities and equates to more than 50% of the total Leased Premises, Lessee may
terminate the Agreement by notifying the City. If the Agreement is not terminated by the
Lessee, the rent shall be adjusted accordingly.
Force Maieure
The City or Lessee shall be excused if delayed, hindered, or prevented from performance
of the Agreement by reason of war, national emergency, or acts of nature. However, the
Lessee shall not be relieved of paying rents, fees, and/or other charges when due and
owing.
Hazardous Materials
The Lessee shall be solely and fully responsible for compliance with Legal Requirements
and shall indemnify, defend, protect, and hold harmless the City arising from or related to
the presence or discharge of Hazardous Materials. The City shall have the right to
terminate in the event of non-compliance or contamination occurring on the Leased
Premises and the City shall not unreasonably withhold assignment or subleasing due to
certain activities related to Hazardous Materials.
Reservation of Avigational Easement
City reserves to itself and its successors and assignees, for the use and benefits of the
public, a right of avigation over the Leased Premises for the passage of aircraft utilizing
the Airport.
Americans with Disabilities Act
The Lessee shall be solely and fully responsible for complying with the Americans with
Disabilities Act of 1990 as amended from time -to -time, with respect to the Leased
Premises and its Activities at the Airport.
Inciiranr_P
The Lessee shall be responsible for procuring and maintaining the liability and property
insurance required by the Agreement, PMCDs, and Legal Requirements.
Damaae. Destruction and Termination
No destruction or damage to the Leased Premises by fire, windstorm, earthquake, or
other casualty, whether insured or uninsured, shall entitle Lessee to terminate the
Agreement.
General Aviation Leasing/Rents and Fees Policy 13
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
Hold Harmless and Indemnification
The Agreement shall require Lessee to defend, indemnify, save, protect, and hold
harmless Lessor, individually and collectively, and its representatives, officers, elected
officials, employees, agents, and volunteers from and against (and reimburse Lessor for)
any and all actual or alleged claims, demands, damages, expenses, costs, fees
(including, but not limited to, attorney, accountant, paralegal, expert, and escrow fees),
fines, environmental costs, and/or penalties which may be imposed upon, claimed against
or incurred or suffered by Lessor.
Non -Liability of Officials and Employees of Lessor
No officer, elected official, employee, agent, or representative, etc. of Lessor shall be
personally liable for any default or liability under this Agreement.
Subleasing
Subleasing is considered a Commercial Activity. Any entity engaging in subleasing must
comply with the PMCDs.
Subleasing Privileges Permitted in the Agreement — If the City permits subleasing in
the Agreement, a standard sublease agreement (consistent with the requirements set
forth in Appendix 5.4) prepared by the Lessee and approved in writing by the Director
may be used by the Lessee to facilitate subleasing. Upon any signed standard sublease
agreement, Lessee shall notify the Director and the standard sublease agreement and
any required documentation for each sublease shall be available to the Director upon
request.
If a standard sublease agreement is not used by the Lessee, the proposed sublease
agreement and any required or requested information, data, and/or documentation shall
be submitted to the Director for review. If the proposed sublease agreement is acceptable
to the Director, the proposed sublease agreement and any additional information, data,
and/or documentation deemed relevant by the Director shall be submitted to the City for
review and approval. The City reserves the right to require Lessee to reimburse the City
for attorney's fees and expenses incurred by the City relating to the review and approval
of the proposed sublease agreement. A Sublessee may not occupy the subject land
and/or Improvements at the Airport prior to receiving the written consent of the Director.
If an entity desires to sublease land and/or Improvements at the Airport and desires to
conduct Activities at the Airport, the Sublessee shall comply with all applicable sections
of the Minimum Standards.
The Lessee shall not be required to pay the City any portion of the revenues generated
or profits earned relating to permitted and/or approved subleasing activities.
General Aviation Leasing/Rents and Fees Policy 14
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
Subleasing Privileges Not Permitted in the Agreement — If the Agreement does not
permit subleasing, the Lessee must obtain the prior written consent of the Director prior
to subleasing. Subleasing privileges shall be granted in the City's sole discretion.
The proposed sublease agreement, a completed Application, and any other required or
requested information and/or documentation shall be submitted to the Director for review
and approval. A Sublessee may not occupy the subject land and/or Improvements at the
Airport prior to receiving written consent of the Director.
Sublessee Obligations — Sublessee shall comply with the PMCDs and all applicable
Legal Requirements.
Subleasing Restrictions — Unless otherwise stated in prior written consent, Sublessee
shall be subject to all applicable terms and conditions of the Lessee's Agreement
governing the land and/or Improvements being subleased.
Any Sublease made contrary to the requirements of this section shall be null and void.
Sale, Assignment, or Transfer
A Lessee shall not sell, assign, or transfer the Agreement, in whole or in part, or any
interest in the Agreement, or any rights or obligations the Lessee has under the
Agreement, without the prior written consent by the Director.
➢ If a Lessee is desirous of such a sale, assignment, or transfer, the Lessee shall
submit a written request to the Director for approval. The request shall be
accompanied by a completed Application by the entity requesting assignment
(Assignee).
➢ At the time a sale, assignment, or transfer is approved in writing by the Director,
the Lessee shall reimburse the City for attorney's fees and expenses incurred
by the City relating to the sale, assignment, or transfer in the sole discretion of
the City.
