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HomeMy WebLinkAbout163 - 01/05/2021 - APPROVING THE FIRST AMENDMENT TO GROUND LEASE AGREEMENT BETWEEN THE CITIES OF LOVELAND AND FORT COLL{00600273} 1 FIRST AMENDMENT TO NORTHERN COLORADO REGIONAL AIRPORT GROUND LEASE AGREEMENT This FIRST AMENDMENT TO NORTHERN COLORADO REGIONAL AIRPORT GROUND LEASE AGREEMENT (“Amendment”) is entered into on this _____________ day of ________, 2020 (the “Effective Date”), by and between CITIES OF FORT COLLINS AND LOVELAND, COLORADO (collectively, the “Cities”), and DISCOVERY AIR, LLC, a Colorado limited liability company (“Lessee”). RECITALS A.The Cities and Lessee entered into that certain Northern Colorado Regional Airport Ground Lease Agreement dated January 16, 2019 (the “Lease”), for the lease of certain premises (the “Leased Premises”), located within the Northern Colorado Regional Airport (the “Airport”), Larimer County, Colorado; B.Since execution of the Lease, the Lessee has developed its plans for the Leased Premises at the Airport such that it anticipates constructing its facilities and improvements in phases. As a result, Lessee has requested, and the Cities have agreed to also phase the rent due for the Leased Premises. The parties therefore desire to amend the Lease to phase the rent, to amend the rentable and non-rentable areas of the Leased Premises, and to clarify other items stated in the Lease. C.The parties therefore desire to amend the Lease to phase the rent, to amend the rentable and non-rentable areas of the Leased Premises, and to clarify other items stated in the Lease as more particularly set forth and described herein below. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1.Definitions. All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms as set forth in the Lease. 2.Amended Paragraph 1.4. The Cities and Lessee agree that Paragraph 1.4 of the Lease is deleted in its entirety and is hereby replaced with the following: “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 site plan depicted in Exhibit “B;” (ii) omitted; (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 further agrees to provide the Commission with Lessee’s final site development plan for review prior to Lessee’s submittal of such final site EXHIBIT A {00600273} 2 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, 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.” 3. Amended Paragraph 1.5. The Cities and Lessee agree that Paragraph 1.5 of the Lease is deleted in its entirety and is hereby replaced with the following: “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 comprising Phase I (as hereinafter defined), 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.” 4. Leased Premises. The Cities and Lessee agree that Paragraph 2.1 is deleted in its entirety and is hereby replaced with the following: 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. 5. Amended Rent. The Cities and Lessee agree that Paragraph 4.2 of the Lease is deleted in its entirety and is hereby replaced with the following: {00600273} 3 4.2 (a) Phase I. Commencing on the earlier of (i) January 1, 2021 and (ii) the date that the first certificate of occupancy (or its equivalent) is issued for any of the Improvements located within the Phase I Rental Area (as hereinafter defined) (the “Phase I Rent Commencement Date”), Lessee agrees to pay to the Cities for the first (1st) year following the Phase I Rent Commencement Date an annual rent of $0.15 per square foot for the Phase I Rental Area, for a total of $18,044.10 per year, subject to adjustment pursuant to Section 4.2(f). Commencing on the 8th anniversary of the Phase I Rent Commencement Date (the “Phase I Rent Escalation Date”), Lessee shall pay to the Cities an annual rent of 167% of the previous year’s annual rent for the Phase I Rental Area, subject to adjustment pursuant to Section 4.2(f). “Phase I Rental Area” as used herein shall mean the area comprising a portion but not all of the Leased Premises generally depicted and identified on Exhibit “C” which is attached hereto and by this reference made a part hereof; the parties hereto have agreed that the Phase I Rental Area contains 120,294 square feet. The Phase I Rental Area includes paved areas which Lessee shall construct to comply with the Minimum Standards. The parties acknowledge and agree that the annual rent for the remaining Rental Area (as hereinafter defined) other than the Phase I Rental Area shall remain as set forth in Paragraph 4.1 of the Lease until a subsequent Additional Phase Rent Commencement Date (as hereinafter defined) has occurred. The term “Additional Phase Rent Commencement Date” shall mean any of the following: the Phase II Rent Commencement Date (as hereinafter defined), Phase III Rent Commencement Date (as hereinafter defined), or Phase IV Rent Commencement Date (as hereinafter defined), as the case may be. The parties acknowledge and agree that Lessee intends to develop and construct the remaining Leased Premises in phases comprising currently undetermined portions of the Leased Premises at times reasonably determined by Lessee. (b) Phase II. Commencing on the earlier of (i) January 1, 2026 and (ii) the date that the first certificate of occupancy (or its equivalent) is issued for