HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/18/2018 - SECOND READING OF ORDINANCE NO. 148, 2018, APPROVIAgenda Item 5
Item # 5 Page 1
AGENDA ITEM SUMMARY December 18, 2018
City Council
STAFF
Jason Licon, Airport Director
Judy Schmidt, Legal
SUBJECT
Second Reading of Ordinance No. 148, 2018, Approving a Fifty-Year Lease Between the Cities of Loveland
and Fort Collins and Discovery Air, LLC for Property Located at the Northern Colorado Regional Airport.
EXECUTIVE SUMMARY
This Ordinance, unanimously adopted on First Reading on December 4, 2018, approves an Airport land lease
agreement between the Cities of Fort Collins and Loveland and Discovery Air, LLC. Staff from the Airport and
the Cities have negotiated a fifty-year lease with Discovery Air, LLC for the development of vacant Airport
property. The proposed development will include corporate aircraft hangar facilities and associated office
space, a new fixed-base aircraft service operation, and a restaurant. Due to the complexity and unique
provisions of the Lease, the Northern Colorado Regional Airport Commission is not authorized to approve and
sign the Lease, rather, the two Cities must each approve the Lease in accordance with their respective
Municipal Codes and Charters.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on Second Reading.
ATTACHMENTS
1. First Reading Agenda Item Summary, December 4, 2018 (w/o attachments) (PDF)
2. Ordinance No. 148, 2018 (PDF)
Agenda Item 9
Item # 9 Page 1
AGENDA ITEM SUMMARY December 4, 2018
City Council
STAFF
Jason Licon, Airport Director
Judy Schmidt, Legal
SUBJECT
First Reading of Ordinance No. 148, 2018, Approving a Fifty-Year Lease Between the Cities of Loveland and
Fort Collins and Discovery Air, LLC for Property Located at the Northern Colorado Regional Airport.
EXECUTIVE SUMMARY
The purpose of this item is to approve an Airport land lease agreement between the Cities of Fort Collins and
Loveland and Discovery Air LLC. Staff from the Airport and the Cities have negotiated a fifty-year lease with
Discovery Air, LLC for the development of vacant Airport property. The proposed development will include
corporate aircraft hangar facilities and associated office space, a new fixed-base aircraft service operation, and
a restaurant. Due to the complexity and unique provisions of the Lease, the Northern Colorado Regional Airport
Commission is not authorized to approve and sign the Lease; rather, the two Cities must each approve the Lease
in accordance with their respective Municipal Codes and Charters.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
The Northern Colorado Regional Airport is a jointly owned and operated public facility shared by the Cities of
Fort Collins and Loveland. In 2015 the Cities entered into an intergovernmental agreement (IGA) that formed
the Northern Colorado Regional Airport Commission, which is delegated certain powers and authority to operate
and maintain the Airport. The IGA provides that the Airport Commission authority to enter into Airport property
lease agreements on behalf of the Cities if such agreements are in a standard form that is approved by the City
Manager and City Attorneys from each City.
The Airport/Cities grant long-term land leases to private sector investors or builders to construct aviation support
facilities. This is a standard policy for publicly owned airports and is in accordance with FAA regulatory
standards. The standard lease term for land for the construction of aircraft hangars is forty years, consisting of
an initial twenty-five year lease with three five-year extension options. At the end of the standard lease term,
the lessee has the ability to renegotiate the lease agreement, or the improvements revert to the ownership of
the Cities. The standard lease agreements also typically require investment by the Cities for the infrastructure
required for each construction project. Pre-development costs have historically been funded using City bonding
resources or through federal and state grant funding, combined with local match dollars for the construction of
access roads, utility extensions, and aircraft taxiways.
The proposed lease agreement negotiated with Discovery Air LLC does not qualify as a standard lease that the
Northern Colorado Regional Airport Commission can approve. This is due to the key differences with the
standard lease format including the extended term of fifty years, the reduced rate to compensate for the
developer’s investment in infrastructure, the size of the proposed lease area, and the potential inclusion of a
metro district. The developer will be assuming all risk and upfront investment for this project, therefore staff is
ATTACHMENT 1
COPY
Agenda Item 9
Item # 9 Page 2
recommending a lower lease rate and extended lease term than what is standard. The following are details on
the lease terms and rates:
• Lease area: 564,096 square feet
• Term: Initial term of fifty-years; and if requested by Discovery Air, a commitment to negotiate in good faith a
new lease of up to 50 years at the expiration of the initial term.
• Annual rates:
o Two year inspection and entitlement period: $0.05 per square foot
o Years 3-10: $0.15 per square foot
o Years 11-50 = $0.25 per square foot plus inflationary adjustments
• Value of the lease = $4.9 million at 2.5% estimated inflation
o Rates do not change based on project phasing or construction schedule
• Developer would relocate the Colorado Firefighting Single Engine Air Tanker Base
This proposal is a public-private partnership, will be a catalyst for high quality development and associated users,
and will provide financial resources to enhance the Airport’s future financial sustainability. A bulleted list of
benefits include:
• No upfront cost to the Cities.
• The project will enhance the Airport’s regional economic impact.
• User fees in addition to the land lease revenue would have an additional positive impact to the Airport’s self-
generated revenue and future financial sustainability.
• The area would take 25 years to fully build out at the current airport construction rate.
o Potential to be a catalyst to attract additional development & businesses.
o Centennial Airport and other successful airports use similar models for large scale aeronautical land
leasing.
• Rates are comparable to existing large scale leases.
• The lease terms conform with FAA regulatory standards and grant assurances.
• Performance measures are included in the Lease agreement.
o Must have site development planning and associated approvals completed prior to the end of the 24
month inspection and entitlement period.
o Requires horizontal infrastructure started within three years.
o Requires vertical infrastructure started within five years.
CITY FINANCIAL IMPACTS
This project would require no upfront cost to the City. The Airport has approximately 200 acres of space available
for development. This proposal will use approximately 6.5% of the available unimproved land for what is
considered to be highest and best use of the available property, in accordance with the Airport’s Master Plan
and Strategic Plan. The Airport will derive lease payments from the property in addition to other fees from the
additional users. The new facilities will create jobs and enhance the regional economic impact of the Airport.
BOARD / COMMISSION RECOMMENDATION
At its October 18, 2018 meeting, the Northern Colorado Regional Airport Commission voted unanimously to
recommend approval of the lease.
At its November 19, 2018 meeting, the Fort Collins Council Finance Committee and recommended the item for
consideration by the City Council at the December 4, 2018 meeting. (Attachment 1)
PUBLIC OUTREACH
The proposal does follow Airport and City policy including the Council adopted Airport Master Plan, and the
Airport Commission adopted Strategic Plan. City Council adopted and approved Airport Master Plan, of which
considerable outreach and public input is included, as are numerous public hearings including adoption by both
COPY
Agenda Item 9
Item # 9 Page 3
City Councils. It additionally conforms to the Airport’s adopted Strategic Plan, which involved considerable
outreach and public involvement.
ATTACHMENTS
1. Council Finance Committee Minutes November 19, 2018 (draft) (PDF)
2. Council Finance Committee Supplemental Information (PDF)
COPY
-1-
ORDINANCE NO. 148, 2018
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROVING A FIFTY-YEAR LEASE BETWEEN THE CITIES OF
LOVELAND AND FORT COLLINS AND DISCOVERY AIR, LLC FOR
PROPERTY LOCATED AT THE NORTHERN COLORADO REGIONAL AIRPORT
WHEREAS, the Cities of Loveland and Fort Collins (collectively the “Cities,” and
“Loveland” or “Fort Collins” individually) jointly own and operate the public airport known as the
Northern Colorado Regional Airport (the “Airport”); and
WHEREAS, the Cities entered into an Amended and Restated Intergovernmental
Agreement for the Joint Operation of the Airport dated January 22, 2015, as amended by the First
Amendment thereto dated June 7, 2016 (the “First Amendment) (the Amended and Restated
Intergovernmental Agreement and the First Amendment are collectively the “IGA”), whereby the
Cities formed a commission and delegated certain duties and responsibilities to such commission
(the “Commission”); and
WHEREAS, pursuant to Section 2. of the First Amendment, the Commission is authorized
to enter into Airport property lease agreements if such agreements are in a form approved by the
City Manager and City Attorneys for each City, among other requirements; and
WHEREAS, the Cities have approved a standard form long-term hangar ground lease
containing agreed upon terms and conditions that the Commission could approve without further
approval by the Cities; and
WHEREAS, the Cities have negotiated a long-term fifty year ground lease (the “Lease”)
with Discovery Air, LLC (“Lessee”) for certain vacant Airport land on which Lessee intends to
construct development for aviation purposes, a copy of which Lease is attached hereto as “Exhibit
A;” and
WHEREAS, Lessee’s proposed development will include aircraft hangars, a fixed-base
operation, associated office space, and a restaurant, as well as other potential improvements such
as a new access road creating a new entrance to the Airport and expanded tarmac; and
WHEREAS, the Lease is contingent on Lessee obtaining certain approvals and financing
for the proposed development and commencing certain development activities within specified
time periods; and
WHEREAS, if requested by the Lessee, the Lease also includes a commitment by the Cities
to negotiate in good faith a new lease of up to fifty years upon expiration of the initial term as more
fully set forth therein; and
WHEREAS, because of the complexity and unique provisions of the Lease, the
Commission is not authorized to approve the Lease; rather, the two Cities must each approve the
Lease in accordance with their respective Municipal Codes and Charters; and
-2-
WHEREAS, while the Commission is not authorized to approve the Lease, the
Commission reviewed the terms and conditions of the Lease and its impact related to the Airport
at its September 20, 2018 and October 18, 2018 regular Commission meetings, and voted to
recommend approval of the Lease by the two City Councils; and
WHEREAS, the Loveland City Council adopted a Resolution approving the Lease at its
regular meeting on November 20, 2018; and
WHEREAS, Fort Collins Municipal Code §23-113 provides that City Council may
approve leases of real property owned in the name of the City for a term in excess of twenty (20)
years by ordinance where Council finds that the lease is in the best interests of the City; and
WHEREAS, the City Council finds that the Lease is in the best interests of the City because
it may be a catalyst to attract additional Airport development and businesses, enhance the Airport’s
economic impact and job creation, and have an additional positive impact to the Airport’s self-
generated income and future financial sustainability; and
WHEREAS, the City Council desires to approve the Lease and to authorize the City
Manager to execute the Lease on behalf of the City of Fort Collins.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That the Ground Lease Agreement between the Cities of Loveland and Fort
Collins and Discovery Air, LLC (the “Lease”), attached hereto as “Exhibit A,” is hereby approved.
Section 3. That the City Manager is hereby authorized, following consultation with the
City Attorney, to modify the Lease in form or substance necessary to effectuate the purposes of
this Ordinance or to protect the interests of the City.
Section 4. That the City Manager and the City Clerk are hereby authorized and
directed to execute the Lease on behalf of the City.
-3-
Introduced, considered favorably on first reading, and ordered published this 4th day of
December, A.D. 2018, and to be presented for final passage on the 18th day of December, A.D.
2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 18th day of December, A.D. 2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
1
NORTHERN COLORADO REGIONAL AIRPORT GROUND LEASE AGREEMENT
CITIES OF LOVELAND AND FORT COLLINS, COLORADO,
AND
DISCOVERY AIR, LLC, A COLORADO LIMITED LIABILITY COMPANY
Exhibit A
2
TABLE OF CONTENTS
ARTICLE 1: TERM; NEW LEASE; CONTINGENCIES .......................................................................................... 3
ARTICLE 2: LEASED PREMISES ............................................................................................................................. 5
ARTICLE 3: USE OF LEASED PREMISES .............................................................................................................. 6
ARTICLE 4: RENT ..................................................................................................................................................... 7
ARTICLE 5: ACCEPTANCE, CONSTRUCTION, CARE, MAINTENANCE, AND REPAIR ................................ 8
ARTICLE 6: ADDITIONAL OBLIGATIONS OF LESSEE .................................................................................... 12
ARTICLE 7: INGRESS AND EGRESS .................................................................................................................... 13
ARTICLE 8: INSURANCE, DAMAGE OR DESTRUCTION................................................................................. 14
ARTICLE 9: LIABILITIES AND INDEMNITIES ................................................................................................... 15
ARTICLE 10: LEASEHOLD MORTGAGES ........................................................................................................... 16
ARTICLE 11: RULES AND REGULATIONS ......................................................................................................... 17
ARTICLE 12: SIGNS ................................................................................................................................................ 17
ARTICLE 13: ASSIGNMENT AND SUBLEASE ................................................................................................... 18
ARTICLE 14: CONDEMNATION ........................................................................................................................... 18
ARTICLE 15: NON-DISCRIMINATION ................................................................................................................. 19
ARTICLE 16: GOVERNMENTAL REQUIREMENTS ........................................................................................... 20
ARTICLE 17: RIGHT OF ENTRY RESERVED ...................................................................................................... 20
ARTICLE 18: TERMINATION ................................................................................................................................ 21
ARTICLE 19: OWNERSHIP OF IMPROVEMENTS, SURRENDER ..................................................................... 23
ARTICLE 20: SERVICES TO LESSEE .................................................................................................................... 23
ARTICLE 21: SURVIVAL OF THE OBLIGATIONS OF THE LESSEE ............................................................... 24
ARTICLE 22: USE SUBSEQUENT TO CANCELLATION OR TERMINATION ................................................ 25
ARTICLE 23: NOTICES ........................................................................................................................................... 25
ARTICLE 24: INVALID PROVISIONS ................................................................................................................... 26
ARTICLE 25: MISCELLANEOUS PROVISIONS .................................................................................................. 26
ARTICLE 26: SUBORDINATION CLAUSES ........................................................................................................ 28
ARTICLE 27: QUIET ENJOYMENT ....................................................................................................................... 29
ARTICLE 28: ENTIRE AGREEMENT .................................................................................................................... 29
ARTICLE 29: REQUIREMENTS FOR CONDOMINIUMIZATION ...................................................................... 29
3
LEASE AGREEMENT
THIS GROUND LEASE AGREEMENT, made and entered into this day of ,
2018 (the “Effective Date”), is by and between the Cities of Fort Collins and Loveland, Colorado (the “Cities”)
and Discovery Air, LLC, a Colorado limited liability company, hereinafter called “Lessee.”
