HomeMy WebLinkAboutResolution - 3281 - Addendum #1 To Lease Agreement - Delta Airlines - Operating Space, LIA - 01_11_1990Resolution # 3281
January 11, 1990
Item #15
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RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and
directed to execute for and on behalf of the City of Lubbock Addendum No. 1
to the Airline Lease Agreement by and between the City and Delta Air Lines,
Inc., attached herewith, which shall be spread upon the minutes of the
Council and as spread upon the minutes of this Council shall constitute and
be a part of this Resolution as if fully copied herein in detail.
Passed by the City Council this 11th day of January , 1990.
MCM N , MAYOR
ATTEST:
e boyo, city secretary
APPROVED AS TO CONTENT:
Bern Case, Director of Aviation
APPROVED AS TO FORM:
Harold Wi ard, Assistartt City
Attorney
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ADDENDUM NO. 1
TO AIRLINE LEASE AGREEMENT
BY AND BETWEEN
THE CITY OF LUBBOCK, TEXAS,
AND
DELTA AIR LINES, INC.
WHEREAS, the City of Lubbock, Texas, hereinafter
referred to as "City", and Delta Air Lines, Inc., here-
inafter referred to as "Lessee", executed an agreement on or
about February 23, 1984, in which Lessee agreed to lease
from City space and facilities in the terminal building at
Lubbock International Airport sufficient to conduct its
business of air transportation at said Airport; and
WHEREAS, both City and Lessee, for good and valuable
consideration, desire to amend the agreement which both such
parties executed on or about February 23, 1984;
NOW THEREFORE, the Certificated Passenger Airline Lease
executed by City and Lessee on or about February 23, 1984,
is hereby amended as follows:
1. Article I, Section 1.03, Paragraph (I) of said
lease agreement is hereby amended to read as follows:
(I) The right to provide food and beverages for
consumption in flight by passengers and crews
of Lessee or by passengers and crews of any
other Certificated Passenger Air Transporta-
tion Companies. Lessee shall also have the
right to arrange for food and beverages to be
provided to its passengers and crew members
when said passengers or crew members are
grounded at the Airport because of weather,
mechanical conditions or other similar emer-
gency conditions; provided, however, that if
said passengers or crew members are to be
given food and beverages at the Airport,
Lessee shall arrange for this service from
the person, firm or corporation holding
concession rights from the City for food and
beverage service at the Airport. In addi-
tion, Lessee may furnish, free of cost,
coffee and doughnuts to its passengers, pro-
vided such items are purchased through the
person, firm or corporation holding conces-
sion rights from the City for food and
beverage service at the Airport. Lessee
shall be relieved of its obligation under
this subparagraph (I) to purchase food and
beverages from the person, firm or corpora-
tion holding concession rights at the Airport
if such concessionaire is unable or unwilling
to provide the food and beverages requested
in a timely manner. Except to the extent
hereinabove specifically provided, nothing in
this subparagraph (I) shall be deemed to give
Lessee the right to maintain or operate at
the Airport a cafeteria, restaurant, bar,
cocktail lounge or vending machines or in any
manner otherwise providing for the sale of
food or beverages to the public.
2. Article V, Section 5.01 of said lease agreement is
hereby amended to read as follows:
Section 5.01 - Term. A. The initial term of
this Lease shall commence on the 1st day of June,
1983, and end on the 30th day of September, 1999,
subject, however, to earlier termination as here-
inafter provided under Article XI and to rene-
gotiation of the Maintenance and Operation portion
of the rentals and fees as hereinafter provided;
the first such renegotiation shall commence upon
written demand by either party at least ninety
(90) days prior to April 1, 1985. Subsequent
renegotiations shall commence upon written demand
by either party at least ninety (90) days prior to
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April 1, 1988; April 1, 1991; April 1, 1994 and
April 1, 1997; such dates being the time of
expiration of anniversary years of this Lease. In
the event that no written demand for renegotiation
is made by either party at least ninety (90) days
prior to the expiration of such anniversary years,
the rentals and fees then current shall apply for
the succeeding three year period.
B. Thirteen (13) months prior to the
expiration of this Lease, City shall notify
Lessee, in writing, that negotiations should
commence to enter into a new lease agreement.
