HomeMy WebLinkAboutResolution No. 2018-10Sponsored by: Administration
CITY OF KENAI
RESOLUTION NO. 2018 -10
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI , ALASKA, APPROVING A
STANDARD LEASE FORM FOR LEASING AIRPORT RESERVE LANDS
WHEREAS , in 2017, City Administration formed a working group to address the City's A irport
Reserve land leas ing program and make recommendations tha t would provide a competitive
environment to encourage growth , development, and a thriving aviation community through
reasonable and responsible land policies and practices ; and ,
WHEREAS, the working group rev iewed other airport leasing programs inside Alaska and in other
states, as well as worked with consultants and reached out to airport leaseholders , users and
financiers for input into improving the C ity's airport reserve leasing program and to ensure the
recommended changes provide a competitive environment to encourage leasing with in the airport
reserve in compliance with FAA regulations and deed restrictions; and
WHEREAS, Ordinance No . 2998-2018 repealed, renamed and re-acted Kenai Municipal Code
Chapter 21 .10-Leasing of Airport Reserve Lands to encourage growth, development and a
thriving aviation community through responsible land policies and practices ; and ,
WHEREAS, a new lease form for leasing airport reserve lands is needed to reflect the changes
to the lease form necessitated by Ord inance No. 2998-2018 and must be approved by Council
Resolution pursuant to KMC 2 1 .10.140 .
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA:
Section 1. That the Lease Form attac hed hereto for the Leas i ng of Airport Reserve Lands is
approved.
Section 2. That this resolution takes effect immediately upon passage.
PASSED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA, this 7 day of February, 20 18 .
KENAI MUNICIPAL AIRPORT
LEASE OF AIRPORT RESERVE LANDS
THIS LEASE AGREEMENT entered into th is day of , 20_, by
and between the CITY OF KENAI , 210 Fidalgo Avenue , Kenai , Alaska 99611-7794, and
whose address is
---------------("Lessee ").
DEFINITIONS
For the purposes of this Lease the following terms are defined in KMC 21 .1 0.020 (effe ctive as
of the date of execution of the lease) as follows:
1. Airport -the Kenai Municipal Airport, including all the runways , ta xiways , aprons , water
lanes, water taxiways, and all City-owned real estate located within the boundaries of
the Airport Reserve as defined in KMC Chapter 21 .05, Airport Administration and
Operation .
2. Ai rport Manager -the offic ial to whom the City Manager of the City has delegated the
authority and responsibility of managing and directing the act ivities of the Airport.
"Airport Manager" includes that person 's authorized representative .
3. Ci t y -the City of Kenai , it s elected officials , officers , employees or agents.
4. City Manager -the official to whom the Kenai City Council has delegated the
responsibil ity of manag ing and directing all activities of the City .
5. Contamination -the unpermitted presence of any released Hazardous Substance.
6. Envi ronmental Law -any applicable federal , state , or loca l statute, law , regulation ,
ordinance , code , perm it, order, decision , judgment of any governmental e nt ity relating
to environmental matters , including littering and dumping .
7. FAA -the abbreviation for the Federal Aviation Admin istration.
8. Hazardous Substance -any substance that is defined under an Environmen tal Law as
hazardous waste , Hazardous Substance, hazardou s materia l, to x ic , pollutant,
contaminant , petroleum , petroleum product, or oil.
9. KMC -the abbreviati o n for the Kenai Mun icipal Co de.
10. Permanent Improvement -a fi xed addition or change to land that is not temporary or
portable , including a building , building addition , gravel fill , pavement, retaining wall ,
storage tan k, well , and remediation of contam ination for what t he lessee is not
responsible
LEASE OF AIRPORT LANDS Page 1 of 31
ARTICLE I
PREMISES LEASED
A. PREMISES: In consideration of Lessee 's payment of the rents and performance of all
the covenants of this Lease, the City leases to the Lessee, and the Lessee leases from the
City, the following described property ("Premises ") in the Kenai Recording District, Third
Judicial District, State of Alaska and located on the Airport; to wit:
Description of Lease Property
B . NO WARRANTY: Except as may be provided in this Lease , the City makes no specific
warrant ies, expressed or implied, concerning the condition of the Premises including , survey,
soils, wetlands , access, and suitability or profitability for any use including those authorized by
this Lease, its environmental condition, or the presence or absence of Hazardous Substances
in , on , and under the surface . The Lessee takes the Premises on an "as is " basis and without
warranty, subject to any and all of the covenants, terms , and conditions affecting the City's title
to the Premises .
A. AUTHORIZED USES :
ARTICLE II
RIGHTS AND USES
1. USE OF PREMISES : The City authorizes the Lessee to use the Premises for
the following purposes only:
List authorized uses and limitations
2. CONTINUOUS OPERATIONS : Unless the City approves otherwise in writing,
the Lessee will operate on the Premises on a continuous basis , uninterrupted
by any period of closure over 15 consecutive days. The Lessee will give the
City written notice before closing the Lessee's business on the Premises for
more than 10 consecutive days. The notice must state the reason for the
closure and the date on which the Lessee will re-open for business . This
provision does not apply to any period during which the Lessee is unable to
operate its business as a result of an act or directive of the City, or as a result
of a closure of the Airport or loss of the Lessee 's buildings on the Premises due
to fire or natural disaster.
B. RIGHTS RESERVED TO THE CITY:
1. RIGHT TO GRANT TO OTHERS : The City reserves the right to grant to others
any rights and privileges not specifically granted to the Lessee on an exclusive
basis. The rights and privileges granted to the Lessee in this Lease are the only
rights and privileges granted to the Lessee by this Lease .
LEASE OF AIRPORT LANDS Page 2 of 31
2 . EASEMENTS : The City reserves the right to make grants to third parties or
reserve to the City easements or rights of way through , on , or above the
Premises. The City will not grant or reserve any easement or right of way that
unreasonably interferes with the Lessee 's authorized uses of the Premises .
3. INGRESS, EGRESS AND INSPECTION: The City reserves the right of ingress
to and egress from the Premises and the right to enter any part of the Premises ,
including buildings , for the purpose of inspection or environmental testing at any
time . Except in the case of an emergency, all inspections and environmental
testing will be coordinated with the Lessee to minimize interference with the
Lessee 's authorized uses of the Premises.
4 . RIGHT OF FLIGHT: There is hereby reserved to the City, its 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 Premises. This public right of
flight will include the right to cause in the airspace any noise inherent in the
operation of any aircraft used for navigation or flight through the airspace or
landing at, taking off from, or operation on the A irport .
C. PROHIBITED USES: Unless specifically authorized by this Lease or an amendment
to this Lease , the following are prohibited:
1. Any use of the Premises other than those author ized in this Lease .
2. Any use of the Premises that is in violation of a City Ordinance or an Airport
regulation.
3. The outside storage on the Premises of junk, salvage aircraft or vehicle parts ,
non-operational support equipment, unused or damaged equipment or material ,
or solid waste or debris unless allowed pursuant to a conditional use permit
under KMC 14.20.
4. The disposal on the Premises or t he Airport of waste materials generated by
the Lessee, including any Hazardous Substance, slash, overburden, and
construction waste.
5. The stripping , wasting , or removing any material from the Prem ises without the
prior written approval of the City.
6. Erecting structures or allowing growth of natural objects that would constitute
an obstruction to air navigation, or allowing any activity on the Premises that
would interfere with or be a hazard to the flight of aircraft, or interfere with air
navigation or communication facilities , serving the Airport .
7. Any use or activity that is prohibited by applicable law or regulation .
LEASE OF AIRPORT LANDS Page 3 of 31
ARTICLE Ill
TERM & HOLDOVER
A. TERM : The initial term of this Lease is for _____ years , from the 1st day
of _______ , 20_, to the 30th day of , 20_.
B. HOLDOVER: If the Lessee holds over and remains in possession of the Prem ises after
the ex piration , cancellation or termination of this Lease, the holding over will not operate as an
extension of the term of this Lease , but only creates a month-to-month tenancy, regardless of
any rent payments accepted by the City. The Lessee's obligations for performance under this
Lease w ill continue during the month-to-month tenancy. The City or Lessee may terminate the
Lessee's holdover with ten days' advance written notice.
ARTIC L E IV
REN T S AND FEES
A. RENT: The initial rent for the Premises is $ .00 per year, as established by
the City pursuant KMC 2 1.10.090 and as subject to annual adjustment on July 1 of each year
under Article V of this Lease, plus applicable sales ta x. The rent shall be payable annually in
advance of the first day of each year of the term of this Lease . All payments required by this
Lease must be made in U.S . dollars. If the annual rent exceeds $2,400, the Lessee may, upon
w ritten notice to the C ity, choose to pay the rent in equal monthly installments, payable in
adva nce on or before the anniversary date of t he term of this Lease and thereafter at mont hly
intervals. No conversion of the payment schedule from annual to monthly shall result in the
City receiving less rent than it would have received had the conversion not taken p lace.
1 . Rent Credit: A rent credit may be applied for a maximum of five years of lease
payments as provided in KMC 21.10.100 (as effective at the time this lease is
e xecuted). Once the work is completed and value determined , a credit will be
applied to the lease payments , prorated as necessary for the successive five
years .
B. RENT PRORATED: Rental for any period less than one year shall be prorated on the
bas is of the rent payable under t his Lease in last full year previous to the prorating .
C . ADDITIONAL RENT: In addition to the rent specified in (a) of this Article , Lessee
agrees to pay to the appropriate parties all levies, a ssessments, and c harges as f ollows :
1. Taxes pertaining to the leasehold interest of the Lessee.
2 . Sales tax now enforced or levied in the future , computed upon rent payable in
monthly installments whether the Lessee pays rent under this Lease on a
monthly or annual basis.
LEASE OF AIRPORT LANDS Page 4 of 31
3. All taxes and assessments levied in the future by the City , as if Lessee was the
legal owner of record of the Premises .
D. PAYMENTS : The Lessee shall make checks, bank drafts, or postal money orders
payable to the City of Kena i and deliver payments to City of Kenai , Finance Department, 210
Fidalgo Avenue , Suite 200, Kenai, Alaska 99611-7794 or any other address the City may
designate in writing to the Lessee.
E. INTEREST : Beginning the day after payment is due , all unpaid rents, charges, and
fees required under this Lease will accrue interest at the rate of eight percent (8 .0%) per
annum . Interest on disputed amounts will not be charged to the Lessee if the dispute is
resolved in the Lessee 's favor.
F. LATE PAYMENT PENAL TY: In addition to any interest payable under Provision (E) of
this Article , each time the Lessee fails to pay any rent or fee by the date required in this Lease,
the City will charge , and the Lessee shall pay, an administrative penalty of ten percent (10 .0%)
of the amount due and unpaid .
G . COURTESY BILLINGS: Lessee acknowledges that any billing statement issued by the
City is provided only as a courtesy . The Lessee is obligated to pay all rents and fees when
due, regardless of whether or not the Lessee receives a billing statement from the City.
H. LIEN AGAINST LESSEE : Any rent, charge , fee, or other consideration which is due
and unpaid at the expiration , termination, or cancellation of this Lease will be a lien against the
Lessee's property, real or personal.
I. PAYMENT OF CITY 'S COSTS: The Lessee will pay all reasonable actua l expenses ,
costs , and attorney fees City may incur, with or without formal action , to enforce, defend, or
protect this Lease or City's rights under this Lease , including any expense incurred with respect
to environmental compliance , bankruptcy or any proceeding that involves the Lessee , the
Lease, the Premises, or improvements or personal property on the Premises . The Lessee will
make payment within 30 days of the date of each notice from City of any amounts pa yable
under t his prov ision.
J. PAYMENT FOR SPECIAL SERVICES : Lessee agrees to pay the City a reasonable
fee for any special services or facilities the City agrees to perform, which the City is not
otherwise obligated by this Lease to provide and which the Lessee requests from the City in
writing .
ARTICLE V
ADJUSTMENT OF RENT AND FEES
A. RENT OR FEE ADJUSTMENT: The City shall adjust rent or fees payable by the
Lessee under Article IV or other provisions of this lease on July 1 of each year of the lease as
proved in KMC 21 .10.090 (as effect ive at the time this lease is executed ) and shall make any
other adj ustments to rent as allowed for in KMC 21 .10.090 .
LEASE OF AIRPORT LANDS Page 5 of 31
No rent or fee change shall be effective until 30 days after the date of the City 's written notice
to the Lessee. If the Lessee believes that any changed rent exceeds the fair market rent for
the Premises, the Lessee may appeal a rent change to the City as provided in KMC 21.10.090.
ARTICLE VI
ASSIGNMENT & SUBLETTING
A. INVALID WITHOUT CITY'S CONSENT: The Lessee may not assign, sublet, or grant
a security interest in , by grant or implication , the whole or any part of this Lease, the Premises ,
or any improvement on the Premises without the written consent of the City. Any proposed
assignment, sublease, or security interest must be written and must be submitted to the City
bearing the original, notarized signature of all parties . The Lessee may submit unsigned draft
documents for the City's conceptual review . However, the City's conceptual approval of a draft
document may not be construed as the City's consent to any assignment, sublease , or security
interest. All provisions in this Lease extend to and bind the assignees and sub-lessees of the
Lessee .
B . NO WAIVER OF CONSENT: The City's consent to one assignment, sublease , or
security interest will not waive the requirement for the Lessee to obtain the City's consent to
any other assignment, sublease, or security interest.
C. ASSIGNEE I LESSEE OBLIGATIONS: An assignment must include a provision stating
that the assignee accepts responsibility for all of the assignor's (Lessee 's) obligations under
this Lease, including environmental liability and respons ibi lity. However, unless the City
specifically releases the Lessee in writing, the City may hold the Lessee responsible for
performing any obligation under this lease which an assignee fails to perform.
D. OCCUPANCY BEFORE CITY CONSENT: An assignee or sub-lessee may not occupy
the Premises before the City consents to the assignment or sublease in writing.
E. CONFLICT OF PROVISIONS : In the event of a conflict between this Lease and an
assignment or a sublease , the terms of this Lease control.
F. LESSEE NOT RELIEVED OF OBLIGATIONS : The City's consent to any sublease
does not relieve or otherwise alter the Lessee 's obligations under this Lease .
G. SECURITY ASSIGNMENTS AND FINANCING:
1. Subject to the requirements of (A) of this Article VI , the Lessee may assign a
security interest in this Lease. The security interest may be in the form of a
mortgage , deed of trust, assignment or other appropriate instrument, provided
a . the security interest pertains only to the Lessee's leasehold interest ;
LEASE OF AIRPORT LANDS Page 6 of 31
b. the security interest does not pertain to or create any interest in City's
title to the Premises; and
c . the documents providing for the security interest are acceptable to the
City.
2. If the assignment of a security interest to which the City has consented shall be
held by an established lending or financial institution , including a bank, an
established insurance company and qualified pension or profit sharing trust,
and the lending institution acquires the Lessee's interest in this Lease as a
result of a foreclosure action or other remedy of the secured party, or through
any transfer in lieu of foreclosure , or through settlement of or arising out of any
pending or contemplated foreclosure action , the lending institution may transfer
its interest in this Lease to a nom inee or a wholly owned subs idiary corporation
with the prior written consent of the City, provided , the transferee assumes all
of the covenants and conditions requ ired to be performed by the Lessee
(including payment of any monies owed by Lessee to the City under the lease ).
In the event of such a transfer, the lending insti t ution shall be relieved of any
further liability under this Lessee .
3. A holder of a security interest in this Lease consented to by the City shall have,
and be subrogated to, any and all rights of the Lessee with respect to the curing
of any default of this Lease by Lessee .
4 . A holder of a security interest consented to by the City that ta k es possession of
th is Lease shall not be released from the ob ligations and liabilities of this Lease
unless the holder ass igns its leasehold estate to an assignee who is financially
capable and otherwise qualified to underta ke to perform and observe the
conditions of this Lease and the City consents to the assignment. The Ci ty's
consent will not be unreasonably wi t hheld .
ARTICLE VII
MAINTENANCE, SNOW REMOVAL & UTILITIES
A MAINTENANCE :
1 . At no cost to the City, the Lessee will keep the Premise s and all improvements
on the Prem ises clean , neat and presentable, as reasonably determined by the
City.
2. At no cost to the City, the Lessee will provide for all maintenance and services
at the Premises as may be ne cessary to facil itate the Lessee's compl iance with
th is Lease and the Lessee 's use of the Prem ises .
LEASE OF AIRPORT LANDS Page 7 of 31
3 . The Lessee shall comply w ith all regulations or ordinances of the City that are
promulgated for the promotion of sanitation. At no cost to the City, the Lessee
shall keep the Premises in a clean and sanitary condition , and control activities
on the Premises to prevent the pollution of water.