WITNESSETH:
WHEREAS, the Cities own and operate an airport known as the Northern Colorado Regional Airport
located in Larimer County, Colorado, including the real property upon which the same is located, (hereinafter,
the “Airport”) pursuant to an Amended and Restated Intergovernmental Agreement for the Joint Operation of
the Airport on January 22, 2015 (the “IGA”), whereby the Cities formed a commission known as the Northern
Colorado Regional Airport Commission and delegated certain duties and responsibilities to such commission
(the “Commission”). The IGA was amended on June 7, 2016; and
WHEREAS, the Cities and Lessee are mutually desirous of entering into this Lease Agreement
(“Agreement”) for the use and occupancy of certain areas at the Airport for aeronautical activities; and
WHEREAS, the Cities desire to accommodate, promote and enhance general aviation at the Airport
and Lessee desires to be assured of the Airport’s continued availability as a base for aircraft; and
WHEREAS, the Cities and Lessee have reached an understanding in principle, which envisions
Lessee’s construction of a fixed-based operation (“FBO”) facility, hangar and office buildings, a restaurant, an
overhead transportation system (commonly referred to as a gondola), an expanded tarmac, parking facilities,
and various infrastructure related thereto, including such pavement and ramp areas as required by the Airport
Minimum Standards for the Provision of Commercial Aeronautical Activities at the Airport, dated September
26, 2008, (the “Minimum Standards”), as they may be amended from time to time by the Cities (collectively,
“Improvements”), the general layout of which is intended to be located within the preliminary site plan which
is attached hereto as Exhibit “B”, which by this reference is made a part hereof; and
WHEREAS, the Lessee understands and acknowledges that Lessee’s planned Improvements are
subject to approval by the City of Loveland through its development review process and to applicable
provisions of the Loveland Municipal Code.
NOW, THEREFORE, in consideration of the premises and of the rents, covenants and conditions
herein contained, the Cities do hereby lease to Lessee the area(s) of the Airport described in Article 2 hereof
(the “Leased Premises”) on the terms and conditions hereinafter set forth.
ARTICLE 1: TERM; NEW LEASE; CONTINGENCIES
1.1 The term of this Agreement shall commence at 12:01 a.m. on the Effective Date and expire at
11:59 p.m. on the last day of the calendar month in which occurs the day immediately preceding the fiftieth
(50th) anniversary of the Effective Date (hereinafter the “Term”), unless sooner terminated in accordance with
the provisions hereof.
1.2 If Lessee desires to continue occupying the Leased Premises after the expiration of the Term,
Lessee may request that the Cities grant a new lease agreement of no more than fifty (50) years. Such a request
shall be made by Lessee in writing and delivered to the Cities not more than eighteen (18) months nor less than
six (6) months prior to the expiration of the Term. In consideration of Lessee’s substantial capital investment
in the Improvements and value created in the form of long-term lease arrangements for same, the Cities agree
to negotiate in good faith with Lessee a new lease for the Leased Premises on the terms set forth in this Section
4
1.2 upon the expiration of the Term. If: (i) Lessee is not then in default under any provision of this Agreement
beyond any and all applicable notice and cure periods; (ii) the Cities determine that the Improvements still have
sufficient value to the Cities; and (iii) such a new lease would be consistent with the Airport’s master plan then
in effect and any and all federal rules, regulations, directives, guidelines or other obligations with respect to the
Airport, including but not limited to the “grant assurances” to the FAA, then the Cities may, in their sole
discretion, offer Lessee a new lease of no more than fifty (50) years of the Leased Premises under such terms
and conditions, including rental rates and on the then-current lease form being offered by the Cities.
1.3 This Agreement is specifically conditioned upon Lessee having obtained from the applicable
government authorities any and all building permits, special use or conditional use permits, licenses and
approvals (collectively, the “Permits”) required for the construction of the Improvements as contemplated
herein, as well as any required off-site improvements related thereto. Lessee covenants that it shall use
commercially reasonable efforts and due diligence to obtain the Permits and deliver copies of the same to the
Cities on or before the date which shall be twenty four (24) months after the Effective Date (the “Permit
Review Date”). Any and all fees, charges or expenses incurred by the Cities in so cooperating shall be borne
by Lessee and shall be reimbursed to the Cities within thirty (30) days of receipt of an invoice for the same.
This Agreement is also specifically conditioned upon Lessee having obtained the Cities’ as applicable, approval
(not to be unreasonably withheld, conditioned or delayed) of site plans, conceptual drawings, and preliminary
and final plans and specifications for the Improvements (collectively, “Plans and Specifications”). In
preparing the Plans and Specifications, Lessee shall ensure that all proposed Improvements to be constructed
in City of Loveland will be in full compliance with the then current Development Policy and Application
Procedures for Development at Northern Colorado Regional Airport, if any (“Development Procedures”). In
addition, Lessee shall also ensure that all Plans and Specifications submitted for approval comply with the
Airport’s design standards, if any, as well as all applicable building, use and zoning regulations. If Lessee is
unable, in its business judgment, to assure itself of the availability of the Permits or the Cities’ approval of the
Plans and Specifications on or before the Permit Review Date, then Lessee shall have the option to terminate
this Agreement by written notice delivered to the Cities within thirty (30) days following the Permit Review
Date, and if within such time period Lessee shall not have obtained the Permits or the Cities’ approval of the
Plans and Specifications, then this Agreement shall terminate as of the end of such thirty (30) day period and
all further obligations of the parties hereunder shall end and be of no further force or effect except for
obligations which expressly survive the termination of this Agreement. The failure to deliver the termination
notice in a timely manner shall render this termination clause inoperative and void. If Lessee has not delivered
copies of the Permits to the Cities by the Permit Review Date, the Cities may terminate this Agreement by
providing Lessee notice of intent to terminate this Agreement within thirty (30) days. If Lessee fails to deliver
the Permits to the Cities by the end of the thirty (30) days, this Agreement shall automatically terminate as of
the thirty-first (31st) day and all further obligations of the parties hereunder shall end and be of no further force
or effect except for obligations which expressly survive the termination of this Agreement.
1.4 In addition, Lessee shall have twenty four (24) months after the Effective Date (the
“Inspection and Entitlement Period”) (i) to obtain, at its sole cost and expense, any and all platting, master
planned, subdivision, PUD, land use or other approvals, including approval of a site development plan
(“Entitlements”) which are required to enable Lessee to operate and develop the Leased Premises in
accordance with the preliminary site plan depicted in Exhibit “B;” (ii) to form or modify a special/metropolitan
district to recover costs associated with developing various utilities and infrastructure, as well as costs incurred
in making various improvements to Rocky Mountain Avenue or elsewhere serving the Leased Premises, which
district service area Lessee agrees shall not encumber the real property owned by the Cities but only the
improvements thereon unless Lessee obtains the express written consent of the Cities; (iii) to inspect, test,
examine, survey or conduct any studies of the Leased Premises as Lessee may deem necessary; (iv) to ascertain
the availability of utilities and other services and to finalize any development agreements related thereto; and
(v) to otherwise investigate the desirability and feasibility of the Leased Premises for Lessee’s use. Lessee
acknowledges that the Cities may enter into an intergovernmental agreement requiring the approval of both
Cities, as co-owners of the Airport, in connection with any service plan or amendment to service plan for
Lessee’s proposed metropolitan district presented to the City of Loveland for approval. Lessee further agrees
5
to provide the Commission with Lessee’s final site development plan for review prior to Lessee’s submittal of
such final site development plan to Loveland in order for the Commission to provide input to Loveland
regarding the plan. Lessee shall be entitled to terminate this Agreement upon notice in writing to the Cities at
any time prior to the end of the Inspection and Entitlement Period if (i) Lessee is unable, in its business
judgment, to assure itself that it will be able to obtain the necessary Entitlements, form or modify the
special/metropolitan district, or finalize any development agreements related to utilities and other necessary
infrastructure or (ii) Lessee otherwise determines, in its business judgment, that the condition of the Leased
Premises is unsatisfactory for Lessee’s intended use, or that any necessary utilities, services, or approvals are
unavailable. If Lessee so terminates this Agreement, all further obligations of the parties hereunder shall end
and be of no further force or effect except for obligations which expressly survive the termination of this
Agreement. If Lessee does not notify the Cities prior to the end of the Inspection and Entitlement Period of
Lessee’s election to terminate this Agreement for any of the foregoing reasons, then this termination clause
shall be inoperative and void, and this Agreement shall remain in full force and effect. If Lessee has not obtained
approval of a site development plan for Lessee’s development of the Leased Premises in substantially similar
form to the plan depicted on Exhibit B, the Cities may terminate this Agreement by providing Lessee notice of
intent to terminate this Agreement within thirty (30) days. If Lessee fails to obtain approval of such site
development plan by the end of the thirty (30) days, this Agreement shall automatically terminate as of the
thirty-first (31st) day and all further obligations of the parties hereunder shall end and be of no further force or
effect except for obligations which expressly survive the termination of this Agreement.
1.5 In the event Lessee has not commenced construction of any horizontal improvements to the
Leased Premises for example, grading work or installation of utilities, within three (3) years after the Effective
Date of this Agreement, subject to extension mutually agreed upon in writing by the parties, this Lease shall
automatically and immediately terminate. In addition, in the event Lessee has not commenced construction of
any of the vertical improvements for the hangar and office buildings and/or FBO facility, it being expressly
understood and agreed that Lessee will be developing the Leased Premises in phases, on or before five (5) years
after the Effective Date of this Agreement, subject to extension mutually agreed upon by the parties, this
Agreement shall automatically and immediately terminate. Nothing contained herein shall prohibit or operate
to prohibit Lessee from applying for or seeking reimbursement for any of the Improvements from any local
government, state or federal entity.
ARTICLE 2: LEASED PREMISES
2.1 The Leased Premises consist of the parcel of land described in Exhibit “A”, which is attached
hereto and by this reference made a part hereof. The Parties acknowledge that the exact legal description is
subject to adjustment and will be more accurately described with the development of the site development plan
for the Leased Premises.
2.2 The Parties further acknowledge that a public use taxiway exists on the west portion of the
Leased Premises that connects current extended taxiway Delta with current taxiway Alpha (hereinafter the
“Existing Tarmac”). The Existing Tarmac is identified on Exhibit B, attached hereto. Use, access, maintenance
and repair of such Existing Tarmac shall be subject to the terms and conditions set forth in this Agreement.
Without limiting the foregoing, the Cities acknowledge that the Improvements, except for the Existing Tarmac
and Additional Taxway as described in Section 5.9.2 below, to be constructed upon the Leased Premises shall,
during the term of this Agreement, be and remain the property of Lessee or any successor in interest.
2.3 Lessee acknowledges that a portion of the Leased Premises may be subject to an existing
intergovernmental lease agreement between the Cities and the State of Colorado, Department of Public Safety,
Division of Fire Prevention and Control (the “Division”) for its SEAT base. To the extent that the leased
premises for the SEAT base overlaps with the Leased Premises of this Lease, it shall be Lessee’s obligation to
obtain the agreement of the Division to relocate its SEAT base to another location on the Airport property,
which relocation shall be accomplished at Lessee’s sole cost and expense. The Cities agree to cooperate in
executing a lease amendment or new lease with the Division as necessary to accomplish the relocation.
6
2.4 The Cities hereby represent and warrant that they have full right and authority to enter into this
Lease and that no other interest exists in the Lease Premises that would materially adversely affect Lessee’s
use and enjoyment of the Leased Premises as contemplated herein and that if during the Inspection and
Entitlement Period any condition is found to exist that in Lessee’s sole reasonable discretion materially
adversely may affect Lessee’s use and enjoyment of the Leased Premises, Lessor shall remove, remediate or
otherwise mitigate such condition to Lessee’s reasonable satisfaction at Lessor’s sole cost and expense.
