Site A-4/T&L PropertiesHANGAR SITE LEASE
THIS LEASE, made and entered into this 31 day of _August , 2007_, by and
between the City of Kalispell, a municipal corporation, hereafter referred to as CITY, and T&L
Properties LLP, hereafter referred to as TENANT:
WITNESSETH:
WHEREAS, the CITY operates the Kalispell City Airport, and
WHEREAS, the CITY's operation of the airport includes the service of leasing tracts of land to various
tenants for the purposes of storage and protection of aircraft and other aeronautical
purposes.
NOW, THEREFORE IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:
The City does hereby agree to lease to TENANT, and TENANT hires from City, those
certain premises located at the Kalispell City Airport, Kalispell, Montana, which are
specifically described in Exhibit "A"(Building Site A-4_) which is attached to this Lease
and by this reference incorporated herein.
2. The term of this Lease shall be for twenty (20) years, commencing on the _31_ day of
_August , 2007_ and ending on the _01_ day of _September ,
2027,_unless sooner terminated by mutual agreement of the parties or by one of the
parties under the specific provisions hereof. TENANT shall have the option to renew for
up to two (2) additional successive terms of five (5) years each. CITY shall give
TENANT sixty (60) days written notice prior to the end of each term and TENANT shall
give CITY written notice of TENANT'S intention to exercise said option no later than
thirty (30) days from the end of each term. Upon expiration of the forgoing terms,
TENANT shall have the right of first refusal to an additional lease not to exceed five (5)
years under such terms and conditions as may be agreed upon at such time.
3. TENANT agrees to pay to the CITY for the use and benefit of the CITY the sum of
$.16 (_sixteen cents) per square foot per year for the projected building area,
which for purposes of this provision shall be one hundred percent (100%) of the actual
square footage occupied by the hangar, and 1 /2 interest in common area herein authorized,
payable as follows:
a. On each July 1, TENANT, without demand, shall pay the annual rental to the next
succeeding fiscal year.
b. On July 1, at the commencement date of the fiscal year during which this Lease
terminates, TENANT, without demand, shall pay the pro-rata portion of the
annual rent for the time period from July 1 to the termination date of the Lease.
Airport Condominium Lease Page 1 of 8
appraiser, who shall appraise the fair market value of the improvements at the then
existing usage. The parties shall equally share the expense of the third appraiser. The
average of the three (3) appraisals shall determine the fair market value of the
improvements at the then existing usage. The CITY shall pay the fair market value of the
improvements at the then existing usage to TENANT within sixty (60) days of the date of
determination of the fair market value as set forth above.
7. TENANT shall hold harmless and indemnify the CITY from any and all liability claims
of any kind or nature, whatsoever, arising out of the erection or expansion of the building
upon the premises contemplated, herein, or the use of said premises by TENANT or
TENANT's invitees or licensees.
a. As evidence of TENANT's covenant herein, TENANT at TENANT expense
shall keep in force, during the term of this Lease, insurance, issued by an
insurance company, licensed to do business in Montana, protecting the CITY
against all liabilities, judgments, costs, damages and expenses which may accrue
against, be charged to, or recovered from the CITY, by reason of damage to
property of, injury to or death of any person or persons on account of any matter
or thing which may occur on the demised premises.
b. Policy or policies in the amount of Seven Hundred and Fifty Thousand Dollars
($750,000.00) with respect to any one person, and One Million and Five Hundred
Thousand Dollars ($1,000,000) with respect to any one occurrence shall be held.
Said insurance policy shall name the CITY, its officers, employees and agents as
additional named insureds, and shall not be canceled or materially changed
without at least thirty (30) days prior notice to the CITY, and shall be subject to
approval as to coverage by the CITY.
C. Proof of insurance coverage required by this Lease shall be provided by TENANT
to CITY at the time of execution of this agreement. CITY reserves the right at
any time during the primary lease term or any extension thereof, to require
TENANT to provide to CITY proof of continued insurance coverage.
d. Policy limits are subject to change in accordance with §2-9-108, MCA,
Limitations on Governmental Liabilityfor Damages in Tort. TENANT shall file
certificates of said insurance with the CITY, and said insurance shall be in full
force and effect, throughout the term of this Lease.
e. Failure or refusal by the TENANT to obtain or maintain said insurance as
required hereunder shall constitute a material breach of this Lease and, in such
event, CITY, in its sole discretion, may terminate this Lease without liability to
TENANT hereunder, or elect to obtain like coverage and the cost for such
coverage shall be paid by TENANT.