4 . The Lessee agrees to comply with all decisions and directions of the City's
Airport Manager regarding maintenance and operation of the Airport, and the
use of the Airport by the Lessee.
B . SNOW REMOVAL:
1. At no cost to the City, the Lessee is responsible for snow removal on the
Premises . The Lessee shall dispose of snow in an off-Premises location
approved in writing by the City or provide suitable snow storage within the
boundaries of the Premises in accordance with all applicable federal and state
laws. At the request of the Airport Manager, the Lessee shall subm it a snow
removal plan for the Premises to the Manager for review. Upon approval of the
Lessee's p lan by the Airport Manager, the Lessee shall conduct all snow
removal operations on the Premises in accordance with the approved plan.
2 . Lessee shall not deposit snow on an apron , tax iway, safety area, or other
aircraft-maneuvering surface provided for common use by others without the
prior w ri tten of the Airport Manager.
3. Lessee agrees to not allow an accumulation of snow on the Premises that would
cause interference w ith adjoining leaseholders or other users of the Airport.
C . UTILITIES: Unless specifically provided otherwise in th is Lease, the Lessee shall ,
at no cost to the City, provide for all utilities at the Premises necessary to facilitate the Lessee's
use of the Premises .
ARTICLE VIII
OPERATIONS
A. OPERATIONS ON THE AIRPORT: The Lessee will ensure that the Lessee, its
employees, guests, contractors , s ub-lessees , and vendors that perform any activity or function
authorized under this Lease shall do so in a manner that ensures the safety of people , the
protection of publ ic health and the environment, and the safety and integrity of the Airport and
the Premises.
B. LESSEE'S CONTROL AND RESPONSIBILITY:
1. The Lessee will assume full control and sole responsibility as between Lessee
and City for the activities of the Lessee, the Lessee's personnel and employees ,
and anyone else acting by, on beha lf of, or under the authority of the Lessee on
the Airport, including the Premises .
LEASE OF AIRPORT LANDS Page 8 of 3 1
2. The Lessee will immediately notify the City of any condition , problem ,
malfunction or other occurrence that threatens the safety of people or the
A irport, harm to public health or the envi ronment, or the safety or integrity of the
Premises .
C. RADIO INTERFERENCE: The Lessee will discontinue the use of any machine or
device that interferes with any government-operated transmitter, receiver , or navigation aid
until the cause of the interference is eliminated .
D. WILDLIFE: The Lessee acknowledges that a concentration of birds or other wildlif e on
an airport constitutes a significant hazard to aircraft operations. The Lessee agrees to keep
the Prem ises clean of fish slime , fish waste, or any other mater ial that might attract birds or
other wildlife . The Lessee accepts full respons ibility to maintain the Premises, contro l
operations , and take all reasonable measures to prevent a concentration of birds or other
wildlife on the Premises .
E . PARKING : The Lessee will provide adequate vehicle , equipment, and aircraft parking
space on the Premises for Lessee 's business or activities , or confine parking to such other
places on the Airport as may be approved or designated in writing by the Airport Manager.
ARTICLE IX
ENVIRONMENTAL PROVISIONS
A. HAZARDOUS SUBSTANCE :
1. The lessee will conduct it business and /or operatio n on the Premises in
compliance with all environmental laws and permits. If ha zardous substances
are handled on the Premises, the Lessee agrees to ha ve properly trained
personnel and adequa te procedures for safely storing , dispens ing , and
otherwise handling Hazardous Substances in accordance with all applicable
federal , state and local laws .
2. Lessee will promptly give the City notice of proceeding to abate or settle matters
relating to the presence of a Hazardous Substance on the Premises or from
Lessee 's operations on the Airport . The Lessee will allow the City to part icipate
in any such proceed ings .
B. ENVIRONMENTAL INDEMNIFICATION : If Con tamination of the Premises or other
property by a Hazardous Substa nce occurs from the Lessee 's operations on the Premises the
Lessee wil l indemn ify, defend , and hold the City harmless from any and all claims, judgments,
damages, penalties , fines , costs, liabilities, or losses, in cluding, but not limi ted to , sums paid
in settlement of claims , attorney's fees, consu ltant fees , and expert fees , which arise during or
afte r the term of this Lease as a result of such Contamination . This indemnification of the City
by Les see includes , but is not limited to, costs in curred in connection with any investigation of
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site conditions or any cleanup , remediat ion, removal , monitoring, or restorative work required
by any federal , state, or local governmental agency because of a Hazardous Substance being
present in the soil or groundwater or under the Premises or other properties affected by the
Contamination .
C. REMEDIATION :
1. In the event of a Hazardous Substance spill on the Premises, the Lessee will
immediately notify the City and the Alaska Department of Environmental
Conversation and act, promptly, at its sole expense , to contain the spill , repair,
any damage , absorb and clean up the spill area , and restore the Premises to a
condition satisfactory to the City and otherwise comply with the applicable
portions of any environmental law.
2 . In addition to any notices required by this Lease , the Lessee will immediately
notify and copy the City in writing of any of the following :
a . Any permit, enforcement, clean up, lien, remova l or other governmental
or regulatory action instituted , completed , or threatened pursuant to an
Environmental Law .
b . Any claim made or threatened by any person against the Lessee or
arising from the Lessee's operations authorized by this Lease , relating
to damage, contribution , compensation , loss or injury resulting, from, or
claimed to result from any Hazardous Substances in , on, or under the
Airport; or
c. Any report made by, or on behalf of, the Lessee to any environmental
agency arising out of or in connection with any Hazardous Substances
in, on , or removed from the Premises , including any complaints , notices,
warnings, or asserted violations.
3 . Remediation and restoration of the contaminated area must meet all applicable
state and federal regulat ions and must meet the requirements of all governing
regulatory authorities .
D. ENVIRONMENTAL AUDIT: The Lessee will provide the City with all investigative data ,
test results , reports , and any other information gathered or analyzed as part of or in relation to
any Environmental Assessment, characterization or audit on the Premises or the A irport that
Lessee performs or causes to be performed after the starting date of this Lease . The Lessee
will submit the data, resu lt , report or information to the City w ithin 60 days following the date
on which it becomes available to the Lessee.
E. RELEASE OF LESSEE: The City releases the Lessee from liability to the City for
Contamination and the presence of Hazardous Substances that existed prior to the
commencement date of this lease unless caused or materially contributed to by the Lessee.
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F. SURVIVAL OF OBLIGATIONS: The obligations and duties of the City and Lessee
under Article IX of this lease shall survive the cancellation , termination or expiration of this
lease .
A. INDEMNIFICATION:
ARTICLEX
INDEMNIFICATION & INSURANCE
1. The Lessee will indemnify, save harmless, and defend the City, its officers ,
agents, and employees from and against any and all liabilities, losses, suits ,
administrative actions, claims, awards , judgments, fines , demands, damages,
injunctive rel ief or penalties of any nature or kind to the full extent of the loss or
obligation for property damage , personal injury, death, violation of any
regulation or grant agreement, or any other injury or harm resulting from or
arising out of any acts or commission of or omission by the Lessee, Lessee 's
agents, employees , customers, invitees or arising out of the Lessee 's
occupation or use of the premises demised or privileges granted, and to pay all
costs connected therewith . This indemn ification of the City by the Lessee shall
include sums paid in settlement of claims, attorney fees, consultant fees, expert
fees, or other costs and expenses, directly or indirectly arising from, connected
to or on account of this Lease as it relates to the Lessee, the Lessee 's activities
at or relating to the Airport, or any act or omission by the Lessee , or by any of
Lessee's officers, employees, agents , contractors or sub-lessees. These
indemnity obligations are in addition to, and not limited by, the Lessee 's
obligation to provide insurance , and shall survive the expiration or earlier
termination of this Lease.
2. The Lessee shall give the City prompt notice of any suit , claim, action or other
matter affecting the City to which Paragraph 1, above , may apply, together with
a copy of any letter by an attorney on behalf of a complainant. any complaint
filed in court, and any notice or complaint by any regulatory agency. The City
shall have the right , at its option , to participate cooperatively in the defense of,
and settlement negotiations regarding , any such matter, without relieving the
Lessee of any of its obligations under this provision .
3. As to any amount paid to others for personal injury or property damage with
respect to which an act or omission of the City is a legal cause , notwithstanding
Paragraph 1 of this section, the Lessee and the City shall re imburse each other
according to the principles of comparative fault. If liability to a third party is
subject to apportionment according to comparative fault under this provision,
the Lessee and the City shall seek in good faith to achieve non-judicial
agreement as to apportionment of fault as between themselves. This
apportionment of liability between the City and the Lessee shall not be
construed to affect the rights of any person who is not a party to this Lease .
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B. INSURANCE: At no expense to the City, the Lessee will obtain and keep in force during
the term of this Lease , insurance of the type and limits required by this provision . Where
specific limits are set, they will be the minimum acceptable limits. If the Lessee 's policy
contains higher limits, the City will be entitled to coverage to the ex tent of the higher limits. At
the time insurance in obtained by the Lessee , all insurance shall be by a company/corporation
rated "A-" or better by A.M. Best. The following policies of insurance are required with the
following minimum amounts:
1. Commercial General Liability, including Premises , all operations , property
damage , products and completed operations, and personal injury and death ,
broad-form contractual, with a per-occurrence limit of not less than $1 ,000,000
combined single limit. If this lease authorizes the Lessee to engage in the sale
or the commercial dispensing or storage of aviation fuel , the policy must not
ex clude of Lessee's fuel handling activities. This policy must name the C ity as
an additional insured .
2. Commercial Automobile Coverage with not less than $1 ,000 ,000 combined
single limit per occurrence. This insurance must cover all owned, hired, and
non-owned motor vehicles used by the Lessee .
3. Workers Compensation Insurance. The Lessee will provide and maintain, for
all employees , coverage as required under AS 23 .30 .045, and, where
applicable, any other statutory obligations. The policy must waive subrogation
against the City.
4 . The Lessee will provide the City with proof of insurance coverage in the form of
an insurance policy or a certificate of insurance, together w ith proof that the
premiums have been paid , showing the types and monetary limits of coverage
secured. All insurance required by this provision must provide that the City be
notified at least 30 days prior to any termination , cancellation , or material
change in the insurance coverage .
5. If the Lessee's insurance coverage lapses or is canceled , Lessee will
immediately, upon written notice by the City, halt all operations on the Airport,
including the Premises. The Lessee will not resume operations until the City
receives evidence that the Lessee has obtained current insurance coverage
meeting the requirements of th is Lease.
6 . The City may, at intervals of not less than five years from the beginning date of
the term of this Lease and upon written notice to Lessee, revise the insurance
requirements required under this Lease. City's determination to revise the
insurance requirements will be based on the risks relative to the Lessee's
operations, any insurance guidelines adopted by the City, and any applicable
law.
LEASE OF AIRPORT LANDS Page 12 of 31
7. If the Lessee subleases all or any portion of the Premises under the provisions
of this Lease , the Lessee will requi re the sub-lessee to provide to the insurance
cove rage required of the Lessee under th is Article X .
ARTICLE XI
LAWS&TAXES
A COMPLIANCE WITH LAW : Lessee shall comply with all applicable laws, ordinances ,
and regulations of public au t horities now or hereafter in any manner affecting the Airport , the
Premises or the sidewalks, alleys , streets, and ways adjacent to the Premises , or any buildings ,
structures , fi xtures and improvements or the use thereof, whether or not any such laws ,
ordinances, and regulations which may be hereafter enacted involve a change of policy on the
part of the governmental body enacting the same . Lessee agrees to hold City financially
harmless :
1. From the consequences of any violation of such laws , ordinances , and/or
regulations ; and
2. From all claims for damages on account of injuries , death, or property damage
resulting from such violation .
B. UNLAWFUL ACTIVITY : The Lessee shall not permit any unlawful use , occupation ,
bus iness, or trade to be conducted on the Premises contrary to any law , ordinance , or
regulation , including zoning ordinances, rules and regulations.
C. LICENSES AND PERMITS : The Lessee will obtain all necessary li censes and permits ,
pay all ta xes and special assessments lawfully imposed upon the Premises , and pay other
fees and charges assessed under applicable law . Nothing in this Lease prevents the Lessee
from challenging any taxes or spec ial assessments to the appropriate authority.
D . LITIGATION : The Kenai municipal code, including regulations promulgated
thereunder, and the laws of the State of A laska will govern in any d ispute between the Lessee
and City. If a dispute continues after exhaustion of administration remedies , any lawsuit must
be brought in the courts of the State of Alaska , in Kenai , Alaska .
E. LESSEE TO PAY TAXES : Lessee shall pay all lawful ta xes and assessment s which ,
during the term of this Lease may become a lien upon or which may be levied by the St ate,
Borough , City, o r any ot her tax levying body, upon any ta xable posse ssory right which Lessee
may have in or to the Prem ises or improvements on the Premises by reason of its use or
occupancy o r the terms of this Lease provided , however, that noth ing in this provision shall
prevent Le ssee from contesting any increase in a ta x or assessment under any applicable law ,
ordinance , or regulation .
LEASE OF AIRPORT LANDS Page 13 of 31
F. PARTIAL INVALIDITY: If any term , prov1s1on, condition, or part of this Lease is
declared by a court of competent jurisdiction to be invalid or unconstitutional, the remaining
terms, provisions, conditions, or parts shall continue in full force and effect as though the
declaration had not been made.
ARTICLE XII
LEASE TERMINATION
A. CANCELLATION : The City may, after 30 days' written notice to the Lessee, cancel
this Lease and recover possession of the Premises if any of the following violations occur,
unless the violation is cured within the 30 days:
1. The Lessee fails to pay when due the rents , additional rents, charges, or other
sums specified in this Lease , including any increases made under this Lease.
2. The Lessee's check for payment of any sum due under this Lease is returned
for insufficient funds .
3. The Lessee uses or authorizes the use of the Premises for any purpose not
authorized by this Lease.
4. The Lessee fails to fully perform and comply with any provision in this Lease.
5. The Lessee violates a provision of Kenai Municipal Code applicable to this
Lessee .
6. The court enters a judgment of insolvency against the Lessee.
7. A trustee or receiver is appointed for the Lessee's assets in a proceeding
brought by or against the Lessee , or the Lessee files a voluntary petition in
bankruptcy.
8. Failure by the Lessee to comply with any land development or permanent
improvement construction required by th is Lease.
B . ENTRY AND RE-ENTRY: In the event that the Lease should be terminated in
accordance with this Article XII, o r by summary proceedings or otherwise, or upon the Lessee's
abandonment of the Premises or a portion of the Premises, the City or its agents, servants, or
representatives may, immediately or any time thereafter, re-enter, and resume possession of
the Premises or portion the reof, and remove all persons and property therefrom, without being
liable for any damages therefore . No re-entry by the City shall be deemed an acceptance of a
surrender of the Lease.
LEASE OF AIRPORT LANDS Page 14 of 31
C. CONTINUING OBLIGATIONS UNTIL PREMISES VACATED : The Lessee will
continue to pay City rent after the expiration, termination, or cancellation of this lease and to
abide by the lease obligations, including providing proof of insurance coverage, through the
date Lessee relinquishes possession of and completely vacates the Prem ises . City will
consider the Premises complete ly vaca ted if the Lessee has
1. Remediated any environmental contamination for which the Lessee is
responsible ;
2. Restored the Premises to a neat and clean physical condition acceptable to the
City .
D. REASONABLE CURE :
1. In the case of a violation that canno t be reasonably cured within 30 days , a
notice of cancellation issued by the City to the Lessee under this Article is
stayed if, within the 30-day notice period , the Le ssee begins and continues
expeditious action to cure the violation . The City will determine if a violation
cannot be reasonably cured within 30 days and what const itutes e xpeditious
action.
2. In the case where, in City's sole determination , Lessee 's violation is considered
an imminent threat to the airport, public health or safety, or the environment,
City will direct the Lessee to stop the activity immediately and may reduce the
period to cure the violation, or the City may correct the violation pursuant to (E)
of this Article.
E. RIGHT OF CITY TO PERFORM :
1. If, after 30 days following notice the Lessee fails or refuses to perform any action
required by this Lease, the City will have the right, but not the obligation , to
perform any or all such actions required by this Lease at the sole expense of
the Lessee . The City will not take action if the Lessee begins and continues
expeditious action to perform any action required by this Lease t hat cannot be
reasonably completed within 30 days . The City will , at its sole discretion ,
determine what constitutes expeditious action and if an action cannot be
reasonably performed in 30 days . The City will subm it to the Lessee an invoice
for the expenses incurred by the City in the performance by the City of any
required action . The Lessee will pay the amount of each in voice with in 30 days
from issuance.