ARTICLE 3: USE OF LEASED PREMISES
3.1 Lessee agrees for itself and its sublessees that it is permitted only to use the Leased Premises
for aeronautical activities. The term “Aeronautical Activities” shall mean any activity or service that involves,
makes possible, facilitates, is related to, assists in, or is required for the operation of aircraft, or which
contributes to or is required for the safety of aircraft operations. Lessee and its sublessees may use, occupy and
sublease the Leased Premises for the following aeronautical purposes and for no other purpose whatsoever
unless approved in writing by the Cities:
3.1.1 For the construction, installation, maintenance, and operation of the Improvements
including an FBO facility, a restaurant, an overhead transportation system, expanded tarmac area,
parking facilities, office and retail space, and hangar space be used for the parking, storage, servicing,
repair, maintenance, modification, and construction of aircraft. Lessee further agrees that the parking
facilities shall not exceed the number of parking spaces ultimately approved in the site plan to be
dedicated to customers of the FBO facility, restaurant, office and retail space. Operation of the FBO
facility and the provision of FBO Services (as hereinafter defined) are referred to herein as the “FBO
Operation”. Lessee shall conduct the FBO Operation (or cause same to be conducted) in compliance
with the Minimum Standards. In addition to compliance with the Minimum Standards, all uses on the
Leased Premises shall also comply with the City of Loveland, Colorado, building, use and zoning
codes, regulations and requirements applicable to the Leased Premises. The Leased Premises shall not
be used for residential purposes.
3.1.2 “FBO Services” as used herein shall mean all essential and specialized aircraft
services necessary to ensure that the basic needs of aircraft owners, pilots, and passengers are provided
for at the Airport at a minimum level or above, as more fully set forth in the Minimum Standards.
Should Lessee desire the FBO to provide aircraft fueling services, the parties shall execute an
amendment to this Lease to include the appropriate terms and conditions for such fueling operations in
compliance with the Minimum Standards. Such amendment shall require approval by the City
Managers for the Cities to the extent permitted by the Cities’ charters and Municipal Codes or by the
City Managers’ duly authorized designees.
3.1.3 Nothing contained in this Agreement shall be construed as granting an exclusive
license, permit, franchise or other right to provide FBO Services or any other services. Lessee
understands and agrees that the Cities may lease other property at the Airport to other tenants who
provide or will cause to be provided the same or similar services.
3.1.4 The Cities make no representations, guarantees, or warranties that the Leased Premises
may be lawfully used for the purposes set forth in this Section 3.1. Lessee shall have the sole
responsibility of obtaining all applicable permits or other governmental approvals necessary to
construct and use the Leased Premises as intended herein, including all permits and/or approvals
required by the City of Loveland.
7
ARTICLE 4: RENT
4.1 Commencing on the Effective Date and continuing until the Rent Commencement Date
(hereinafter defined), Lessee shall pay to the Cities an annual rent of $0.05 per square foot for the Rental Area
(as hereinafter defined), for a total of $28,204.80 per year.
4.2 Commencing on the earlier of (i) twenty four months (24) months after the Effective Date and
(ii) the date that the first certificate of occupancy (or its equivalent) is issued for any of the Improvements (the
“Rent Commencement Date”), Lessee agrees to pay to the Cities for the first ten (10) years following the Rent
Commencement Date during the Term an annual rent of $0.15 per square foot for the Rental Area (as hereinafter
defined), for a total of $84,614.40 per year. Commencing on the eleventh (11th) year of the Term, Lessee shall
pay to the Cities an annual rent of $0.25 per square foot for the Rental Area, for a total of $141,024.00, which
rental shall thereafter during the Term be subject to adjustment pursuant to Section 4.3. “Rental Area” as used
herein shall mean area comprising a portion but not all of the Leased Premises upon which the parties hereto
have agreed to calculate the annual rental for the Leased Premises, which Rental Area contains 564,096 square
feet as depicted in Exhibit “A” which is attached hereto and by this reference made a part hereof. The Rental
Area includes paved areas which Lessee shall construct to comply with the Minimum Standards.
4.3 Commencing on the first day of the month following the eleventh (11th) anniversary of the
Rent Commencement Date, and each year thereafter during the remainder of the Term, the annual rent shall be
adjusted by multiplying the annual rent payable in the next preceding year by a fraction, the numerator of which
shall be the C.P.I., as hereinafter defined, published for the previous month of December and the denominator
of which shall be the C.P.I. published for the month of December which preceded the month used as the
numerator.In no event shall the annual rent be reduced from that payable in a previous year.
4.3.1 The term “C.P.I.” as used herein shall mean the Consumer Price Index for all Urban
Consumers (CPI_U), All Items, for Denver-Boulder-Greeley, CO as published by the Bureau of Labor
Statistics of the United States Department of Labor, 1982-84 base = 100. In the event the base year is
changed, the C.P.I. shall be converted to the equivalent of the base year 1982-84 = 100. In the event
the Bureau of Labor Statistics ceases to publish the C.P.I., or this index, an equivalent or comparable
economic index will be used.
4.4 The annual rent payable hereunder may be paid in advance in annual installments, or shall be
paid in equal monthly installments on the first day of each month in advance at the office of the Airport Manager
or at such other office as may be directed in writing by the Cities. Payments due to the Cities under this
Agreement shall be made in legal tender of the United States and paid without offset. In addition to any other
remedies provided in this Agreement, in the event that any rental, fee or charge set forth in this Agreement is
not paid to the Cities within ten (10) days of the date due, Lessee agrees to pay a late charge of $50.00 for each
such late payment, and default interest shall accrue on such payment from the date the payment was due, at a
rate of twelve percent (12%) per annum.
With respect to the hangars Lessee proposes to construct as part of the Improvements depicted on
Exhibit B, Lessee agrees that the the hangars shall, collectively, be at least a total square footage reasonably
consistent with Exhibit B to be finally determined during the Inspection and Entitlement Period as part of
site plan development approval process and shall have a concrete or asphalt floor, with each Hangar to have at
least one aircraft access door sized to accommodate an average private aircraft. Lessee shall use commercially
reasonable and diligent efforts to complete construction of the Hangars within 3years from the completion of
horizontal infrastructure needed to serve the same..
4.5 Lessee, as additional rent, shall construct and maintain a paved aircraft ramp area on the Leased
Premises (the “Ramp”). The Ramp must be designed and built to size and specifications in compliance with
the Minimum Standards, and for a minimum weight bearing capacity, established by the Cities, built to the full
width of the Leased Premises, and to connect with adjacent taxiway, ramp and/or auto parking areas, in order
8
that a continuous and safe pavement section results. If access to the Leased Premises is not available on existing
taxiways and/or roadways, then Lessee may also be requested to construct the same during the Inspection and
Entitlement Period as part of site plan development approval process. It is the responsibility of Lessee to
maintain the entire Ramp area, and all other pavement areas on the Leased Premises, in a manner, which is safe
and clean of debris so as not to cause danger or unsafe conditions for taxiing aircraft and Airport users.
Notwithstanding the foregoing, the Cities shall be responsible for snow removal on the aircraft Ramp area
excluding any parking and side lots and excluding any area within three feet (3’) of any Hangar; provided,
however, that priority of snow removal shall be in accordance with the Cities’ Snow Removal Plan as it now
exists or as it may be amended in the Cities’ sole discretion. Lessee grants to users of the Airport the right to
use aircraft Ramp areas on the Leased Premises for passage of aircraft at all times on and near the adjacent
taxiway. The construction time and default provisions of subsection 4.4 shall be applicable to the Ramp
described in this subsection.
4.6 The Cities understand that Lessee intends to sublease portions of the Leased Premises and/or
the Improvements located thereon and, in such instances, the Cities may agree to accept payments of any rents
or fees required hereunder directly from such sublessees; provided, however, that the obligations of such a
sublessee to make any payment required hereunder directly to the Cities shall not relieve Lessee of its liability
or obligations for such payment.
4.7 Fees due under the Minimum Standards or to obtain any permit or license required by the
Minimum Standards for commercial activities conducted in whole or part on the Leased Premises shall be paid
by Lessee to the Cities as additional rent under this Agreement.
ARTICLE 5: ACCEPTANCE, CONSTRUCTION, CARE, MAINTENANCE, AND REPAIR
5.1 Subject to the provisions of Sections 1.3 and 1.4 hereof, Lessee accepts possession of the
Leased Premises “as is” in its present condition, and, subject to all limitations imposed upon the use thereof by
the rules and regulations of the Federal Aviation Administration (“FAA”), the Airport Rules and Regulations
(as hereinafter defined), and by ordinances of the Cities. The Cities represent to Lessee that, to their knowledge,
the Leased Premises are free of any adverse environmental conditions and no part of the Leased Premises lies
in a flood hazard area or constitutes a fresh water wetland, nor is any part of the Leased Premises within one
hundred feet (100’) feet of a fresh water wetland. Except as may otherwise be provided for herein, the Cities
shall not be required to maintain nor to make any improvements, repairs or restoration upon or to the Leased
Premises or to any of the improvements presently located thereon or placed thereon by Lessee.
5.2 Lessee may construct the Improvements on the Leased Premises for the uses specified in
Article 3 hereof and shall not be required to obtain any approvals from the Cities in connection therewith so
long as the construction of the Improvements issubstantially consistent with the previously approved Plans and
Specifications. Prior to the commencement of any construction of the Improvements, Lessee shall have the
Leased Premises staked by a certified surveying company to ensure all Improvements are place accurately on
the Leased Premises. Within ninety (90) days of any certificate of occupancy being received, Lessee shall
submit to the Airport Manager a full set of as-built record drawings of the completed Improvements, which
among other things, depicts exact locations of the completed Improvements, including utilities, made on and/or
off of the Leased Premises.
5.3 All improvements, alterations, additions, removal and relocation of structures and construction
projects constructed on the Leased Premises shall in all respects be accomplished in a good and workmanlike
manner; in accordance with previously approved Plans and Specifications and the applicable building code;
pursuant to a valid building permit, when applicable, issued by the applicable authority; according to the terms
and conditions of such building permit; and in a manner consistent with state and federal requirements.
5.4 Lessee shall include in all construction contracts entered into by it in connection with any
construction of the Improvements, a provision requiring the contractor to indemnify, release, and save harmless
9
the Cities, their commissioners, officers, representatives, agents and employees from any and all loss of or
damage to property, or injuries to, or death of, any person or persons and from any and all damages, suits,
causes of action, and judgments, including workman’s compensation claims, in any way resulting from, or
arising out of, directly or indirectly, such contractor’s operations in connection herewith, and the contractor’s
use or occupancy of the Leased Premises, and of any portion of the Airport, and including acts and omissions
of officers, employees, representatives, agents, servants, subcontractors, assigns, and suppliers of the contractor
as well as all other persons doing business with contractor; provided, however, that the Cities shall give the
contractor prompt and timely notice of any claim made against the Cities which may result in a judgment
against the Cities because of such injuries or damages, and shall deliver to the contractor all papers, notices,
documents, summons and other legal process served upon the Cities or its agents; provided further, that the
contractor and its insurer, or either of them, shall have the right to compromise and defend all claims, actions,
suits and proceedings to the extent of the contractor’s interests therein; and, provided further, contractor need
not indemnify, release and save harmless the Cities against loss of property, or injury to or death of persons,
caused by the negligence or willful misconduct of the Cities, their commissioners, agents or employees. Lessee
shall require the contractor to furnish liability insurance in such amounts as may be reasonably required by the
Cities. Lessee shall also include in any construction contract such provisions as may be reasonably required
by the Cities relating to the operations of the contractor on the Airport. Lessee shall provide to the Cities a
copy of all construction contracts entered into in connection with the Leased Premises.
5.5 When construction work involving structural components or structural modification has been
completed, Lessee shall deliver to the Cities a certificate of an architect or structural engineer licensed to
practice in the State of Colorado, not in regular employ of either party hereto and familiar with the construction
of said improvements, certifying that the improvements have been constructed substantially in accordance with
the approved Plans and Specifications and in compliance with all laws, ordinances, and governmental rules and
regulations and orders and certifying that in the engineer’s or architect’s opinion such improvements have an
expected useful life of a duration which is customary for such improvements under similar conditions and
circumstances.
5.6 Except as otherwise expressly provided herein, Lessee shall, throughout the term of this
Agreement, assume the entire responsibility, cost and expense for all repair and maintenance whatsoever on
the Leased Premises and all Improvements thereon in a good workmanlike manner, whether such repair or
maintenance be ordinary or extraordinary, structural or otherwise. Additionally, Lessee, without limiting the
generality hereof, shall, except as otherwise expressly provided herein:
5.6.1 Keep at all times, in a clean and orderly condition and appearance, the Leased
Premises, all Improvements thereon and all of Lessee’s fixtures, equipment and personal property
which are located on any part of the Leased Premises. Lessee shall not park or leave, or allow to be
parked, aircraft on the taxiways, ramps or pavement adjacent to any building in a manner which unduly
interferes with or obstructs access to other buildings or movement on adjacent taxiways.
5.6.2 Provide and maintain on the Leased Premises all obstruction lights and similar devices,
and safety equipment required by law.
5.6.3 Take measures to prevent erosion, including but not limited to, the planting and
replanting of grasses with respect to all portions of the Leased Premises not paved or built upon, if any,
and in particular shall plant, maintain and replant any landscaped areas.
5.6.4 Be responsible for the maintenance and repair of all utility services lines placed on the
Leased Premises and used by Lessee exclusively, including, but not limited to, water lines, gas lines,
electrical power and telephone conduits and lines, sanitary sewers and storm sewers.
10
5.6.5 Maintain (or cause to be maintained) all paved areas of the Leased Premises, excluding
the Additional Taxiway (hereinafter defined), in a manner that is safe and clear of debris so as not to
cause danger or unsafe conditions for taxiing aircraft and Airport users.
