HomeMy WebLinkAbout5806RESOLUTION NO. 5806
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
AUBURN, WASHINGTON, AUTHORIZING THE MAYOR TO
EXECUTE AN AMENDMENT TO THE AUBURN MUNICIPAL
AIRPORT LAND LEASE WITH CASCADE HELICOPTER
SERVICES RELATING TO THE IMPLEMENTATION OF THE
2025 FAIR MARKET VALUE LEASE RATE ADJUSTMENT
AND OTHER TERMS
WHEREAS, the City of Auburn has a land lease located on the Auburn Municipal
Airport ("Airport") with Cascade Airframe Repair Inc., DBA Cascade Helicopter Services
("Cascade"), successor in interest to Sky Services; and
WHEREAS, the lease contains a Fair Market Valuation ("FMV") rent escalation
clause; and
WHEREAS, the appraisal establishing the FMV rent for the 2025 term produced a
rate that is substantially higher than the 2024 lease rate; and
WHEREAS, on October 7th, 2024 the Auburn City Council approved Resolution
5785 authorizing the Mayor to execute lease amendments with the Airport land lease
tenants, including Cascade; and
WHEREAS, Cascade never executed the amendment authorized in Resolution
5785. Instead, Cascade desired to negotiate different terms in exchange for providing
certain services and benefits to the Airport not provided by the other tenants.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, HEREBY RESOLVES as follows:
Section 1. The Mayor is authorized to execute the lease amendment attached
as Exhibit A.
Resolution No 5806
January 7, 2025
Page 1 of 2
Section 2. The Mayor is authorized to implement such administrative
procedures as may be necessary to carry out the directives of this legislation.
Section 3. This Resolution shall take effect and be in full force upon passage
and signatures hereon.
Dated and Signed this 31d day of February, 2025.
CITY OF AUBURN
ATTEST: APPROVED AS TO
h CLAM ctwt-
gV,Shawn �Ca Abell, MMC, City Clerk ason Whalen, City Attorney
Resolution No 5806
January 7, 2025
Page 2 of 2
SEVENTH AMENDMENT TO THE LEASE AGREEMENT
BETWEEN THE CITY OF AUBURN AND SKY SERVICES, INC.
THIS SEVENTH AMENDMENT is made and entered into this 3rd day of
February, 2025, by and between the CITY OF AUBURN, a municipal corporation of the State
of Washington (the "CITY"), and Cascade Airframe Repair Inc., a Washington corporation,
DBA Cascade Helicopter Services (the "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.
I. RECITALS:
1. The CITY and Sky Services entered into a lease agreement at the Auburn Municipal
Airport dated February 27t1i, 1978 (the "Original Lease Agreement"), authorized through
the ratification of Resolution 866.
2. Sky Services was succeeded by Auburn Flight Services who was further succeeded by
Cascade Helicopter Services.
3. The Original Lease Agreement together with all previous amendments (dated: 1/3/1984,
10/2/1989, 3/15/1999, 5/26/2000, 5/4/2015 & 9/16/2019) are collectively referred to herein
as the "Lease Agreement".
4. Paragraph 3 "Rental Rate and Rate Adjustment" of the Second Amendment provided for
periodic rent adjustments of the Premises.
5. That portion of Sixth Amendment relating to rental rate and rate adjustments provided for
periodic rent adjustments, replacing in its entirety Paragraph 3 "Rental Rate and Rate
Adjustment" of the Second Amendment.
6. Certain tenants, including the Lessee have been receiving a 35% discount to the FMV
lease rate in exchange for the Lessee taking on the cost and burden of maintaining the
pavement areas located within their leased premises.
On October 7t', 2024 in a regular Council Meeting, the Auburn City Council passed
Resolution 5785 approving lease amendments implementing the 2025 Fair Market
Valuation ("FMV") lease rate adjustment over a three-year period. Lessee elected not to
participate in the lease amendments approved under Resolution 5785 on the grounds that
Lessee argued that Lessee provided and would agree to provide more services, providing
for a greater impact to the Airport than the other Airport land tenants and therefore
should realize a greater discount to the FMV than what was accounted for in the Lessees
proposed amendment described in Resolution 5785.
RES 5806, Seventh Amendment to Lease Agreement between COA & Sky services, Inc.
Original Lease approved under Resolution NO.866
The Parties wish to amend Paragraph 6 set forth in the Sixth Amendment, including
adding new subparagraphs "(e)" and "(f)" and Addendum 1 to this Seventh Amendment.
Further, the Parties wish to attribute and memorialize the lease rate discount provided to
Lessee based upon Lessee's satisfactory performance of the services described in
Addendum 1, attached to this Seventh Amendment to the Lease Agreement.
II. AMENDMENT:
NOW THEREFORE in consideration of their mutual covenants, conditions, and
promises, the Parties agree as follows:
1. Paragraph 6 as amended in the Sixth Amendment is amended to read as follows
including the addition of a new subparagraph "(e)" and "(f)":
(a). The Monthly Base Rent will be increased by 3% on June 1 of every calendar year
ending in a "2" or "7" during the term of this Lease Agreement, with the first adjustment
commencing June 1, 2027. 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). Intentionally Omitted
(c.). Intentionally Omitted
(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 adjustment set forth in Sections 6(a) & (e) will not
be applied each such fifth (5th) 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.
6(e) The 2025 FMV adjustment as defined in Section 6 of this Lease Agreement as amended
will be implemented over two years based on the following schedule:
RES 5806, Seventh Amendment to Lease Agreement between COA & Sky Services, Inc.
Original Lease approved under Resolution NO. 866
• January 2025 — December 2025 assessed at $0.57 per square foot, per year.
• January 2026 — May 2027 assessed at $0.7425 per square foot, per year.