LEASE OF AIRPORT LANDS Page 15 of 3 1
2. If Lessee fails or refuses to perform any action that has been deemed an
imminent threat the City will have the right , but not the obligation , to perform
any or all such actions required to expeditious ly correct the imminent threat.
Lessee shall reimburse the City for any cost, including legal fees and
administrat ive costs reasonably incurred by the City in a cting to correct the
imminent threat violation .
F . WAIVER: A waiver by the City of any default by the Lessee of any provision of this
Lease will not operate as a waiver of any subsequent default. If the City waives a default, the
City is not requi red to provide notice to the Lessee to restore or revive any term or condition
under this Lease. The waiver by the City of any provision in this Lease cannot be enforced or
relied upon unless the wa iver is in writing and signed on behalf of the City . The City's failure
to insist upon the strict performance by the Lessee of any provision in th is Lease is not a waiver
or relinquishment for the future, and the provis ion will continue in full force .
G. AIRPORT CLOSURE :
1. If the City closes the airport to aircraft operations for sixty days or less, this
Lease will remain in full force and effect without adjustment
2. If the Ci ty closes the Airport to aircraft operations for more than si xty days , but
not permanently, and this Lease is for aviation or direct aviation support use s,
the Lessee may, upon written notice to the City , either term inate the Lease or
reta in the Lease and receive a fifty (50 %) percent rent reduction or credit for
that portion of the closure that exceeds sixty days.
3. If the City permanently close s the Airport to aircraft operations and
a. this Lease is for aviation or direct aviation support uses , the Lessee may
terminate th is agreement by written notice to the City; or
b. this Lease is for non-aviation uses , the Lessee may request in writing to
have the Lease terminated . The City will consider the Lessee 's request
in light of the City's best interest and either term inate the Lease , or deny
the Les see 's reques t in writing .
H. DISASTERS : The Lessee or City may cancel this lease upon written notice to the ot her
party if:
1. the Premises becomes unusable through no fault of either party and
performance under this lea se becomes impossible; or
2. the Airport becomes unusable through no fault of either party and the
perfo rman ce under this lease becomes impossible .
LEASE OF AIRPORT LANDS Pa ge 16 of 31
If the Lessee elects in writing that it will continue to operate after notice from City to Lessee
that the Airport has become unusable , the Lessee 's obligations under the Lease will continue ,
but City shall be under no obligation to continue to perform .
Causes for termination of the lease under this provision (G) include acts of God, the public
enemy, and the United States.
I. NATIONAL EMERGENCY: If the federal government declares a national emergency,
neither party may hold the other liable for any inability to perform any part of this Lease as a
resu lt of the national emergency.
J. SURRENDER ON TERMINATION: Except as provided otherwise in this Article XII ,
Lessee shall , on the last day of the term of this Lease (includ ing any extension or renewal
thereof) or upon any earlier termination of this Lease , surrender and deliver up the premises
into the possession and use of City without fraud or delay in good order, condition, and repair,
except for reasonable wear and tear since the last necessary repair, replacement, restoration
or renewal , free and clear of all lettings and occupancies unless ex pressly permitted by the
C ity in writing , and free and clear of all liens and encumbrances other than those created by
and for loans to City.
K. OWNERSHIP AND DISPOSITION OF IMPROVEMENTS:
1. Ownership of Permanent Improvements: Permanent improvements on the
Premises, e x cluding Site Development Materials, constructed , placed , or
purchased by the Lessee remain the Lessee 's property as long as this
Lease remains in effect, including any period of extension or holdover with
the consent of the Lessor.
2 . Disposition of Site Development Materials: The Lessee acknowledges that,
once placed by the Lessee, the removal from the Premises of Site
Development Materials can damage the Premises, adversely affect surface
water drainage patterns, and destabilize ad j acent structures . When placed
on the Prem ises by the Lessee, Site Development Materials, including
building pads, parking areas , driveways, and similar structures:
a. become a part of the realty and the property of the City of Kenai;
b. unless otherwise directed by the Lessor, must be mainta ined by the
Lessee throughout the term of this Lease , including any ex tensions and
periods of holdover; and
c . may not be removed by the Lessee without the prior written approval of
the Lessor.
LEASE OF AIRPORT LANDS Page 17 of 3 1
3. Disposition of Personal Property and Permanent Improvements Other Than
Site Development Materials:
a. Unless the Lessor otherwise directs as provided below, when this Lease
expires, terminates , or is cancelled and is neither extended nor followed
by a successive lease, the departing Lessee may do one or more of the
following:
i. remove Lessee-owned Permanent Improvements from the
Premises, remediate any Contam ination for wh ich the Lessee
is respons ible, and restore the Premises to a clean and neat
physical condition acceptable to the Lessor within 60 days
after the expiration , cancellation , or termination date of this
Lease;
ii. with written approval from the Lessor, sell Lessee-owned
Permanent Improvements to the succeeding lessee, remove
all personal property, remediate, any Contamination for which
the Lessee is responsible and leave the Premises in a clean
and neat phys ical condition acceptable to the Lessor within 60
days after notice from the Lessor that the Lessor has approved
an application for a lease of the Premises by another person
or such longer period specified in the notice, but in no event
more than 180 days after the e xpiration , termination, or
cancellation date of this Lease;
iii . elect to have the Lessor sell Lessee-owned Permanent
Improvement s at public auction as provided below, remediate
any Contamination for which the Lessee is responsible, and
restore the premises to a clean and neat physical condition
acceptable to the Lessor. If the Lessor sells Permanent
Improvements under this Paragraph for removal from the
Premises , the departing Lessee's obligation under this
Paragraph conti nues until the Premises are remed iat ed and
restored to a clean and neat physical condition acceptable to
the Lessor after the improvements have been removed .
b . If the departing Lessee elects to have the Lessor sell Lessee-owned
Permanent Improvements at public auction per this Section , the Lessee
shall , within 30 days after the expiration , cancellation , or termination of
this Lease:
i. submit to the Lessor a written request and authorization to sell
the Permanent Improvements by public auction ;
LEASE OF AIRPORT LANDS Page 18 of 31
ii. provide to the Lessor an executed conveyance document
transferring clear title to the Permanent Improvements to the
successful bidder at the public auction , along with
aut hor ization to the Lessor, as agent for the Lessee for
purposes of the sale only, to endorse the name of the
successful bidder on the conveyance document upon rece ipt
of payment of the successful bid price ; and
ii i. before the date of the public auction, remove all personal
property, remediate any Contaminat ion for which the Lessee
is responsible and leave the Prem ises in a neat and clean
physical condition acceptable to the Lessor.
c. When selling Lessee-owned Permanent Improvements at public auction
for the departing Lessee, the Lessor will establish the terms and
conditions of the sale. The Lessor shall pay the Lessee any proceeds of
the sale of the Permanent Improvements , less the administrative costs
of the public auction and any financial obligation the Lessee owes to the
Lessor under this Lease . Payment will be made within a reasonable
time after the Lessor completes the sale transaction and receives the
proceeds, but not to exceed 60 days. If all or a portion of the Permanent
Improvements do not sell at public auction , the Lessee will remove those
Permanent Improvements , remed iate any Contamination for which the
Lessee is responsible and restore the Premises to a clean and neat
physical condition acceptable to the Lessor within 60 days after the
auction .
d. If the Lessee shows good cause to the Lessor and if it is not inconsistent
with the best interest of the City of Kenai , the Lessor will grant an
extension of time that is sufficient to allow the Lessee to remove or sell
Lessee-owned Permanent Improvements , remediate any
Contamination for which the Lessee is respons ible and to restore the
Premises to a clean and neat physical condition acceptable to the
Lessor.
e . The Lessor will, by written notice , direct the departing Lessee to remove
Lessee-owned Permanent Improvements from the Premises , to
remediate , consistent with applicable law, any Contamination for which
the Lessee is responsible and to restore the Premises to a clean and
neat physical cond ition acceptable to the Lessor if the Lessor
determines in writing :
i. that the continued presence of the Permanent
Improvements on the Premises are not consistent with any
written Airport program or plan required for compliance
with applicable federal , state, or local law;
LEASE OF AIRPORT LANDS Page 19 of 31
ii. that the continued presence of the Permanent Improvements
on the Premises is not in the best interest of the City of
Kenai ; or
iii. that the Permanent Improvements present a hazard to public
health or safety.
f . The departing Lessee to whom the Lessor has issued direction under
Paragraph e of this Section shall comply with the Lessor's direction
within 60 days after issuance of the direction and at no cost to the
Lessor. If the departing Lessee shows good cause to the Lessor,
continues to work diligently to comply with Lessor's direction, and if it is
not inconsistent with the best interest of the City of Kenai, the Lessor will
allow in writing a longer period that is sufficient to allow the Lessee to
comply with the Lessor's direction. A departing Lessee who fails to
comply with a direction issued by the Lessor under Paragraph e of this
Section , shall , within 30 days of being billed by the Lessor, reimburse
the Lessor for any costs reasonably incurred by the Lessor, including
legal fees and administrative costs, to enforce the Lessor's direction or
to remove and dispose of unremoved Lessee-owned improvements,
remediate any Contamination for which the Lessee is responsible and
restore the Premises .
g. If the departing Lessee does not timely rem ove or sell the Lessee-owned
Permanent Improvements on the Premises in accordance with the
requirements of this Section, any remaining Permanent Improvements
and any remaining personal property of the departing Lessee will be
considered permanently abandoned. The Lessor may sell , lease,
demolish, dispose of, remove , or retain the abandoned property for
Airport use as the Lessor determines is in the best interest of the City of
Kenai. The departing Lessee shall, within 30 days after being billed by
the Lessor, reimburse the Lessor for any costs reasonably incurred by
the Lessor, including legal and administrative costs, to demolish,
remove , dispose , clear title to , or sell the abandoned property and to
remediate and restore the Premises.
h. After the expiration, termination, or cancellation of the Lea se , including
any holdover, the departing Lessee lose s all right to occupy or use the
premises without the express or implied consent of the Lessor. Except
as the Lessor notifies the departing Lessee otherwise in writing , the
Lessor consents to the departing Lessee's continued use and
occupancy of the Premises to diligently accomplish the requirements of
this Section. Until the departing Lessee relinquishes possession of and
completely vacates the Premises and notifies the Lessor in writing that
LEASE OF AIRPORT LANDS Page 20 of 31
it has relinquished and vacated the Premises, the departing Lessee shall
perform the following as if the lease were still in effect,
i. pay rent to the Lessor;
ii. maintain the premises;
iii. provide the Lessor w ith evidence of each insurance coverage ,
if any, required under the Lease; and
iv. cease using the premises other than to d ili gently accomplish
the requirements of this Section , and to comply with the other
requirements of the Lease .
i. A departing Lessee will not be considered to have relinquished
possession and completely vacated the Premises until
i. the departing Lessee has:
(a) remediated , consistent with applicable law, any
Contamination for which the Lessee is
responsible; and
(b) restored the Premises to a clean and neat
physical condition acceptable to the Lessor; and
ii. either
(a) removed all of the Lessee's Permanent Improvements
and personal property from the premises or sold the
Permanent Improvements and personal property to a
succeed ing Lessee under the provisions of th is Lease ; or
(b) transferred title to the Lessee 's Permanent Improvements
and personal property that remain on the premises to the
Lessor.
ARTICLE XIII
GENERAL COVENANTS
A. USE OF THE AIRPORT : Except as provided herein, any regular use of Airport lands
or facilities without the written consent of the City is prohibited . This prohibition shall not apply
to use of areas designated by the City for specified public uses , such as passenger terminals,
automobile parking areas , and streets .
LEASE OF AIRPORT LANDS Page 21 of 31
B. COSTS AND EXPENSES : Costs and e xpenses incident to this lease , including but
not limited to recording costs , shall be paid by Lessee .
C . CARE OF THE PREMISES : The Lessee shall keep the Premises clean and in good
order at the Lessee 's own expense , allowing no damage, waste, nor destruction thereof, nor
removing any material therefrom , without written permission of the City. At the expiration of
the term fixed , or any earlier termination of the Lease, the Lessee will peaceably and quietly
quit and surrender the prem ises to the City.
D . CONSTRUCTION APPROVAL AND STANDARDS: Any building construction on the
Premises by the Lessee must be compatible with its surroundings and cons istent with the uses
authorized under this Lease , as determined by the City. The Lessee must obtain the City's
written approval before plac ing fill material , beginning any land development, or constructing
or demolishing any improvements on the Premises , and before beginning any alterations ,
modifications , or renovation of existing structures on the Prem ises. The Lessee must submit
to the City detailed drawings of the proposed development, alteration , modification , or
renovation, together with specifications or any other information the City reasonably requires .
Further, the Lessee will submit to City evidence of the Lessee 's compliance with Federal
Aviation Administration regulation 14 CFR Part 77 .
E. LEASE SUBORDINATE TO AIRPORT FINANCING REQUIREMENTS : Les see
agrees that City may modify this Lease to meet revised requirements for Federal or State
grants, or to conform to the requirements of any revenue bond covenant. However, the
modification shall not act to reduce the rights or privileges granted the Lessee by this Lease ,
nor act to cause the Lessee financial loss .
F. RIGHT TO ENJOYMENT AND PEACEABLE POSSESSION : City hereby agrees and
covenants that the Lessee , upon paying rent and perform ing other covenants , terms, and
conditions of th is Lease , shall have the right to quietly and peacefully hold , use , occupy, and
enjoy the Premises, except that the following shall not construed as a denial of the right of
quiet or peaceable possession :
1. Any inconvenience caused by public works projects in or about the Premises ;
and
2. Any other entries by the City on the Premises reserved or authorized under
other provisions of this Lease .
G. NO PARTNERSHIP OR JOINT VENTURE CREATED: It is expressly understood that
the City shall not be construed or held to be a partner or joint ven ture of Lessee in the conduct
of the Lessee 's activities or business on the Premises. The relationship between the City and
the Lessee is , and shall at all times remain , strictly that of landlord and tenant , respectively .
LEASE OF AIRPORT LANDS Page 22 of 31
H. DISCRIMINATION: The Lessee will not discriminate on the grounds of race, color,
religion, national origin, ancestry, age, or sex against any patron, employee, applicant for
employment, or other person or group of persons in any manner prohibited by federal or state
law. The Lessee recognizes the right of the City to take any action necessary to enforce this
provision, including actions required pursuant to any federal or state law.
I. AFFIRMATIVE ACTION: If required by 14 CFR Part 152, subpart E, the Lessee will
undertake an affirmative action program to insure that no person will be excluded from
participating in any employment activities offered by the Lessee on the grounds of race, creed,
color, national origin, or sex. No person may be excluded on these grounds from participating
in or receiving the services or benefits of any program or activity covered by subpart E. The
Lessee further agrees that it will require its sub-organization(s) provide assurance to the City
to the same effect that they will also undertake affirmative action programs and require
assurances from their sub-organization( s) as required by 14 CFR, Part 152, subpart E.
Tenant shall use the premises in compliance with all other requirements imposed by or
pursuant to title 49, code of Federal Regulations, DOT, 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 the Regulation may be amended.
J. INTEGRATION, MERGER, AND MODIFICATION: This Lease sets out all the terms,
conditions, and agreements of the parties and supersedes any previous understandings or
agreements regarding the Premises whether oral or written. No modification or amendment
of this Lease is effective unless in writing and signed on behalf of the City and the Lessee.
K. RIGHT TO ADOPT RULES: City reserves the right to adopt, amend, and enforce
reasonable rules and regulations governing the Airport, including the Premises. The City shall
not be liable to Lessee for any diminution or deprivation of possession, or of Lessee's rights
under this Lease, on account of the exercise of the City's authority reserved under this
provision. Furthermore, the Lessee shall not be entitled to terminate the whole or any portion
of the leasehold estate created under this Lease, by reason of the exercise of the City's
authority reserved under this provision, unless the exercise thereof so interferes with Lessee's
use and occupancy of the Premises as to constitute a termination , in whole or in part, of this
Lease by operation of law under the laws of the State of Alaska and of the United States made
applicable to the states.
L. LESSEE'S OBLIGATION TO PREVENT AND REMOVE LIENS: Lessee will not permit
any liens including, but not limited to, mechanics', laborers', or materialmen's liens obtainable
or available under the then existing laws, to stand against the Premises or improvements on
the Premises for any labor or material furnished to Lessee or claimed to have been furnished
to Lessee or to the Lessee's agents , contractors , or sub-lessees, in connection with work of
any character performed or claimed to have been performed on the Premises or improvements
by or at the direction or sufferance of Lessee. Provided, however, the Lessee shall have the
right to provide a bond as contemplated by Alaska law and contest the validity or amount of
any such lien or claimed lien. Upon a final determination of the lien or claim for lien, the Lessee
LEASE OF AIRPORT LANDS Page 23 of 31
will immediately pay any judgment rendered with all proper costs and charges and shall have
such lien released or judgment satisfied at Lessee's own expense .