5.7 Lessee shall conduct an initial Phase I environmental study (“Phase I”) for the Leased Premises
within six (6) months of the Effective Date. Such Phase I shall serve as a baseline for the provisions of this
Paragraph 5.7 and 5.8 below. If such Phase I \ identifies conditions that need to be remediated, Lessor shall
forthwith do so at its sole cost and expense, if Lessee so elects. Lessee shall notify the Cities of its decision to
remediate within thirty (30) days of completion of the Phase I. If Lessee does not elect to remediate, the Lease
shall terminate on the thirty-first (31st) day after completion of the Phase I. Thereafter, Lessee shall not cause
or permit any Hazardous Material as said term is hereinafter defined, to be brought upon, kept or used in or
about the Leased Premises by Lessee, its agents, employees, contractors, or sublessees without the prior written
consent of the Cities, which consent the Cities shall not unreasonably withhold, condition or delay as long as
Lessee demonstrates to the Cities’ reasonable satisfaction that such Hazardous Material is necessary, desirable
or useful to Lessee’s business or operations on the Leased Premises and will be used, kept and stored in
compliance with all laws regulating such Hazardous Material (“Hazardous Material Regulations”).
Notwithstanding the foregoing, aircraft fuel, lubricating oil, antifreeze and biodegradable cleaning solvents
used in the course of aircraft maintenance may be brought upon and used on the Leased Premises in the ordinary
course of Lessee’s or its sublessees’ operations as long as any such materials are used, kept, stored, transported
and disposed of in compliance with all applicable Hazardous Material Regulations, including, without
limitation, the Storm Water Management Plan adopted by the Cities. If (i) Lessee breaches the obligations
stated in the preceding sentence, or (ii) if the presence of Hazardous Material on the Leased Premises if caused
by or voluntarily permitted by Lessee results in contamination of the Leased Premises, then Lessee shall
indemnify, defend and hold the Cities harmless from any and all claims, judgments, damages, penalties, fines,
costs, liabilities, or losses which arise during or after the lease term as the result of such contamination. This
indemnification of the Cities by Lessee includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal or restoration work required by any federal,
state, or local governmental agency or political subdivision because of Hazardous Material present in the soil
or groundwater on or under the Leased Premises that occurred during the term of this Agreement as a result of
Lessee’s or its sublessees’ acts. Without limiting the foregoing, if the presence of any Hazardous Material on
the Leased Premises caused or permitted by Lessee results in any contamination of the Leased Premises, Lessee
shall promptly take all actions, at its sole expense, as are necessary to return the Leased Premises to the
condition existing prior to the introduction of any such Hazardous Material to the Leased Premises.
5.8 “Hazardous Material” means any hazardous or toxic substance, material or waste which is or
becomes regulated by any local governmental authority, the State of Colorado, or the United States Government
and includes, without limitation, any material or substance that is (i) defined as a “hazardous substance” under
appropriate state law provisions; (ii) petroleum; (iii) asbestos; (iv) designated as a “hazardous substance”
pursuant to Section 311 of the Federal Water Pollution Act (33 U.S.C. §1321); (v) defined as “hazardous waste”
pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act (42 U.S.C. § 6903); (vi)
defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental
Compensation and Liability Act (42 U.S.C. §9601); or (vii) defined as a “regulated substance” pursuant to
Subchapter IX Solid Waste Disposal Act (Regulation of Underground Storage Tanks) (42 U.S.C. §6991).
5.9 As shown on the site plan attached hereto as Exhibit “B”, Lessee may, as part of the
Improvements, construct an expanded tarmac area and other paved areas outside the Rental Area but within the
boundaries of the Leased Premises (such expanded tarmac and other paved areas being hereinafter referred to
as “Additional Paved Areas”). Lessee shall construct the Additional Paved Areas in compliance with FAA
standards for airport design in effect at the time of construction. The Additional Paved Areas are depicted on
Exhibit “A” comprising a portion but not all of the Leased Premises. It is agreed that future parking areas to
serve a restaurant and related facilities will NOT be subject to FAA standards and will not be eligible for FAA
reimbursement contemplated below for expanded tarmac areas.
11
5.9.1 The parties hereto acknowledge and agree that portions of the Additional Paved Areas
that may be designated as expanded tarmac and other paved areas subject to airport ground control may
be eligible for reimbursement from the FAA discretionary grant resources. Accordingly, though Lessee
shall be responsible for the initial construction of such Additional Paved Areas, the Cities agree to
timely apply for FAA discretionary grant resources for purposes of reimbursing Lessee for the cost of
constructing same only to the extent that such grant request does not disproportionately impact Airport
projects; provided, however, Lessee acknowledges that the granting of such funding shall be in the
FAA’s sole discretion. If the FAA approves grant funding for the construction of any portion of the
Additional Paved Areas, the Cities shall so notify Lessee (which notification shall include details on
any and all FAA requirements for such funding) and shall reimburse Lessee for the cost of constructing
same (such reimbursement not to exceed the amount granted by the FAA) within ninety (90) days after
the Cities have received both such FAA funding and Lessee’s written request for reimbursement, which
written request shall include a final lien waiver from Lessee’s general contractor and invoices and other
reasonable documentation showing the cost of constructing such portions of the Additional Paved
Areas together with any other documentation that may be required by the FAA. If Lessee so elects to
construct such portions of the Additional Paved Areas, same shall be built in accordance with all state
and federal regulations, including those of the FAA and the Transportation Security Administration
(“TSA”), and Lessee shall warrant that the same shall be free of defects in materials and workmanship
for a period of two (2) years after substantial completion and acceptance by the Cities of same.
5.9.2 Upon completion of any of the Additional Paved Areas, Lessee shall be deemed to
have granted to the Cities and Airport users the right to use same from time to time for passage of
aircraft and other vehicles. If Lessee is reimbursed for its costs in constructing portions of the
Additional Paved Areas, Lessee shall pay the Cities as additional rent the Airport’s current improved
land lease rate for the square footage of the Additional Paved Areas except for those areas defined as
transitional surface for passage of aircraft that will not be solely utilized by the Improvements on the
Leased Premises (the “Additional Taxiway”). The Additional Taxiway, once determined, will be
marked and striped as a taxiway, and will be designed to replace the Existing Taxiway Delta and Alpha
One and will conform to FAA design standards for a Group 1 aircraft as defined in FAA Advisory
Circular 150/5300-13A. At all times, the Existing Taxiway shall remain open and accessible for the
passage of aircraft until such time as the Additional Taxiway is complete and acceptable for the passage
of aircraft in the sole discretion of the Airport Manager. The Additional Taxiway will connect current
taxiway Delta with current taxiway Alpha Throughout the term of this Agreement, the Cities shall be
responsible for the maintenance and repair of the Existing Taxiway and Additional Taxiway (the
“Airport Maintained Paved Areas”). Lessee shall have the right to charge reasonable and customary tie
down fees for temporary occupancy by aircraft of the Additional Paved Areas (other than transit or de
minimus occupancy). Notwithstanding anything contained in this Agreement to the contrary, it is
expressly agreed and understood that Lessee has no obligation to monitor or police vehicles (except
those allowed on the Airport by Lessee or its sublessees) on the Airport Maintained Paved Areas to
determine if they are legally upon the Airport or to determine if they are operating in a safe condition
or in a safe manner. Lessee shall be responsible (at its cost and expense) for maintaining the Additional
Paved Areas outside of the Additional Taxiway in a manner that is safe and clear of debris so as not to
cause danger or unsafe conditions for taxiing aircraft and Airport users. The Cities shall be solely
responsible (at their cost and expense) for maintaining only the Additional Taxiway.
5.10 Subject to the provisions of Article 10, Lessee shall keep the Leased Premises, and the
Improvements constructed by Lessee or its sublessees on the Leased Premises free and clear of any liens and
encumbrances, except as contemplated by Article 10, or unless expressly approved in writing by the Cities,
and shall indemnify, hold harmless and defend the Cities from any liens and encumbrances arising out of any
work performed or materials furnished by or at the direction of Lessee or its sublessees. In the event any lien
is filed, Lessee shall do all acts necessary to discharge any lien within ten (10) days of filing, or if Lessee desires
to contest any lien, then Lessee shall deposit with the Cities such security as the Cities shall reasonably demand
to insure the payment of the lien claim. In the event Lessee fails to pay any lien claim when due or fails to
12
deposit the security with the Cities, then the Cities shall have the right to expend all sums necessary to discharge
the lien claim, and Lessee shall pay the Cities, as additional rental when the next rental payment is due, all sums
expended by the Cities in discharging any lien, including reasonable attorneys’ fees and costs.
ARTICLE 6: ADDITIONAL OBLIGATIONS OF LESSEE
6.1 Lessee shall conduct its operations and cause each of its sublessees to conduct their operations
hereunder in an orderly and proper manner, considering the nature of such operations, so as not to unreasonably
annoy, disturb, endanger or be offensive to others.
6.2 Further, Lessee shall take all reasonable measures:
6.2.1 To reduce to a practicable minimum vibrations tending to damage any equipment,
structure, buildings or portions of buildings.
6.2.2 Not to produce or allow to be produced on the Airport through the operation of
machinery or equipment any electrical, electronic or other disturbances that interfere with the operation
by the Cities or the FAA of air navigational, communication or flight equipment on the Airport or on
aircraft using the Airport, or with ground transportation communications.
6.3 Lessee shall comply and shall require all of its sublessees to comply with all federal, state and
municipal laws, ordinances, rules, regulations and requirements, the Minimum Standards, Airport security rules
and regulations, and other Airport rules and regulations, as they now exist or may hereafter be amended or
promulgated, and the terms of this Agreement, applicable to the Leased Premises and the Improvements thereon
and its operations and activities at the Airport hereunder.
6.4 Lessee and its sublessees shall commit no nuisance, waste or injury on the Leased Premises,
and shall not do, or permit to be done, anything that may result in the creation, commission or maintenance of
such nuisance, waste or injury on the Leased Premises.
6.5 Lessee shall take measures and shall require its sublessees to take measures to ensure security
in compliance with FAA and TSA regulations and the Airport Security Plan, as they now exist or may hereafter
be amended or promulgated.
6.6 Lessee and its sublessees shall not do, nor permit to be done, any act or thing which will
invalidate or conflict with any fire insurance policies or regulations applicable to the Leased Premises or any
part thereof; or other contiguous premises at the Airport.
6.7 Lessee and its sublessees shall be responsible for complying with all laws and regulations
related to the the installation, maintenance or operation of any restaurant, kitchen, stand or other establishment
of any type for the sale of food or of any vending machines or device designed to dispense or sell merchandise
or services of any kind to the general public.
6.8 Except for uses permitted under Article 3 hereof, Lessee shall not provide or allow to be
provided, any services of any sort on the Leased Premises for commercial purposes without all required
development approvals, and a license from the Cities if and as required by the Minimum Standards then in
effect.
6.9 Lessee will conduct its operations and require its sublessees to conduct their operations in such
a manner as to keep the noise produced by aircraft engines and component parts thereof, and any other noise,
to a minimum, by such methods as are practicable, considering the extent and type of the operations of Lessee
and/or its sublessees and the limitations of federal law. Lessee and its sublessees agree that all aircraft based
on the Leased Premises shall comply with the noise standards established under Part 36 of Title 14 of the Code
13
of Federal Regulations (“FAR 36”) as amended from time to time. In addition, Lessee and its sublessees will
employ the maximum amount of noise arresting and noise reducing devices that are available and economically
practicable, considering the extent of their operations, but in no event less than those devices required by
federal, state or local law. In its use of the Leased Premises, Lessee and its sublessees shall take all possible
care, exercise caution and use commercially reasonable efforts to minimize prop or jet blast interference and
prevent jet blast damage to aircraft operating on taxiways and to buildings, structures and roadways, now
located on or which in the future may be located on areas adjacent to the Leased Premises. In the event the
Cities determine that Lessee and/or its sublessees has not curbed the prop or jet blast interference and/or
damage, Lessee hereby covenants and agrees to erect and maintain at its own expense such structure or
structures as may be necessary to prevent prop or jet blast interference, subject, however, to the prior written
approval of the Cities as to type, manner and method of construction.
6.9 Lessee shall not store nor permit the storage of disabled aircraft or any equipment or materials
outside of the Improvements on the Leased Premises for any period in excess of thirty (30) consecutive days
without the prior written approval of the Cities.
6.10 On forms and at the frequency prescribed by the Airport Manager at least annually, and with
respect to each aircraft regularly stored on the Leased Premises, Lessee shall provide the Cities with the (a)
make and model (b) N-number and (c) identity and address of the registered owner. This requirement shall
apply to aircraft whether owned by Lessee or another party, and regardless of whether its storage is subject to
the Minimum Standards.
ARTICLE 7: INGRESS AND EGRESS
7.1 Lessee and its sublessees shall have the right of ingress and egress between the Leased
Premises and the public landing areas at the Airport by means of connecting taxiways; and between the Leased
Premises and the entrance(s) to the Airport by means of connecting paved roads. In addition, Lessee and its
sublessees shall have the right to use the public runways and public aviation aids at all times during which they
are open to the public. Such rights of ingress, egress and use shall be in common with others having rights of
use and passage thereon.