Lessee shall upon receipt of such notification
arrange for a meeting with City if Lessee desires
to execute a new lease with City. The Lessee and
City shall meet and commence said negotiations
within thirty (30) days of the written
notification hereinabove referred to and shall
continue such negotiations with reasonable
diligence so that a new lease shall be executed by
the parties and be in effect upon the expiration
of the term of this lease agreement. In the event
the parties hereto have negotiated with diligence
and are unable to conclude a new lease agreement
before the expiration of the term of this lease
agreement and it is evident that additional time
is needed to conclude such new lease agreement,
then in such event the Lessee may apply for an
extension of time in which to operate at the
Airport and conclude the negotiations, which
extension may be granted by the Director of
Aviation. Such extension shall be for no longer
period of time than twelve (12) months from the
date of termination of this Lease. Any extension
of this Lease shall be in writing and signed by
Lessee and the Director of Aviation. During any
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extension, Lessee shall be subject to the rates,
fees, rentals and other charges established by the
Airport Board for Certificated Passenger Air
Transportation Companies that are month -to -month
tenants. Both City and Lessee herein agree,
however, that all negotiations for any new lease
shall be conducted in good faith.
3. Article V of said lease agreement is hereby
amended by adding Section 5.06 thereto, which shall read as
follows:
Section 5.08 - Duty to Prevent Unauthorized
Access to the Premises. Lessee shall prohibit and
prevent access or entry into the Exclusive Leased
Premises and any sterile area by any person or
property whose access or entry is not authorized
and Lessee agrees that in the event that a civil
penalty or fine is levied against the Airport or
City as a result of Lessee's failure to comply or
act in accordance with this provision, or any
other applicable federal, state or local statutes,
ordinances, rules and regulations affecting the
use, occupancy or operation of any of said
premises, Lessee shall immediately reimburse the
Airport or City the full amount of the penalty or
fine and correct the act or omission leading to,
causing or contributing to the violation. The
term "sterile area" as herein used shall mean any
area at the Airport which Lessee possesses or
controls either singularly or in conjunction with
other air carriers and to which access is
controlled by the inspection of persons and
property in accordance with any security program
mandated by the Federal Aviation Administration.
4. Article VI, Sections 6.01, 6.02 and 6.03 of said
lease agreement are hereby amended to read as follows:
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Section 6.01 - Rental for Exclusive Terminal
Building Space. Rental for the 3,882 square feet
of exclusive leased space within the terminal
building of the Airport, as described in Section
1.01, shall include a fixed fee of $5.63 per sq.
ft. per year (to cover debt service) or $21,855.66
per year.
In addition to the fixed fee above set forth,
a variable sum shall be charged to Lessee for
Maintenance and Operation (M & 0) costs as
follows:
(a) The charge for M & 0 prior to April 1,
1988, shall be assessed at the rate of
$2.62 per sq. ft. per year; and
(b) Effective April 1, 1988, the charge for
M & O shall be increased to $2.87 per
sq. ft. per year; and
(c) Effective October 1, 1988, the charge
for M & O shall be increased to $3.87
per sq. ft. per year, subject to CPI
adjustments as hereinafter set forth;
and
(d) Effective October 1, 1989, the charge
for M & 0 shall be increased to $4.87
per sq. ft. per year, subject to CPI
adjustments as hereinafter set forth;
and
(e) Effective October 1, 1990, the charge
for M & O shall be increased to $5.87
per sq. ft. per year, subject to CPI
adjustments as hereinafter set forth.
Notwithstanding any of the rates set forth in
subsections (c) through (e) of this section and
further notwithstanding any provision to the
contrary in this Lease, effective October 1, 1988,
and each year thereafter on the same month and day
:01.1W
for the remainder of the term of this Lease, the M
& O portion of the rental for exclusive leased
space due under this section shall be adjusted
upward or downward in accordance with the increase
or decrease for the same period of time in the
Consumer Price Index published by the Bureau of
Labor Statistics of the United States Government,
hereinabove and hereinafter called "CPI". It is
the intention of the parties hereto that the
charges set forth in subsections (c) through (e)
of this section shall vary upward or downward in
accordance with the CPI.
Section 6.02 - Landing Fee. The fee for the
use of the landing area and facilities necessary
therefor as granted hereunder, except those for
which rentals are specifically provided elsewhere
herein, shall be as follows:
32.5q effective October 1, 1981
35q effective October 1, 1983
400 effective October 1, 1986
per 1,000 pounds of the approved maximum gross
landing weight of each actual flight operated.
Effective October 1, 1988, the fee for the
use of the landing area and facilities necessary
therefor as granted hereunder, except those for
which rentals are specifically provided elsewhere
herein, shall be .45 per 1,000 pounds of the
approved maximum gross landing weight of each
actual flight operated. Effective October 1,
1991, the fee for the use of such landing area and
facilities shall be .50 per 1,000 pounds of the
approved maximum gross landing weight of each
actual flight operated. Effective October 1,
1994, the fee for the use of such landing area and
facilities shall be .55 per 1,000 pounds of the
approved maximum gross landing weight of each
actual flight operated. Effective October 1,
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1997, the fee for the use of such landing area and
facilities shall be .60 per 1,000 pounds of the
approved maximum gross landing weight of each
actual flight operated.