M. CONDEMNATION : In the event the Premises or any part thereof shall be condemned
and taken for a public or a quasi-public use, then upon payment of any award or compensation
arising from the condemnation or taking , the City and the Lessee shall make a good faith effort
to agree upon
1. the division of the proceeds ;
2. the abatement in rent payable during the term or any extension of the term of
this Lease; and
3. other adjustments as the parties may agree upon as being just and equitable
under all the circumstances .
If, within thirty days after the award has been paid into Court, the City and Lessee are unable
to agree upon what division, abatement in rent, and other adjustments as are just and
equitable , the dispute shall be determined by arbitration.
N. SUCCESSORS IN INTEREST: This Lease shall be binding upon and shall inure to the
benefit of the respective successors and assigns of the parties hereto, subject to such specific
limitations on assignment as are provided for in this Lease .
0 . NOTICES :
1. Any notices required by th is Lease must be in writing and must be delivered
personally or mailed by cert ified or registered mail in a prepaid envelope. A
mailed notice
a. must be addressed to the respective party at the address written on the
first page of this Lease or to the latest address designated in accordance
with (2) of this Provision (O); and
b. shall be deemed delivered on the date it is deposited in a U .S. general
or branch post office .
2. The City or the Lessee may, from time to time, designate a new address at
which they will receive notices by providing the other party with written notice at
least 15 days prior to the effective date of the change . An address change
notice must be delivered according to the procedure set out in ( 1) of this
Provision (0).
P. RETENTION OF RENTAL : In the event the City terminates this Lease because of any
breach by the Lessee, the City shall retain any unused balance of the rental payment last made
by the Lessee City as partial or total liquidated damages for the breach.
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Q. FIRE PROTECTION: The Lessee will take all reasonable precautions to prevent, and
take all necessary action to suppress destructive or uncontrolled fires and comply with all laws ,
regulations, and rules promulgated and enforced by the City for fire protection on the Airport.
R. PERSONAL USE OF MATERIALS: No interest in coal, oil, gas or any other mineral,
or in any deposit of stone or gravel valuable for extraction or utilization is included in the
Premises or in the rights granted by this lease. The Lessee shall not sell or remove from the
Premises for use elsewhere any timber, stone, gravel , peat moss, topsoil or any other material
valuable for building or commercial purposes.
S. APPROVAL OF OTHER AUTHORITIES : The granting of this lease by the City does
not relieve the Lessee of the responsibility to obtain any license or permit as may be required
by federal, state, or local law.
T . EXECUTION BY THE PARTIES: This Lease is of no effect unless signed by the
Lessee , or a duly authorized representative of Lessee , and an authorized representative of the
City.
U. CAPTIONS: The captions of the provisions of this Lea se are for convenience only and
do not necessarily define, limit, describe, or construe the contents of any provision.
V . RIGHTS OF CONSTRUCTION: This Lease is intended to make public property
available for private use, while at all times protecting the public interest to the greatest extent
possible. Following the rule that transfers of interest in public property are to be strictly
construed in favor of the public property landlord , all rights granted to the Lessee under this
Lease will be strictly construed, and all rights of the City and the protections of the public
interest will be liberally construed.
W. LESSEE ACKNOWLEDGEMENT: The Lessee acknowledges that the Lessee has
read this Lease and fully understands "its terms, that the Lessee has been fully advised or has
had the opportunity of advice by separate legal counsel , and voluntarily executes this Lease.
Lessee also acknowledges and agrees that the rule of interpretation under which a document
is construed against the drafter will not apply to this Lease.
X. APPROVAL BY LESSOR: Any approval required of the Lessor by this Lease will not
be unreasonably withheld. The Lessor's approval does not waive the Lessee's legal
responsibility or liability to comply with all applicable federal and state laws and regulations .
ARTICLE XIV
SURVEY, IMPROVEMENTS AND PERFORMANCE BOND
A. SURVEY: The Lessee is solely responsible, at its sole expense, to confirm or establish
the phys ical location of the boundaries of the Premises prior to beginning any construction
thereon, in c luding clearing grubbing, back-filling and environmental sampling . Any survey of
the Premises shall be performed by a Land Surveyor registered in the State of Alaska. The
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Lessee shall furnish the City with a copy of the plat of any survey performed on the Premises
by, or on behalf of, the Lessee .
B. IMPROVEMENTS:
1. REQUIRED IMPROVEMENTS: At no cost to the City, Lessee agrees to
complete land development and construction of Permanent Improvements
including , by
no later than , with an aggregate cost of at
least$ , excluding financing costs . In addition to the as-
built drawings required by this Lease, the Lessee must submit to the City written
evidence that the Lessee has completed the land development and constructed
improvements on the Premises with an aggregate cost or investment of not
less than$ ------
The evidence of cost must be submitted to the City within sixty days of the
completion of the development and improvements , but by no later than
a. Costs considered toward the aggregate cost of permanent
improvements include building construction, design, labor, materials,
materials shipping, permits, equipment, soil testing, environmental
baseline report , and environmental assessment directly related to the
construction; premises and as-built surveys ; site preparation , including
excavation, geotextile fabric, filling, grading , fill material , gravel , and
pavement, remediation of environmental contamination (unless Lessee
caused or Materially Contributed To the Contamination); and utility
connection costs.
b . The cost of Permanent Improvements excludes:
1. work performed by the City and not reimbursed by the Lessee;
and
2. work performed by the Lessee and reimbursed by the City.
2. FAILURE TO COMPLETE IMPROVEMENTS: If the Lessee fails to complete
the required construction within the time allowed under (b)(1) of this Article,
including any extensions granted , the City will execute against and the Lessee
will forfeit , any bond or other guarantee given by the Lessee and, as applicable ,
City will :
a. initiate cancellation of the lease ; or
b. reduce the term of the lease to a period that is consistent with the portion
of the required construction timely completed .
LEASE OF AIRPORT LANDS Page 26 of 31
3. APPEARANCE: When completed, all improvements on the Premises must be
neat, presentable, and compatible with the authorized use of the Premises
under this Lease, as determined by the City.
4. CITY APPROVAL REQUIRED: The Lessee must first obtain the City's written
approval before beginning any land development, construction or demolition of
any improvements on the Premises, or before beginning any alterations,
modifications, or renovation of existing structures on the Premises . The Lessee
must submit to the City detailed drawings of the proposed development,
alteration , modification, or renovation . Further, the Lessee will submit to City
evidence of the Lessee's compliance with the FAA regulation 14 CFR Part 77.
5. CITY APPROVAL WITHHELD : The City's approval of any construction,
alteration, modification , or renovation will not be withheld unless
a. the Lessee fails to demonstrate adequate financial resources to
complete the project;
b . the project plans, specifications , and agency approvals are incomplete;
c . the proposed project would result in a violation of an applicable
ordinance, regulation, or law;
d. the proposed project would interfere with or is incompatible with the
safety, security, maintenance, or operation of the airport;
e. the proposed project is inconsistent with the Airport Master Plan;
f. the proposed project is inconsistent with the terms of the lease, zoning
ordinances, or the City's Comprehensive Plan;
g. the project plans do not make sufficient provision for drainage, aircraft,
vehicle , and equipment parking, or for snow storage; or
h. the proposed project does not conform to generally recogn ized
engineering principles or applicable fire or building codes.
6. DEMOLITION: Prior to any demolition of any structure(s) on the Premises,
Lessee will deliver to City a written scope of work that, at a minimum , lists the
structure(s) that are to be demolished and the timeframe for demolition and
removal of the debris from the Airport. City will review Lessee 's scope for
demolition and issue Lessee written approval for the work to be done.
LEASE OF AIRPORT LANDS Page 27 of 31
7. BUILDING SETBACK: No building or other permanent structure may be
constructed or placed within twenty feet of any lot of the Premises without City's
prior written approval. In addition, no building or other permanent structure may
be constructed or placed within twenty feet of any boundary line of the Premises
which fronts on a landing strip , taxiway, or apron.
8. AS-BUil T DRAWINGS: Within sixty days after completion of construction or
placement of improvements upon the Premises, the Lessee will deliver to the
City a copy of an as-built drawing , acceptable to the City, showing the location
and dimensions of the improvements, giving distances to all Premises'
boundaries. If the Lessee constructs underground improvements, the Lessee
will appropriately mark the surface of the land with adequate surface markers.
The type , quantity, and distance between such markers will be subject to
approval of the City.
9. AIRPORT SECURITY FENCING : If any construction by the Lessee requires a
realignment or alteration of an existing security fence on the Premises or
boundary of the Premises , the Lessee agrees to realign or alter the fence in a
manner approved in writing by the Airport Manager. Anytime the fence must
be breached to allow the Lessee to complete improvement construction or
fence modifications, the Lessee shall, at the Lessee 's sole expense place
temporary barriers to maintain the security of the Airport, as determined by the
Airport Manager. If damage occurs to a security fence on the Premises or
boundary of the Premises in connection with the Lessee 's use or occupation of
the Premises, the Lessee shall promptly repair the fence to the satisfaction of
the Airport Manager.
10. DAMAGE TO IMPROVEMENTS: If Lessee's improvements on the Premises
are damaged or destroyed, Lessee will cause the improvements to be repaired
or rebuilt, and restored to normal function within two years following the damage
or destruction . If the Lessee fails to timely rebuild or restore the improvements ,
the City may, at its sole discretion, either reduce the term of this Lease
commensurate with the estimated value of the Lessee's remaining, fully
functional improvements on the Premises, or cancel this Lease.
11 . DAMAGE NEAR EXPIRATION : If Lessee's improvements are damaged to the
extent that more than 50% of the space is unusable and the damage occurs
within five years of the expiration of the term of this Lease, Lessee may remove
the damaged improvements, restore the Premises and terminate this Lease.
C. PERFORMANCE BOND (Optional): Prior to beginning the construction of permanent
improvements required under (1) of this Article, the Lessee shall submit to the City a
performance bond , deposit, or other security in the amount of$ . The form
of the bond or other security shall be subject to the City's approval.
LEASE OF AIRPORT LANDS Page 28 of 31
D. SURRENDER ON TERMINATION : Lessee shall, on the last day of the term of this
Lease or upon any earlier termination of this Lease, surrender and deliver upon the premises
into the possession and use of City without fraud or delay in good order, condition, and repair,
except for reasonable wear and tear since the last necessary repair, replacement, restoration
or renewal, free and clear of all lettings and occupancies unless expressly permitted by the
City in writing, and free and clear of all liens and encumbrances other than those created by
and for loans to City. Upon the end of the term of this Lease, including any extension or
renewal, or any earlier termination thereof, title to the buildings, improvements and building
equipment shall automatically vest in City without requirement of any deed, conveyance, or bill
of sale thereon . However, if City should require any such document in confirmation hereof,
Lessee shall execute , acknowledge , and deliver the same and shall pay any charge, tax, and
fee asserted or imposed by any and all governmental unites in connection herewith.
E. NOTICE OF CONSTRUCTION: The Lessee agrees to notify the City in writing three
days prior to commencing any construction project valued in excess of $1,000.00 on the
Premises. The Lessee agrees to assist in the posting of a notice of non-responsibility and
maintenance of the notice on the Premises during construction . Lessee agrees that in the
event the Lessee fails to notify the City as required by this Provision (f), the Lessee shall
indemnify the City against any materialmen's liens as defined in AS 34.35.050 which arise as
a result of construction on the premises .
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, the day
and year stated in the individual acknowledgments below.
LESSEE:
By:------------
Lessee Name
Its: Director
LEASE OF AIRPORT LANDS
Date
LESSOR:
City of Kenai
Paul Ostrander
Its : City Manager
Date
Page 29 of 31
ACKNOWLEDGMENTS
STATE OF ALASKA )
) SS.
THIRD JUDICIAL DISTRICT )
TH IS IS TO GERTI FY that on this __ day of , 20_, Name: Lessee Name,
Director, of , being personally known to me or
having produced satisfactory evidence of identification , appeared before me and
acknowledged the voluntary and authorized execution of the foregoing instrument on behalf of
said corporation .
Notary Public for Alaska
My Commission Expires: ______ _
ST A TE OF ALASKA )
) SS.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this __ day of , 20_, Paul Ostrander, City
Manager of the City of Kenai , Alaska , being personally known to me or having produced
satisfactory evidence of identification , appeared before me and acknowledged the voluntary
and authorized execution of the foregoing instrument on behalf of said City.
Notary Public for Alaska
My Commission Expires: ______ _
ATTEST:
Jamie Heinz, City Clerk
SEAL :
LEASE OF AIRPORT LANDS Page 30 of 31
Approved as to Lease Form :
Scott Bloom , C ity Attorney
AFTER RECORDING RETURN TO:
City of Kena i
210 Fida Igo Avenue
Kena i, AK 99611
LEASE OF AIRPORT LANDS Pag e 31 of 31
"V/tf C<je, «J/t/v a Pa~~ e'tf «J/tlv a Fat~ II
210 Fidalgo Ave, Kenai, Alaska 99611-7794
Telephone: (907) 283-7535 I Fax : (907) 283-3014
www. kenai. city
MEMORANDU M
TO: Mayor Brian Gabriel and Kenai City Council
FROM:
'{'',..,,.
Scott Bloom · 5
DATE : February 1, 2018
SUBJECT: Resolution No. 2018-10 -Standard Lease Form
Resolution No . 2018-1 O approves a new standard lease form for airport reserve lands that is
consistent with recent code amendments. It is requested that action be postponed until the second
meeting in February to allow the Airport Commission time to review the new proposed lease form .
This memorandum addresses the material changes in the lease forms. To illustrate some of the
changes, a Lease Form used in 2016 is provided as an attachment in track change format. It is
important to note that the 2016 lease was approved by ordinance , as it, and all recent leases have
deviated from the previous approved lease form, which has not been used in years. In the
attached lease form :
• The Defin itions section is amended to acknowledge the new codified definitions in KMC,
and amend lease definitions to mirror the definitions provided for in code.
• Article I has no material changes
• Article II is amended to eliminate the requirement that a business can only be closed for
30 days in a 12 month time period as this requirement is not enforced and is unnecessary.
• Article Ill has no material changes
• Article IV is amended to reflect that rent will be adjusted annually as prov ided in the KMC
12 .10.090 (by Anchorage Consumer Price Index). It also inserts into the lease form rent
credits , which have been included in recent lease, but were never a part of the approved
lease form . Rather than restate what is in code, the new lease form references the lease
credit provision of code (KMC 21.10.100). References to reimbursement for City
constructed improvements are deleted as City constructed improvements were not carried
forward in the code changes from Ordinance No. 2998-2018 , and while not disallowed ,
would require a separate agreement.
Page 2 of 2
Standard Lease Form
• Article V is amended to reflect the new provisions for adjusting and calculating rent as
provided for in KMC 21.10.090. This includes both annual adjustments (CPI) and other
adjustments based on a ten year cyclical market analysis or appraisal based on changing
market conditions . Again references to City owned improvements are removed.
• Article VI is amended as it relates to the consent by the City to third party security interests.
There is little if any benefit to the City in consenting to a security interests except that it
benefits the City's tenants . The legal department is reluctant to make assurances and
commitments to holders of security interests any more than completely necessary. The
terms included in the prior lease form can be negotiated if necessary, but recent
experience has shown that holders of security interests can be satisfied and conduct
business with airport lessees without the City having to make the level of commitment that
exists in the prior lease form.
• Article VII through X remain XI remain largely unchanged.
• Article XII primarily deviates from the old form lease in Section K. Improvements previously
were owned by the City at the end of the lease. Consistent with the new code amendments
and recent leases, ownership of improvements now remains with the lessees. The lease
form expands on the basic codified framework in a complimentary manner. It is not shown
in track changes in the attachment becomes it has previously been incorporated in recent
leases.
• Article XIII through XIV remain materially unchanged.
• Article XV, which relates to City constructed improvements is deleted in its entirety as City
constructed improvements have not been carried forward in the new code amendments.
Your consideration is appreciated .
KENAI MUNICIPAL AIRPORT
LEASE OF AIRPORT RESERVE LANDS
THIS LEASE AGREEMENT entered into this day of ,
~~.by and between the CITY OF KENAI, 210 Fidalgo Avenue, Kenai, Alaska 99611-
7794, and whose address is
_______________ ("Lessee ").
DEFINITIONS
For the purposes of this Lease the following terms are defined in KMC 21 .10 .020 (effective as
of the date of execution of the lease) as follows:
1. Airport -the Kenai Municipal Airport , including all the runways, taxiways, aprons , water
lanes, water taxiways, and all City-owned real estate located within the boundaries of
the Airport Reserve as defined in KMC Chapter 21.05 , Airport Administration and
Operation .