7.1.1 Lessee shall be responsible for the construction of any taxiways and/or roadways
needed for access to the Leased Premises at its sole cost and expense. Upon completion of construction,
those portions of any such taxiways or roadways located off the Leased Premises shall be conveyed
and dedicated to the Cities or City of Loveland, as determined in a development agreement to be
considering during the Inspection and Entitlement Period as part of site plan development approval
process that shall address maintenance, conveyance and dedication, warranty, and warranty surety.
7.2 The use of any roadways or taxiways on the Airport shall be subject to the Rules and
Regulations of the Airport, which are now in effect or which may hereafter be promulgated, and subject to
temporary closure, provided, however, that any closure shall be only for reasonably necessary or unique
circumstances, and provided that fourteen (14) days’ prior written notice will be given to Lessee relevant to
any closure, unless such closure is necessary due to emergency. Lessee, for itself and its authorized sublessees,
hereby releases and discharges the Cities, the Commission, their officers, employees and agents, and all their
respective successors and assigns, of and from any and all claims, demands, or causes of action which Lessee
or its authorized sublessees may now or at any time hereafter have against any of the foregoing, arising or
alleged to arise out of the closing of any street, roadway or other area, provided that other reasonable means of
access to the Leased Premises remain available to Lessee without cost to Lessee, unless otherwise mandated
by emergency safety considerations or lawful exercise of the police power. Lessee shall not do or permit
anything to be done which will interfere with the free access and passage of others to space adjacent to the
Leased Premises or in any streets or roadways on the Airport.
14
7.3 Lessee understands and agrees that the public taxilanes on the Leased Premises may be used
by all airplanes legally upon the Airport. Lessee shall assure that the public taxilanes are left open and
unobstructed. Notwithstanding anything contained in this Agreement to the contrary, it is expressly agreed and
understood that Lessee has no obligation to monitor or police vehicles (except those allowed on the Airport by
Lessee) on the public taxilanes to determine if they are legally upon the Airport or to determine if they are
operating in a safe condition or in a safe manner.
ARTICLE 8: INSURANCE, DAMAGE OR DESTRUCTION
8.1 Lessee, at its sole cost and expense, shall procure and maintain throughout the term of this
Agreement insurance protection for all risk coverage on the Improvements which are part of the Leased
Premises to the extent of one hundred percent (100%) of the actual replacement cost thereof. All policies of
insurance required herein shall be taken out with insurance companies qualified to do insurance business in the
State of Colorado and having a Bests’ Insurance Guide rating of at least A-, and all such policies shall be
renewed at least ten (10) days before their expiration date.
8.1.1 The above stated property insurance shall be for the benefit and to safeguard the
interests of the Cities and Lessee.
8.1.2 Lessee shall settle all losses with the insurance carrier. Lessee shall consult with the
Cities and use its best efforts to obtain a settlement that covers the cost of repairing or rebuilding the
Improvements.
8.1.3 Lessee shall provide certificates of insurance, in a form acceptable to the Cities and
marked “premium paid” evidencing existence of all insurance required to be maintained prior to
occupancy of the Improvements. Upon the failure of Lessee to maintain such insurance as above
provided, the Cities, at their option, may take out such insurance and charge the cost thereof to Lessee,
which shall be payable on demand, or may give notice of default pursuant to Article 18.
8.2 In the event the Improvements and any subsequent improvements, insurable or uninsurable, on
the Leased Premises are damaged or destroyed to the extent that they are unusable by Lessee for the purposes
for which they were used prior to such damage, or same are destroyed, Lessee shall promptly repair and
reconstruct the Improvements substantially as they were immediately prior to such casualty or in a new or
modified design, subject to the provisions of Article 5 hereof and applicable building codes and Airport design
standards, if any, existing at the time of repairing or rebuilding. If the aforesaid damage or destruction occurs
in the last five (5) years of the Term, Lessee may elect not to repair and reconstruct the Improvements, subject
to the following terms and conditions:
8.2.1 Lessee shall give the Cities written notice of its election not to repair and reconstruct
the Improvements within ninety (90) days of the date upon which the Improvements were damaged or
destroyed. Is such case, and Cities shall have the option of either:
8.2.1.1 Requiring Lessee to clear the site, remove all debris and paving, stub up all
utilities, and restore the site to its original cleared condition prior to commencement
of construction; in which case Lessee shall retain all insurance proceeds above those
necessary to fund such site restoration; or
8.2.1.2 Taking title to the damaged Improvements, as is, in which case Lessee shall
assign to and the Cities shall retain all insurance coverage and proceeds.
8.2.2 Upon Lessee’s notice under Section 8.2.1 hereof and Lessee’s compliance with the
provisions of Sections 8.2.1.1 or 8.2.1.2 hereof, the Cities shall terminate this Agreement and relieve
Lessee of all future rental obligations hereunder.
15
8.3 All policies of insurance required herein shall name the Cities as additional insureds.
8.4 Whenever in this Agreement, provision is made for the carrying of any insurance, it shall be
deemed that such provision is complied with if such insurance otherwise complying with such provision is
carried under a blanket policy or policies covering the Leased Premises as well as other properties.
8.5 Lessee shall not violate, nor permit to be violated, any of the conditions of any of the said
policies; and shall perform and satisfy, or cause to be satisfied, the requirements of the companies writing such
policies.
ARTICLE 9: LIABILITIES AND INDEMNITIES
9.1 The Cities shall not in any way be liable for any cost, liability, damage or injury, including cost
of suit and expenses of legal services, claimed or recovered by any person whomsoever as a result of any
operations, works, acts or omissions performed on the Leased Premises, or the Airport, by Lessee, its agents,
servants, employees or authorized sublessees, or their guests or invitees. Lessee, and each of its sublessees,
shall not in any way be liable for any cost, liability, damage or injury, including cost of suit and expenses of
legal services, claimed or recovered by any person whomsoever as a result of any operations, works, acts or
omissions performed on the Leased Premises, or the Airport, solely by the Cities or the Commission, their
agents, servants, employees or authorized tenants, or their guests or invitees.
9.2 Lessee agrees (and shall cause its sublessees to agree) to indemnify, save and hold harmless,
the Cities and the Commission, their officers, agents, servants and employees (collectively, “Indemnified
Parties”), of and from any and all costs, liability, damage and expense, including costs of suit and reasonable
expenses of legal services, claimed or recovered, justly or unjustly, falsely, fraudulently or frivolously, by any
person, firm or corporation by reason of injury to, or death of, any person or persons, including Cities’
personnel, and damage to, destruction or loss of use of any property, including Cities’ property, to the extent
arising from, or resulting from, any operations, works, acts or omissions of Lessee, its agents, servants,
employees, contractors, or authorized sublessees; provided, however, the foregoing indemnity shall not apply
to the extent any such cost, liability, damage or expense arises from the negligence or willful misconduct of
any Indemnified Parties. Upon the filing with the Cities by anyone of a claim for damages arising out of
incidents for which Lessee herein agrees to indemnify and hold the Indemnified Parties harmless, the Cities
shall notify Lessee of such claim and in the event that Lessee does not settle or compromise such claim, then
Lessee shall undertake the legal defense of such claim on behalf of Lessee and the Indemnified Parties. It is
specifically agreed, however, that the Cities at their own cost and expense, may participate in the legal defense
of any such claim. Any final judgment rendered against the Indemnified Parties for any cause for which Lessee
is liable shall be conclusive against Lessee as to liability and amount upon the expiration of the time for appeal.
9.3 Lessee shall procure and keep in force during the term of this Agreement a policy of
commercial general liability insurance insuring Lessee and the Cities against any liability for personal injury,
bodily injury, death, or property damage arising out of the subject of this Agreement with a combined single
limit of at least Five Million dollars ($5,000,000.00). Lessee shall also procure and keep in force during the
term of this Agreement policies or endorsements providing coverage for aircraft liability, hangar keepers’
liability, products liability, motor vehicle liability and insured contracts coverage with the same combined
single limit. Finally, Lessee shall maintain workers’ compensation insurance in accordance with Colorado law.
The policies shall be for the mutual and joint benefit and protection of Lessee and the Cities and such policies
shall contain a provision that the Cities, although named as an insured, shall nevertheless be entitled to recovery
under said policies for any loss occasioned to it, its servants, agents, citizens, and employees by reason of
Lessee’s negligence. Lessee shall provide certificates of insurance, in a form reasonably acceptable to the
Cities and marked “premium paid” evidencing existence of all insurance required to be maintained by Lessee
prior to the Commencement Date. In addition to the insurance requirements of this Section 9.3, Lessee shall
procure (or cause the operator of the FBO facility to procure), prior to the opening and operation of the FBO
16
facility, all insurance for an FBO and for any additional specialized services offered by Lessee (or the FBO
operator) as required by the Minimum Standards; provided that in the event of any conflict between the
insurance provisions of this Agreement and the terms of the Minimum Standards, the most stringent insurance
requirements shall apply.
9.4 Lessee represents that it is the owner of or fully authorized to use any and all services,
processes, machines, articles, marks, names or slogans used by it in its operations under or in any way connected
with this Agreement. Lessee agrees to save and hold the Cities, their officers, employees, agents and
representatives free and harmless of and from any loss, liability, expense, suit or claim for damages in
connection with any actual or alleged infringement of any patent, trademark or copyright, or arising from any
alleged or actual unfair competition or other similar claim arising out of the operations of Lessee under or in
any way connected with this Agreement.
ARTICLE 10: LEASEHOLD MORTGAGES
10.1 Subject to the Cities’ prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed, Lessee may, at any time, or from time to time, hypothecate, pledge, encumber or
mortgage its interest in this Agreement, the leasehold estate in the Leased Premises created hereby, or any part
or parts thereof or interest therein. No mortgage or other encumbrance of the leasehold that is granted by
Lessee may encumber the fee or reversionary interest of the Cities in the Leased Premises. So long as Lessee
is in compliance with all terms, conditions, and provisions of the Lease, the right of Lessee to mortgage its
leasehold estate shall be a continuing right and shall not be deemed to be exhausted by its exercise on one or
more occasions. However, it shall be a further condition of Lessee’s right to mortgage its leasehold estate that
the mortgagee agree notwithstanding the terms of any mortgage that all insurance proceeds available to Lessee
will be applied to repair and restore any damaged building(s) or other improvements located on the Leased
Premises. If Lessee shall execute a Leasehold Mortgage of its leasehold estate, and if the holder of such
Leasehold Mortgage shall provide the Cities through the Commission or Airport Manager with notice in the
manner described in Article 23 with notice of such Leasehold Mortgage together with a true copy of such
Leasehold Mortgage and the name and address of the Leasehold Mortgagee (as hereinafter defined), then
following receipt of such notice by the Cities, the provisions of this Article 10 shall apply in respect to such
Leasehold Mortgage.
10.2 The term “Leasehold Mortgage” as used in this Agreement shall include, but not be limited
to, a mortgage, a deed of trust, a deed to secure debt, or other security instrument by which Lessee’s leasehold
estate is mortgaged, conveyed, assigned, or otherwise transferred, to secure a debt or other obligation in
connection with the construction contemplated by Article 5, above. The term “Leasehold Mortgagee” as used
in this Agreement shall refer to the holder of any Leasehold Mortgage upon the leasehold estate created by this
Agreement and/or in Lessee’s interest and estate in any Improvements.
10.3 The Cities, upon providing Lessee any notice of default under this Agreement or termination
of this Agreement, shall at the same time provide a copy of such notice to the Leasehold Mortgagee by first
class U.S. mail at the address specified in the notice given pursuant to Section 10.1, above. Such Leasehold
Mortgagee shall have the additional periods of time specified in Sections 10.4 hereof to remedy, commence
remedying, or cause to be remedied the default or acts or omissions which are specified in any such notice.
The Cities shall accept such performance by or at the instigation of such Leasehold Mortgagee as if the same
had been done by Lessee.
10.4 Anything contained in this Agreement to the contrary notwithstanding, if any default shall
occur which entitles the Cities to terminate this Agreement, the Cities shall have no right to terminate this
Agreement unless, following the expiration of the period of time given Lessee to cure such default or the act or
omission which gave rise to such default, the Leasehold Mortgagee is given an additional period of sixty (60)
days to:
17
10.4.1 Notify the Cities of such Leasehold Mortgagee’s desire to defeat such termination
notice; and
10.4.2 Pay or cause to be paid all rent, additional rent, and other payments then due and in
arrears as specified in the termination notice to such Leasehold Mortgagee and which may become due
during such sixty (60) day period; and
10.4.3 Comply with due diligence and continuity, or in good faith commence to and with
diligence continue to pursue compliance with all non-monetary requirements of this Agreement then
in default.
10.5 The making of a Leasehold Mortgage shall not be deemed to constitute an assignment or
transfer of this Agreement or of the leasehold estate hereby created, nor shall the Leasehold Mortgagee, as such,
be deemed to be an assignee or transferee of this Agreement or of the leasehold estate hereby created so as to
require such Leasehold Mortgagee, as such, to assume the performance of any of the terms, covenants or
conditions of this Agreement. Any Leasehold Mortgagee who acquires Lessee’s interest in this Agreement by
foreclosure, assignment in lieu of foreclosure or otherwise shall be deemed to be a permitted assignee or
transferee, and shall be deemed to have agreed to perform all of the terms, covenants and conditions on the part
of Lessee to be performed hereunder from and after the date of such purchase or assignment, but only for so
long as such purchaser or assignee is the owner of the leasehold estate. If the Leasehold Mortgagee or its
designee shall become holder of the leasehold estate and if the Improvements on the Leased Premises shall
have been or become materially damaged on, before or after the date of such purchase or assignment, the
Leasehold Mortgagee or its designee shall, subject to Section 8.2 hereof, be obligated to repair, replace or
reconstruct the damaged Improvements.