➢ The Assignee shall satisfy all criteria set forth in this Policy, the PMCDs, and
all applicable Legal Requirements.
Written consent of the Director is not required in connection with: (a) the merger,
consolidation, or reorganization of the Lessee with any Affiliate of the Lessee, (b) the sale
of all or substantially all of the assets of the Lessee to any Affiliate of the Lessee, or (c)
assignment to any Affiliate of the Lessee.
Any sale, assignment, or transfer, with exception of the situations and/or circumstances
noted in this section, made without the prior written consent of the Director shall be
considered null and void.
General Aviation Leasing/Rents and Fees Policy 15
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
Change in Controlling Ownership
Any change in the controlling ownership of a Lessee is subject to the prior written consent
of the Director.
If a Lessee is desirous of changing its controlling ownership, the Lessee shall submit a
completed Application to the Director for review. If the Application is acceptable to the
Director, the Director shall submit the Application and a recommendation to the City for
review and consideration.
➢ At the time the change in controlling ownership is approved in writing by the
Director, the Lessee shall reimburse the City for attorney's fees and expenses
incurred by the City relating to the change in controlling ownership in the sole
discretion of the City.
Any change in controlling ownership made without the prior written consent of the Director
shall be considered null and void.
Encumbrances and Mortgage
A Lessee shall not mortgage, pledge, assign as collateral, encumber or in any manner
transfer, convey, or dispose of the Leased Premises or any interest therein without the
prior written consent of the Director.
If a Lessee is desirous of mortgaging, pledging, assigning as collateral, encumbering or
in any manner transferring, conveying, or disposing of the Leased Premises or any
interest therein, the Lessee shall submit a written request to the Director for review. If the
request is acceptable, the Director shall submit the request and a recommendation to the
City for review and consideration.
➢ At the time the request is approved in writing by the Director, the Lessee shall
reimburse the City for attorney's fees and expenses incurred by the City relating
to the encumbrance request in the sole discretion of the City.
Any encumbrance made without the prior written consent of the City shall be considered
null and void.
Relocation
In the event that relocation is deemed necessary (e.g., to correct deviations from 14 CFR
Part 77, to ensure consistency with the Airport Layout Plan, etc.), the City shall provide
Airport land and/or Improvements that are similar to the Airport land and/or Improvements
currently being occupied and/or used by the Lessee. Such Airport land and/or
Improvements shall be leased to the Lessee under the same terms and conditions as
stipulated in the existing Agreement.
If similar Airport land and/or Improvements are not available, the City may, in its sole
discretion, buyout the leasehold interest held by the Lessee at the market value
determined by an Appraiser engaged by the City using the approach outlined in Appendix
General Aviation Leasing/Rents and Fees Policy 16
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
5.5. If the Lessee disagrees with the market value conclusion reached by the Appraiser,
the Lessee shall have the right to initiate the dispute resolution process set forth in
Appendix 5.8.
If the relocation is solely for the benefit of the City, the City shall pay all reasonable (and
verifiable) relocation costs and expenses associated with relocating the Lessee.
Relocation shall follow all applicable federal, FAA, and Texas Legal Requirements for
relocation proceedings and any appraisal report shall meet the requirements of such.
➢ If there is any discrepancy between this Policy and such Legal Requirements,
the Legal Requirements shall prevail.
3.3. Other (General) Terms and Conditions
In addition to the key terms and conditions (outlined in Section 3.2), the Agreement shall
include the following:
No Waiver — the City shall not waive the right to enforce the Agreement, in whole or in
part.
Licenses, Certifications, and Permits — the Lessee shall have (and provide copies to
the Director upon request) all licenses, certifications, and permits required to conduct
Lessee's activities.
Indemnification — the Lessee shall defend, indemnify, save, protect, and hold harmless
the City, City Council, and the City of Lubbock Airport Board (Board), individually and
collectively, and its representatives, officers, elected officials, employees, agents, and
volunteers from and against (and reimburse the City, City Council, or Board for) any and
all actual or alleged claims, demands, damages, expenses, costs, fees ((including, but
not limited to, attorney, accountant, paralegal, expert, and escrow fees), fines,
environmental costs, and/or penalties (collectively referred to as costs) which may
imposed upon, claimed against or incurred or suffered by the City, City Council, or Board
as a result of, or arising out of the Lessee's activities, actions, or inactions.
Books and Records — the Lessee shall keep complete books and records of the amounts
due and owing to the City for rents, fees, or other charges applicable to the Agreement.
The Director shall have access to such records upon reasonable notice. The City reserves
the right to audit such records. The entity shall have the burden of proof if the amount
determined by the City is disputed.
Holdover Possession — in the event the Lessee should hold over and remain in
possession of the Leased Premises after the expiration of term of the Agreement, the
rents, fees, and other charges paid during the holding over period shall be equal to a
minimum of 150% of the monthly rents, fees, and other charges that were charged by the
City at the time the Agreement expired.
General Aviation Leasing/Rents and Fees Policy 17
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
AGREEMENTS
Surrender Leased Premises — requires that upon expiration of the term of the
Agreement or earlier termination of the Agreement, Lessee vacate and surrender
possession of the Leased Premises to Lessor as outlined in the Improvements section.
Independent Entities — the Agreement shall not be construed to establish a partnership
between the City and the Lessee.
Binding Effect — the Agreement shall be binding on and take effect to the benefits of the
heirs, successors, and assigns of the City and the Lessee.
