HomeMy WebLinkAbout067 - 05/20/2003 - AUTHORIZING CITY MANAGER TO EXECUTE AMENDMENTS TO LONG-TERM LEASES OF PROPERTY AT THE FORT COLLINS-L ORDINANCE NO. 067, 2003
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE CITY MANAGER TO EXECUTE AMENDMENTS TO TWO
LONG-TERM LEASES OF PROPERTY AT THE FORT COLLINS-LOVELAND
MUNICIPAL AIRPORT IN ORDER TO REDUCE THE AMOUNT OF LIABILITY
INSURANCE REQUIRED OF THE NEW TENANT, EAGLE AIR INVESTMENTS, LLC.
AND TO MAKE OTHER INSURANCE RELATED CHANGES
WHEREAS, the Cities of Loveland and Fort Collins, Colorado (the "Cities") have leased
certain property to Firewall Forward, Inc., now known as Firewall Forward Aircraft Engines, Inc.
("Firewall") pursuant to the terms of a Lease Agreement dated March 1, 1987, ("Firewall Lease
Agreement"), and to Gracon Leasing Co. pursuant to the terms of the Lease Agreement dated
February 17, 1994 ("Gracon Lease Agreement"); and
WHEREAS, effective April 1, 2002, Firewall assigned the Firewall Lease Agreement to a
separate entity,formerly known as Firewall Forward Investments,LLC,and now using the name of
Eagle Air Investments,LLC, a Colorado Limited Liability Company ("Eagle Air"); and
WHEREAS,effective on or about May 18,2001,the Gracon Lease Agreement was assigned
to an entity currently known as Runway Runaway Investments, LLC, which now desires to assign
the Gracon Lease Agreement to Eagle Air; and
WHEREAS,Eagle Air is currently in the process of seeking the Cities'approval of the two
above described assignments,which approval will be considered by the City Managers of each City;
and
WHEREAS, Section 6.1 H. of the Firewall Lease Agreement requires Eagle Air to provide
proof of liability insurance to the Cities in an amount of not less than five million dollars
($5,000,000); and
WHEREAS, both Eagle Air and the Cities have determined that the acquisition of liability
insurance in such an amount is very difficult at this time because of the state of the insurance
industry following the tragedy of September 11, 2001; and
WHEREAS,Eagle Air is able and willing to provide liability insurance in the amount of not
less than one million dollars ($1,000,000) at this time; and
WHEREAS,the Cities believe that a reduction of the liability insurance limit in the Firewall
Lease Agreement from five million dollars ($5,000,000) to one million dollars ($1,000,000) on a
temporary basis is warranted and will not unduly increase the risk to the Cities; and
1
WHEREAS,current insurance industry practices make it difficult for Eagle Air to procure
certain detailed insurance provisions required in both the Firewall and Gracon Lease Agreements,
thereby necessitating the use of discretion by the City in determining which provisions are necessary
for the protection of the interests of the City.
NOW,THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS, COLORADO as follows:
Section 1. That the City Manager is hereby authorized to enter into an amendment to
Section 6.1 H.of the Firewall Lease Agreement which will reduce the amount of liability insurance
coverage required to be provided by the tenant from FIVE MILLION DOLLARS ($5,000,000) to
ONE MILLION DOLLARS ($1,000,000), with adequate provision for an increase in the amount
when deemed necessary by the City Manager based on insurance market conditions and any liability
concerns of the City, and to make such other amendments to the insurance coverage requirements
of the Firewall and Gracon Lease Agreements as the City Manager, in consultation with the City
Attorney, may deem necessary in light of current insurance industry practices and to protect the
interests of the City.
Section 2. That all other terms and conditions of the Firewall and Gracon Lease
Agreements shall remain in full force and effect.
Introduced and considered favorably on first reading and ordered published this 6th day of
May, A.D. 2003, and to be presented for final passage on the 20th day of May, A.D. 2003.
Mayor -----
ATTEST:
r�
City Clerk
Passed and adopted on final reading this 20th day of May, A.D. 2003.
YMayor 'y
ATTEST:
City Clerk -M 7C C-7/ 1
2