ARTICLE 11: RULES AND REGULATIONS
Lessee acknowledges that the Cities have proposed or adopted rules and regulations with respect to the
occupancy and use of the Airport (“Rules and Regulations”), and such Rules and Regulations may be
amended, supplemented or re-enacted from time to time by the Cities, provided that such Rules and Regulations
apply generally to all similar occupants and users on the Airport and same do not unreasonably impede, impair
or restrain general aviation usage at the Airport. Lessee and its sublessees agree to observe and obey any and
all such Rules and Regulations and all other federal, state and municipal rules, regulations and laws and to
require its officers, agents, employees, sublessees, contractors, and suppliers to observe and obey the same. In
the event of a conflict between the provisions of the Rules and Regulations and this Agreement, the more
stringent provisions shall control. This provision will include compliance with the Airport’s Noise Abatement
Plan as it now exists and as it may hereafter be amended or supplemented. The Cities reserve the right to deny
access to the Airport and its facilities to any person, firm or corporation that fails or refuses to obey and comply
with the Rules and Regulations or any other applicable rules, regulations or laws. Nothing in this Article 11
shall be construed to limit the rights of Lessee to file any action challenging the lawfulness of any such
amendment, supplement or reenactment of any such Rules and Regulations, or to challenge the application of
the same to Lessee.
ARTICLE 12: SIGNS
Lessee shall have the right to install and maintain one or more signs on the Leased Premises identifying
Lessee, its sublessees and their operations and identifying permitted business tenants in the FBO facility;
provided, however, the subject matter, type, design, number, location and elevation of such signs, and whether
lighted or unlighted, shall be subject to and in accordance with the City of Loveland Sign Code and Airport
design standards, if any. No sign will be allowed that may be confusing to aircraft pilots or automobile drivers
or other traffic.
18
ARTICLE 13: ASSIGNMENT AND SUBLEASE
13.1 The prior written consent of the Cities shall be required for any sale, transfer, assignment or
sublease of this Agreement and of the leasehold estate hereby created. Consent may be withheld by the Cities
in the event (a) Lessee is in default of any of the terms or conditions of this Agreement beyond any applicable
notice and cure period; (b) the transferee, assignee or sublessee does not deliver to the Cities its written
agreement to be bound by all of the provisions of this Agreement in a form reasonably satisfactory to the Cities;
(c) the transferee, assignee or sublessee does not submit proof of insurance as required at Sections 8 and 9,
herein; or (d) the transferee, assignee or sublessee has not met the licensing requirements set forth in the
Minimum Standards. In reviewing a request for consent to assignment or sublease of this Agreement, the Cities
may inquire into the legal, technical and financial qualifications of the proposed transferee, assignee or
sublessee, and Lessee shall provide such information and assistance as may be reasonably requested in doing
so. The Cities may condition their consent to or deny consent for any transfer, assignment or sublease upon
terms and conditions reasonably related to the legal, technical, and financial qualifications of the proposed
transferee, assignee or sublessee. Consent shall not otherwise be unreasonably withheld, conditioned or
delayed. Upon the granting of written consent by the Cities and actual transfer or assignment, Lessee shall be
released by the Cities from its obligations under this Agreement. Other than in the manner set forth in Article
29 below, Lessee shall not subdivide or fractionalize either its ownership of the Improvements or leasehold
interest in the Leased Premises.
13.2 Notwithstanding the provisions of Section 13.1, Lessee shall have the right to engage in the
following activities through sublease, license or concession agreements, which shall be subject and subordinate
to this Agreement and include the same insurance and indemnity provisions in favor of the Cities, without the
prior written consent of the Cities:
13.2.1 “Aeronautical activities” as defined in Section 3.1 above; and
13.2.2 Subletting of hangar space, retail and restaurant space, office space and the FBO
facility, renting of tie-down space, and other activities included in services provided by an FBO under the
Minimum Standards, as amended from time to time.
13.3 Notwithstanding anything to the contrary contained herein, Lessee shall be permitted to assign
this Agreement (without the need for Cities’ approval) to any corporation with which Lessee may merge or
consolidate, or to which Lessee may sell or assign all or substantially all of its corporate assets, or to a wholly
owned subsidiary or affiliate, so long as such corporation or entity taking assignment is controlled by Martin
Lind.
13.4 Any attempt to transfer any interest in violation of the provisions of this Article 13 shall be
void unless otherwise provided by Colorado law.
ARTICLE 14: CONDEMNATION
In the event that all or any portion of the Leased Premises is taken for any public or quasi-public purpose by
any lawful power or authority by the exercise of the right of appropriation, condemnation or eminent domain
(or pursuant to a sale to such power or authority under the threat of condemnation or eminent domain), all rents
payable with respect to that portion of the Leased Premises taken shall no longer be payable, and the proceeds,
if any, from such taking or sale shall be allocated between the Cities and Lessee in accordance with the
applicable condemnation law, with Lessee being entitled to compensation for the fair market value of the
leasehold interest, Improvements and personal property taken. If a portion of the Leased Premises is so taken
or sold, and as a result thereof, the remaining part cannot reasonably be used to continue the authorized uses
set forth in Article 3, as determined by Lessee in its sole discretion, then this Agreement shall terminate at
Lessee’s election, and Lessee’s obligation to pay rent and perform the other conditions of this Agreement shall
be deemed to have ceased as of the date of such taking or sale. In the event Lessee elects not to terminate this
19
Agreement, effective as of the date of such taking, the rental payable hereunder shall be wholly abated during
any time Lessee or its sublessees are unable to carry on their operations, and upon restoration and resumption
of Lessee’s and its sublessees’ operations, the rental payable hereunder shall be reduced by the same proportion
which that portion of the Leased Premises so taken bears to the entire area of the Leased Premises prior to such
taking. Nothing in this subparagraph shall be construed to limit the Cities' rights to condemn Lessee's leasehold
rights and interests in the Leased Premises pursuant to state law.
ARTICLE 15: NON-DISCRIMINATION
15.1 Lessee, for itself, its heirs, personal representatives, successors in interest, and assigns, as a
part of the consideration hereof, does hereby covenant and agree as a covenant running with the land that in the
event facilities are constructed, maintained, or otherwise operated on the Leased Premises, for a purpose for
which a United States government program or activity is extended, Lessee shall maintain and operate such
facilities and services in compliance with all requirements imposed pursuant to Title 49, Code of Federal
Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in
federally-assisted programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights
Act of 1964, and as said regulations may be amended.
15.2 Lessee, for itself, its personal representatives, successors in interest and assigns, as a part of
the consideration hereof, does hereby covenant and agree as a covenant running with the land that:
15.2.1 No person on the grounds of race, color, national origin, creed, religion, sex, disability,
or age and without regard to the exercise of rights guaranteed by state or federal law shall be excluded
from participating in, denied the benefits of, or be otherwise subjected to discrimination in the use of
the Leased Premises;
15.2.2 In the construction of any Improvements on, over or under such land and the furnishing
of services thereon, no person on the grounds of of race, color, national origin, creed, religion, sex,
disability or age shall be excluded from participation in, denied the benefits of, or otherwise be
subjected to discrimination;
15.2.3 That Lessee shall use the Leased Premises in compliance with all other requirements
imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation,
Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in federally-assisted programs of the
Department of Transportation Effectuation of Title VI of the Civil Rights Act of 1964, and as said
regulations may be amended.
15.3 In this connection, the Cities reserve the right to take whatever action they might be entitled
by law to take in order to enforce this provision following sixty (60) days’ prior written notice to Lessee of any
alleged violation. This Article 15 is to be considered as a covenant on the part of Lessee, a breach of which,
continuing after notice by the Cities to cease and desist and after a determination that a violation exists made
in accordance with the procedures and appeals provided by law, will constitute a material breach of this
Agreement and will entitle the Cities, at their option, to exercise its right of termination as provided for herein,
or take any action that it deems necessary to enforce compliance herewith.
15.4 To the extent legally required and applicable, Lessee assures that it will undertake an
affirmative action program as required by 14 CFR, Part 152, Subpart E, to ensure that no person shall on the
grounds of race, creed, color, national origin, disability or sex, be excluded from participation in any
employment activities covered in 14 CFR Part 152 Subpart E. Lessee assures that no person shall be excluded
on these grounds from participating in or receiving the services or benefits of any program or activity covered
by this subpart. Lessee assures that it will require that its covered sub organizations provide assurances to
Lessee that they similarly will undertake an affirmative action program and that they will require assurances
from their sub organizations, to the extent required by 14 CFR Part 152, Subpart E, to the same effect.
20
15.5 Lessee shall include the foregoing provisions (Sections 15.1 through 15.4) in every agreement
or concession pursuant to which any person or persons, other than Lessee, operates any facility at the Leased
Premises providing service to the public and shall include a provision granting the Cities a right to take such
action as the United States may direct to enforce such covenant.
ARTICLE 16: GOVERNMENTAL REQUIREMENTS
16.1 Lessee shall procure all licenses, certificates, permits or other authorization from all
governmental authorities, if any, having jurisdiction over Lessee’s operations at the Leased Premises which
may be necessary for Lessee’s operations on the Airport.
16.2 Lessee shall pay all taxes, license, certification, permits and examination fees and excise taxes
which may be assessed, levied, exacted or imposed on the Leased Premises or operation hereunder or on the
gross receipts or gross income to Lessee therefrom, and shall make all applications, reports and returns required
in connection therewith.
16.3 Lessee shall pay all water, sewer, utility and other applicable use taxes and fees, arising from
its occupancy and use of the Leased Premises and/or the Improvements.
16.4 Lessee agrees that the Cities are governmental entities; therefore, all direct and indirect
financial obligations of each City under this Agreement shall be subject to annual appropriations pursuant to
Article X, Section 20 of the Colorado Constitution, the Cities' respective charters and ordinances, and applicable
law. This Agreement and the obligations of the Cities hereunder do not constitute a multi-year fiscal obligation
and are expressly contingent upon the Cities' respective governing bodies budgeting and appropriating the funds
necessary to fulfill the Cities’ respective obligations.
ARTICLE 17: RIGHTS OF ENTRY RESERVED
17.1 The Cities, by their officers, employees, agents, representatives and contractors, shall have the
right at all reasonable times to enter upon the Leased Premises and enter the Improvements for any and all
purposes not inconsistent with this Agreement, including, without limitation, inspection, environmental testing,
and repair and maintenance of the Additional Taxiway, if it exists, provided such action by the Cities, their
officers, employees, agents, representatives and contractors does not unreasonably interfere with Lessee’s (or
its sublessees’) use, occupancy or security requirements of the Leased Premises. Except when necessary for
reasons of public safety or law enforcement, or for the protection of property, as reasonably determined by the
Cities, the Cities shall provide seventy-two (72) hours’ written notice of its intent to inspect.
17.2 Without limiting the generality of the foregoing, the Cities, by their officers, employees,
agents, representatives, contractors and furnishers of utilities and other services, shall have the right, at their
own cost and expense, whether for their own benefit, or for the benefit of others than Lessee at the Airport, to
maintain existing and future Airport mechanical, electrical and other utility systems and to enter upon the
easements in the Leased Premises to make such repairs, replacements or alterations thereto, as may, in the
opinion of the Cities, be deemed necessary or advisable, and from time to time to construct or install over, in
or under existing easements within the Leased Premises such systems or parts thereof and in connection with
such maintenance use the Leased Premises’ existing easements for access to other parts of the Airport otherwise
not conveniently accessible; provided, however, that in the exercise of such rights of access, repair, alteration
or new construction, the Cities shall not install a utility under or through any building on the Leased Premises
or unreasonably interfere with the actual use and occupancy of the Leased Premises by Lessee (or its
sublessees). It is specifically understood and agreed that the reservation of the aforesaid right by the Cities
shall not impose or be construed to impose upon the Cities any obligation to repair, replace or alter any utility
service lines now or hereafter located on the Leased Premises for the purpose of providing utility services only
to the Leased Premises; provided, however, that if the Cities repair, replace or alter any utility service lines now
21
or hereafter located on the Leased Premises for the purpose of providing utility services to others, the Cities
will restore the Leased Premises to their preexisting condition in a timely manner. Lessee will provide for the
installation, maintenance and repair, at its own expense, of all service lines of utilities providing services only
to the Leased Premises. Cities will repair, replace and maintain all other utility lines, at the Cities’ expense.
17.3 In the event that any personal property of Lessee or any sublessee shall obstruct the access of
the Cities, their officers, employees, agents or contractors, or the utility company furnishing utility service over,
along and across the existing easements to any of the existing utility, mechanical, electrical and other systems,
and thus shall interfere with the inspection, maintenance or repair of any such system pursuant to Section 17.2,
Lessee shall move such property, as directed by the Cities or said utility company, upon reasonable notice by
the Cities, in order that access may be had to the system or part thereof for inspection, maintenance or repair.
