HomeMy WebLinkAboutResolution No. 2013-32the aYy of
KENAIALA SKA
Suggested by: Administration
CITY OF KENAI
RESOLUTION NO. 2013 -32
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, APPROVING
THE FIRST AMENDMENT TO THE AIRLINE OPERATING AGREEMENT AND
TERMINAL AREA LEASE AND AUTHORIZING THE CITY ENTER INTO SUCH
AGREEMENT WITH GRANT AVIATION.
WHEREAS, the City of Kenai is the owner and operator of the Kenai Municipal Airport;
and,
WHEREAS, the administration working with an airport consultant has developed an
amendment to the current airline operating agreement and terminal area lease; and,
WHEREAS, the airline operating agreement and terminal area lease has modernized
the airport airline terminal leasing procedures and policies and increased airport
operating revenue; and,
WHEREAS, the administration has consulted with the three regularly scheduled
passenger airlines currently operating at the Kenai Municipal Airport regarding the
agreement; and,
WHEREAS, non - signatory airlines operating out of the passenger building will pay an
additional 30% for landing fees than signatory airlines; and,
WHEREAS, it is in the best interest of the City of Kenai to authorized the City Manager
to enter into such agreement with Grant Aviation on behalf of the City.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA, that: 1) the Kenai City Council approves the First Amendment to the Airline
Operating Agreement and Terminal Area Lease form as shown in Exhibit 1; and 2) the
Kenai City Manager is authorized to enter into such agreements with Grant Aviation.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 15th day of May,
2013.
PAT PORTER, MAYOR
ATT ST: `
Sa)j M dig ity Clerk
PEA
Municipal Airport
Memo
"Se,v6nW 3 &greaiev'7C.et•'wL6, Pei'iiv ule
305 N. WILLOW ST. SURE 200 KBW, ALASKA 99611
TELEPHONE 9072837951
FAX 9072833737
To: Rick R. Koch — City Manages
From: Mary L. Bondurant - Airport
Date: May 7, 2013
Subject: Resolution 2013 -32 - FirstAmendment to Airline Operating Agreement
& Terminal Area Lease
Attached to this memo is the First Amendment, to the Kenai Municipal Airport Airline Operating
& Terminal Area Lease signed by Grant Aviation, Inc., for City Council approval and
Administration execution. The current agreement which has been in place since June 1, 2008
expires on May 31, 2013.
During the past several months, Airport and City Administration, along with Steve Horton of
Liebowitz & Horton, evaluated financial costs associated with Airport operations. Based on this
evaluation, an amendment to the current agreement was successfully negotiated with a 5% rate
increase from 2013 to 2014 and each year following an increase for the term of the amendment
will be limited to CPI adjustments.
I recommend approval of this first amendment to the airline operating agreement.
Please contact me if you have any questions.
Attachments
www.ci.kenai.ak.us.
FIRST AMENDMENT
TO THE
KENAI MUNICIPAL AIRPORT
AIRLINE OPERATING AGREEMENT
AND TERMINAL AREA LEASE
THIS FIRST AMENDMENT to the Kenai Municipal Airport Airline Operating
Agreement and Terminal Area Lease (the "First Amendment ") is made and entered into this 1st
day of June, 2013, by and between the City of Kenai, Alaska (the "City"), a political subdivision
of the State of Alaska, and Cm raA,4 Viw+rcr t ne (the "Airline "), a corporation
organized and existing under the laws of the State of «. C4. and authorized to do
business in the State of Alaska.
RECITALS
The circumstances surrounding the making of this First Amendment are as follows:
A. City and Airline are parties to the Airline Operating Agreement and Terminal Area
Lease (the "Agreement ") dated June 1, 2008, 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, 2008 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.
First Amendment - Airline Operating LESSOR
Agreement and Terminal Area Lease Page 1 of 5 LESSEE
;J -
AMENDMENTS
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 June 1, 2013 ( "Commencement
Date ") and shall terminate in sixty (60) consecutive months thereafter (except as it may
be terminated or extended in accordance with 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 of this Agreement.
2. Any reference to Exhibits A and B in the Agreement or this First Amendment shall mean
the Exhibits A and B which are attached to this First Amendment and incorporated herein
by reference.
3. Any reference to Exhibit C, "Calculation of Terminal Rent, Apron Space Rent and
Landing Fees" in the Agreement or this First Amendment shall mean the Exhibit C which
is attached to this First Amendment and incorporated herein by reference, including all
notes to that Exhibit C.
4. Section 5.2.1 of the Agreement is amended to read in its entirety as follows:
Airline shall pay to the City within thirty (30) days following the end of each month,
without demand or invoicing, landing fee charges for aircraft landings for the preceding
month at the rate and in the amount then currently approved by the City as provided in
Exhibit C - Airline Rate Schedule. For each year of the Agreement, the terminal rental
rate will be based on the previous year's rates increased by the percentage of the increase
in the U.S. Bureau of Labor Statistics (BLS) Consumer Price Index (CPI) for All Urban
Consumers - Anchorage Metropolitan Statistical Area (MSA).
5. Section 5.3.1 of the Agreement is amended to read in its entirety as follows:
Airline shall pay to the City in advance, on the first day of each month, without demand
or invoicing, rentals for Airline's Exclusive Use Space and Joint Use Space at the rate and
in the amount then currently approved by the City as provided in Exhibit C - Airline Rate
Schedule. For each year of the Agreement, the terminal rental rate will be based on the
previous year's rental rates increased by the percentage of the increase in the BLS CPI
for All Urban Consumers - Anchorage MSA.
First Amendment - Airline Operating LESSOR
Agreement and Terminal Area Lease Page 2 of 5 LESSEE
6. Section 5.4 of the Agreement is amended to read in its entirety as follows:
Airline shall pay to the City in advance, on the first day of each month, without demand
or invoicing, rentals for Airline's use of the terminal apron space for the parking of
aircraft and the storage of ground service equipment (GSE) at the rate and in the amount
then currently approved by the City as provided in Exhibit C - Airline Rate Schedule.
For each year of the Agreement, the terminal apron aircraft parking rental rate and the
GSE storage space rental rate will be based on the previous year's rental rates increased
by the percentage of the increase in the BLS CPI for All Urban Consumers - Anchorage
MSA.
The terms of the Agreement shall continue in full force and effect except as modified by
this First Amendment.
First Amendment - Airline Operating LESSOR
Agreement and Terminal Area Lease Page 3 of 5 LESSEE
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, the day and year
stated in the individual acknowledgments below.
LESSOR:
CITY OF KENAI
By:
Rick K. Koch - City Manager
LESSEE:
By:
Name - Title l�'• )3•"-Uc-z A4 '6;-'c sS� •�
(If Lessee is a Corporation)
ATTEST:
Name and Title
STATE OF ALASKA )
)ss
THIRD JUDICIAL DISTRICT )
THIS Ili�r S TO CERTIFY that otl this6 A day of /�ti4� _ 2013, /�- T4e %rc Gr fQx .,
(name), + e > r �e y � (title) of 6r+z i , i ! ; cr �, o vt� 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.
STAI`i , OF ALASKA
NOTARY PUBLIC
1~.s -AW Dekmhlo 0
AtyCcurenlaeion F dub 23, 2016
Notary Public for Alaska
My Commission expires: 07/07.3A
First Amendment • Airline Operating LESSOR
Agreement and Terminal Area Lease Page 4 of 5 LESSEE tni-^
STATE OF ALASKA )
)ss
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this day of 2013, RICK K.
KOCH, 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:
Approved by Kenai City Council
Approved as to lease form by City Attorney _10
Approved by Finance Director
Approved by City Manager
Return to: City Attorney
210 Fidalgo Ave.
Kenai, AK 99611
First Amendment - Airline Operating LESSOR
Agreement and Terminal Area Lease Page 5 of 5 LESSEE
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EXHIBIT C
AIRLINE RATE SCHEDULE
KENAI MUNICIPAL AIRPORT
City of Kenai, Alaska
ENA ExhC 2014 A1.123 01- Jun -13
Calculation of Terminal Rent, Apron Space Rent and Landing Fees (1)
Grant Aviation 2014 Terminal Rent
(a) (b) (c) (a)x(b)x(c)
Allocated Utilization Adjusted Projected
Area Square Adjustment Square Base Rental Enplanement Rental
Exclusive use space
Joint use space:
Baggage make -up area
Baggage breakdown area
Baggage claim area
Passenger holdroom, arrival an(
departure hallways
Total Terminal Rent
Terminal Apron Aircraft
Parking & GSE Space Rent
Landing Fees
544 - 544 $30.44 1 $16,559
2,400
68.29%
1,639
$18.45
28.56%
$8,635
960
68.29%
656
$18.45
28.56%
$3,454
1,200
68.29%
819
$30.44
28.56%
$7,124
1,824
68.29%
1,246
$30.44
28.56%
$10.828
Square
Rental Rate
Space
Feet
s
Rent
5,712
$0.46
$2,634
2014 Landing Fees
Projected
Landing
Landed Wgt
Fee
Landing
1,000s
Rate
Fees
27,424
(3) $1.54
$42,159
NOTES:
(1) Rents and fees are scheduled to increase by the BLS Anchorage MSA CPI for 2015 thru 2018
years of the agreement.
(2) The Utilization Adjustment is based on the square footage of leased Exclusive Use Space divided by
the total square footage that is available to lease (1696 sf / 2484 sf = 68.29 %).
(3) Aircraft landed weights are estimated. Actual landing fees are to be based on actual weight.
First Amendment - Airline Operating LESSOR _
Agreement and Terminal Area Lease Page 2 of 3 LESSEE