6(f) .Notwithstanding the provisions of Section 6 (e) above, for rental rate adjustments
determined by FMV, the provisions of Addendum 1, attached hereto, shall apply.
2. Lessee's name is amended as follows:
Cascade Airframe Repair, Inc. DBA Cascade Helicopter Services
All other terms and conditions of this Lease Agreement as amended shall remain the same.
RES 5806, Seventh Amendment to Lease Agreement between COA & Sky Services, Inc.
Original Lease approved under Resolution NO. 866
ADDENDUM 1
In exchange for those services provided to the Airport by Lessee, Lessee shall receive a 45%
discount to the appraisal rate determined through the Fair Market Value ("FMV") appraisal
setting forth the land lease rates provided for in the Lease. The discount shall be attributed to the
following services provided for in the table below.
Discount
Cascade Provided Service
Maintenance of the pavement area within the leased premises. The pavement
35%
must be kept in a similar or better condition than the surrounding pavement in the
vicinity of the leased premises.
Participating with Airport Management in the hosting of Auburn's annual
"Airport Days". At a minimum participation will include providing Cascade's
1 %
east paved lot as guest parking for the event and allowing access to power at no
cost to the City.
Provide support for Airport Emergencies. This will include providing qualified
personnel to be on -call and respond to aircraft incidents and disabled aircraft at
2%
the Airport within lhr of being notified of said incident. This will also include
utilizing Cascade -owned equipment to move disabled aircraft when necessary at
no cost to the City.
2%
Provide Jet -A fuel service to the Airport.
Support of for Emergency Air Medical Operations. Cascade will allow
I%
emergency air medical rotor wing evacuation operations to utilize its leased
premises.
Courtesy Vehicle. Cascade will provide a courtesy vehicle (make and model to be
approved by Airport Management) for use by Airport visitors at no charge to the
4%
Airport or the users of the vehicle. Cascade must have the vehicle available 24/7,
year-round, keep it in good operating condition as well as provide all necessary
insurance on the vehicle.
In years ending in a "4" and "9" (years proceeding implementation of the next FMV cycle) the
Parties will convene and audit the services provided. If the City determines that Lessee is not
offering the above services at a reasonable level as determined by the City, the Parties agree that
said service and the associated discount rate shall be removed from the next FMV cycle.
[SIGNATURES ON THE FOLLOWING PAGES]
RES 5806, Seventh Amendment to Lease Agreement between COA & Sky Services, Inc.
Original Lease approved under Resolution NO. 866
Signed and dated on this $� day of le -,A /- ti �, r 6
Cascade Airframe Repair, Inc. DBA
Cascade Helicopter Services
Name: Sparrow Tang
TATE OF WASHINGTON )
)SS.
County )
2025
ror• a &'61 '%JCU' 6
Title: President/CEO
The under ' ned<Notary Public hereby certifies: That on this _day of
20_, personally ap efore me (name),
(title), to me known to be the individual(s) described in
and who executed the within inkviment, and acknowledged that he/she signed and sealed the same
as his/her free and voluntary act anddeed, for the purposes and uses therein mentioned, and on
oath stated that he/she was duly authorize xecute said document on behalf of
In Witness Whereof i have hereunto set my hand a ffixed my official seal the day and
year first above written.
Notary Public in and for the State of W ington,
Residing at
My commission expires
RES 5806, Seventh Amendment to Lease Agreement between COA & Sky Services, Inc.
Original Lease approved under Resolution NO.866
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of Siskiyou ss.
On 02/05/2025 before me, Destiny Marie Bird, Notary Public, personally appeared Sparrow Tang, who
proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the
instrument.
,
W „�•.., . s^ DESTINY MARIE BIRD
Notary Public - California I certify under PENALTY OF PERJURY under the laws of the
Siskiyou County
'* Commission a 247e11; • State of California that the foregoing paragraph is true and correct.
• My Comm. Expires De! +G. 2027 J
^" WITNESS my hand and official seal.
(Seal) ,
ignature of Notary Public
OPTIONAL -
Though this section is optional, completing this information can deter alteration of the document or fraudulent
reattachment of this form to an unintended document.
CAPACITY(IES) CLAIMED BY SIGNER(S)
SIGNER'S NAME:
❑ Individual
❑ Corporate Officer
Title
❑ Partner(s) ❑ Limited
❑ General
❑ Attorney -in -Fact
❑ Trustee(s)
❑ Guardian/Conservator
❑ Other:
t7te
r (Principal) is Representing:
DESCRIPTION OF ATTACHED DOCUMENT
Title or Type of Document
Number of Pages
Date of Document
Signer(s) Other Than Named Above
FM-78.6
Signed and dated on this 3 day of F200Y' UarM , 2025
City of Auburn
r
Mayor: Nancy Back s
STATE OF WASHINGTON )
ss.
County of �-1 )
The undersigned Notary Public hereby certifies: That on this '�) day of I :-P- bDV'LA AM,
20 2 5, personally appeared before me N a If 1 C 4 lBaC k tJ1 S (name),
MASAoy o4 A\-% CkN 04 Ptbur v1(title), tome known to be the individual(s) described in
and who executed the wit in 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
VV% Ci hn 0+ AubUn-\
In Witness Whereof I have hereunto set my hand and affixed my official seal the day and
year first above written.
State of Washington
HANNAH SCHOLL
LICENSE # 202199
MY COMMISSION EXPIRES
Notary Public in and for the State of Washington,
Residing at A LA%6LAVYI , W PC
My commission expires 09 —10%- 207—U
RES 5806, Seventh Amendment to Lease Agreement between COA & Sky Services, Inc.
Original Lease approved under Resolution NO. 866