2. Airport Manager -the official to whom the City Manager of the City has delegated the
authority and responsibility of managing and directing the activities of the Airport .
"Airport Manager" includes that person 's authorized representative .
3. City-the City of Kenai , Alaska, a home rule municipal corporation of Alaskaits e lected
officials . officers, employees or agents .
4. City Manager -the official to whom the Kenai City Council has delegated the
responsibility of managing and directing all activities of the City.
5. Contamination -the unpermitted presence of any released Hazardous Substance .
6. Environmental Law -any applicable federal , state, or local statute , law, regulation ,
ordinance, code, permit, order, decision, judgment of any governmental entity relating
to environmental matters , including littering and dumping .
7. FAA -the abbreviation for the Federal Aviation Administrat ion.
8. Hazardous Substance -any substance that is defined under an Environmental Law as
hazardous waste, Hazardous Substance, hazardous material , toxic, pollutant,
contaminant, petroleum, petroleum product, or oil.
9. KMC -the abbreviation for the Kenai Municipal Code.
LEASE OF AIRPORT LANDS Page 1 of 33
9-:N_
+G,.lL_Permanent Improvement -a fixed addition or change to land that is .not temporary or
portable , including a building , building addition, gravel fill , pavingpavement, retaining
wall , storage tank,-800 well , and remediation of co ntamination for what the lessee is
not responsible,.
ARTICLE I
PREMISES LEASED
A. PREMISES: In consideration of Lessee's payment of the rents and performance of all
the covenants of this Lease , the City leases to the Lessee , and the Lessee leases from the
City, the following described property ("Premises") in the Kenai Recording District, Third
Judicial District, State of Alaska and located on the Airport; to wit:
Description of Lease Property
B. NO WARRANTY: Except as may be provided in this Lease, the City makes no specific
warranties, expressed or implied , concerning the condition of the Prem ises including , survey,
soils , wetlands , access, and suitability or profitability for any use including those authorized by
this Lease, its environmental condition , or the presence or absence of Hazardous Substances
in , on , and under the surface . The Lessee ta kes the Premises on an "as is " basis and without
warranty, subject to any and all of the covenants , terms, and conditions affecting the City's title
to the Premises.
A. AUTHORIZED USES:
ARTICLE 11
RIGHTS AND USES
1. USE OF PREMISES : The City authorizes the Lessee to use the Premises for
the following purposes only:
List authorized uses and limitations
2. CONTINUOUS OPERATIONS: Unless the City approves otherwise in writing ,
the Lessee will operate its business on the Premises on a continuous basis ,
uninterrupted by any period of closure over 15 consecutive days.:. or 30
aggregate days within any 12 month period of the term of this lease . The
Lessee will g ive the City written notice before closing the Lessee's business on
the Premises for more than 10 consecutive days. The notice must state the
reason for the closure and the date on which the Lessee will re-open for
business . This provision does not apply to any period during which the Lessee
is unable to operate its business as a result of an act or directive of the City, or
as a result of a closure of the Airport or loss of the Lessee 's buildings on the
Premises due to fire or natural disaster.
LEASE OF AIRPORT LANDS Page 2 of 33
B. RIGHTS RESERVED TO THE CITY:
1. RIGHT TO GRANT TO OTHERS: The City reserves the right to grant to others
any rights and privileges not specifically granted to the Lessee on an exclusive
bas is. The rights and privileges granted to the Lessee in this Lease are the only
rights and privileges granted to the Lessee by this Lease.
2. EASEMENTS : The City reserves the right to make grants to third parties or
reserve to the City easements or rights of way through , on , or above the
Premises. The City will not grant or reserve any easement or right of way that
unreasonably interferes with the Lessee 's authorized uses of the Premises.
3. INGRESS, EGRESS AND INSPECTION : The City reserves the right of ingress
to and egress from the Premises and the right to enter any part of the Premises ,
including buildings, for the purpose of inspection or environmental testing at any
time. Except in the case of an emergency, all inspections and environmental
testing will be coordinated with the Lessee to minimize interference with the
Lessee 's authorized uses of the Premises.
4 . RIGHT OF FLIGHT: There is hereby reserved to the City, its 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 Premises. This public right of
flight will include the right to cause in the airspace any noise inherent in the
operation of any aircraft used for navigation or flight through the airspace or
landing at, taking off from , or operation on the Airport .
C. PROHIBITED USES: Unless specifically authorized by this Lease or an amendment
to th is Lease, the following are prohibited:
1 . Any use of the Premises other than those authorized in this Lease.
2 . Any use of the Premises that is in violation of a City Ordinance or an Airport
regulation.
3. The outside storage on the Prem ises of junk, salvage aircraft or vehicle parts ,
non-operational support equipment, unused or damaged equipment or material ,
or solid waste or debris unless allowed pursuant to a conditional use permit
under KMC 14 .20 .
4 . The disposal on the Premises or the Airport of waste materials generated by
the Lessee, including any Hazardous Substance, slash , overburden , and
construction waste.
5. The stripping , wasting, or removing any material from the Premises without the
prior written approval of the City.
LEASE OF AIRPORT LANDS Page 3 of 33
6 . Erecting structures or allowing growth of natural obje cts that would consti t ute
an obstruction to air navigation , o r allowing any activity on the Prem ises that
would interfere with or be a hazard to the flig ht of aircraft, or interfere with air
navigation or communication facilities , serving the Airport.
7. Any use or activity that is proh ibited by applicable law or regulation.
ARTIC LE Ill
TERM & HOLDOVER
A. TERM: The initial term of this Lease is for years , from the 1st day of
_______ , £Q__to the 30th day of , m._.
B. HOLDOVER: If the Lessee holds over and remains in possession of the Premises after
the expiration , cancellation or termination of this Lease, the holding over will not operate as an
extension of the term of this Lease , but only creates a month-to-month tenancy, regardless of
any rent payments accepted by the City. The Lessee's obligations for performance under this
Lease will continue during the month-to-month tenancy. The City or Lessee may terminate the
Lessee 's holdover with ten days ' advance written notice .
ART ICL E IV
RENTS AND FEES
A. RENT: The initial rent for the Premises is $ .00 pe r year, as established by
the City pu rsuant KMC 21.10.090 and as subject to annual adjustment on July 1 of each year
under Article V of this Lease , plus applicable sales ta x. The rent shall be payable annually in
advance of the first day of each year of the term of this Lease. All payments requ ired by th is
Lease must be made in U.S. dollars . If the annual rent exceeds $2,400 , the Lessee may, upon
written notice to the City, choose to pay the rent in equal monthly installments , payable in
advance on or before the anniversary date of the term of this Lease and thereafter at monthly
intervals . No conversion of the payment schedule from annual to monthly shall result in the
City receiving less rent than it would have received had the conversion not taken place.
1. Rent Credit: A rent c red it may be applied for a maximum of five years of lease
payments as provided in KMC 21 .10 .100 (as effective at the time this lease is
executed). The credit may only include the value of site preparation ·.vork on the
leased premises to include clearing and grubbing, unclassified excavation ,
classified fill and back fill , a crushed aggregate base course and utility
extensions . For tho credit to be applied, all site preparation must be completed .
An engineer's estimate of value of the site work must be provided to the City
and accepted prior to work being done . An engineer's as built drawing must be
provided to the City and accepted at the completion of the site ·.vork . On c e the
work is completed and value determined , a credit will be applied to the lease
payments , prorated as necessary for the successive five years.
B . RENT PRORATED: Renta l for any period less than one year shall be prorated on t he
basis of the rent payable under this Lease in last full year previous to the prorating.
LEASE OF AIRPORT LANDS Page 4 of 33
C. ADDITIONAL RENT: In addition to the rent specified in (a ) of this Article , Lessee
agrees to pay to the appropriate parties all levies , assessments, and charges as follows :
1. Taxes pertaining to the leasehold interest of the Lessee.
2. Sales tax now enforced or levied in the future , computed upon rent payable in
monthly installments whether the Lessee pays rent under this Lease on a
monthly or annual basis.
3. All ta xes and assessments levied in the future by the City , as if Lessee was the
legal owner of record of the Premises .
4. Reimbursement for City constructed improvements under Article XV.
D. PAYMENTS: The Lessee shall make checks, bank drafts , or postal money orders
payable to the C ity of Kenai and deliver payments to City of Kenai , Finance Departmen t, 210
Fidalgo Avenue , Suitg 200 , Kenai , Alaska 99611-7794 or any other address the Ci ty may
designate in writing to the Lessee.
E. INTEREST: Beginning the day after payment is due, all unpaid rents , charges , and
fees required under this Lease will accrue interest at the rate of eight percent (8.0%) per
annum . Interest on disputed amounts will not be charged to the Lessee if the dispute is
resolved in the Lessee 's favor .
F. LATE PAYMENT PENALTY: In addition to any interest payable unde r Prov ision (E) of
this Article, each time the Lessee fails to pay any rent or fee by the date required in th is Lease,
the City will charge , and the Lessee shall pay, an administrative penalty of ten percent (1 0.0%)
of the amount due and unpaid.
G. COURTESY BILLINGS: Lessee acknowledges that any bill ing statement issued by the
City is prov ided only as a courtesy. The Lessee is obligated to pay all rents and fees when
due , regardless of whether or not the Lessee receives a billing statement from the City .
H. LIEN AGAINST LESSEE: Any rent, charge, fee, or other consideration which is due
and unpaid at the expiration , term ination , or cancellation of this Lease will be a lien against the
Lessee 's property, real or personal.
I. PAYMENT OF CITY 'S COSTS : The Lessee will pay all reasonable actual expenses,
costs , and attorney fees City may incur, with or without formal action , to enforce, defend , or
protect this Lease or City's rights under this Lease, including any e xpense incurred with respect
to en vironmental comp liance , ban kruptcy or any proceeding that involves the Lessee , the
Lease, the Premises , or improvements or perso nal property on the Premises. The Lessee will
make payment w ithin 30 days of the date of each notice from Ci ty of any amounts payable
under t his pro vision .
LEASE OF AIRPORT LANDS Page 5 of 33
J . PAYMENT FOR SPECIAL SERVICES: Lessee agrees to pay the City a reasonable
fee for any special services or facilities the City agrees to perform, which the City is not
otherwise obligated by this Lease to provide and which the Lessee requests from the City in
writing .
ARTICLE V
ADJUSTMENT OF RENT AND FEES
A. RENT OR FEE ADJUSTMENT: At intervals of approximately five years, the C ity shall,
in its sole discretion, adjust the rent or a fee payable The City shall adjust rent or fees payable
by the Lessee under Article IV or other provision§ of this lease on July 1 of each year of the
lease as proved in KMC 21 .10.0 9G O (as effective at t he time this lease is executed) and shall
make any other adjustments to rent as allowed for in KMC 21 .10.090. The amount to which
the City increases or decreases any rent or fee shall be established in accordance with KMC
21 .10.100 and 21.10 .160. Any rent change by the City shall be based on the fair market value
ef
1 . The Premises in its condition on the term beginning date stated in Article Il l ;
~
2 . Any improvements made by the City subsequent to that date, the cost of \Vhich
is not reimbursed by the Lessee .
No rent or fee change shall be effective until 30 days after the date of the City 's written
notice to the Lessee. If the Lessee bel ieves that any changed rent exceeds the fair market rent
for the Premises, the Lessee may appeal #:le-£._rent change to the C ity under as provided in
KMC 21 .10.09o.+W.
B. CITY CONSTRUCTED IMPROVEMENTS: Improvements constructed by the City on,
or in connection with, the Premises shall not be considered a part of the Premises for the
purpose of establishing the rent under (a) of this Article , if the Lessee , as a condition of this
lease , reimburses the City for the City's construction costs pursuant to KMC 21 .10.110.
ARTICLE VI
ASSIGNMENT & SUBLETTING
A. INVALID WITHOUT CITY'S CONSENT: The Lessee may not assign , sublet, or grant
a security interest in , by grant or implication, the whole or any part of this Lease , the Premises,
or any improvement on the Premises without the written consent of the City. Any proposed
assignment, sublease, or security interest must be written and must be submitted to the City
bearing the original , notarized signature of all parties . The Lessee may submit unsigned draft
documents for the City's conceptual review. However, the City's conceptual approval of a draft
document may not be construed as the City's consent to any assignment, sublease, or security
interest. All provisions in this Lease extend to and bind the assignees and sub:lessees of the
Lessee.
LEASE OF AIRPORT LANDS Page 6 of 33
B. NO WAIVER OF CONSENT: The City's consent to one assignment, sublease, or
security interest will not waive the requirement for the Lessee to obtain the City's consent to
any other assignment, sublease, or security interest.
C. ASSIGNEE I LESSEE OBLIGATIONS: An assignment must include a provision stating
that the assignee accepts responsibility for all of the assignor's (Lessee's) obligations under
this Lease, including environmental liability and responsibility. However, unless the City
specifically releases the Lessee in writing, the City may hold the Lessee responsible for
performing any obligation under this lease which an assignee fails to perform .
D. OCCUPANCY BEFORE CITY CONSENT: An assignee or sub:lessee may not occupy
the Premises before the City consents to the assignment or sublease in writing.
E. CONFLICT OF PROVISIONS: In the event of a conflict between this Lease and an
assignment or a sublease , the terms of this Lease control.
F. LESSEE NOT RELIEVED OF OBLIGATIONS: The City's consent to any sublease
does not relieve or otherwise alter the Lessee 's obligations under this Lease.
G. SECURITY ASSIGNMENTS AND FINANCING:
1. Subject to the requirements of (A) of this Article VI , the Lessee may assign a
security interest in this Lease . The security interest may be in the form of a
mortgage, deed of trust, assignment or other appropriate instrument, provided
a. the security interest pertains only to the Lessee's leasehold interest;
b. the security interest does not pertain to or create any interest in City's
title to the Premises; and
c. the documents providing for the security interest are acceptable to the
City.
2. If the assignment of a security interest to which the City has consented shall be
held by an established lending or financial institution, including a bank, an
established insurance company and qualified pension or profit sharing trust ,
and the lending institution acquires the Lessee's interest in this Lease as a
result of a foreclosure action or other remedy of the secured party, or through
any transfer in lieu of foreclosure, or through settlement of or arising out of any
pending or contemplated foreclosure action, the lending institution may transfer
its interest in this Lease to a nominee or a wholly owned subsidiary corporation
with the prior written consent of the City, provided, the transferee assumes all
of the covenants and conditions required to be performed by the Lessee
(including payment of any monies owed by Lessee to the City under the lease).
LEASE OF AIRPORT LANDS Page 7 of 33
In the event of such a transfer, the lending institution shall be rel ieved of any
further liability under this Lessee .
3 . A holder of a security interest in this Lease consented to by the City shall have,
and be subrogated to, any and all rights of the Lessee with respect to the curing
of any default of this Lease by Lessee .
4. If, before any default has occurred in the Lease, the holder of a security interest
in this Lease consented to by the City g ives the City a written notice of the
holder's post office address, tho City shall thereafter
a. by regular U.S. mail, send to the holder a copy of each notice of default
at the same time as tho City gives notice of default to the Lessee; and
b. not accept any surrender or enter into any modification of this Lease
without the prior written consent of the holder, which the holder shall not
unreasonably delay or withho ld.
5. Tho City will enter into a ne1N lease of tho Premises with tho holder of a security
interest consented to by the City, if the City terminates this Lease prior to its
normal expiration due to a default by the Lessee. Tho new lease shall be for
the rema inder of the term of th is Lease and shall be effective as of the
termination of this Lease . Tho City's grant of tho now lease shall be subject to
tho following cond itions:
a. The new lease shall be effective on the date this Lease is terminated;
b. Tho nmu lease shall be for the same rent, additional rent, and covenants
as this Lease;
e. By no later than the twentieth day following tho termination of this Lease,
the security holder must submit a written request to the City for the new
lease, together with payment of all rent , additional rent and other sums
then due to the City under this Lease.
d. The security holder shall pay to the City, at the time of tho execution and
delivery of such new lease any and all sums duo thereunder in
addition to those which \\'ould at the time of the execution and de li11ery
thereof be due under this Lease but for such termination, and in addition
thereto , any reasonable expenses, including legal and attorneys ' fees ,
to which the City shall have been subjected by reason of such default.
e. The security holder shall , on or before the execution of the now lease,
perform all tho other obligations of the Lessee under this Lease to the
LEASE OF AIRPORT LANDS Page 8 of 33
extent the Lessee tailed to perform them prior to the termination of this
Lease .
e~. A holder of a security interest consented to by the City that takes possession of
this Lease or enters into a new lease with the City shall not be released from
the obligations and liabilities of this Lease or the ne•.v lease unless the holder
assigns its leasehold estate to an assignee who is financially capable and
otherwise qualified to undertake to perform and observe the conditions of this
Lease or the nmv lease and the City consents to the assignment. The City's
consent will not be unreasonably withheld. If the seourity holder asserts that the
City is unreasonably withholding its consent to a proposed assignment, the
dispute shall be resolved by arbitration .
ARTICLE VII
MAINTENANCE, SNOW REMOVAL & UTILITIES
A. MAINTENANCE:
1. At no cost to the City, the Lessee will keep the Premises and all improvements
on the Premises clean , neat and presentable, as reasonably determined by the
City.
2. At no cost to the City, the Lessee will provide for all maintenance and services
at the Premises as may be necessary to facilitate the Lessee's compliance with
this Lease and the Lessee 's use of the Premises.
3. The Lessee shall comply with all regulations or ordinances of the City that are
promulgated for the promotion of sanitation. At no cost to the City, the Lessee
shall keep the Premises in a clean and sanitary condition, and control activities
on the Premises to prevent the pollution of water.
4. The Lessee agrees to comply with all decisions and directions of the City's
Airport Manager regarding maintenance and operation of the Airport, and the
use of the Airport by the Lessee .
B. SNOW REMOVAL:
1. At no cost to the City , the Lessee is responsible for snow removal on the
Premises . The Lessee shall dispose of snow in an off-Premises location
approved in writing by the City or provide suitable snow storage within
the boundaries of the Premises in accordance with all applicable federal
and state laws . At the request of the Airport Manager, the Lessee shall submit
a snow removal plan for the Premises to the Manager for review . Upon
approval of the Lessee 's plan by the Airport Manager, the Lessee shall
conduct all snow removal operations on the Premises in accordance with the
approved plan .
LEASE OF AIRPORT LANDS Page 9 of 33
2. Lessee shall not deposit snow on an apron , taxiway, safety area, or other
aircraft-maneuvering surface provided for common use by others without the
prior written of the Airport Manager.
3. Lessee agrees to not allow an accumulation of snow on the Premises that would
cause interference with adjoining leaseholders or other users of the Airport .
C. UTILITIES: Unless specifically provided otherwise in this Lease , the Lessee shall,
at no cost to the City, provide for all utilities at the Premises necessary to facilitate the Lessee's
use of the Premises.
ARTICLE VIII
OPERATIONS
A. OPERATIONS ON THE AIRPORT: The Lessee will ensure that the Lessee , its
employees, guests, contractors, sub:lessees , and vendors that perform any activity or function
authorized under this Lease shall do so in a manner that ensures the safety of people, the
protection of public health and the environment, and the safety and integrity of the Airport and
the Premises .
B. LESSEE'S CONTROL AND RESPONSIBILITY:
1. The Lessee will assume full control and sole responsibility as between Lessee
and City for the activities of the Lessee, the Lessee's personnel and employees ,
and anyone else acting by, on behalf of, or under the authority of the Lessee on
the Airport, including the Premises .
2. The Lessee will immediately notify the City of any condition, problem ,
malfunction or other occurrence that threatens the safety of people or the
Airport, harm to public health or the environment, or the safety or integrity of the
Premises .
C. RADIO INTERFERENCE: The Lessee will discontinue the use of any machine or
device that interferes with any government-operated transmitter, receiver, or navigation aid
until the cause of the interference is eliminated.
D. WILDLIFE: The Lessee acknowledges that a concentration of birds or other wildlife on
an airport constitutes a significant hazard to aircraft operations. The Lessee agrees to keep
the Premises clean of fish slime, fish waste , or any other material that might attract birds or
other wildlife. The Lessee accepts full responsibility to maintain the Premises, control
operations, and take all reasonable measures to prevent a concentration of birds or other
wildlife on the Premises .
E. PARKING: The Lessee will provide adequate vehicle, equipment, and aircraft parking
LEASE OF AIRPORT LANDS Page 10 of 33
space on the Premises for Lessee's business or activit ies , or confine parking to such other
places on the Airport as may be approved or designated in writing by the Airport Manager.
ARTICLE IX
ENVIRONMENTAL PROVISIONS
A. HAZARDOUS SUBSTANCE:
1. The lessee will conduct it business and/or operation on the Premises in
compliance with all environmental laws and permits. If hazardous substances
are handled on the Premises, the Lessee agrees to have properly trained
personnel and adequate procedures for safely storing , dispensing, and
otherwise handling Hazardous Substances in accordance with all applicable
federal , state and local laws .
2. Lessee will promptly give the City notice of proceeding to abate or settle matters
relating to the presence of a Hazardous Substance on the Premises or from
Lessee 's operations on the Airport. The Lessee will allow the City to participate
in any such proceedings .
B. ENVIRONMENTAL INDEMNIFICATION: If Contamination of the Premises or other
property by a Hazardous Substance occurs from the Lessee's operations on the Premises the
Lessee will indemnify, defend , and hold the City harmless from any and all claims, judgments,
damages, penalties , fines , costs , liabilities , or losses , including, but not limited to, sums paid
in settlement of claims, attorney's fees, consultant fees, and expert fees , which arise during or
after the term of this Lease as a result of such Contamination. This indemnification of the City
by Lessee includes, but is not limited to, costs incurred in connection with any investigation of
site conditions or any cleanup, remediation , removal, monitoring . or restorative work required
by any federal , state , or local governmental agency because of a Hazardous Substance being
present in the soil or groundwater or under the Premises or other properties affected by the
Contamination.
C . REMEDIATION:
1. In the event of a Hazardous Substance spill on the Premises, the Lessee will
immediately notify the City and the Alaska Department of Environmental
Conversation and act, promptly, at its sole expense, to contain the spill , repair ,
any damage, absorb and clean up the spill area , and restore the Premises to a
condition satisfactory to the City and otherwise comply with the applicable
portions of any environmental law.
2. In addition to any notices required by this Lease , the Lessee will immediately
notify and copy the City in writing of any of the following :
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a. Any permit, enforcement, clean up, lien, removal or other governmental
or regulatory action instituted, completed , or threatened pursuant to an
Environmental Law.
b. Any claim made or threatened by any person against the Lessee or
arising from the Lessee 's operations authorized by this Lease, relating
to damage, contribution, compensation, loss or injury resulting , from, or
claimed to result from any Hazardous Substances in , on , or under the
Airport; or
c. Any report made by , or on behalf of, the Lessee to any environmental
agency arising out of or in connection with any Hazardous Substances
in, on , or removed from the Premises, including any complaints , notices,
warnings, or asserted violations.
3. Remediation and restoration of the contaminated area must meet all applicable
state and federal regulations and must meet the requirements of all governing
regulatory authorities .
D . ENVIRONMENTAL AUDIT: The Lessee will provide the City with all investigative data,
test results, reports, and any other information gathered or analyzed as part of or in relation to
any Environmental Assessment, characterization or audit on the Premises or the Airport that
Lessee performs or causes to be performed after the starting date of this Lease. The Lessee
will submit the data, result , report or information to the City within 60 days following the date
on which it becomes available to the Lessee.
E. RELEASE OF LESSEE: The City releases the Lessee from liability to the City for
Contamination and the presence of Hazardous Substances that existed prior to the
commencement date of this lease unless caused or materially contributed to by the Lessee .
F. SURVIVAL OF OBLIGATIONS : The obligations and duties of the City and Lessee
under Article IX of this lease shall survive the cancellation , termination or expiration of this
lease .
A INDEMNIFICATION :
ARTICLE X
INDEMNIFICATION & INSURANCE
1. The Lessee will indemnify, save harmless, and defend the City, its officers,
agents, and employees from and against any and all liabilities , losses , suits ,
administrative actions, claims , awards, judgments, fines, demands, damages,
injunctive relief or penalties of any nature or kind to the full extent of the loss or
obligation for property damage , personal injury, death , violation of any
regulation or grant agreement, or any other injury or harm resulting from or
arising out of any acts or commission of or omission by the Lessee , ms-Lessee 's
LEASE OF AIRPORT LANDS Page 12 of 33
agents , employees , customers, invitees or arising out of the Lessee 's
occupation or use of the premises demised or privileges granted, and to pay all
costs connected therewith. This indemnification of the City by the Lessee shall
include sums paid in settlement of claims, attorney fees , consultant fees , expert
fees , or othe r costs and e xpenses, directly or indirectly arising from , connected
to or on account of this Lease as it relates to the Lessee , the Lessee 's activities
at or relating to the Airport , or any act or omission by the Lessee, or by any of
+t&-Lessee 's officers, employees, agents , contractors or sub:lessees. These
indemnity obligations are in addition to, and not limited by, the Lessee's
obligation to provide insurance , and shall survive the expiration or earlier
termination of this Lease .
2. The Lessee shall give the City prompt notice of any suit, claim, action or other
matter affecting the City to wh ich Paragraph 1, above , may apply, together with
a copy of any letter by an attorney on behalf of a complainant, any complaint
filed in court, and any notice or complaint by any regulatory agency. The City
shall have the right , at its option , to participate cooperatively in the defense of,
and settlement negotiations regarding , any such matter, without relieving the
Lessee of any of its obligations under this provision.
3. As to any amount paid to others for personal injury or property damage with
respect to which an act or omission of the City is a legal cause, notwithstanding
Paragraph 1 of this section , the Lessee and the City shall reimburse each other
according to the principles of comparative fault. If liability to a third party is
subject to apportionment according to comparative fault under this provision ,
the Lessee and the City shall seek in good faith to achieve non-judicial
agreement as to apportionment of fault as between themselves . This
apportionment of liability between the City and the Lessee shall not be
construed to affect the rights of any person who is not a party to th is Lease.
B. INSURANCE: At no expense to the City, the Lessee will obtain and keep in force during
the term of this Lease , insurance of t he type and limits required by this provision . Where
spe cific limits are set, they will be the minimum acceptable limits . If the Lessee 's policy
contains higher limits, the City will be entitled to coverage to the e xtent of the higher limits. At
the time insurance in obtained by the Lessee , all insurance shall be by a company/corporation
rated "A-" or better by A.M . Best. The following policies of insurance are required with the
following minimum amounts:
1. Commercial General Liability, including Premises , all operations , property
damage , products and completed operations , and personal injury and death,
broad-form contractual , with a per-occurrence limit of not less than $1,000 ,000
combined single limit. If this lease authorizes the Lessee to engage in the sale
or the commercial dispensing or storage of aviation fuel , the policy must not
exclude of ~Lessee 's fuel handl ing act ivities. This policy must name the City
as an additional insured .
LEASE OF AIRPORT LANDS Page 13 of 33
2. Commercial Automobile Coverage with not less than $1 ,000,000 combined
single limit per occurrence . This insurance must cover all owned , hired , and
non-owned motor vehicles used by the Lessee.
3. Workers Compensation Insurance . The Lessee will provide and maintain , for
all employees, coverage as required under AS 23.30.045, and, where
applicable, any other statutory obligations. The policy must waive subrogation
against the City.
4. The Lessee will provide the City with proof of insurance coverage in the form of
an insurance policy or a certificate of insurance , together with proof that the
premiums have been paid , showing the types and monetary limits of coverage
secured. All insurance required by this provision must provide that the City be
notified at least 30 days prior to any termination , cancellation , or material
change in the insurance coverage.
5. If the Lessee's insurance coverage lapses or is canceled, Lessee will
immediately, upon written notice by the City, halt all operations on the Airport,
including the Premises . The Lessee will not resume operations until the City
receives evidence that the Lessee has obtained current insurance coverage
meeting the requirements of this Lease.
6 . The City may, at intervals of not less than five years from the beginning date of
the term of this Lease and upon written notice to Lessee , revise the insurance
requirements required under this Lease. City's determination to revise the
insurance requ irements will be based on the risks relative to the Lessee's
operations, any insurance guidelines adopted by the City, and any applicable
law.
7. If the Lessee subleases all or any portion of the Premises under the provisions
of this Lease, the Lessee will require the sublessee to provide to the insurance
coverage required of the Lessee under this Article X.
ARTICLE XI
LAWS & TAXES
A. COMPLIANCE WITH LAW : Lessee shall comply with all applicable laws , ordinances ,
and regulations of public authorities now or hereafter in any manner affecting the Airport, the
Premises or the sidewalks, alleys , streets , and ways adjacent to the Premises , or any buildings,
structures, fixtures and improvements or the use thereof, whether or not any such laws,
ordinances, and regulat ions which may be hereafter enacted involve a change of policy on the
part of the governmental body enacting the same . Lessee agrees to hold City financially
harmless:
1. From the consequences of any vio lation of such laws , ord inances , and/or
regulations; and
LEASE OF AIRPORT LANDS Page 14 of 33
2. From all claims for damages on account of injuries, death, or property damage
resulting from such violation.
B . UNLAWFUL ACTIVITY: The Lessee shall not permit any unlawful use, occupation,
business, or trade to be conducted on the Premises contrary to any law, ordinance , or
regulation, including zoning ordinances, rules and regulations.
C . LICENSES AND PERMITS: The Lessee will obtain all necessary licenses and permits,
pay all taxes and special assessments lawfully imposed upon the Premises, and pay other
fees and charges assessed under applicable law. Nothing in this Lease prevents the Lessee
from challenging any taxes or special assessments to the appropriate authority.
D. LITIGATION: The Kenai municipal code , including regulations promulgated
thereunder, and the laws of the State of Alaska will govern in any dispute between the Lessee
and City. If a dispute continues after exhaustion of administration remedies, any lawsuit must
be brought in the courts of the State of Alaska , in Kenai , Alaska.
E. LESSEE TO PAY TAXES : Lessee shall pay all lawful taxes and assessments which ,
during the term of this Lease may become a lien upon or which may be levied by the State,
Borough, City, or any other tax levying body, upon any taxable possessory right which Lessee
may have in or to the Premises or improvements on the Premises by reason of its use or
occupancy or the terms of this Lease provided, however, that nothing in this provision shall
prevent Lessee from contesting any increase in a tax or assessment under any applicable law,
ordinance, or regulation .
F. PARTIAL INVALIDITY: If any term, prov1s1on , condition, or part of this Lease is
declared by a court of competent jurisdiction to be invalid or unconstitutional, the remaining
terms, provisions, conditions, or parts shall continue in full force and effect as though the
declaration had not been made.
ARTICLE XII
LEASE TERMINATION
A. CANCELLATION: The City may, after 30 days' written notice to the Lessee, cancel
this Lease and recover possession of the Premises if any of the following violations occur,
unless the violation is cured within the 30 days :
1. The Lessee fails to pay when due the rents, additional rents, charges, or other
sums specified in this Lease, including any increases made under this Lease.
2. The Lessee's check for payment of any sum due under this Lease is returned
for insufficient funds .
3 . The Lessee uses or authorizes the use of the Premises for any purpose not
authorized by this Lease.
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4. The Lessee fa ils to fully perform and comply with any provision in this Lease .
4:-5. The Lessee violates a provision of Kenai Municipal Code applicable to this
Lessee .
~_6 _. _The court enters a judgment of insolvency agains t the Lessee .
~_7 _. _A trustee or receiver is appointed for the Lessee's assets in a proceeding
brought by or against t he Lessee , or the Lessee files a voluntary pet ition in
bankruptcy.
::/-:_8 _. _Failure by the Lessee to comply with any land development or perm a nent
improvement construction required by this Lease .
B. ENTRY AND RE -ENTRY: In the event that the Lease should be terminated in
accordance with this Article X II , or by summary proceedings or otherwise, o r upon the Lessee 's
abandonment of the Prem ises or a portion of the Premises , the City or its agents , servants , or
representatives may, immed iately or any time thereafter, re-enter , and resume possess ion of
the Premises or portion thereof, and remove all persons and prop e rty therefrom , without being
liable for any damages therefore . No re-entry by the City shall be deemed an acceptance of a
surrender of the Lease.
C . CONTINUING OBLIGATIONS UNTIL PREMISES VACATED: The Lessee will
continue to pay City ren t after the expira ti on , termination , or cancellation of this lease and to
ab ide by the lease obligations , including providing proof of insurance coverage , through the
date Lessee re linqu ishes possess ion of and completely vacates the Premises. City wil l
consider the Premises completely vacated if the Lessee has
1. Remediated any environmental contamination for which the Les see is
respons ible;
2. Restored the Premises to a neat and clean physical condition acceptable to the
Ci ty.
D. REASONABLE CURE :
1. In the case of a violation tha t cannot be reasonably cured within 30 days, a
notice of cancellation issued by the City to the Lessee under this Article is
stayed if, with in the 30-day notice period, the Lessee begins and continues
expeditious action to cure the violation . The City w ill determine if a violation
cannot be reasonably cured with i n 30 days and what constitutes e xpedi tious
action .
2. In the case where , in City's sole determ ination , Lessee 's violatio n is considered
an imminent threat to the airport, public health or safety, or the environment,
LEASE OF AIRPORT LANDS Page 16 of 33
City will direct the Lessee to stop the activity immediately and may reduce the
period to cure the violation , or the City may correct the violation pursuant to (E)
of this Article .
E. RIGHT OF CITY TO PERFORM :
1. If, after 30 days following notice the Lessee fails or refuses to perform any action
required by this Lease , the City will have the right, but not the obligation, to
perform any or all such actions required by this Lease at the sole expense of
the Lessee . The City will not take action if the Lessee begins and continues
expeditious action to perform any action required by this Lease that cannot be
reasonably completed within 30 days. The City will , at its sole discretion ,
determine what constitutes expeditious action and if an action cannot be
reasonably performed in 30 days. The City will submit to the Lessee an invoice
for the expenses incurred by the City in the performance by the City of any
required action. The Lessee will pay the amount of each invoice within 30 days
from issuance.
2. If Lessee fails or refuses to perform any action that has been deemed an
imminent threat the City will have the right, but not the obligation, to perform
any or all such actions required to expeditiously correct the imminent threat.
Lessee shall reimburse the City for any cost, including legal fees and
administrative costs reasonably incurred by the City in acting to correct the
imminent threat violation .
F. WAIVER: A waiver by the City of any default by the Lessee of any provision of this
Lease will not operate as a waiver of any subsequent default. If the City waives a default, the
City is not required to provide notice to the Lessee to restore or revive any term or condition
under this Lease. The waiver by the City of any provision in this Lease cannot be enforced or
relied upon unless the waiver is in writing and signed on behalf of the City. The City's failure
to insist upon the strict performance by the Lessee of any provision in this Lease is not a waiver
or relinquishment for the future, and the provision will continue in full force.
G. AIRPORT CLOSURE :
1. If the City closes the airport to aircraft operations for sixty days or less, this
Lease will remain in full force and effect without adjustment
2. If the City closes the Airport to aircraft operations for more than sixty days, but
not permanently, and this Lease is for aviation or direct aviation support uses,
the Lessee may, upon written notice to the City, either terminate the Lease or
retain the Lease and receive a fifty (50%) percent rent reduction or credit for
that portion of the closure that exceeds sixty days.
3. If the City permanently closes the Airport to aircraft operations and
LEASE OF AIRPORT LANDS Page 17 of 33
a. this Lease is for aviation or direct aviation support uses, the Lessee may
terminate this agreement by written notice to the City; or
b. this Lease is for non-aviation uses, the Lessee may request in writ ing to
have the Lease terminated . The City will consider the Lessee's request
in light of the City's best interest and either terminate the Lease, or deny
the Lessee's request in writing .
H . DISASTERS: The Lessee or City may cancel this lease upon written notice to the other
party if:
1. the Premises becomes unusable through no fault of either party and
performance under this lease becomes impossible; or
2. the Airport becomes unusable through no fault of either party and the
performance under this lease becomes impossible.
If the Lessee elects in writing that it will continue to operate after notice from City to Lessee
that the Ai r port has become unusable, the Lessee's obligations under the Lease will continue ,
but City shall be under no obligation to continue to perform.
Causes for termination of the lease under this provision (G) include acts of God, the public
enemy, and the United States.
I. NATIONAL EMERGENCY: If the federal government declares a national emergency,
neither party may hold the other liable for any inability to perform any part of this Lease as a
result of the national emergency.
J . SURRENDER ON TERMINATION: Except as provided otherwise in this Article XII,
Lessee shall , on the last day of the term of this Lease (including any extension or renewal
thereof) or upon any earl ier termination of this Lease, surrender and deliver up the prem ises
into the possession and use of City without fraud or delay in good order, condition, and repair,
except for reasonable wear and tear since the last necessary repair, replacement, restoration
or renewal , free and clear of all lettings and occupancies unless expressly permitted by the
City in writing , and free and clear of all liens and encumbrances other than those created by
and for loans to City.
K. OWNERSHIP AND DISPOSITION OF IMPROVEMENTS:
1. Ownership of Permanent Improvements: Permanent improvements on the
Premises, excluding Site Development Materials , constructed , placed , or
purchased by the Lessee remain the Lessee's property as long as this
Lease remains in effect, including any period of extension or holdover with
the consent of the Lessor.
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2. Disposition of Site Development Materia ls: The Lessee acknowledges that,
once placed by the Lessee, the removal from the Premises of Site
Development Materials can damage the Premises, adversely affect surface
water drainage patterns, and destabilize adjacent structures. When placed
on the Premises by the Lessee, Site Development Materials , including
building pads, parking areas, driveways, and similar structures:
a. become a part of the realty and the property of the City of Kenai;
b. unless otherwise directed by the Lessor, must be maintained by the
Lessee throughout the term of this Lease, including any extensions and
periods of holdover; and
c. may not be removed by the Lessee without the prior written approval of
the Lessor.
3. Disposition of Personal Property and Permanent Improvements Other Than
Site Development Materials :
a. Unless the Lessor otherwise directs as provided below, when this Lease
expires, terminates, or is cancelled and is neither extended nor followed
by a successive lease, the departing Lessee may do one or more of the
following:
i. remove Lessee-owned Permanent Improvements from the
Premises, remediate any Contamination for which the Lessee
is responsible, and restore the Premises to a clean and neat
physical condition acceptable to the Lessor within 60 days
after the expiration, cancellation, or termination date of this
Lease;
ii. with written approval from the Lessor , sell Lessee-owned
Permanent Improvements to the succeeding lessee, remove
all personal property, remediate, any Contamination for which
the Lessee is responsible and leave the Premises in a clean
and neat physical cond ition acceptable to the Lessor within 60
days after notice from the Lessor that the Lessor has approved
an application for a lease of the Premises by another person
or such longer period specified in the notice, but in no event
more than 180 days after the expiration , termination, or
cancellation date of this Lease ;
iii. elect to have the Lessor sell Lessee-owned Permanent
Improvements at public auction as provided below, remediate
any Contamination for which the Lessee is responsible, and
LEASE OF AIRPORT LANDS Page 19 of 33
restore the premises to a clean and neat physical condition
acceptable to the Lessor. If the Lessor sells Permanent
Improvements under this Paragraph for removal from the
Premises , the departing Lessee's obligation under this
Paragraph continues until the Premises are remediated and
restored to a clean and neat physical condition acceptable to
the Lessor after the improvements have been removed .
b. If the departing Lessee elects to have the Lessor sell Lessee-owned
Permanent Improvements at public auct ion per this Section, the Lessee
shall , with in 30_days after the expiration , cancellation , or termination of
this Lease :
i. submit to the Lessor a written request and authorization to sell
the Permanent Improvements by public auction ;
ii. provide to the Lessor an executed conveyance document
transferring clear title to the Permanent Improvements to the
successful bidder at the public auction , along with
authorization to the Lessor, as agent for the Lessee for
purposes of the sale only, to endorse the name of the
successful bidder on the conveyance document upon receipt
of payment of the successful bid price ; and
iii. before the date of the public auction , remove all pe rsonal
property, remediate any Contamination for which the Lessee
is responsible and leave the Premises in a neat and clean
physical condit ion acceptable to the Lessor .
c . When selling Lessee-owned Permanent Improvements at public auction
fo r the departing Lessee , the Lessor will establish the terms and
cond itions of the sale . The Lessor shall pay the Lessee any proceeds of
the sale of the Permanent Improvements, less the admin istrative costs
of the public auction and any financial obligation the Lessee owes to t he
Lessor under this Lease . Payment will be made within a reasonable
time after the Lessor completes the sale transaction and receives the
proceeds, but not to exceed 60 days . If all or a portion of the Permanent
Improvements do not sell at public auction , the Lessee will remove those
Permanent Improvements , remediate any Contamination for wh ich the
Lessee is responsible and restore the Premises to a clean and neat
physical condit ion acceptable to the Lessor within 60 days after the
auction .
d. If the Lessee shows good cause to the Lessor and if it is not inconsistent
with the best interest of the City of Kenai, the Lessor will grant an
extension of time that is sufficient to allow the Lessee to remove or sell
LEASE OF AIRPORT LANDS Page 20 of 33
Lessee-owned Permanent Improvements, remediate any
Contamination for which the Lessee is responsible and to restore the
Premises to a clean and neat physical condition acceptable to the
Lessor.
e. The Lessor will, by written notice , direct the departing Lessee to remove
Lessee-owned Permanent Improvements from the Premises, to
remediate, cons istent with applicable law, any Contamination for which
the Lessee is responsible and to restore the Premises to a clean and
neat phys ical condition acceptable to the Lessor if the Lessor
determines in writing :
i. that the cont inued presence of the Permanent
Improvements on the Premises are not cons istent with any
written Airport program or plan required for compliance
with applicable federal, state, or local law;
ii . that the continued presence of the Permanent Improvements
on the Premises is not in the best interest of the City of
Kenai ; or
iii. that the Permanent Improvements present a hazard to public
health or safety.
f. The departing Lessee to whom the Lessor has issued direction under
Paragraph &-~of this Section shall comply with the Lessor's direction
within 60 days after issuance of the direction and at no cost to the
Lessor. If the departing Lessee shows good cause to the Lessor,
continues to work diligently to comply with Lessor's direction, and if it is
not inconsistent with the best interest of the City of Kenai , the Lessor will
allow in writing a longer period that is sufficient to allow the Lessee to
comply with the Lessor's direction . A departing Lessee who fails to
comply with a direction issued by the Lessor under Paragraph 5-~of this
Section , shall , within 30 days of being billed by the Lessor, reimburse
the Lessor for any costs reasonably incurred by the Lessor, including
legal fees and administrative costs, to enforce the Lessor's direction or
to remove and dispose of unremoved Lessee-owned improvements,
remediate any Contamination for which the Lessee is responsible and
restore the Premises.
g. If the departing Lessee does not timely remove or sell the Lessee-owned
Permanent Improvements on the Premises in accordance with the
requirements of this Section , any remaining Permanent Improvements
and any remaining personal property of the departing Lessee will be
considered permanently abandoned. The Lessor may sell, lease ,
demolish, dispose of, remove , or retain the abandoned property for
LEASE OF AIRPORT LANDS Page 21 of 33
Airport use as the Lessor determines is in the best interest of the City of
Kenai. The departing Lessee shall, within 30 days after being billed by
the Lessor, reimburse the Lessor for any costs reasonably incurred by
the Lessor, including legal and administrative costs, to demolish ,
remove, dispose, clear title to , or sell the abandoned property and to
remediate and restore the Premises.
h. After the expiration , termination , or cancellation of the Lease, including
any holdover, the departing Lessee loses all right to occupy or use the
premises without the express or implied consent of the Lessor . Except
as the Lessor notifies the departing Lessee otherwise in writing, the
Lessor consents to the departing Lessee's continued use and
occupancy of the Premises to diligently accomplish the requirements of
this Section . Until the departing Lessee relinqu ishes possession of and
completely vacates the Premises under Paragraph Q of this Section and
notifies the Lessor in writing that it has relinquished and vacated the
Premises, the departing Lessee shall perform the following as if the
lease were still in effect,
i. pay rent to the Lessor;
ii. maintain the premises ;
iii. provide the Lessor with evidence of each insurance coverage ,
if any, required under the Lease ; and
iv. cease using the premises other than to diligently accomplish
the requirements of this Section , and to comply with the other
requirements of the Lease.
i. A departing Lessee will not be considered to have relinquished
possession and completely vacated the Premises unt il
i. the departing Lessee has:
(a) remediated, consistent with applicable law , any
Contamination for which the Lessee is
responsible ; and
(b) restored the Premises to a clean and neat
physical condition acceptable to the Lessor; and
ii. either
LEASE OF AIRPORT LANDS Page 22 of 33
(a) removed all of the Lessee's Permanent Improvements
and personal property from the premises or sold the
Permanent Improvements and personal property to a
succeeding Lessee under the provisions of this Lease; or
(b) transferred title to the Lessee's Permanent Improvements
and personal property that remain on the premises to the
Lessor.
ARTICLE XIII
GENERAL COVENANTS
A. USE OF THE AIRPORT: Except as provided herein , any regu lar use of Airport lands
or facilities without the written consent of the City is prohibited . This prohibition shall not apply
to use of areas designated by the City for specified public uses, such as passenger terminals,
automobile parking areas, and streets .
B. COSTS AND EXPENSES: Costs and expenses incident to this lease , including but
not limited to recording costs , shall be paid by Lessee.
C . CARE OF THE PREMISES: The Lessee shall keep the Premises clean and in good
order at the Lessee's own expense, allowing no damage, waste , nor destruction thereof, nor
remov ing any material therefrom, without written permission of the City. At the expiration of
the term fix ed, or any earlier termination of the Lease , the Lessee will peaceably and qu ietly
quit and surrender the premises to the City.
D. CONSTRUCTION APPROVAL AND STANDARDS: Any building construction on the
Premises by the Lessee must be compatible with its surroundings and consistent with the uses
authorized under this Lease , as determined by the City. The Lessee must obta in the City's
written approval before placing fill material , beginning any land development, or constructing
or demolishing any improvements on the Premises , and before beg inning any alterations ,
modifications, or renovation of existing structures on the Premises . The Lessee must submit
to the City detailed drawings of the proposed development, alteration , modification, or
renovation , together with specifications or any other information the City reasonably requires .
Further, the Lessee will submit to City evidence of the Lessee's compliance with Federal
Aviation Administration regulation 14 CFR Part 77.
E. LEASE SUBORDINATE TO AIRPORT FINANCING REQUIREMENTS: Lessee
agrees that City may modify this Lease to meet revised requirements for Federal or State
grants, or to conform to the requirements of any revenue bond covenant. However, the
modification shall not act to reduce the rights or privileges granted the Lessee by this Lease,
nor act to cause the Lessee financial loss.
F. RIGHT TO ENJOYMENT AND PEACEABLE POSSESSION : City hereby agrees and
covenants that the Lessee , upon paying rent and performing other covenants, terms , and
conditions of this Lease , shall have the right to quietly and peacefully hold, use, occupy, and
LEASE OF AIRPORT LANDS Page 23 of 33
enjoy the Premises, except that the following shall not construed as a denial of the right of
quiet or peaceable possession :
1. Any inconvenience caused by public works projects in or about the Premises ;
and
2. Any other entries by the City on the Premises reserved or authorized under
other provisions of this Lease.
G. NO PARTNERSHIP OR JOINT VENTURE CREATED: It is expressly understood that
the City shall not be construed or held to be a partner or joint venture of Lessee in the conduct
of the Lessee's activities or business on the Prem ise s . The relationship between the City and
the Lessee is, and shall at all times remain, strictly that of landlord and tenant, respectively.
H. DISCRIMINATION: The Lessee will not discriminate on the grounds of race, color,
religion, national origin , ancestry, age, or sex against any patron, employee, applicant for
employment, or other person or group of persons in any manner prohibited by federal or state
law. The Lessee recognizes the right of the City to take any action necessary to enforce this
provision , including actions required pursuant to any federal or state law.
I. AFFIRMATIVE ACTION : If required by 14 CFR Part 152 , subpart E, the Lessee will
undertake an affirmative action program to insure that no person will be excluded from
participating in any employment activities offered by the Lessee on the grounds of race, creed,
color, national origin , or sex. No person may be excluded on these grounds from participating
in or receiving the services or benefits of any program or activity covered by subpart E. The
Lessee further agrees that it will require its sub-organization(s) provide assurance to the City
to the same effect that they will also undertake affirmative action programs and require
assurances from their sub-organization(s) as required by 14 CFR , Part 152, subpart E.
Tenant shall use the premises in compliance with all other requirements imposed by or
pursuant to title 49 , code of Federal Regulations, DOT, 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 the Regulation may be amended .
J . INTEGRATION, MERGER, AND MODIFICATION: This Lease sets out all the terms,
conditions, and agreements of the parties and supersedes any previous understandings or
agreements regarding the Premises whether oral or written . No modification or amendment
of this Lease is effective unless in writing and signed on behalf of the City and the Lessee.
K. RIGHT TO ADOPT RULES: City reserves the right to adopt, amend , and enforce
reasonable rules and regulations governing the Airport, inclu ding the Premises. The City shall
not be liable to Lessee for any diminution or deprivation of possession , or of Lessee's rights
under this Lease, on account of the exercise of the City's authority reserved under this
provis ion . Furthermore, the Lessee shall not be entitled to terminate the whole or any portion
of the leasehold estate created under this Lease, by reason of the exercise of the City's
authority reserved under this provision , unless the exercise thereof so interferes with Lessee's
LEASE OF AIRPORT LANDS Page 24 of 33
use and occupancy of the Premises as to constitute a termination , in whole or in part, of this
Lease by operation of law under the laws of the State of Alaska and of the United States made
applicable to the states .
L. LESSEE'S OBLIGATION TO PREVENT AND REMOVE LIENS: Lessee will not permit
any liens including, but not limited to, mechanics', laborers', or materialmen's liens obtainable
or available under the then existing laws, to stand against the Premises or improvements on
the Premises for any labor or material furnished to Lessee or claimed to have been furnished
to Lessee or to the Lessee's agents, contractors , or sub:lessees, in connection with work of
any character performed or claimed to have been performed on the Premises or improvements
by or at the direction or sufferance of Lessee . Provided, however, the Lessee shall have the
right to provide a bond as contemplated by Alaska law and contest the validity or amount of
any such lien or claimed lien. Upon a final determination of the lien or claim for lien, the Lessee
will immediately pay any judgment rendered with all proper costs and charges and shall have
such lien released or judgment satisfied at Lessee's own expense .
M. CONDEMNATION: In the event the Premises or any part thereof shall be condemned
and taken for a public or a quasi-public use, then upon payment of any award or compensation
arising from the condemnation or taking, the City and the Lessee shall make a good faith effort
to agree upon
1. the division of the proceeds;
2. the abatement in rent payable during the term or any extension of the term of
this Lease; and
3. other adjustments as the parties may agree upon as being just and equitable
under all the circumstances.
If, within thirty days after the award has been paid into Court, the City and Lessee are unable
to agree upon what division, abatement in rent , and other adjustments as are just and
equitable, the dispute shall be determined by arbitration .
N. SUCCESSORS IN INTEREST: This Lease shall be binding upon and shall inure to t he
benefit of the respective successors and assigns of the parties hereto, subject to such specific
limitations on assignment as are provided for in this Lease.
0 . NOTICES:
1. Any notices required by this Lease must be in writing and must be delivered
personally or mailed by certified or registered mail in a prepaid envelope . A
mailed notice
a. must be addressed to the respective party at the address written on the
first page of this Lease or to the latest address designated in accordance
with (2) of this Provision (O ); and
LEASE OF AIRPORT LANDS Page 25 of 33
b. shall be deemed delivered on the date it is deposited in a U.S . general
or branch post office.
2. The City or the Lessee may, from time to time, designate a new address at
which they will receive notices by providing the other party with written notice at
least 15 days prior to the effective date of the change . An address change
notice must be del ivered accord ing to the procedure set out in (1) of this
Provision (0).
P. RETENTION OF RENTAL: In the event the City terminates this Lease because of any
breach by the Lessee, the City shall retain any unused balance of the rental payment last made
by the Lessee City as partial or total liquidated damages for the breach .
Q. FIRE PROTECTION: The Lessee will take all reasonable precautions to preven t, and
take all necessary action to suppress destructive or uncontrolled fires and comply with all laws ,
regulations, and rules promulgated and enforced by the City for fire protection on the Airpo rt.
R. PERSONAL USE OF MATERIALS : No interest in coal , oil , gas or any other mineral ,
or in any depos it of stone or gravel valuab le for extraction or utilization is included in the
Premises or in the rights granted by this lease . .,. The Lessee shall not sell or remove from the
Premises for use elsewhere any timber, stone, gravel , peat mos s, topsoil or any other material
va luable for building or commercial purposes .
S. APPROVAL OF OTHER AUTHORITIES: The granting of this lease by the City does
not rel ieve the Lessee of the respons ibility to obtain any license or permit as may be required
by federal, state , o r local law.
T. EXECUTION BY THE PARTIES : This Lease is of no effect unless signed by the
Lessee , or a duly authorized representative of Lessee , and an authorized representative of t he
City.
U. CAPTIONS : The capt ions of the provisions of this Lease are for convenience only and
do not necess arily define, limit, describe, or construe the contents of any prov ision.
V . RIGHTS OF CONSTRUCTION : This Lease is intended to make public property
available for private use, while at all times protecting the public interest to the greatest extent
possible. Following the rule t ha t transfers of interest in publ ic property are to be strictly
construed in favor of the public property land lord , all rights granted to the Lessee under th is
Lease will be strictly construed , and all rights of the City and the protections of the publi c
interest will be liberally construed .
W . LESSEE ACKNOWLEDGEMENT: The Lessee acknowledges that the Lessee has
read this Lease and fully understands its terms, that the Lessee has be e n fully advised or has
had the opportunity of advice by separate legal counsel , and voluntarily executes th is Lease.
Lessee also acknowledges and agrees that the rule of interpretation under which a document
LEASE OF AIRPORT LANDS Page 26 of 33
is construed against the drafter will not apply to this Lease.
X. APPROVAL BY LESSOR: Any approval required of the Lessor by this Lease will not
be unreasonably w ithheld . The Lessor's approval does not waive the Lessee's legal
responsibi lity or liability to comply with all applicable federal and state laws and regulations .
ARTICLE XIV
SURVEY, IMPROVEMENTS AND PERFORMANCE BOND
A. SURVEY: The Lessee is solely responsible , at its sole expense, to confirm or establish
the physical location of the boundaries of the Premises prior to beginning any construction
thereon , including clearing grubbing, back-filling and environmental sampling. Any survey of
the Premises shall be performed by a Land Surveyor registered in the State of Alaska . The
Lessee shall furnish the City with a copy of the plat of any survey performed on the Premises
by, or on behalf of, the Lessee.
B. IMPROVEMENTS :
1. REQUIRED IMPROVEMENTS: At no cost to the City, Lessee agrees to
complete land development and construction of Permanent Improvements
including , by
no later than , with an aggregate cost of at
least $ , excluding financing costs. In addition to the as-
built drawings required by this Lease , the Lessee must submit to the City written
evidence that the Lessee has completed the land development and
constructed improvements on the Prem ises with an aggregate cost or
investment of not less than $ ------
The evidence of cost must be submitted to the City within sixty days of the
completion of the development and improvements, but by no later than
a . Costs considered toward the aggregate cost of permanent
improvements include building construction , design, labor, materials ,
materials shipping , permits, equipment, soil testing, environmental
baseline report , and environmental assessment directly related to the
construction ; premises and as-built surveys; site preparation, including
excavation , geotextile fabric, filling , grading, fill material, gravel , and
pavement, remediation of environmental contamination (unless Lessee
caused or Materially Contributed To the Contamination); and utility
connection costs .
b . The cost of Permanent Improvements excludes:
1. work performed by the City and not reimbursed by the Lessee ;
and
LEASE OF AIRPORT LANDS Page 27 of 33
2. work performed by the Lessee and reimbursed by the City.
2. FAILURE TO COMPLETE IMPROVEMENTS: If the Lessee fails to complete
the requ ired construction within the time allowed under (b)(1 ) of this Article ,
includ ing any extensions granted , the City will execute against and the Lessee
will forfeit, any bond or other guarantee given by the Lessee and , as applicable ,
City will:
a . initiate cancellation of the lease ; or
b. reduce the term of the lease to a period that is consistent with the portion
of the required construction timely completed -;-GF~
3. APPEARANCE: When completed, all improvements on the Premises must be
neat, presentable , and compatible with the authorized use of the Premises
under this Lease, as determined by the City.
4. CITY APPROVAL REQUIRED : The Lessee must first obta in the City's written
approval before beginning any land development, construction or demolition of
any improvements on the Premises , or before beginning any alterat ions ,
modifications, or renovation of existing structures on the Premises . The Lessee
must submit to the City detailed drawings of the proposed development,
alteration , mod ification , or renovat ion . Further, the Lessee will submit to City
evidence of the Lessee 's compliance with the FAA regulation 14 CFR Part 77 .
5. CITY APPROVAL WITHHELD: The City's approval of any construction ,
alteration , modification , or renovation will not be withheld unless
a. the Lessee fa ils to demonstrate adequate financial resources to
complete the project;
b. the project plans, specifications, and agency approvals are incomplete;
c . the proposed project would result in a violation of an appl icable
ordinance, regulation, or law;
d . the proposed project would interfere with or is incompatible with the
safety, security, maintenance , or operat ion of the airport;
e. the proposed project is inconsistent with the Airport Master Plan ;
f. the proposed project is inconsistent with the terms of the lease, zoning
o rdinances, or the City's Comprehensive Plan ;
g. the project plans do not make sufficient provision for drainage, aircraft,
vehicle, and equipment parking , or for snow storage; or
LEASE OF AIRPORT LANDS Page 28 of 33
h . the proposed project does not conform to generally recognized
engineering principles or applicable fire or building codes .
6. DEMOLITION: Prio r to any demol ition of any structure(s) on the Premises ,
Lessee will deliver to City a written scope of work that , at a minimum, lists the
structure(s) that are to be demolished and the timeframe for demolition and
removal of the debris from the Airport. City will review Lessee 's scope for
demolition and issue Lessee written approval for the work to be done .
7. BUILDING SETBACK: No building or other permanent structure may be
constructed or placed within twenty feet of any lot of the Premises without City's
prior w ritten approva l. In addition , no building or other permanen t structure may
be constructed or placed within twenty feet of any boundary line of the Premises
which fronts on a landing strip , ta xiway, or apron .
8. AS -BUILT DRAWINGS : Within sixty days after completion of construct ion or
placement of improvements upon the Premises, the Lessee will deliver to the
City a copy of an as-built drawing , acceptable to the City , showing the location
and dimensions of the improvements , giving distances to all Premises '
boundaries. If the Lessee constructs underground improvements, the Lessee
will appropriately mark the surface of the land with adequate surface markers .
The type, quantity, and distance between such markers will be subject to
approval of the City.
9. AIRPORT SECURITY FENCING : If any const ruction by the Lessee requires a
rea lignment or alteration of an ex isting security fence on the Premises or
boundary of the Premises , the Lessee agrees to real ign or alter the fence in a
manner approved in writing by the Airport Manager. Anytime the fence must
be breached to allow the Lessee to complete improvement construction or
fence modifications , the Lessee shall , at the Lessee's sole expense p lace
temporary barriers to maintain the security of the Airport, as determined by the
Airport Manager. If damage occurs to a security fence on t he Premises or
boundary of the Premises in connection w ith the Lessee 's use or occupation of
the Premises, the Lessee shall promptly repair the fence to the satisfaction of
the Airport Manager.
I 0. DAMAGE TO IMPROVEMENTS : If Lessee 's improveme nts on the Premises
are damaged or destroyed , Lessee will cause the improvements to be repaired
or rebuilt , and res tored to normal f unction within two years following the damage
or destruction. If the Lessee fails to time ly rebuild or restore the improvements,
the City may, at its sole discreti on , e ither reduce the term of th is Lease
commens urate with the estimated va lue of the Lessee 's remain ing , fully
fun ctional improvements on the Premises, or cancel this Lease .
LEASE OF AIRPORT LANDS Page 29 of 33
11 . DAMAGE NEAR EXPIRATION: If Lessee 's improvements are damaged to the
extent that more than 50% of the space is unusable and the damage
occurs within five years of the expiration of the te rm of this Lease, Lessee may
remove the damaged improvements, restore the Premises and terminate this
Lease.
C. PERFORMANCE BOND (Optional): NIA-Prior to beginning the construction of
permanent improvements required under fb1(1) of this Article , the Lessee shall submit to the
City a performance bond, deposit, or other security in the amount of$ . The
form of the bond or other security shall be subject to the City's approval.
D. SURRENDER ON TERMINATION: Lessee shall , on the last day of the term of th is
Lease or upon any earlier termination of th is Lease, surrender and deliver upon the premises
into the possession and use of City without fraud or delay in good order, condition , and repair,
except for reasonable wear and tear since the last necessary repair, replacement, restoration
or renewal, free and clear of all lettings and occupancies unless expressly permitted by the
City in writing , and free and clear of all liens and encumbrances other than those created by
and for loans to City. Upon the end of the term of this Lease , including any extens ion or
renewal , or any earlier termination thereof, title to the buildings, improvements and building
equipment shall automatically vest in C ity without requirement of any deed , conveyance, or bill
of sale thereon . However, if City should require any such document in confirmation hereof,
Lessee shall execute , acknowledge, and deliver the same and shall pay any charge, tax, and
fee asserted or imposed by any and all governmental unites in connection herewith.
E. NOTICE OF CONSTRUCTION: The Lessee agrees to notify the City in writing three
days prior to commencing any construction project valued in excess of $1,000.00 on the
Premises . The Lessee agrees to assist in the posting of a not ice of non-responsibility and
maintenance of the notice on the Premises during construction. Les see agrees that in the
event the Lessee fails to notify the City as required by this Provision (f), the Lessee shall
indemnify the City against any materialmen's liens as defined in AS 34.35.050 which arise as
a result of construction on the premises.
ARTICLE XV
SPECIAL PROVISIONS
A CITY CONSTRUCTED IMPROVEME~JTS . NII\
I . l\LTERNl\TIVE ONE The City oommits to oonstruot improvements after the
lease is signed .
a. l\s part of the exohange of oonsideration of this lease, the City will, at
the City 's expense , oause the following impro\•ements to be oonstruoted
on or in oonnection with the Premises:
LEASE OF AIRPORT LANDS Page 30 of 33
b . Tho City's total cost of the impro¥oment construction shall not e*ceod
$ without tho Lessee's written concurrence.
c. Tho Lessee shall reimburse the City f.or the City's cost of constructing
the impro¥ements. The reimbursement shall be made in ten (10) equal
annual payments . plus interest at eight percent (8%) per year on the
unpaid balance . Tho Lessee may pay the entire remaining balance to
the City earlier than due.
d . l\fter completing tho impro¥oments , the City will gi¥e the Lessee 'Nritten
notice of the City's total cost of constructing tho impro¥ements and the
date on which the Lessee's reimbursement payments shall begin , which
date shall be no earlier than 60 days after the date of the City's notice .
The Lessee 's annual reimbursement payment for each succeeding year
shall be made to the City by no later than the anni¥ersary of date on
which the first payment was due.
e. Failure by the Lessee to timely reimburse the City as required under (b)
through (d) of this pro¥ision shall be grounds for termination of this lease
by the City.
2 . ALTERNATIVE TVVO The City builds impro¥emonts before the lease is
signed . ~J/A
a. The Lessee acknowledges that prior to tho e*ecution of this lease, the
City constructed the following impro¥ements on or in connection with
the Premises :
b . The City's total cost to construct tho impro¥ements 'A'as
e. As part of the consideration of this lease , the Lessee shall reimburse the
City for tho City's cost of constructing the impro1.iements . The
reimbursement shall be made in ton (10) equal annual payments, plus
interest at eight percent (8%) per year on tho unpaid ba lance. The
Lessee may pay the entire remaining balance to the City earlier than
00&.
d. The Le ssee shall make tho first reimbursement payment to tho City by
no later than tho first anni¥ersary of the lease term beginning date gi¥on
LEASE OF AIRPORT LANDS Page 31 of 33
in Article Ill of this lease . The Lessee 's annual reimbursement payment
for each succeeding year shall be made to the City by no later than the
anniversary of date on which the first payment was duo .
e. Failure by the Lessee to timely reimburse the City as required under (c)
and (d) of th is provision shall be grounds for termination of this Lease
by tho City.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands , the day
and year stated in the individual acknowledgments below.
LESSEE:
By:------------
Lessee Name
Its: Director
Date
LESSOR:
City of Kenai
Paul Ostrander
Its : City Manager
Date
ACKNOWLEDGMENTS
STATE OF ALASKA )
) SS.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this __ day of , ~.Name: Lessee Name,
Director, of , being personally known to me or
having produced satisfactory evidence of identification , appeared before me and
acknowledged the voluntary and authorized execution of the foregoing instrument on behalf of
said corporation .
Notary Public for Alaska
My Commission Expires : ______ _
STATE OF ALASKA
LEASE OF AIRPORT LANDS Page 32 of 33
) SS .
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this __ day of , .fQ_, Paul Ostrander, City
Manager of the City of Kenai , Alaska, being personally known to me or having produced
satisfactory evidence of identification, appeared before me and acknowledged the voluntary
and authorized e xecution of the foregoing instrument on behalf of said City.
ATTEST:
Jamie Heinz, City Clerk
SEAL :
Approved as to Lease Form :
Scott Bloom , City Attorney
AFTER RECORDING RETURN TO:
City of Kenai
210 Fida Igo Avenue
Kenai, AK 99611
LEASE OF AIRPORT LANDS
Notary Public for Alaska
My Commission Expires: ______ _
Page 33 of 33