Not later than the fifth day of each month,
Lessee shall file with the Director of Aviation a
report of Lessee's actual landings at the Airport
for the preceding month, which report shall
include the number and type of aircraft making
such landings.
The term "approved maximum gross landing
weight" for any aircraft, as used herein, shall be
the maximum landing weight approved by the Federal
Aviation Administration for landing such aircraft
at the Airport. Lessee shall provide the City
with a summary of the "approved maximum gross
landing weights" for each type of aircraft it
operates at the Airport. Five hundred (500)
pounds or any larger part of one thousand (1,000)
pounds shall be counted as if a whole one thousand
(1,000) pounds and any smaller part shall be
disregarded.
Section 6.03 - Rental for Common Use Area.
A. Common Bag Claim Area
Rental for the 16,939 sq. ft. common bag
claim area shall be charged jointly to Lessee and
all other Certificated Passenger Air Transporta-
tion Companies which now or may hereafter have
valid leases at the Airport according to the
common bag claim area formula, as hereinafter
defined, and Lessee herein agrees to pay its pro
rata portion of such rental, which shall include a
fixed fee of $5.63 per sq. ft. per year (to cover
debt service) or $95,366.57 per year.
In addition to the fixed fee above set forth,
a variable sum shall be charged jointly to Lessee
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and all such Air Transportation Companies for
Maintenance and Operation (M & O) costs as
follows:
(a) The charge for M & O prior to April 1,
1988, shall be assessed jointly at the
rate of $2.62 per sq. ft. per year; and
(b) Effective April 1, 1988, the charge for
M & O shall be increased to $2.87 per
sq. ft. per year; and
(c) Effective October 1, 1988, the charge
for M & O shall be increased to $3.87
per sq. ft. per year, subject to CPI
adjustments as hereinafter set forth;
and
(d) Effective October 1, 1989, the charge
for M & 0 shall be increased to $4.87
per sq. ft. per year, subject to CPI
adjustments as hereinafter set forth;
and
(e) Effective October 1, 1990, the charge
for M & O shall be increased to $5.87
per sq. ft. per year, subject to CPI
adjustments as hereinafter set forth.
Notwithstanding any of the rates set forth in
subsections (c) through (e) of this section and
further notwithstanding any provision to the
contrary in this Lease, effective October 1, 1988,
and each year thereafter on the same month and day
for the remainder of the term of this Lease, the M
& O portion of the rental for common bag claim
area due under this section shall be adjusted
upward or downward in accordance with the increase
or decrease for the same period of time in the
Consumer Price Index published by the Bureau of
Labor Statistics of the United States Government,
hereinabove and hereinafter called "CPI." It is
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the intention of the parties hereto that the
charges set forth in subsections (c) through (e)
of this section shall vary upward or downward in
accordance with the CPI.
The total common bag claim area charges shall
be prorated among all Certificated Passenger Air
Transportation Companies at the Airport based on
the following formula: 20% of the total charges
shall be divided equally among all Certificated
Passenger Air Transportation Companies and the
remaining 80% prorated based on each such
carrier's percentage of enplanements in the
preceding month. Not later than the fifth day of
each month, the Lessee shall file with the Direc-
tor of Aviation a summary of the actual number of
passenger enplanements on Lessee's aircraft and
the actual number of departures of Lessee's
aircraft from the Airport for the preceding month.
Lessee agrees to pay its calculated pro rata
amount of common bag claim area rental monthly in
accordance with the above common bag claim area
formula.
B. Common Boarding Lounge Area
Approximately 51,685 square feet of
space and nine (9) loading gates are available for
use as common boarding lounge area. Both City and
Lessee agree that for purposes of this Lease the
common boarding lounge area shall consist of those
six (6) gates that formed the common boarding
lounge area before the Airport was expanded and
remodeled to provide additional space for airline
ticketing and operations facilities, but such
common area shall be enlarged to include an addi-
tional gate for each Certificated Passenger Air
Transportation Company that either begins or has
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already begun providing Air Transportation
services at the Airport after January 1, 1987.