If Lessee or any sublessee shall fail to so move such property after direction from the Cities or said utility
company to do so, the Cities or the utility company may move it, and Lessee on behalf of itself and its sublessees
hereby waives any claim against the Cities for damages as a result there from, except for claims for damages
arising from the Cities’ negligence or willful misconduct.
17.4 The Cities reserve the right to access the Leased Premises at all times and without notice to
Lessee for the operation of emergency vehicles and fire trucks as necessary or appropriate to the safe operation
of the Airport.
ARTICLE 18: TERMINATION
18.1 In the event of a default on the part of Lessee in the payment of rents, the Cities shall give
written notice to Lessee and each holder of a Leasehold Mortgage, if any, of which they have been give notice
under Section 10.1, of such default, and demand the cancellation of this Agreement, or the correction thereof.
If, within sixty (60) days after the date the Cities give such notice, Lessee has not corrected said default and
paid the delinquent amount in full, then subject to Article 10 above, the Cities may, by written notice to Lessee
and the holder of a Leasehold Mortgage, terminate this Agreement.
18.2 Subject to the provisions of Section 18.1 and Article 10 above, this Agreement, together with
all rights and privileges granted in and to the Leased Premises, shall terminate at the option of the Cities with
prompt written notice to Lessee and the holder of a Leasehold Mortgage upon the happening of any one or
more of the following events:
18.2.1 The filing by Lessee of a voluntary petition in bankruptcy, or any assignment for
benefit of creditors of all or any part of Lessee’s assets; or
18.2.2 Any institution of proceedings in bankruptcy against Lessee; provided, however, that
Lessee may defeat such termination if the petition is dismissed within one hundred twenty (120) days
after the institution thereof; or
18.2.3 The filing of a petition requesting a court to take jurisdiction of Lessee or its assets
under the provision of any Federal reorganization act which, if it is an involuntary petition is not
dismissed within one hundred twenty (120) days after its being filed; or
18.2.4 The filing of a request for the appointment of a receiver or trustee of all, or substantially
all, of Lessee’s assets by a court of competent jurisdiction, which if the request if not made by Lessee
is not rejected within one hundred twenty (120) days after being made, or the request for the
appointment of a receiver or trustee of all, or substantially all, of Lessee’s assets by a voluntary
agreement with Lessee’s creditors.
18.3 Subject to Article 10, upon the default by Lessee in the performance of any covenant or
condition required to be performed by Lessee other than the payment of rent, and the failure of Lessee to remedy
22
such default for a period of sixty (60) days after mailing by the Cities of written notice to remedy the same,
unless more extensive notice is otherwise provided for in this Agreement, the Cities may, by written notice of
cancellation to Lessee, and each holder of a Leasehold Mortgage, terminate this Agreement and all rights and
privileges granted hereby in and to the Leased Premises.
18.4 Upon the default by Lessee, and the giving of notice of the default and cancellation by the
Cities as provided for elsewhere herein, the notice of cancellation shall become final.
18.5 Subject to the provisions of Section 18.1 and Article 10, upon the cancellation or termination
of this Agreement for any reason, all rights of Lessee, authorized tenants and any other person in possession of
the Leased Premises shall terminate, including all rights or alleged rights of Leasehold Mortgagees, sublessees,
creditors, trustees, assigns, and all others similarly so situated as to the Leased Premises. Except as may be
expressly provided to the contrary elsewhere herein, upon said cancellation or termination of this Agreement
for any reason, the Leased Premises and all Improvements located thereon, except for Lessee’s (and its
sublessees’) equipment, fixtures and other personal property which may be removed from said Leased Premises
without damage thereto as provided elsewhere herein, shall be and become the property of the Cities, free and
clear of all encumbrances and all claims of Lessee, its sublessees (if any), Leasehold Mortgagees, creditors,
trustees, assigns and all others, and the Cities shall have immediate right of possession of the Leased Premises
and such Improvements. Lessee agrees to execute any documents, if any, necessary to transfer title of such
Improvements to the Cities.
18.6 Failure by the Cities or Lessee to take any authorized action upon default by Lessee of any of
the terms, covenants or conditions required to be performed, kept and observed by Lessee shall not be construed
to be, nor act as, a waiver of said default nor of any subsequent default of any of the terms, covenants and
conditions contained herein to be performed, kept and observed by Lessee. Acceptance of rentals by the Cities
from Lessee, or performance by the Cities under the terms hereof, for any period or periods after a default by
Lessee of any of the terms, covenants and conditions herein required to be performed, kept and observed by
Lessee shall not be deemed a waiver or estoppel of any right on the part of the Cities to cancel this Agreement
for any subsequent failure by Lessee to so perform, keep or observe any of said terms, covenants or conditions.
18.7 This Lease will terminate at the option of Lessee:
18.7.1 Upon the permanent closure of the Airport, the term “permanent closure” to mean for
the purposes of this Agreement, the closure of the Airport for ninety (90) or more consecutive days;
18.7.2 The loss of the ability of Lessee, its sublessees or their customers due to no significant
fault of Lessee to fly in or out of the Airport for reasons other than inclement weather, casualty or
disaster, for a period of ninety (90) consecutive days; and
18.7.3 The default by Cities in the performance of any covenant or condition required to be
performed by the Cities, and the failure of the Cities to remedy such default for a period of sixty (60)
days after receipt from Lessee of written notice to remedy the same, or default in the timely payment
of any money due Lessee and failure to cure such default within sixty (60) days after notice to the
Cities. Notice of exercise of the option to terminate by Lessee shall be given in the manner specified
in Article 23 (Notices).
18.8 If, after the FBO facility is operational, Lessee ceases to conduct or cause to be conducted its
authorized Aeronautical Activities on the Leased Premises for a period of twelve (12) consecutive months, the
Cities may terminate this Agreement by written notice to Lessee given at any time while such cessation
continues, unless Lessee resumes or causes to be resumed such activities within sixty (60) days following
receipt of written notice from the Cities of such intent to terminate this Agreement.
23
18.9 Upon termination of this Agreement prior to the expiration of the Term, the Cities may, but
are not required to, relet the Leased Premises, or any part thereof, for the whole or any part of the remainder of
the Term, or for a longer period of time. Subject to Section 21.3, any rents received by the Cities as a result of
such reletting shall remain the property of the Cities and shall not be credited to or otherwise become the
property of Lessee.
ARTICLE 19: OWNERSHIP OF IMPROVEMENTS, SURRENDER
19.1 Title to the Improvements during the Term shall be in Lessee, but notwithstanding such title,
the terms and conditions of this Agreement shall govern the construction, use, maintenance and operation of
the Improvements and the exercise of Lessee’s rights with respect thereto; and Lessee’s right, title, interest, and
estate in and to the Improvements shall not be separable from the leasehold estate granted Lessee hereunder.
Lessee shall be entitled to claim all depreciation and other tax attributes applicable to the use and ownership of
the Improvements during the Term. Upon the expiration or earlier termination of this Agreement, title to the
Improvements shall vest in and become the full and absolute property of the Cities without need of any further
action being taken by Lessee or the Cities, and Lessee shall immediately surrender possession of the
Improvements upon such termination or expiration as provided in Section 19.2 below. Lessee shall execute
any and all documents, if any, necessary to transfer title to the Cities. Except as otherwise expressly set forth
herein, the value or cost of the Improvements constructed by Lessee shall not in any way constitute a substitute
for or a credit against any obligation of Lessee under this Agreement to pay rent as required pursuant to Article
4.
19.2 Subject to Section 8.2 above, upon the expiration, cancellation or earlier termination of this
Agreement pursuant to any terms hereof, Lessee shall peaceably quit and surrender the Leased Premises and
Improvements, and any and all machinery and equipment constructed, installed or placed by Lessee thereon
which is necessary to the operation of the Improvements to the Cities in good order and condition, ordinary
wear and tear and obsolescence in spite of repair excepted. Lessee shall have the right, but not the obligation,
within sixty (60) days after expiration or earlier termination of this Agreement to remove from the Leased
Premises all personal property, fixtures and trade equipment other than fixtures, machinery and equipment
necessary to the operation of the Improvements. Lessee shall repair, at its sole cost and expense, any damage
to the Leased Premises or to the Improvements caused by such removal.
19.3 Upon such expiration, cancellation or termination, the Cities may re-enter and repossess the
Leased Premises together with all Improvements and additions thereto, or pursue any remedy permitted by law
for the enforcement of any of the provisions of this Agreement, at the Cities’ election. In the event that Lessee
remains in possession of the Leased Premises after the expiration, cancellation or termination of this Agreement
without written agreement with respect thereto, then Lessee shall be deemed to be occupying the Leased
Premises as a tenant at-will, subject to all of the conditions, provisions and obligations of this Agreement, but
without any rights to extend the term of this Agreement. The Cities’ acceptance of rent from Lessee in such
event shall not alter the status of Lessee as a tenant at-will whose occupancy of the Leased Premises may be
terminated by the Cities at any time upon thirty (30) days’ prior written notice.
ARTICLE 20: SERVICES TO LESSEE
20.1 The Cities covenant and agree that during the term of this Agreement, and subject to Airport
priorities then in effect, they will use reasonable efforts to (a) operate the Airport as such for the use and benefit
of the public; provided, however, that the Cities may prohibit or limit any given type, kind or class of
aeronautical use of the Airport if such action is necessary for the safe and/or efficient operation of the Airport
or necessary to serve the civil aviation needs of the public, (b) maintain the runways, taxiways and Additional
Taxiway, if it exists, in good repair, including the removal of snow, and (c) keep in good repair hard-surfaced
public roads on the Airport for access to the Leased Premises and remove snow.
20.1.1 Except as otherwise expressly set forth herein, said obligations of the Cities relevant
to the maintenance of public roads and taxiways shall extend to the point where in such roads, streets
24
and taxiways reach the property line of the Leased Premises, or the Ramp area constructed by Lessee
under Article 4.5.
20.1.2 Except as otherwise expressly set forth herein, said obligations of the Cities relevant to
the snow removal from public roads and taxiways shall extend to the point where in such roads, streets
and taxiways reach the property line of the Leased Premises, and shall additionally include the Ramp
area constructed by Lessee under Article 4.5 subject to the snow removal limitations set forth under
Article 4.5, above.
20.2 Except in cases of emergency, in which case no notice shall be required, the Cities will give
not less than fourteen (14) days’ prior written notice to Lessee of any anticipated temporary Airport closure,
for maintenance, expansion or otherwise. Rent due for the Leased Premises under Article 4 shall abate on the
twenty first (21st) consecutive day of any voluntary temporary Airport closure by the Cities and such abatement
shall continue until the Airport reopens, provided that no abatement shall exceed a total of sixty (60)
consecutive days’ rent. Notwithstanding the above, the Cities shall not be deemed to be in breach of any
provision of this Article 20 in the event of a permanent closure of the Airport; provided, however, that if such
permanent closure is in connection with the construction of a new airport by the Cities, Lessee shall have the
option to enter into a substitute ground lease agreement with the Cities for the use of a portion of such new
airport not smaller than the Leased Premises under financial terms which are no less favorable than those set
forth herein.
ARTICLE 21: SURVIVAL OF THE OBLIGATIONS OF LESSEE
21.1 In the event that this Agreement shall have been terminated due to default by Lessee in
accordance with notice of termination as provided in Article 18, all of the obligations of Lessee under this
Agreement shall survive such termination, re-entry, regaining or resumption of possession and shall remain in
full force and effect for the full term of this Agreement, and the amount or amounts of damages or deficiency
shall become due and payable to the Cities to the same extent, at the same time or times, and in the same manner
as if no termination, re-entry, regaining or resumption of possession had taken place. The Cities may maintain
separate actions each month to recover the damage or deficiency then due or at its option and at any time may
sue to recover the full deficiency for the entire unexpired term of this Agreement discounted to present value.
21.2 The amount of damages for the period of time subsequent to termination (or re-entry, regaining
or resumption of possession) on account of Lessee’s rental obligations shall be the sum of the following:
21.2.1 The amount of the total of all installments of rents, less the installments thereof payable
prior to the effective date of termination; and
21.2.2 An amount equal to all expenses incurred by the Cities and not reimbursed in
connection with regaining possession, restoring the Leased Premises required by Article 19, above,
acquiring a new lease for the Leased Premises, legal expenses (including, but not limited to, reasonable
attorneys’ fees) and putting the Leased Premises in order.
21.3 There shall be credited to the account of Lessee against its survived obligations hereunder, the
amount actually received from any lessee, licensee, permittee, or other occupier in connection with the use of
the Leased Premises or Improvements or portions thereof during the balance of the term of this Agreement,
and the market value of the occupancy of such portions of the Leased Premises (including the Improvements)
as the Cities may themselves during such period actually use and occupy. No such use and occupancy shall
be, or be construed to be, an acceptance of a surrender of the Leased Premises, nor shall such use and occupancy
constitute a waiver of any rights of the Cities. The Cities will use their best efforts to minimize damages to
Lessee under this Article.
25
21.4 The provisions of this Article 21 shall not be applicable to termination of this Agreement if
expressly provided to the contrary elsewhere in this Agreement.
ARTICLE 22: USE SUBSEQUENT TO CANCELLATION OR TERMINATION
The Cities shall, upon termination or cancellation, or upon re-entry, regaining or resumption of
possession, have the right to repair and to make structural or other changes to the Leased Premises and
Improvements, including changes which alter their character and the suitability thereof for the purposes of
Lessee under this Agreement, without affecting, altering or diminishing the obligations of Lessee hereunder,
provided that any structural changes shall not be at Lessee’s expense.
