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HomeMy WebLinkAboutResolution No. 2019-24Sponsored by: Administration CITY OF KENAI RESOLUTION NO. 2019 -24 A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, APPROVING THE THIRD AMENDMENT TO THE AIRLINE OPERATING AGREEMENT AND TERMINAL AREA LEASE AND AUTHORIZING THE CITY ENTER INTO SUCH AGREEMENT WITH GRANT AVIATION, INC. WHEREAS, the City of Kenai is the owner and operator of the Kenai Municipal Airport; and, WHEREAS, a recommendation of the 2007 Supplemental Planning Assessment was to update the City's airline operating agreement and terminal lease; and, WHEREAS , Council approved Resolution No. 2008-27 establishing a new airline operating agreement and terminal lease to modernize the airport airline terminal leasing procedures and policies and increase airport operating revenue effective June 1, 2008 for a sixty-month period ; and, WHEREAS, Council approved Resolution No. 2013-31 approving the First Amendment to the airline operating agreement and terminal area lease effective July 1, 2013 for a sixty-month period; and , WHEREAS , Council approved Resolution No . 2018-43 approving the Second Amendment to the airline operating agreement and terminal area lease effective July 1, 2018 for a period of twelve months in consideration of the terminal rehabilitation project; and, WHEREAS , with a February 2020 completion date for the terminal rehabilitation project, City Administration would have final costs , confirmation on changes to the airline exclusive and joint use areas, and be prepared to negotiate a five-year airline operating agreement effective July 1, 2020; and, WHEREAS, it is in the best interest of the City of Kenai to authorize the City Manager to enter into such agreement with Grant Aviation, Inc., on behalf of the City . NOW , THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. That the Kenai City Council approves the Third Amendment to the Airline Operating Agreement and Terminal Area Lease form as shown in Exhibit 1. Section 2. That the Kenai City Manager is authorized to enter into such an agreement with Grant Aviation, Inc. Section 3. That this resolution takes effect immediately upon adoption . Resolution No. 2019-24 Page 2 of 2 ADOPTED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA, this 17th day of April , 2019. BRIAN GABRIEL SR., MAYOR ATTEST: 'Vtffap "'/tli a PaJ'~ Ct'tf "'/t/i a Fv.t~" 210 F idalgo Ave , Kenai , Alaska 99611 -7794 Telephone : (907) 283-7535 I Fax: (907) 283-3014 www . kenai. city MEMORANDUM TO: THROUGH: FROM : DATE: SUBJECT: Mayor Brian Gabriel and Kenai City Council Paul Ostrander, City Manager Mary L. Bondurant, Airport Manager April 5, 2019 Resolution No. 2019-24 Approval Third Amendment to the Airline Operating Agreement and Terminal Area Lease for Grant Aviation, Inc. Attached to this memo is the Third Amendment to the Kenai Municipal Airport Airline Operating Agreement and Terminal Area Lease for Council approval. The original Agreement and the First Amendment to the Agreement each were for five-year terms starting June 1, 2008 and ending June 30, 2018. Instead of negotiating another five-year agreement in 2018 due to the Terminal Rehabilitation Project, the Second Amendment term was for twelve-months, ending June 30, 2019. The project is scheduled for completion in February 2020. At that time, the City will have the fina l airline allocations for exclusive and joint use space and will begin negotiations for a five- year agreement based on accurate airport operation costs. I recommend approval of the Third Amendment to the Airline Operating Agreement with a term of twelve months, effective July 1, 2019 through June 30, 2020 under the same terms and conditions of the Second Amendment. Thank you for your consideration . THIRD AMENDMENT TO THE KENAI MUNICIPAL AIRPORT AIRLINE OPERATING AGREEMENT AND TERMINAL AREA LEASE THIS THIRD AMENDMENT to the Kenai Municipal Airport Airline Operating Agreement and Terminal Area Lease (the "Third Amendment") is made and entered into this 1st day of July, 2019, by and between the City of Kenai, Alaska (the "City"), a political subdivision of the State of Alaska, and Grant Aviation, Inc., ("Airline"), a corporation organized and existing under the laws of the State of Washington and authorized to do business in the State of Alaska. RECITALS The circumstances surrounding the making of this Third Amendment are as follows : A. City and Airline are parties to the Airline Operating Agreement and Terminal Area Lease (the "Agreement") dated June I , 2008 as amended by the First Amendment dated June 1, 2013 and Second Amendment dated July 1, 2016 (herein referred to as the "Agreement"), under which Airline operates an Air Transportation business and leases property at the Kenai Municipal Airport. B. Pursuant to Section 12.20 of the Agreement, the Agreement may be amended in whole or in part without further consideration upon mutual written consent of City and Airline who both herein wish to amend the Agreement. C. Pursuant to Section 2.1 of the Agreement, the term began on June 1, 2013 and continued for a consecutive sixty (60) month period thereafter. D . Pursuant to Section 5 .2 of the Agreement, the Landing Fee charges shall be based on the rate and amount then currently approved by the City as provided in Exhibit C . E. Pursuant to Section 5 .3 of the Agreement, rentals for the Airline's Exclusive Use Space and Joint Use Space shall be based on the rate and amount then currently approved by the City as provided in Exhibit C. F . Pursuant to Section 5.4 of the Agreement, the Terminal Apron Aircraft Parking and GSE Space rentals shall be based on the rate and amount then currently approved by the City as provided in Exhibit C. Third Amendment -Airline Operating Agreement and Terminal Area Lease Page l of3 LESSOR LESSEE AMENDMENTS I . Section 2.1 of the Agreement is amended to read in its entirety as follows : The term of this Agreement (the "Term") shall begin on July I , 2019 ("Commencement Date") and shall terminate in twelve (12) consecutive months thereafter (except as it may be terminated or extended in accordance w ith this Agreement), and the rentals, fees , and charges shall be effective on the Commencement Date, but only in the event that the Premises are then tendered to Airline ready for use and occupancy in accordance with the terms and provisions ofthis Agreement. 2. The terms of the Agreement shall continue in full force and effect except as modified by this Third Amendment. IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, the day and year stated in the individual acknowledgments below . CITY OF KENAI Paul Ostrander Its: City Manager (If Lessee is a Corporation) ATTEST: Name Title GRANT AVIATION, INC. Robert M. Kelley Its: President Third Amendment -Airline Operating Agreement and Terminal Area Lease LESSOR LESSEE Page 2 of3 STA TE OF ALASKA ) ) SS THIRD JUDICIAL DISTRICT ) The foregoing instrument was acknowledged before me this _ day of ______ , 2019, by Paul Ostrander, City Manager of the City of Kenai, an Alaska municipal corporation, on behalf of the City. Notary Public in and for Alaska My Commission expires: __ _ STATE OF ALASKA ) ) SS THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY the foregoing instrument was acknowledged before me this __ day of , 2019, by Robert M. Kelley, President of Grant Aviation, Inc., an Alaska corporation, on behalf of the corporation. Notary Public in and for Alaska My Commission expires: __ _ Approved by Kenai City Council ----------------- Approved as to lease form by City Attorney ------------- Approved by Finance Director------------------ Approved by City Manager __________________ _ Return to: City Clerk 210 Fidalgo Ave. Kenai, AK 99611 Third Amendment -Airline Operating Agreement and Terminal Area Lease Page 3 of3 LESSOR LESSEE