Subordination — the Agreement is subordinate to any agreement between the City and
the United States Government, the State of Texas, or any other Agency having
jurisdiction.
Governing Law and Venue — the Agreement shall be made in accordance with the laws
of Texas and the venue in Lubbock County.
Paragraph Headings —the paragraph headings in the Agreement shall only be used as
a matter of convenience and/or reference.
Severability — if a provision of the Agreement is held to be unlawful, invalid, or
unenforceable by final judgment of any Agency or court of competent jurisdiction, the
invalidity, voiding, or unenforceability of such provision shall not in any way affect the
validity of any other provisions of the Agreement.
Counterparts — if the Agreement is executed in counterparts, each shall be deemed an
original and which together shall constitute one and the same Agreement.
Modification — any change or modification to the Agreement shall not be valid unless
made in writing, agreed to, and signed by the City and Lessee.
Time of the Essence — the City and Lessee shall agree that time is of the essence in
performance of the Agreement.
Entire Agreement — the Agreement shall be construed to embody the entire
understanding and agreement between the City and the Lessee.
Notices — the Agreement shall identify the location and contact person (if applicable) for
the City and the Lessee as well as the method for providing any notices required in the
Agreement.
Representations and Warranties of the Lessee — the Agreement shall outline the
representations and warranties of the Lessee.
Exhibits — the Agreement shall include drawings of the Leased Premises (at a minimum)
and any additional exhibits which are required to perfect the Agreement.
General Aviation Leasing/Rents and Fees Policy 18
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
RENTS AND FEES
4. RENTS AND FEES
4.1. Introduction
The City is required, by the Assurances, to maintain a rent and fee structure that makes
the Airport as self-sustaining as possible given the circumstances that exist. As such, the
City will charge Market Rent for Airport land and/or Improvements.
The City, by entering into Agreements and by other means that may be available to the
City shall endeavor to recover the costs being incurred by the City relating to the planning,
development, operation (including maintenance and repair), management, and marketing
of the Airport (that are not being covered by federal or state Airport Improvement
Programs) through the establishment of rents, fees, and other charges.
The City shall be properly compensated for the privileges granted to an Operator, Lessee,
or Permittee. It is the policy of the City to seek terms and conditions that, while being
reasonable and not unjustly discriminatory, provide the best return to the City.
While each Lessee at the Airport shall be subject to the same rents, fees, and other
charges as are uniformly applicable to other Lessees utilizing the same or similar Airport
land and/or Improvements for the same or similar use or purpose, it is recognized that the
use and attributes of Airport land and/or Improvements and/or the terms and conditions
of Agreements (and the approach utilized to reach agreement and related timing) varies.
As a result, the rents, fees, or other charges at the Airport may vary as well. However, the
City shall not charge unjustly discriminatory rents, fees, or other charges.
4.2. Establishment of Market Rent
Market Rent for aeronautical land and/or Improvements (referred to as the "property" or
"properties" in this Section) at the Airport shall be determined by: (a) Rent Study, (b)
comparative analysis of the rents being charged for similar properties at the Airport, (c)
negotiation, or (d) competitive process, as follows.
➢ By definition, aeronautical properties include, but are not necessarily limited to,
unimproved land (land not having landside and/or airside access and/or utilities
to the property), improved land (land having airside and landside access and
utilities to the property), Ramp, Vehicle parking areas, Fuel storage facilities,
terminal buildings, office and shop facilities, Hangars, storage areas, and other
support buildings or related facilities.
Rent Study
The objective of the Rent Study is to establish Market Rent for aeronautical land and
Improvements at the Airport based on a comparative analysis of the rents being charged
for similar properties at comparable airports. The process that shall be used to establish
Market Rent for properties at the Airport is set forth herein.
General Aviation Leasing/Rents and Fees Policy 19
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
RENTS AND FEES
The City shall engage an aviation consultant or Appraiser who meets the qualifications
set forth in Appendix 5.6 with the following background and experience to conduct a Rent
Study:
➢ working knowledge of the aviation industry;
➢ familiarity with federal and state Legal Requirements and FAA regulations,
obligations, and guidance pertaining to setting rents for aeronautical land and
Improvements being used for General Aviation purposes; and
➢ experience providing Rent Studies at similar locations.
Rents and related information shall then be obtained (from locations determined to be
comparable) and analyzed to derive the Market Rent for the subject properties.
➢ The City and Lessee (if applicable) may suggest locations to the aviation
consultant or Appraiser considered to be comparable, however the aviation
consultant or Appraiser shall not be obligated to use such recommended
locations.
To ensure consistency in the determination of Market Rent for the subject property, the
City may categorize and group similarly situated properties by use and attributes. In
determining the Market Rent for the subject property, the aviation consultant or Appraiser
shall use such categorizations and groupings with consideration given to the functional
utility or limitations of the subject property. This shall include, but not necessarily be
limited to, any limitations or restrictions on the development, the availability of utilities,
and/or the ability of the subject property to support the Aircraft that normally frequent the
Airport.
The aviation consultant or Appraiser shall consider properties at the Airport that are
similar to the subject property and, if appropriate, the aviation consultant or Appraiser
may also consider properties located at competitive facilities and general real estate
market conditions and trends in the local market.
If the rents charged for similar properties at the Airport, comparable locations, and/or
competitive facilities are impacted by the fees being charged or if fees are charged in lieu
of rent, the relationship between the rents and fees shall be considered and addressed
by the aviation consultant or Appraiser.