any of the Improvements located within the Phase II Rental Area (as hereinafter defined) (the “Phase II Rent Commencement Date”), Lessee agrees to pay to the Cities for the first (1st) year following the Phase II Rent Commencement Date an annual rent of 300% of the prior year’s annual rent for the Phase II Rental Area, subject to adjustment pursuant to Section 4.2(f). Commencing on the 8th anniversary of the Phase II Rent Commencement Date (the “Phase II Rent Escalation Date”), Lessee shall pay to the Cities an annual rent of 167% of the prior year’s annual rent for the Phase II Rental Area, subject to adjustment pursuant to Section 4.2(f). “Phase II Rental Area” as used herein shall mean the area comprising a portion but not all of the Leased Premises generally depicted and identified on Exhibit “C” which is attached hereto and by this reference made a part hereof; the parties hereto have agreed that the Phase II Rental Area contains 242,626 square feet. The Phase II Rental Area includes paved areas which Lessee shall construct to comply with the Minimum Standards. {00600273} 4 The parties acknowledge and agree that the annual rent for the remaining Rental Area (as hereinafter defined) other than the Phase I Rental Area and Phase II Rental Area shall remain as set forth in Paragraph 4.1 of the Lease until a subsequent Additional Phase Rent Commencement Date (as hereinafter defined) has occurred. (c) Phase III. Commencing on the earlier of (i) January 1, 2029 and (ii) the date that the first certificate of occupancy (or its equivalent) is issued for any of the Improvements located within the Phase III Rental Area (as hereinafter defined) (the “Phase III Rent Commencement Date”), Lessee agrees to pay to the Cities for the first (1st) year following the Phase III Rent Commencement Date an annual rent of 300% of the prior year’s annual rent for the Phase III Rental Area subject to adjustment pursuant to Section 4.2(f). Commencing on the 8th anniversary of the Phase III Rent Commencement Date (the “Phase III Rent Escalation Date”), Lessee shall pay to the Cities an annual rent of 167% of the prior year’s annual rent for the Phase III Rental Area, subject to adjustment pursuant to Section 4.2(f). “Phase III Rental Area” as used herein shall mean the area comprising a portion but not all of the Leased Premises generally depicted and identified on Exhibit “C” which is attached hereto and by this reference made a part hereof; the parties hereto have agreed that the Phase III Rental Area contains 150,622 square feet. The Phase III Rental Area includes paved areas which Lessee shall construct to comply with the Minimum Standards. The parties acknowledge and agree that the annual rent for the remaining Rental Area (as hereinafter defined) other than the Phase I Rental Area, Phase II Rental Area, and Phase III Rental Area shall remain as set forth in Paragraph 4.1 of the Lease until a subsequent Additional Phase Rent Commencement Date (as hereinafter defined) has occurred. (d) Phase IV. Commencing on the earlier of (i) January 1, 2030 and (ii) the date that the first certificate of occupancy (or its equivalent) is issued for any of the Improvements located within the Phase IV Rental Area (as hereinafter defined) (the “Phase IV Rent Commencement Date”), Lessee agrees to pay to the Cities for the first (1st) year following the Phase IV Rent Commencement Date an annual rent of 300% of the prior year’s annual rent for the Phase IV Rental Area, subject to adjustment pursuant to Section 4.2(f). Commencing on the eighth anniversary of the Phase IV Rent Commencement Date (the “Phase IV Rent Escalation Date”), Lessee shall pay to the Cities an annual rent of 167% of the prior year’s annual rent for the Phase IV Rental Area, subject to adjustment pursuant to Section 4.2(f). “Phase IV Rental Area” as used herein shall mean the area comprising a portion but not all of the Leased Premises generally depicted and identified on Exhibit “C” which is attached hereto and by this reference made a part hereof; the parties hereto have agreed that the Phase IV Rental Area contains 162,006 square feet. The Phase IV Rental Area includes paved areas which Lessee shall construct to comply with the Minimum Standards. “Rental Area” as used herein shall mean area comprising a portion but not {00600273} 5 all of the Leased Premises upon which the parties hereto have agreed to calculate annual rental for the Leased Premises, the total Rental Area contains 675,548 square feet as depicted in Exhibit “C” 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. The escalation of Rent described herein above is generally described in Exhibit “D” attached hereto, such Exhibit is for demonstration purposes and is not intended to control the Rent Commencement Date or Rent Escalation Date for any Phase (as defined for each Phase above), such Dates to be established as set forth herein above. (e) Contingent Phase V. The Lessee shall not owe to the Cities any rent for the remaining portion of the Leased Premises not included as a Phase Rental Area (“Remainder Area”) until such time as the Lessee commences any development of the Remainder Area. For purposes of this Lease, “development” shall mean any of the following: (i) use of land; (ii) construction; and/or (iii) clearing, grading, re-grading, or cutting in anticipation of the construction of infrastructure, structures, or buildings, except that “development” shall not include solely landscaping or other activities or use of the Remainder Area that are not intended for the production of revenue for the Lessee. Commencing on the first day of the month following the date that the Lessee begins development of the Remainder Area, Lessee shall pay rent to the Cities as follows: (i) If the Lessee develops the Remainder Area for aeronautical uses, the Lessee shall pay rent at the same rate as Lessee has paid for each Phase listed above starting at the commencement rate ($0.15 per square foot adjusted for CPI for the term the Lease has been in effect since the Phase I Commencement Date) for a period of eight (8) years and increasing to the escalation rate of 167% of the previous year’s annual rent; or (ii) If the Lessee develops the Remainder Area for non-aeronautical uses, Lessee shall pay rent to the Cities at the Airport’s improved property rental rate in effect at the time or fair market value, whichever is required by the FAA. Lessee acknowledges and agrees that if the Remainder Area is developed for non-aeronautical uses, such use may require release of the Remainder Area by the FAA, which release shall be in the sole discretion of the FAA. (f) Commencing on May 1st ,2022, and on May 1st in 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. If this Agreement is executed after January 1st, such C.P.I. increase for the calendar year in which this Agreement is executed shall be prorated. The term "C.P.I." as used herein shall mean the Consumer Price Index for all Urban Consumers, all items, Selected Large Cities, for the Denver/Boulder Area as published by the Bureau of Labor Statistics of the United States {00600273} 6 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 use the C.P.I., or this index, an equivalent or comparable economic index will be used. 6. Deletion of Paragraph 4.3. The Cities and Lessee agree that Paragraph 4.3 of the Lease is hereby deleted in its entirety. 7. Amended Exhibit “A” and Exhibit “B”. The Cities and Lessee agree that Exhibit “A” and Exhibit “B” to the Lease are deleted in their entirety and are hereby replaced with the attached Exhibit “A1” and Exhibit “B1” respectively. Furthermore, the Cities and Lessee agree that any all references to Exhibit “A” in the Lease are hereby amended to reference Exhibit “A1” and all references to Exhibit “B” in the Lease are hereby amended to reference Exhibit “B1”. 8. Ratification of Lease. Except as expressly set forth in this Amendment, the Lease otherwise is unmodified, remains in full force and effect and is incorporated and restated herein as if fully set forth at length. Each reference in the Lease to itself shall be deemed also to refer to this Amendment. 9. Counterparts. This Amendment may be executed in two or more counterparts, each of which will be deemed an original, which together will constitute one in the same agreement. A facsimile or other electronic signature shall have the same force and effect as an original signature; provided, however, subsequent to any execution of this Amendment by electronic means, the parties hereto agree to exchange original signatures upon the written request of either party. 10. Modifications. This Amendment may be modified only in writing signed by both the Cities and Lessee. 11. Capitalized Terms. All capitalized terms used herein shall have the meaning as set forth in the Lease, unless otherwise defined herein. 12. Nature of Amendment. The Lease as amended by this Amendment shall remain in full force and effect in accordance with all of its terms and provisions. This Amendment shall be binding upon and inure to the benefit of the parties hereto, and their respective heirs, personal representatives, successors and assigns. No additions or modifications of any term or provision of this Amendment shall be effective unless set forth in writing, signed by the party against whom enforcement of such addition or modification is sought. This Amendment contains the entire agreement of the parties hereto, and supersedes any prior written or oral agreements, negotiations or understandings between them concerning the subject matter contained herein. {00600273} 7 IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment to Shopping Center Lease by their duly authorized officers, effective as of the Effective Date. THE CITIES: 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 LESSEE: Discovery Air, LLC, a Colorado limited liability company, ATTEST: By: Name: Title: Discovery Air Lease Area Approx. 1,301,774 SF Boundary and area are approximate and subject to professional survey upon commencement of Phase I construction K 0 500 1,000 Feet Exhibit "A1" Description of Leased Premises Phase II Rental Area 242,626 SF Phase I Rental Area 120,294 SF Phase III Rental Area 150,622 SF Phase IV Rental Area 162,006 SF Contingent Phase V Remainder Area 253,595 SF Public Taxiway 141,552 SF Contingent Ramp 79,788 SF Contingent Ramp 104,564 SF Contingent Ramp 46,665 SF K 0 500 1,000 Feet Exhibit "C" Discovery Air Lease Areas Exhibit “D” Rent Phasing Example This example assumes a constant 2% annual CPI