Initially, the base rental rate for the
common boarding lounge area shall be $2.62 per sq.
ft. per year. Effective April 1, 1988, the base
rental rate for the common boarding lounge area
shall be $2.87 per sq. ft. per year. Effective
October 1, 1988, and each year thereafter on the
same month and day for the remainder of this
Lease, the base rental rate for the common board-
ing lounge area shall be adjusted upward or down-
ward in accordance with the increase or decrease
for the same period of time in the Consumer Price
Index published by the Bureau of Labor Statistics
of the United States Government, hereinafter
called "CPI." In addition to any increase or
decrease in the base rental rate resulting from
changes in the CPI, $1.00 per sq. ft. will auto-
matically be added to the base rental rate effec-
tive October 1, 1988, and a like sum shall auto-
matically be added to such base rental rate on the
same month and day of each of the next two
succeeding years so that the base rental rate,
subject to adjustment for changes in the CPI,
shall be as follows:
(a) April 1, 1988, to October 1, 1988 --
$2.87 per sq. ft. per year x 51,685
square feet = $148,335.95 (yearly
rental);
(b) October 1, 1968, to September 30, 1989 -
- $3.87 per sq. ft. per year x 51,685
square feet = $200,020.95 (yearly
rental);
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(c) October 1, 1989, to September 30, 1990 -
- $4.87 per sq. ft. per year x 51,685
square feet = $251,705.95 (yearly
rental);
(d) October 1, 1990, to September 30, 1991 -
- $5.87 per sq. ft. per year x 51,685
square feet = $303,390.95 (yearly
rental).
Rental of the common boarding lounge area
shall be charged jointly to all Certificated
Passenger Air Transportation Companies which now
or may hereafter have leases at the Airport
according to the common boarding lounge area
formula, as herein defined, and in accordance with
the following calculation, and Lessee herein
agrees to pay its pro rata portion of such rental:
(6/9 X base rental rate X 51,685 square feet =
annual rental)
However, the fraction in the above calculation
shall be enlarged by one -ninth each time that a
Certificated Passenger Air Transportation Company
either has begun or does begin providing Air
Transportation services at the Airport after
January 1, 1987. In like manner, the fraction
shall be reduced by one -ninth whenever any
Certificated Passenger Air Transportation Company
ceases providing Air Transportation services at
the Airport after January 1, 1987. Except,
however, such fraction shall not be reduced if any
Certificated Passenger Air Transportation Company
with an unexpired lease takes bankruptcy and
refuses to surrender its lease or allow the City
to reclaim the space so occupied by such Air
Transportation Company for any reason whatsoever.
City and Lessee hereby agree that two (2) new
Certificated Passenger Air Transportation Compa-
nies have commenced providing Air Transportation
services at Lubbock International Airport after
January 1, 1987, and that the fraction in the
formula as above set forth shall be adjusted in
accordance with the above described procedure from
the date such new Air Transportation Companies
commenced services, which dates were November 12,
1987, and January 31, 1989, respectively. City
and Lessee also hereby agree that the Certificated
Passenger Air Transportation Company which began
providing Air Transportation services at the
Airport on January 31, 1989, ceased providing such
services and discontinued operations at the
Airport on July 31, 1989.
The total common boarding lounge area charges
shall be prorated among all Certificated Passenger
Air Transportation Companies at the Airport based
on the following formula: 20% of the total charges
shall be divided among all Certificated Passenger
Air Transportation Companies based on the percent-
age of departures in the previous month, and 80%
shall be prorated based on each such carrier's
percentage of enplanements in the previous month.
Lessee agrees to pay its calculated pro rata
amount of common boarding lounge area rental
monthly in accordance with the above common board-
ing lounge area formula.
Loading gates which have not been designated
as common boarding lounge area shall not be
considered as such unless added to the common area
in accordance with this Section 6.03. However,
Lessee may at no additional charge utilize the
loading gates not included in the common area for
diversion or off -schedule operations. Lessee may
similarly use these loading gates for charter
flights after negotiating a use fee with the
Airport Board of City. City herein agrees to
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train Lessee's personnel to operate such loading
gates for these purposes.
5. Article VI, Section 6.06 of said lease agreement
is hereby amended by adding a paragraph at the end of such
section which shall read as follows:
Lessee shall pay City a late payment charge
of five percent (5%) of the total amount of
rentals, fees and other charges payable if payment
is not made when due.
6. Article VI of said lease agreement is hereby
amended by adding Section 6.08 thereto, which shall read as
follows:
Section 6.08 - Security Charges. Notwith-
standing anything to the contrary contained in
this lease agreement, a charge of twenty-five
cents (250) shall be assessed to Lessee for each
of Lessee's enplaned passengers at the Airport for
backup security reimbursement. An enplaned
passenger is any person that initially boards an
airplane at the Airport or any person that leaves
an airplane and reboards an airplane at the
Airport.