ARTICLE 23: NOTICES
23.1 Any notice, consent, approval or other communication given by either party to the other
relating to this Agreement shall be in writing, and shall be delivered in person, sent by certified U.S. mail
postage prepaid, sent by reputable overnight courier, or sent by electronic means (with evidence of such
transmission received) to such other party at the respective addresses set forth below (or at such other address
as may be designated from time to time by written notice given in the manner provided herein). Such notice
shall, if hand delivered or personally served, be effective immediately upon receipt. If sent by US mail postage
prepaid, such notice shall be deemed given on the third (3rd) business day following deposit in the United
States mail, postage prepaid and properly addressed; if delivered by overnight courier, notice shall be deemed
effective on the first (1st) business day following deposit with such courier; and if delivered by electronic
means, notice shall be deemed effective when received.
23.2 The notice addresses of the parties are as follows:
To the Cities: Northern Colorado Regional Airport Commission
Attn: Airport Manager
4900 Earhart Drive
Loveland, CO 80538
Facsimile: (970) 962-2855
Email address: airport@cityofloveland.org
With a copy to: Loveland City Attorney’s Office
500 E. Third Street
Loveland, CO 80537
Fort Collins City Attorney’s Office
City Hall West
300 LaPorte Ave.
Fort Collins, CO 80521
and
To Lessee: Attn: Martin Lind
Attn: Gary White, Esq.
Company Name: Discovery Air, LLC
c/o Water Valley Land Company
Address: 1625 Pelican Lakes Pointe, Suite 201
City, State and Zip Code: Windsor, CO 80550
26
Email Address: mlind@watervalley.com
ARTICLE 24: INVALID PROVISIONS
The invalidity of any provisions, articles, paragraphs, portions or clauses of this Agreement shall have
no effect upon the validity of any other part or portion hereof, so long as the remainder shall constitute an
enforceable agreement. Furthermore, in lieu of such invalid provisions, articles, paragraphs, portions or
clauses, there shall be added automatically as a part of this Agreement, a provision as similar in terms to such
invalid provision as may be possible and be legal, valid and enforceable.
ARTICLE 25: MISCELLANEOUS PROVISIONS
25.1 Remedies to be Non-exclusive. All remedies provided in this Agreement shall be deemed
cumulative and additional and not in lieu of, or exclusive of, each other, or of any other remedy available to the
Cities, or Lessee, at law or in equity, and the exercise of any remedy, or the existence herein of other remedies
or indemnities shall not prevent the exercise of any other remedy, provided that the Cities’ remedies in the
event of default shall not exceed those set forth in this Agreement.
25.2 Non-liability of Individuals. No director, officer, agent or employee of the Cities shall be
charged personally or held contractually liable by or to the other party under any term or provision of this
Agreement or of any supplement, modification or amendment to this Agreement because of any breach thereof,
or because of his or their execution or attempted execution of the same. Except to the extent otherwise expressly
provided for herein, no officer, manager, member, agent or employee of Lessee shall be charged personally or
held contractually liable by or to the other party under any term or provision of this Agreement or of any
supplement, modification or amendment to this Agreement because of any breach thereof, or because of his or
their execution or attempted execution of the same.
25.3 Estoppel Certificate. At the request of Lessee in connection with (i) its obtaining a Leasehold
Mortgage or (ii) an assignment of its interest in this Agreement, the Cities shall execute and deliver a written
statement identifying them as the lessors under this Agreement and certifying:
25.3.1 The documents that then comprise this Agreement,
25.3.2 That this Agreement is in full force and effect,
25.3.3 The then current annual amount of rent and the date through which it has been paid,
25.3.4 The expiration date of this Agreement,
25.3.5 That no amounts are then owed by Lessee to the Cities (or, if amounts are owed,
specifying the same)
25.3.6 To the knowledge of the Cities, there are not defaults by Lessee under this Agreement
or any facts which but for the passage of time, the giving of notice or both would constitute such a
default, and
25.3.7 Remaining rights to renew the term of this Agreement to the extent not theretofore
exercised.
The Leasehold Mortgagee or party acquiring Lessee’s interest in this Agreement shall be entitled to rely
conclusively upon such written statement.
27
25.4 Recording of Memorandum of Agreement. A memorandum of this Agreement shall be
recorded by the Cities, and the costs of such recordation, and any closing costs associated with this Agreement,
its execution and recordation, shall be billed to and paid by Lessee as additional rent.
25.5 General Provisions.
25.5.1 This Agreement shall be construed in accordance with the laws of the State of
Colorado and venue shall be in Larimer County, Colorado.
25.5.2 This Agreement is made for the sole and exclusive benefit of the Cities and Lessee,
their successors and assigns, and is not made for the benefit of any third party.
25.5.3 In the event of any ambiguity in any of the terms of this Agreement, it shall not be
construed for or against any party hereto on the basis that such party did or did not author the same.
25.5.4 All covenants, stipulations and agreements in this Agreement shall extend to and bind
each party hereto, its legal representatives, successors and assigns.
25.5.5 The titles of the several articles of this Agreement are inserted herein for convenience
only, and are not intended and shall not be construed to affect in any manner the terms and provisions
hereof, or the interpretation or construction thereof.
25.5.6 Nothing herein contained shall create, or be construed to create, a partnership, joint
venture, agency or any other relationship between the Cities and Lessee, other than that of landlord and
tenant. The Cities and Lessee each expressly disclaim the existence of any such other relationship
between them.
25.5.7 Cities have and may allow certain portions of the Airport to be used by other tenants
at any time and Lessee shall not interfere in any manner with said other tenants or with the facilities
granted to such tenants. Nothing herein contained shall be construed to grant or authorize the granting
of an exclusive right prohibited by Section 308 of the Federal Aviation Act of 1958, as amended, and
the Cities reserved the right to grant to others the privilege and right of conducting any one or all of the
activities specified herein, or any other activities of an aeronautical nature.
25.5.8 In the event any action or proceeding is brought to recover payments due under this
Agreement or take possession of the Leased Premises and/or the improvements thereon, or to enforce
compliance with this Agreement for failure to observe any of its covenants, the prevailing party shall
be awarded reasonable attorneys’ fees and costs as set by the court.
25.5.9 The time within which either party hereto shall be required to perform any act under
this Agreement, other than the payment of money, shall be extended by a period equal to the number
of days during which performance of such act is delayed unavoidably by strikes, lockouts, acts of God,
governmental restrictions, failure or inability to secure materials or labor by reason of or similar
regulation or order of any governmental or regulatory body, war, enemy action, acts of terrorism, civil
disturbance, fire, unavoidable casualties, or any similar occurrence.
25.5.10 The Cities designate the Airport Manager as their representatives who shall make,
within the scope of their authority, all necessary and proper decisions with reference to this Agreement.
25.5.11 Lessee agrees that that the Cities are governmental entities subject to the Colorado
Open Records Act (“CORA”), C.R.S. § 24-72-201 to 205.5, which provides that all public records shall
be open for inspection by any person at reasonable times, except as provided in CORA or as otherwise
specifically provided by law. Lessee may mark any documents provided to the Cities as “trade secrets”,
28
“privileged information”, or “confidential commercial, financial, or other data.” Unless such
documents are marked appropriately and in accordance with CORA, the Cities may be required to
release relevant information related to this Agreement and the Leased Premises.
25.6 Availability of Government Facilities. In the event the existence, maintenance or operation of
air navigation aids or other facilities supplied or operated by the United States or the State of Colorado at or in
conjunction with the Airport are discontinued, the Cities shall have no obligation to furnish such facilities.
25.7 Avigation Easement. There is hereby reserved to the Cities, their successors and assigns, for
the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of
the Leased Premises, together with the right to cause in said airspace such noise as may be inherent in the
operation of aircraft, now known or hereafter used for navigation of or flight in the air, using said airspace or
landing at, taking off from or operating on the Airport. Lessee agrees to execute any and all documents, if any,
necessary to establish such avigation easement.
25.8 Part 77. Lessee agrees to comply with the notification and review requirements covered in
Part 77 of the Federal Aviation Regulations or any amendments thereto in the event any future structure or
building is planned for the Leased Premises, or in the event of any planned modification or alteration of any
present or future building or structure situated on the Leased Premises.
ARTICLE 26: SUBORDINATION CLAUSES
26.1 This Agreement is subject and subordinate to the following:
26.1.1 The Cities reserve the right to develop and improve the Airport in any manner
approved by the City Councils, provided Lessee is not deprived of (i) the use of or access to the Leased
Premises by motor vehicles and/or aircraft owned or operated by Lessee or Lessee’s assigns,
sublessees, renters, agents, employees or invitees or (ii) any of Lessee’s rights under this Agreement.
26.1.2 The Cities reserve the right to take any action they consider necessary to protect the
aerial approaches to the Airport against obstruction, together with the right to prevent Lessee from
erecting or permitting to be erected any building or other structure on the Airport which would limit
the usefulness of the Airport or constitute a hazard to aircraft.
26.1.3 This Agreement is and shall be subordinate to the provisions of existing and future
agreements between the Cities and the United States relative to the operation or maintenance of the
Airport, the execution of which has been or may be required as a condition precedent to the obtaining
or expenditure of federal funds for the benefit of the Airport. This Agreement shall also be subordinate
to any FAA and TSA regulations as they exist or as they may be amended from time to time in the
future.
26.1.4 During time of war or national emergency, the Cities shall have the right to lease all
or any part of the landing area of the Airport to the United States for military use, and if any such lease
is executed, the provisions of this Agreement insofar as they may be inconsistent with the provisions
of such lease to the government, shall be suspended, but such suspension shall not extend the term of
this Agreement. Abatement of rentals shall be reasonably determined by the Cities and Lessee in
proportion to the degree of interference with Lessee’s use of the Leased Premises.
26.1.5 Except to the extent required for the performance of any obligations of Lessee
hereunder, nothing contained in this Agreement shall grant to Lessee any rights whatsoever in the
airspace above the Leased Premises other than those reasonably necessary to Lessee’s enjoyment of
the Leased Premises and Cities’ Airport facilities and which are consistent with FAA rules, regulations
and orders currently or subsequently effective. Further, Lessee’s rights in airspace above the Leased
29
Premises and the Airport and the Airport facilities shall be not less than the rights therein by other users
of the Airport and Airport facilities.
ARTICLE 27: QUIET ENJOYMENT
Cities hereby covenant and warrant that they are the owners of the Leased Premises and that Lessee
upon payment of rentals herein provided for and performance of provisions on its part to be performed shall
and may peacefully possess and enjoy the Leased Premises during the term hereof and any extensions hereof
without any interruption or disturbance.
ARTICLE 28: ENTIRE AGREEMENT
This Agreement constitutes the entire agreement of the parties hereto and may be changed, modified,
discharged or extended by written instrument duly executed by the Cities and Lessee. The parties agree that
no representations or warranties shall be binding upon the Cities or Lessee unless expressed in writing.
ARTICLE 29: REQUIREMENTS FOR CONDOMINIUMIZATION
This Agreement does not authorize Lessee to create either a common interest community or hangar
condominiums on the Leased Premises. If Lessee desires to create a common interest community or hangar
condominiums on the Leased Premises, a written amendment to this Agreement shall be required, containing
such additional terms as the Cities may reasonably require, including but not necessarily limited to terms
necessary for compliance with the Colorado state law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first
above written.
[Signatures on the following page]
30
CITY OF LOVELAND, COLORADO
Stephen C. Adams, City Manager
ATTEST:
Clerk
APPROVED AS TO FORM:
_________________________________
Assistant City Attorney
CITY OF FORT COLLINS, COLORADO
___________________________________
Darin A. Atteberry, City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
_________________________________
Assistant City Attorney
Discovery Air, LLC, a Colorado limited liability company,
ATTEST:
By:
Name:
Title:
31
Exhibit “A”
Description of Leased Premises
[ATTACHED]
32
Exhibit “B”
Preliminary Site Plan
[ATTACHED]
BRL
ROFA
RSA
APPLICANT:
DATE:
SHEET TITLE:
CHECKED BY:
DRAWN BY:
NOT FOR
CONSTRUCTION
PRELIMINARY SITE PLAN
LOVELAND, COLORADO
DJ
MB, BR
NORTHERN COLORADO REGIONAL AIRPORT
APRIL 17, , 2018
AIRPARK OF THE ROCKIES, LLC
1625 PELICAN LAKES POINT,
SUITE 201
WINDSOR, CO 80550
(970) 686-5825
FAX (970) 686-2768
&2168/7,1*(1*,1((56
767,1&
748 WHALERS WAY, BLDG. D
FORT COLLINS, COLORADO
(970) 226-0557
FAX (970) 226-0204
.QRZZKDW
V
55
PRELIMINARY
SITE PLAN
SP-03
EXISTING PAVEMENT
PROPOSED PAVEMENT
BUILDING RESTRICTION LINE
RUNWAY OBJECT FREE AREA
RUNWAY SAFETY AREA
LIMIT OF WORK
LEGEND
PROPOSED OFFICE
EXISTING BUILDING
PROPOSED HANGAR
PROPOSED FBO
LOT SUMMARY
62’
(typ.)
62’
(typ.)
40’
40’
100’
40’
15’
15’
: