HomeMy WebLinkAboutFULL EXEC FMV Cycle_rent language_term - RES 5457SIXTH AMENDMENT TO THE LEASE AGREEMENT INITIALLY BETWEEN SKY
SERVICES, INC., THEN AUBURN FLIGHT SERVICES AND CURRENTLY SPAROW
TANG, DBA CASCADE HELICOPTER SERVICES AND THE CITY OF AUBURN
THIS AMENDMENT is made and entered into this C day of
2019, by and between the CITY OF AUBURN, a municipal corporation of the State of
Washington (hereinafter referred to as the "CITY"), and Sparrow Tang, DBA Cascade
Helicopter Services, successor of Sky Services and Auburn Flight Services (hereinafter referred
to as Lessee), as an amendment to the Lease Agreement between the parties for land located on
the Auburn Municipal Airport ("Airport") dated the 27th day of February, 1978.
WITNESSETH:
WHEREAS, the City entered into a Fixed Base Lease with Sky Services for aviation related
use of property at the Auburn Municipal Airport, authorized under Resolution 866; and
WHEREAS, Sky Services has been succeeded by Auburn Flight Services and currently
Cascade Helicopter Services; and
WHEREAS, The Lease Agreement has been previously been amended five times,
authorized under Resolutions 893, 2003, 3065, 3181 & 5144; and
WHEREAS, both parties desire to extend the Lease for the 50 year renewal term that was
established in Amendment V of the Lease although Lessee failed to provide timely written notice
of such desire as required by Section 31 of the Lease; and
WHEREAS, Sections 6 of the Lease Agreement as amended in Section 3 of Amendment
II provides for rent adjustments of the Premises,
NOW THEREFORE in consideration of their mutual covenants, conditions and promises,
the Parties agree as follows:
Section 4 "Term" of the Lease is amended as follows:
The initial term of this Lease shall be for a period of forty (40) years, commencing on the 1st day
of June, 1978 and terminating on the 315t day of May, 2018. Upon expiration, the term is
extended an additional fifty (50) years from that date.
Section 3 of Amendment II as it replaces in its entirety Section 6 of the Original Lease
Agreement is replaced in its entirety with the following:
6. Rental Rate and Rate Adjustment
Sixth Amendment to Lease Agreement between COA & Sky Services, Inc.
Original Lease approved under Resolution NO. 866
(a). The Monthly Base Rent will be adjusted on June 1 of every calendar year ending in a "2" or
" T' during the term of this lease by a multiplier equal to the change in the Price Index (PI)
pursuant to the procedure set forth in Section 6(c) below with the first PI adjustment
commencing June 1, 2022. Notwithstanding the foregoing, Monthly Base Rent will be adjusted
every five (5) years, commencing on January 1, 2025, to equal the "fair market rental value"
(FMV) of Auburn Airport land, pursuant to the procedure set forth in Section 6(d) below.
(b). Definitions: The adjusted Monthly Base Rent will be determined in accordance with the
formula set for in Section 6(c) below. In applying the formula, the following definitions apply:
(1) "Bureau" means the U.S. Department of Labor, Bureau of Labor Statistics or any
successor agency.
(2) "Price Index" means the Consumer Price Index for the month of February for all
Urban Consumers, All Items (Seattle -Tacoma -Bellevue) issued from time to time by
the Bureau, or any other measure hereafter employed by the Bureau in lieu of the
price index that measures the cost of living or if said Bureau should cease to issue
such indices and any other agency of the United States should perform substantially
the same function, then the indices issued by such other agency.
(c.). The adjusted Monthly Base Rent shall be determined by multiplying the Monthly Base Rent
being adjusted by a multiplier equal to the cumulative change in the Price Index over the
previous 24 months ending in February of the adjustment year, computed as follows:
(Cumulative percentage change in Price Index over previous 24 months ending in February) x
(current Monthly Base Rent) _ (Adjusted Monthly Base Rent)
(d). Each five (5) years, commencing on January 1, 2025, the Monthly Base Rent will be revised
based upon an appraisal establishing fair market rental value of Auburn Airport land, excluding
rental value of any Lessee constructed Improvements. Lessor will retain and pay the costs of an
MAI appraiser. The annual adjustment formula set forth in Sections 6(b) & (c) will not be
applied each such fifth (51h) year. Lessor may, at its discretion, utilize an appraisal completed
within 12 months prior to the date of the periodic five year adjustment. Additionally, this
appraisal may be used by Lessor for setting rates for leases other than this Lease. In the event
Lessee disagrees with Lessor's appraisal, Lessee may, at their own expense, retain a second
appraisal. Lessor and Lessee will then attempt to negotiate a lease rate. If these negotiations are
unsuccessful, the parties will mutually agree on the selection of an arbitrator. The costs of
arbitration will be shared equally. The arbitrator's determination will be based upon the
appraisals, but in no event will the new Monthly Base Rent be lower than the Monthly Base Rent
in effect at the time of arbitration. The decision of the arbitrator regarding the increases will be
final. In the event of ongoing negotiations or arbitration, the determined rental rate will be made
retroactive to January 1 of the current FMV cycle.
Sixth Amendment to Lease Agreement between COA & Sky Services, Inc.
Original Lease approved under Resolution NO. 866
[SIGNATURES ON THE FOLLOWING PAGES]
Sixth Amendment to Lease Agreement between COA & Sky Services, Inc.
Original Lease approved under Resolution NO. 866
Dated and Signed on this 6 day of 5P , 2)4,C � Z,,-- , 2019
Sparrow Tang DBA Cascade Helicopter
Services
N e: Title:
STATE 0F,W*51 @N— )
ss.
County of Sys (�)
Findividual
lic or other officer completing
te verifies only the Identity of
who signed the document to
rtificate is attached, and not
ess, accuracy, or validity of
that document.
The undersigned Notary Public her certifies:: awn this ( day of �r
20 , personally appeared before me (fir (name),
I(L, tto me known to be th& individual(* described in
and who executed the within instrument, and acknowledged that he/she -signed and sealed the same
as his/her —free and voluntary act and deed, for the purposes and uses therein mentioned, ftnd-en
In Witness Whereof I have hereunto set my hand and affixed my official seal the day and
year first above written.
=VALARIE A. WILEY
4frglo—
CoMM.# 2277144 wNOTARY PUBLIC•CALIFORNIANSISKIYOU COUNTY
=Fo,MY Comm. EXP. MAR. 9, 2023
Notary Public in and f
Residing at
My com ission expires
Sixth Amendment to Lease Agreement between COA & Sky Services, Inc.
Original Lease approved under Resolution NO. 866
Dated and Signed on this day of '-�c 2019
City of Auburn
X;,b, lt'6w
N/Ityor: Nanc Ir
us
Approved as to form.
City Attorney: Steven L. ross
STATE OF WASHINGTON )
ss.
County of )
The undersigned Notary Public hereby certifies: That on this'-- day of
20 1�, personally appeared before me �� ��� , -\", , (name),
o-" (title), to me known to be the individual(s) described in
and who executed the within instrument, and acknowledged that he/she signed and sealed the same
as his/her free and voluntary act and deed, for the purposes and uses therein mentioned, and on
oath stated that he/she was duly authorized to execute said document on behalf of
In Witness Whereof I have hereunto set my hand and affixed my official seal the day and
year first above written.
pN
Notary Public in and for the State of Washington,
N ° • �� = Z Residingat
p
�o`_ _ My commission expires
4-09'
OF
Sixth Amendment to Lease Agreement between COA & Sky Services, Inc.
Original Lease approved under Resolution NO. 866