Similar Properties On -Airport
The Director may, in its sole discretion, set Market Rent for the subject property if rents
for similar properties at the Airport have been established through an Agreement with the
City within one year. In this case, each of the elements under this Section shall be
considered by the Director in determining the Market Rent.
Negotiation/Competitive Process
Market Rents can also be established by negotiation or through competitive process.
General Aviation Leasing/Rents and Fees Policy 20
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
RENTS AND FEES
Rate of Return
In the event that the City develops all or part of the Improvements, to establish rents, the
City may, in its sole discretion, establish a reasonable rate of return on the investment
(based on a 10% rate of return being Airport standard).
Airport Sponsor Financing
In the event that the City provides funds for the development of all or part of the capital
Improvements, such funds shall be provided on terms and conditions commensurate with
the prevailing terms and conditions in the market (e.g., loan term, down payment, interest
rate, etc.) for the type of Improvement being developed. The rent for the Improvement
can be established based on the loan payments by Lessee to the City.
4.3. Adjustment of Rents
Methodology
All rents shall be established and shall be effective upon the first day of the calendar year
following promulgation of this Policy (January 1, 2018) and all rents shall be adjusted
every five years thereafter (e.g., January 1, 2023, 2028, 2033, etc.) based on the findings
of a Rent Study (described in Section 4.2). On an annual basis between each Rent Study
(e.g., January 1, 2019, 2020, 2021, and 2022), all rents shall be adjusted based on the
change in the Consumer Price Index (described in this section).
Consumer Price Index (CPI)
CPI shall mean the Consumer Price Index for All Urban Consumers published by the
United States Department of Labor, Bureau of Labor Statistics.
If a substantial change is made in the method by which the CPI is determined, the CPI
shall be adjusted to the figure that would have resulted had no change occurred in the
manner of determining the CPI. In the event that the CPI (or a successor or substitute
index) is not available, a reliable governmental or other nonpartisan publication evaluating
the information previously used in determining the CPI shall be used instead of the CPI.
The rental rates shall be adjusted upward or downward for each ensuing calendar year
in direct proportion to the fluctuation in the CPI. Any adjustment to the rental rates from
changes in the CPI shall be determined by calculating the increase or decrease in the
CPI for the preceding 12 months.
4.4. Establishment and Adjustment of Fees
The City shall charge fees to recover the costs being incurred by the City associated with
the planning, development, operation (including maintenance and repair), management,
and marketing of the Airport (that are not being covered by federal or state Airport
Improvement Programs).
General Aviation Leasing/Rents and Fees Policy 21
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
RENTS AND FEES
Costs shall include, but not necessarily be limited to: (a) all Airport planning,
engineering, design, and development costs (City's portion only), (b) all Airport
operating, management, and maintenance and repair costs (City's portion
only), and (c) all Airport debt service, capital outlays, reserves, and
amortization.
All General Aviation related revenues (including rents) shall be deducted from
all General Aviation related costs and the difference shall be charged to
Lessees, Sublessees, Permittees, and users of the Airport on a proportionate
basis in the form of fees.
Fees may include, but are not necessarily limited to, Fuel flowage fees, Aircraft parking
fees, Aircraft landing fees, Based Aircraft fees, General Aviation Operator permit fees,
Percentage of gross receipts fee, and/or temporary or special use permit fees. All fees
shall be identified in the Airport's Rents and Fees Schedule.
Fuel Flowage Fees — Based and Transient Aircraft Owners/Operators shall pay a Fuel
flowage fee based on the number of gallons dispensed into the Aircraft at the Airport as
required in the PMCDs.
Commercial Operators who provide Fueling (and/or Fuel handling) services at the Airport
shall be responsible for the collection of the Fuel flowage fee from the sale of Fuel to
(and/or handling of Fuel on behalf of) consumers served and for payment to the City.
Non -Commercial Self -Fueling entities shall report Fuel volumes and pay the Fuel flowage
fee directly to the City.
Aircraft Parking Fees — Transient Aircraft Owners/Operators shall pay an Aircraft
parking fee.
Aircraft Landing Fees — Transient Aircraft Owners/Operators shall pay an Aircraft
landing fee.
Based Aircraft Fees — Based Aircraft Owners/Operators shall pay an annual fee.
General Aviation Operator and Lessee Application Fees — At the time an Application
is submitted to the Director to conduct Activities, the prospective entity shall pay a one-
time fee based on the type of Activities.
Percentage of Gross Receipts Fee — Commercial Operators shall be required to pay a
percentage of gross receipts on Activities conducted.
If the City includes a Fuel flowage fee in the Airport's Rents and Fees Schedule, the City
shall not charge an additional percentage of gross receipts fee on Fuel sales. The City
shall not charge a percentage of gross receipts fee on Aircraft charter Activities in
accordance with Title 49 — Transportation, Subtitle VII — Aviation Programs, Part A — Air
Commerce and Safety, Subpart I — General, Chapter 401 — General Provisions, Section
40116 — State Taxation, paragraph (b).
General Aviation Leasing/Rents and Fees Policy 22
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
RENTS AND FEES
Fees shall be adjusted each year based on the calendar year budget for the Airport.
➢ All adjustments shall be effective on the first day of the calendar year.
➢ Any deficits shall be carried forward and considered when establishing fees for
the following year. Any surplus or any portion of any surplus may be used, at
the sole discretion of the Director, to service Airport debt, make Airport capital
Improvements, increase Airport reserves, or may be carried forward for
consideration in establishing Airport fees for the following year.
4.5. Payment of Rents, Fees, or Other Charges
No entity shall be permitted to lease or occupy Airport land and/or Improvements unless
the entity is Current and in Good Standing. The City may, in its sole discretion, enforce
the payment of any rent, fee, or other charge due and owing to the City by any legal
means available to the City under any Agreement and/or as provided by Legal
Requirements. All rents, fees, or other charges assessed by the City not paid within 5
business days of being due and owing to the City shall be assessed a late fee in
accordance with the General Aviation Rents and Fees Schedule.
General Aviation Leasing/Rents and Fees Policy 23
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
APPENDIX
5. APPENDIX
5.1. RFI, RFQ, and/or RFP Document Guidelines
The content that may be included in each type of document is identified in the table that
follows:
Objectives with respect to the opportunity
Responsibility for compliance with Legal Requirements
Overview of the community, the Airport, and the marketplace
Location and approximate size of the subject property
Complete and thorough description of the subject property
Anticipated use of the subject property
If Commercial, outline the desires with regard to the: (a) entity's
qualifications and experience and (b) the range, level, and quality of
General Aviation products, services, and facilities (and/or Improvements)
to be developed
Anticipated lease term duration
Minimum rent for the subject property
If Commercial, identify the minimum fees and/or other charges for
engaging in Activities at the Airport
Schedule that identifies key dates for the process
If necessary, the location, date, time, and requirement for attendance at a
pre -proposal conference
Specific instructions regarding the content and format of the submission
Require a proposal bond or personal guarantee (that shall remain in effect
for 180 calendar days), in the amount equal to the total rents, fees, and
other charges proposed to be paid in the first month of the Agreement or
$1,000 (whichever is greater)
Place, date, time, and any additional instructions for submission
Grounds for denial or disqualification and withdrawal
Evaluation and/or selection criteria to be utilized
Required forms, statements, and affidavits to be completed for submission
Draft of proposed Agreement and/or Permit
Primary Management and Compliance Documents
5.2. Advertising Guidelines
The RFI/RFQ/RFP advertisement should:
provide a description of the RFI/RFQ/RFP opportunity including identification
of the Airport land and/or Improvements that are and/or may be available for
lease (subject property) and the General Aviation products, services, and/or
facilities that are and/or may be desired by the City;
provide instructions to proposers for obtaining the RFI/RFQ/RFP document;
and,
➢ identify the date, time, and method for submittals.
General Aviation Leasing/Rents and Fees Policy 24
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
APPENDIX
5.3. City Improvement Leasing Policy
The Director may, in its sole discretion, enter into a short-term (i.e., less than one-year)
Non -Commercial Aircraft T-Hangar Agreement which grants an entity the right to use
and/or occupy a City -owned T-Hangar at the Airport in accordance with the following
process. A Non -Commercial Aircraft T-Hangar Agreement shall, at a minimum, include
the provisions set forth in Appendix 5.4.
Application
Entities desirous of obtaining an Agreement to use a City Hangar shall complete and
submit a Hangar Lessee Application (Application) to the Director.
➢ In addition to the completed Application, entity shall pay all applicable fees
and/or other charges and provide a non -interest bearing deposit equal to two
month's rent (as stipulated in the Airport's Rents and Fees Schedule).
• If entity executes a Non -Commercial Aircraft Hangar Agreement, 50% of
the deposit shall be applied to the first month's rent. The remaining portion
of the deposit shall be held by the City as a non -interest bearing security
deposit.
➢ Upon receipt of the: (a) completed Application, (b) applicable fees and/or other
charges, and (c) deposit, the entity shall be placed in the last position on the
Hangar Waiting List (if applicable).
To be removed from the Hangar Waiting List, the entity shall notify the Director in writing.
At the time the entity is removed from the Hangar Waiting List, the non -interest bearing
deposit shall be refunded to the entity.
➢ If an entity is desirous of reapplying, the entity shall apply in accordance with
this section and be placed in the last position on the Hangar Waiting List.
Notification of Hangar Availability — If a City Hangar becomes available, the Director
shall contact the entity in the first position on the Hangar Waiting List.
➢ It is the entity's sole responsibility to keep a current address and telephone
number on file with the Director.
If the Director is unable to reach the entity in the first position by telephone on the Hangar
Waiting List, a certified letter will be sent to the address the entity has on file with the City.
➢ If the entity does not respond to the Director within 14 calendar days, the entity
shall not be eligible to lease the available Hangar.
➢ In the event an entity fails to respond on three consecutive occasions, the entity
shall be removed from the Hangar Waiting List and the deposit shall be forfeited
to the City.
General Aviation Leasing/Rents and Fees Policy 25
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
APPENDIX
If the entity in the first position does not respond within 14 calendar days of the Director
sending a certified letter, the Director shall contact the entity in the next position on the
Hangar Waiting List and so on.
Receipt of Notification of Hangar Offering — Upon receipt of notification of Hangar
availability, the entity shall respond to the Director within 14 calendar days in one of the
following ways:
accept the available Hangar, execute a Non -Commercial Aircraft Hangar
Agreement, and begin using and/or occupying the Hangar.
• Before acceptance of an available Hangar, it is the entity's sole
responsibility to ensure that the Hangar will accommodate entity's
Aircraft.
decline the available Hangar and maintain the entity's current position on the
Hangar Waiting List.
decline the available Hangar and request that the entity be removed from the
Hangar Waiting List, at which time, the deposit will be refunded to the entity.
Assignment of Hangar Without Aircraft Ownership — A Hangar shall not be used
and/or occupied unless the Aircraft is owned, leased, and/or operated by (under the full
and exclusive control of) the entity and evidence is provided to the Director within 14
calendar days from the date of accepting the available Hangar.
In the event the entity intends to purchase, lease, or acquire full and exclusive
control of the Aircraft, evidence (that the entity has purchased, is leasing, or
has acquired full exclusive control of the Aircraft) shall be provided to the
Director within 60 calendar days from the date of accepting the available
Hangar.
If the entity fails to provide the required evidence, the Non -Commercial Aircraft
Hangar Agreement shall be immediately terminated, the entity shall be
removed from the Hangar Waiting List, and the entity's deposit shall be forfeited
to the City.
Certificates of Insurance shall be delivered to the Director identifying industry standard
liability coverage for the non-commercial Aircraft in compliance with the PMCDs.
If the Lessee sells or otherwise disposes of the Aircraft, the Lessee may continue to use
and/or occupy the Hangar provided the entity is in compliance with this section.
Subleasing is not permitted and will result in immediate termination of the Non -
Commercial Aircraft Hangar Agreement and the entity's deposit shall be forfeited to the
City.
Aircraft Partnership — Each Aircraft partner shall provide proof of ownership or lease
and proof of liability insurance coverage to the Director.
General Aviation Leasing/Rents and Fees Policy 26
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
APPENDIX
Hangar Interest Transfer — Lessee may not transfer interest in the Hangar to an Aircraft
partner within two years of the date of the Aircraft partnership agreement on file with the
City.
Hangar Occupation as Contingency for Aircraft Sale — The sale of any Aircraft,
contingent upon the continued use of any Hangar, is not permitted. At the time of
purchase, the new owner of the Aircraft must vacate the Hangar.
Vacating a Hangar — Lessee shall provide written notice to the Director no less than 30
calendar days prior to vacating a Hangar.
Hangar Trades — Lessees may elect to trade Hangars, if mutually agreed and subject to
obtaining the prior written consent of the Director, in accordance with the following
requirements:
Each Lessee is in full compliance with the Non -Commercial Aircraft Hangar
Agreement.
Each Lessee must have used and/or occupied the Hangar for a period of not
less than 30 calendar days.
Prior written notification shall be provided to the Director at least 30 calendar
days prior to the proposed trade date.
Hangar trades will commence on the first day of the month.
5.4. Standard Sublease Form Requirements
The standard sublease form shall include, at a minimum, the following:
➢ Legal name, address, and contact information of the subleasing entity.
➢ Land and/or Improvement identification, location, and description.
➢ Term of sublease.
➢ Rights, obligations, permitted uses, and limitations of Operator and the
subleasing entity.
➢ Defaults, remedies, and termination of Operator and the subleasing entity.
➢ Compliance with the PMCDs and all applicable Legal Requirements.
➢ If subleasing for the purpose of Aircraft storage (Hangar or tiedown):
• Aircraft registration number, make, model, and maximum gross landing
weight.
• Requirement to provide a Certificate of Insurance identifying industry
standard liability coverage for the non-commercial Aircraft in compliance
with the PMCDs.
5.5. Establishment of Market Value
The City shall engage an Appraiser who meets the qualifications set forth in Appendix 5.6
to conduct an appraisal in compliance with the requirements set forth in Appendix 5.7 to
determine market value.
General Aviation Leasing/Rents and Fees Policy 27
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
APPENDIX
The Appraiser shall use current appraisal methods that are appropriate for appraising
airport land and/or Improvements used for General Aviation purposes.
➢ To determine market value, the Appraiser shall consider all three recognized
appraisal methods: cost approach, market data or sales comparison approach,
and income approach.
➢ Although application of all three approaches shall not be required, the
Appraiser must adequately explain the omission of any method.
➢ At a minimum, the Appraiser shall utilize the income approach (and the direct
capitalization technique) to derive the market value of the subject property.
Integral to this process, the Appraiser shall conduct an analysis of rents, fees,
or other charges for similar properties at comparable airports.
➢ The Appraiser shall consider each of the factors delineated in Section 4.2
including, but not limited to, identification of comparable airports, identification
of similar properties at comparable airports, property groupings (if applicable),
similar on -Airport properties, market conditions and trends, component rents,
and impacts of fees on rents.
➢ If using the cost approach to derive the replacement cost of the subject
Improvements, the depreciation deduction shall be based on the economic life
and the effective age of the subject Improvements. Widely recognized and
highly regarded national publications (such as Marshall Valuation Service) shall
be used as the basis for determining the economic life of the subject
Improvements.
The Appraiser shall use an appropriate and justifiable rate of return for airport properties.
➢ The capitalization rates utilized by the Appraiser shall be obtained through
relevant, reasonable, and appropriate methods and must be adequately
discussed in the appraisal report.
The subject property shall be appraised assuming that highest and best use is aviation
related.
The appraiser shall also assume that the subject property will be located on the Airport
and that access to the Infrastructure and amenities of the Airport shall be available.
Additionally, the appraisal shall meet the Uniform Standards of Professional Appraisal
Practice (USPAP).
5.6. Appraiser Qualifications
Appraisals for aeronautical land and/or Improvements shall be performed by an Appraiser
who shall be a Member, Appraisal Institute (MAI) or similarly designated and equally
qualified Appraiser who shall be certified by a recognized appraisal organization.
Appraiser must be certified by the Texas Appraiser Licensing & Certification Board
(TALCB) as a Certified General Appraiser.
General Aviation Leasing/Rents and Fees Policy 28
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
APPENDIX
➢ An out-of-state Appraiser may perform an appraisal provided that the Appraiser
(prior to conducting the appraisal) satisfies the TALCB's requirements by way
of reciprocity or otherwise.
Appraiser shall have working knowledge of the aviation industry and airports including
commercial entities (i.e., aviation businesses — FBOs and SASOs), Non -Commercial
entities (i.e., aircraft owners and operators), and related activities.
Appraiser shall be familiar with federal and state Legal Requirements and FAA
regulations, obligations, and guidance pertaining to valuing airport Improvements being
used for General Aviation purposes.
Appraiser shall have experience providing the same services at comparable airports.
Appraiser shall have performed a minimum of five appraisals involving airport
land and/or Improvements within the past five years.
• Prior to initiating work, Appraiser shall provide a list to the City identifying
the location, the type of appraisal conducted, and the extent of analysis
performed.
• Appraisals of non -aeronautical properties performed in connection with the
acquisition of such properties by an airport owner/operator shall not be
applied towards these requirements.
Appraisers who only conduct appraisals of off -airport (e.g., non -aeronautical) property (for
acquisition or other purposes) shall not qualify for the purposes of providing appraisal
services for aeronautical land and/or Improvements.
5.7. Appraisal Requirements
In addition to complying with all applicable appraisal standards, in preparing the appraisal
for the City, the Appraiser must comply with the following:
Reporting Requirements — General — The depth of the discussion and analysis
regarding the potential value impact of the following topics must be consistent with:
➢ the potential value impact itself; and
the reporting option utilized (Self -Contained Appraisal Report, Summary
Appraisal Report, or Restricted Appraisal Report).
Letter of Transmittal — Narrative Appraisal Reports — In addition to the value
conclusion(s), effective date of value, and property rights appraised, the letter of
transmittal must clearly set forth:
The extent of the appraisal process (Complete Appraisal or Limited Appraisal)
as well as the reporting option utilized (Self -Contained Appraisal Report,
Summary Appraisal Report, or Restricted Appraisal Report).
General Aviation Leasing/Rents and Fees Policy 29
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
APPENDIX
➢ Reference to, or inclusion of, any contingencies and/or special appraisal
assumptions which affect the validity of the appraisal and/or the reliability of the
value estimate(s).
➢ All estimates of value must be expressed as of the current date of the appraisal;
future dates of value are not acceptable unless otherwise directed by the
Director.
Market Value — All appraisal reports must include the Definition of Market Value
contained in the most current Dictionary of Real Estate Appraisal.
Regional, County, City, and Market Area (Neighborhood) Data — The analysis of
regional, county, city or town, and market area (neighborhood) data must be consistent
with the complexity of the appraisal assignment and the specific relevance of regional,
county, city, and market area factors to the subject property. The extent of the reporting
of regional, county, city, and market area data must be consistent with the reporting option
utilized.
Market Analysis/Market Conditions — The market analysis/market conditions section of
the appraisal report must contain data and analysis consistent with the complexity of the
appraisal assignment, with the focus on current market trends which affect the value and
exposure time of the subject property. This section should conclude with a statement
regarding the subject property's competitive position within the market. The extent of the
reporting of data must be consistent with the reporting option utilized.
Exposure Time — An estimate of exposure time must be included for each market
valuation scenario addressed in the appraisal and should be a logical extension of the
analysis of market conditions.
Site Description — Describe the physical characteristics of the site (size, shape,
topography, soil, and drainage conditions, frontage, access and exposure, street
Improvements, and utility availability). Additionally, the site description must include an
analysis of any special or unusual features or conditions and the effect on the utility or
value of the site. The extent of the reporting of the site description must be consistent with
the reporting option utilized.
When a site inspection reveals obvious potential environmental hazards, it is incumbent
upon the Appraiser to adhere to the requirements of USPAP in disclosure requirements.
Observations of obvious and significant evidence of potential Hazardous Materials waste
(supplemented by photographs) must be included in the appraisal report.
Zoning Descriptions — The zoning description must address the subject property's
conformity or nonconformity with current zoning and must include an analysis of land use
issues that affect (positively or negatively) the subject property's legally permissible uses.
Examples include pending zoning change, pending amendments to the General Plan,
open space overlay, pending changes in local Agency sphere of influence boundaries,
General Aviation Leasing/Rents and Fees Policy 30
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
APPENDIX
scenic/view corridor restrictions, and 14 CFR Part 77 Safe, Efficient Use, and
Preservation of the Navigable Airspace restrictions (e.g., height limitations, setbacks,
clear zones, etc.).
Taxes and Assessment Data — Taxes and assessment data must also include the
amount of any outstanding special assessments.
Description of Improvements — Describe the exterior and interior physical
characteristics of the structural Improvements (type, size, design or layout, structural
components, construction materials, equipment, and mechanical systems) and the quality
and condition of same (noting deferred maintenance, if any). Depending upon the type of
Improvements and market standards for the subject property, size should be expressed
in a gross, rentable, and usable area basis. Comment is required regarding the functional
utility and any significant lack of utility relative to market standards requires expanded
analysis. The description of site Improvements (e.g., parking area, landscaping, etc.)
must include physical characteristics. The extent of reporting of the description of
Improvements must be consistent with the reporting option utilized.
Remaining Economic Life — If using the cost approach in the valuation analysis, the
description of the existing Improvements must include a statement as to remaining
economic life of the subject Improvements.
➢ Widely recognized and highly regarded national publications (e.g., Marshall
Valuation Service) shall be used as the basis for determining the economic life
of the subject Improvements.
Current Occupancy — Current occupancy must be reported together with current lease
terms and conditions (as applicable).
Operating History — Income Properties — When applicable, a three year operating
history must be reported and analyzed and prior rental income, expenses, and occupancy
rates must be presented in reasonable detail.
Highest and Best Use — All appraisals of proposed development must include an
analysis of the highest and best use of the land as if vacant and the highest and best use
as proposed. For existing Improvements which are clearly representative of highest and
best use, the analysis of the land (as if vacant) and the property (as improved) can be
abbreviated. In cases of excess land or where existing Improvements are not
representative of highest and best use, an expanded analysis is required. The extent of
the reporting of the highest and best use analysis must be consistent with the reporting
option utilized.
With additional regard to proposed developments, the cost approach should be utilized
to test the financial feasibility of the proposed development. When cost exceeds value or
when the indication of project profitability is below typical expectations for similar
developments, an expanded highest and best use analysis is required.
General Aviation Leasing/Rents and Fees Policy 31
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
APPENDIX
Comparable Data Documentation — Comparable sales and rental data are to be
detailed and documented as follows:
Self -Contained Appraisal Reports and Summary Appraisal Reports must
contain the summary details of each item of market data utilized in the valuation
analysis. This may be accomplished by the use of summary tables in the body
of the appraisal report. Documentation as to verification and recording data
must be retained in the appraisal file.
Restricted Appraisal Reports need not contain the details of each item of
market data utilized in the valuation analysis. However, specific details,
including documentation as to verification and recording data, must be retained
in the Appraiser's files.
Rental data (for Airport land and/or Improvements) is to be derived from an analysis of
comparable airports having similar properties.
Adjustment Grids (optional) — Adjustments to the comparable sales or rental data may
be presented in a grid format and adjustments may be expressed on a qualitative and/or
quantitative basis.
All adjustments contained in an adjustment grid must be adequately explained in the
appraisal report.
When an adjustment grid is not utilized, the appraisal report must contain sufficient
narrative to enable the reader to understand the comparative analysis.
Overall capitalization rates and discount rates must be supported by data and analysis.
For Self -Contained and Summary Appraisal Reports, the data and analysis
must be summarized within the report. For Restricted Appraisal Reports, the
data and analysis must be contained in the Appraiser's files.
Exhibits/Photographs — Required photographs and exhibits, as applicable, shall
include:
➢ Photographs of the subject property
➢ Location map(s)
➢ Airport Layout Plan
➢ Site Plan/Plot Plan
➢ Complete Legal Description (if not included in the body of the report).
5.8. Dispute Resolution
If a Lessee disagrees with the conclusion (Market Rent or market value) reached, the
Lessee may, at Lessee's risk, cost, and expense, engage a second firm (aviation
consultant or Appraiser) to conduct an independent Rent Study as set forth in Section 4.2
or appraisal as set forth in Appendix 5.7. If the conclusions reflect a variance of 10% or
less, the results shall be averaged to determine the conclusion.
General Aviation Leasing/Rents and Fees Policy 32
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)
Lubbock Preston Smith
International Airport
APPENDIX
If the variance exceeds 5% and an agreement cannot be reached between the City and
the Lessee regarding the conclusion, the first and second firms shall mutually select a
third firm who shall meet the qualifications set forth in Section 4.2.
➢ The third firm shall make a determination regarding the conclusion based on a
review of the first and second Rent Studies (or appraisals).
➢ If the first and second firms are unable to agree upon the third firm, the City
shall appoint a third firm who shall meet the qualification stipulated in Section
4.2 to make a determination regarding the Market Rent (or the market value).
The third firm may request a hearing at which the first and second firms shall provide
additional information, data, documentation, and/or clarification regarding the conclusions
as the third aviation firm may require. The third firm shall have the right to gather, analyze,
and consider additional information, data, and documentation as the third firm deems
relevant, reasonable, and appropriate.
The third firm shall make a final determination based on a review of the two conclusions
and any additional information, data, documentation, and/or clarification provided by the
first and second firms and/or gathered or analyzed by the third firm. The decision of the
third firm regarding the conclusion shall be accepted by the City and Lessee and shall be
legally binding.
All costs and expenses associated with the work of the third firm shall be paid equally by
the City and the Lessee.
➢ During any period when there is disagreement between the City and the Lessee
regarding a rent adjustment, the Lessee shall be responsible for the payment
of the adjusted rent as recommended by the firm first engaged by the City.
Once the disagreement is resolved, any difference between the rent paid and
the final determined rent shall be paid to the City or credited to the Lessee's
account (as appropriate).
General Aviation Leasing/Rents and Fees Policy 33
City of Lubbock, Lubbock Preston Smith International Airport (1212212017)