7. Article VIII, Section 8.02, Paragraph (A) of said
lease agreement is hereby amended to read as follows:
(A) The right to further develop or improve the
landing area and other portions of the Airport as
City deems necessary. City agrees to advise
Lessee of any proposed capital expenditure in
excess of $100,000 and to consult with Lessee
prior to undertaking such capital expenditure.
However, nothing in this Section 9.02 or elsewhere
in this Lease shall be construed as a delegation
of the City's authority to determine when such
capital expenditures are deemed necessary. If
feasible, such improvements shall be made in a
manner which will cause Lessee as little
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inconvenience as possible. Lessee shall not be
assessed any rentals, fees or other charges for
such improvements unless Lessee occupies or
utilizes such improvements either exclusively or
in conjunction with other air carriers, or the
improvements are required by the Federal Aviation
Administration or for the safe operation of the
Airport.
8. Article XIII of said lease agreement is hereby
amended by adding Section 13.20 thereto, which shall read as
follows:
Section 13.20 - Understanding of the Parties. City
herein agrees not to assess Lessee any rates for rentals,
fees and other charges less favorable than those rates for
rentals, fees and other charges assessed to standard short-
term tenants and month -to -month tenants for comparable space
or facilities. However, City reserves the right to assess
higher rates for rentals, fees and charges to short-term and
month -to -month tenants in the future. A short-term tenant
is herein defined to mean a Certificated Passenger Air
Transportation Company other than a tenant at will or hold
over tenant which has a lease agreement with the City with
an initial term of less than three (3) years. A month -to -
month tenant or tenant at will is herein defined to mean a
Certificated Passenger Air Transportation Company which is
neither a long-term tenant nor a short-term tenant at the
Airport and whose business relationship with the City is on
a month -to -month basis. A long-term tenant is herein
defined to mean a Certificated Passenger Air Transportation
Company which has a lease agreement with the City with an
initial term of three (3) or more years.
9. Notwithstanding the date on which this ADDENDUM is
executed, Lessee herein agrees to pay City rentals for
exclusive leased space and common areas retroactively in
accordance with amended Sections 6.01 and 6.03 as though
this ADDENDUM had been executed and became effective on
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April 1, 1988. However, in calculating such rentals, Lessee
shall be given credit for those rentals already paid to City
since April 1, 1988. Any rentals due City after such calcu-
lations are made shall be immediately due and payable upon
execution of this ADDENDUM. If such calculations indicate
that rentals have been overpaid, Lessee shall receive a
credit for such overpayments.
10. Notwithstanding the date on which this ADDENDUM is
executed, Lessee herein agrees to pay City landing fees
retroactively in accordance with amended Section 6.02 as
though this ADDENDUM had been executed and became effective
on October 1, 1988. However, in calculating such landing
fees, Lessee shall be given credit for those landing fees
already paid to City since October 1, 1988. Any landing
fees due after such calculations are made shall be immedi-
ately due and payable upon execution of this ADDENDUM. If
such calculations indicate that landing fees have been over-
paid, Lessee shall receive a credit for such overpayments.
11. The rentals and fees set forth in amended Sections
6.01, 6.02 and 6.03, as modified by this ADDENDUM, shall
remain in force and effect according to the terms set forth
in the above mentioned sections unless such rentals and fees
set forth in said amended sections, above named, are renego-
tiated.
12. In the event of any conflict between the provi-
sions of this ADDENDUM and the provisions of the said lease
agreement which this ADDENDUM amends and modifies, the
provisions of this ADDENDUM shall be controlling and shall
define and govern the business relationship between the City
and Lessee.
13. The location of the Exclusive Leased Premises and
the Non -Exclusive Use Premises herein leased to Lessee are
each designated and set forth on Exhibit B attached hereto
and by this reference made a part of this ADDENDUM for all
purposes.
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14. Nothing in this ADDENDUM shall ever be construed
or understood as a delegation or surrender of the City of
Lubbock's governmental authority.
Executed this 11th day of January , 1989.
CITY OF LUBBOCK
BY: 5•00� _
B.C. McMIN , MAYOR
ATTEST:
Ran tte Boyd, City 4rebretary
APPROVED AS TO CONTENT:
"�-�•' ^^"-- Director
of Aviation
APPROVED AS TO FORM:
&A-4-4 1 '0
rWi a d Assi int
City Attorney
DELTA A/IR LINES, INC.
BY:
Thomas J. Roeck, Jr.
Senior Vice President -Finance
ATTEST:
�and
� Chief Financial Officer
;ASSISTANT 810§fikgf
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