Airport Condominium Lease Page 3 of 8
C. During the initial twenty-year term of the lease, the annual lease payment shall
increase 3% annually, from the previous year's payment. In the event TENANT
elects to exercise his option to renew this lease for a subsequent five-year term,
the annual lease payment shall be reviewed and reset by CITY.
d. The Airport Manager or his designee will be responsible for the collection of lease
payments or administrative fees for existing hangar and ground leases, and for
adjustments to lease fees resulting from application of the criteria established in
part (d), above.
4. TENANT shall use said property for the storage of light aircraft and other lawful
purposes necessarily incidental thereto and for no other purpose.
5. TENANT shall have the right and privilege of sale, assignment or transfer of this Lease
for the purpose defined in ¶5, hereof, upon written notice to the CITY stating the name
and address of the proposed buyer, assignee, or transferee.
a. If the CITY shall determine that said proposed buyer, assignee, or transferee is
objectionable, any such reasonable objection shall be stated in writing to the
TENANT within twenty (20) days after said notice.
b. The CITY shall not unreasonably withhold consent to sell, assign, or transfer this
Lease, but reserves the right to adjust the annual rental payments following
assignment.
C. After sale or assignment by TENANT of its interest here, TENANT shall be
relieved from liability for rental payments accruing thereon, and the buyer,
assignee, or transferee shall thereafter be liable.
d. Transferee under this paragraph shall only acquire the balance of the term of the
lease and shall be subject to all terms and conditions of this lease, including the
obligation to provide CITY with proof of insurance coverage as required by ¶8.
6. If, for any reason, the CITY discontinues aviation operations on Kalispell City Airport
site, this lease shall terminate and the CITY shall pay the fair market value at the then
existing usage of the improvements constructed on the site to the TENANT. The fair
market value of the improvements at the then existing usage shall be determined as
follows:
CITY and TENANT shall each hire, at their own expense, an appraiser to
determine the fair market value of the improvements constructed by TENANT at the then
existing usage on the site. If the two (2) appraisals do not differ by more than three
percent (3%), the fair market value of the improvements at the then existing usage shall be
the average of the two (2) appraisals. If there is a difference of more than three percent
(3%) between the two (2) appraisals, the first two (2) appraisers shall select a third
Airport Condominium Lease Page 2 of 8
8. TENANT shall be responsible for acquiring whatever insurance TENANT deems
necessary to safeguard TENANT'S interest in the TENANT's building, herein
authorized, and personal property stored in said building, and TENANT expressly
covenants and agrees to assert no claim against CITY as a result of the loss or damage to
the building or personal property belonging to TENANT or anyone else resulting from
the action of any third party who is not an employee, agent of contractor for the CITY.
a. TENANT herein covenants and agrees to take whatever steps TENANT sees fit
to take in protecting TENANT'S property and persons from loss or damage as a
result of vandalism, malicious mischief, theft or kindred losses, and agrees to
assert no such claim against the CITY incident thereto.
b. All losses suffered by TENANT resulting from criminal activity or others shall be
reported to the police. The CITY assumes no responsibility for such losses.
9. In the event that soils or other material are found on the leased site that are "Hazardous"
or "Deleterious Substances" as defined by the Montana Comprehensive Environmental
Cleanup and Responsibility Act, §75-10-701 et seq. MCA ("CECRA"), "Hazardous
Substances" as defined by the Comprehensive Environmental Response, Compensation
and Liability Act, 42 USC §9600, et seq. ("CERCLA", "Hazardous Waste" as defined by
the Montana Hazardous Waste and Underground Storage Tank Act, §75-10-401 et seq.,
MCA or the Solid Waste Disposal Act, as amended by the Resource Conservation
Recovery Act, 42 USC §6901 et seq., or which require special remediation or disposal or
disposal pursuant to any other applicable law, TENANT shall excavate, handle and
dispose of such soils or other material only in compliance with such statutes and
regulations.
a. In the event TENANT leaves any of the above -described materials on the
property, the CITY may, at its option, have wastes properly disposed of and
assess the costs of removal, storage, transport and disposal to TENANT.
b. All Hazardous Materials must be appropriately labeled and stored.
C. In the event Hazardous Materials are spilled upon the property, it is the
responsibility of TENANT to have the spill cleaned up according to State and
Federal laws and regulations. In the event that drains or floor sumps are
contaminated, it will be the responsibility of TENANT to clean up those systems.
d. TENANT is aware that there are significant penalties for improperly disposing of
wastes or submitting false information, including the possibility of fine and
imprisonment for knowing violations. TENANT must comply with all state,
federal and local laws pertaining to the handling and storage of hazardous
materials.
Airport Condominium Lease Page 4 of 8
11. No construction or installation of any underground fuel storage tank dispensing system
shall be allowed upon the premises.
12. Any utility services required by TENANT's building or for its use shall be obtained by
TENANT at TENANT's expense.
13. a. TENANT agrees that upon completion the building will be maintained in good
order, repair and safe condition and in compliance with the law. TENANT shall
make any and all additions to, or alterations or repairs in and about the land and/or
improvements which may be required and, in doing so, TENANT shall observe
and comply with all existing or future public laws, ordinances and regulations
applicable to the land or public airport land upon which the leased premises are
located.
b. TENANT shall maintain an area of ten (10) feet from the exterior walls of the
hangar or of the median point between hangars if there is less than twenty (20)
feet between hangars, free from brush and weeds. If TENANT fails to keep and
maintain the leased premises and improvements as required hereunder, CITY may
in its discretion following written notice undertake to do or have done such and
any expenses incurred by CITY shall be paid by TENANT.
C. TENANT shall not store personal property, equipment of any kind, or vehicles,
outside of the hangar.
14. TENANT shall be responsible for all taxes levied upon the structure erected hereunder
and any equipment or property located therein. The land is owned by the CITY and is
exempt from taxes, and the CITY agrees to maintain such tax exempt status.
15. TENANT shall comply with all State and Federal laws and regulations and with the
Operating Regulations of the City of Kalispell. CITY shall have the right, through its
agents or employees, for reasonable ingress and egress to inspect premises to ascertain
that the terms of this Lease are being adhered to.
16. Notices to CITY shall be sent by certified mail, postage prepaid to City Manager, City of
Kalispell, P.O. Box 1997, Kalispell, MT 59903-1997, and notices to TENANT shall be
sent by certified mail, postage prepaid to:
T & L Properties, LLP
2216 Missoula Ave
MSLA. MT. 59802
17. TENANT shall have the right to cancel and terminate this Lease and any obligations
arising hereunder by written notice to the CITY delivered within 60 days hereafter.
Airport Condominium Lease Page 5 of 8
18. CITY reserves the right to further develop or improve, or not develop or improve, the
landing area of the airport as it sees fit, regardless of the desires or view of the TENANT,
and without interference or hindrance.
19. This Lease shall be subordinate to the provisions and requirements of any existing or
future Lease between the CITY and the United States, relative to the development,
operation or maintenance of the airport.
20. TENANT agrees to comply with the notification and review requirements covered by Part
77 of the Federal Aviation Regulations in the event any future structure or building is
planned for the leased premises, or in the event of any planned modification or alteration
of any present or future building or structure situated on the leased premises.
21. It is mutually agreed and understood that if TENANT should fail to make the annual lease
payments as described above, or fail to perform any condition or covenant or condition of
this Lease or fail to maintain the leased premises in a manner satisfactory to the CITY,
and such condition or conditions exist for more than ninety (90) days after written notice
is given to the TENANT, CITY may then terminate and end this Lease and re-enter and
retake possession of the premises. All buildings and improvements placed on the
premises shall thereupon revert to the CITY. This paragraph shall not apply to failure of
TENANT to obtain or maintain insurance as set forth above.
22. It is mutually agreed that this Lease shall inure to the benefit of and be binding upon the
respective parties, their heirs, successors in interest and assigns. It is further agreed that
time is of the essence of this Lease.
23. Any change or modification of this Lease, in order to be effective, must be in writing and
signed by the respective parties.
24. In the event either party to this Lease shall be required to bring an action against the other
parry to enforce this Lease, or any portion thereof, the prevailing party shall be entitled to
reasonable attorney's fees and cost therefore in addition to any damages that might be
awarded.
25. Tenant will abide by all rules and regulations established by the City of Kalispell for
the City Airport.
Airport Condominium Lease Page 6 of 8
IN WITNESS WHEREOF, said CITY has caused this Lease to be signed on its behalf by the
Manager of said CITY and said TENANT has executed this Lease this day of ,
STATE OF MONTANA
: ss
County of Flathead
CITY OF KALISPELL
On this'1\ day of .zy m° t , 20c 1, before me, a Notary Public in and for the State of Montana,
personally appeared�c ;t ,t`4anown to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he/she executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal, the day and
year first above written.
z
. g
SEAL
- A
Airport Condominium Lease Page 7 of 8
Notary Public, State of Montana
Residing at
My Commission expires
STATE OF MONTANA
ss
County of Flathead
On this ,!;day of , 200 % , before me, a Notary Public in and for the State of Montana,
personally appeared �v� > 1� t known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he/she executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal, the day and
year first above written.
NANCY D. CATHCART
=z� NCiT4R[AL-- NOTARYPUELIC-MOP:TANA
SEAL *= ftesia:ng a! <'{1E!!, Montana
Airport Condominium Lease Page 8 of 8
Notary Public, Mate of Montana
Residing at J ,
My Commission expires { :r