Site A-5/Mount Cleveland Dev/) -
HANGAR SITE LEASE
77/1S LAAS-'A', madeand entered into this I Oday of November, 2008, by and bctwccn the City of
Kalispell, a municipal corporation, hereafter refi✓rrcd to as CITY, and Mount Cleveland Development,
LLC',7 93 MT HWY 35 Bigfork, MT, 59911 hereafter referred to as'I FNANT-
WITNESSE'rH:
WHEREAS, the CITY operates the Kalispell City Airport, and
WHEREAS, the CITY'; operation of the airport includes the service of Ieasing tracts of land to various
tenants for the purposes of storage and protection of aircraft and other aeronautical
purposes.
NOW, THF.RFFORF, IT 1S AC3RFI::0 BETWE EN THE' PARTIES HL-IXU lTO AS FOLLOWS:
1. The City does hereby agree to lease to TENANT, and TENANT hires from City, those
certain promises located at the Kalispell City Airport, Kalispell, Montana, which arc
specifically described in Exhibit "A"(Building Site A-5) 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 10 day of
November, 2009sknd ending on the 1 day of December, 2028, 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 f ive (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
TI+;NANT'S intention to exercise said option no Itttcrthan thirty (IO) days frown the end of
each term. Upon expiration of the forgoing terms, 'ITI< NANT shall have the right of first
refusal to an additional lease not to exceed five (5) years under such terms and conditions
Lis may be agreed upon at such time.
3. TENANT agrees to nay to the; CiTY Im the use and benefit of the: CITY the surn 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 11botago 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 yt:ar.
b. On July 1, tat the commencement date of the fiscal year during which this T,case
terminates, TENANT, without demand, shall pay the; pro-rata portion of the
annual rent for the time period from July 1 to the tennination date of the U-ase.
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C. During, the initial twenty-year term of the lease, the annual lease paymem shall
increase 3`Yo ,utnually, from the previous year's payment. In the event. TENANT
elects to exercise his option to renew this lease f`or a subsequent five-year term,
the winual lease payment shall he reviewed and resct by CiTV-
d. The Airport Manager or his designee will be responsible for the collection of lease:
payments or adminimxative lees liar existing hangarand ground leases, and for
adjustments to lease fees resulting from application of the criteria established in
pert (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 115, 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 ohjcetion shall be stated in writing to the
TENANT within twenty (20) days after said notice.
b. The CITY shall not unrcasonahly 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 Iiability for rental payments accruing; thereon, and the buyer,
assignee, or translcrce shall thereafter be liable.
cI. 'l'ransferee under this paragraph shall only acquire: the balance of the term ol'the
lease and shall be subject to all terms and conditions of thiti lease, including the
obligation to provide CITY with prool'ofinsuranee coverage as required by ¶8.
6. If, fi>r any reason, the CITY discontinues aviation operations on Kalispell City Airport
site, this luasc shall terminate and the CITY shall pay the lair 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 cxistint; usage shall be determined as
lbllows:
CITY and TENANT shall each hire, at their own expense, an appraiser to
determine; the; fair market value ol'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 val ue: ofthe improvements at the then existing, usage shall he
the average ol'the two (2) appraisals. ll'there is a difference of more thaD three; percent
(3%) between the two (2) appraisals, the first two (2) appraisers shall select a third
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appraiser, who shall appraise the: fair market value of the improvements at the then
existing usage. The parties shall equally .share the expense; ol* the third appraiser. The
average of the three (s) appraisals shall detcrnnine the lair market value of the
improvements at the then existing usage. The; CITY shall pay the fair market value of the;
improvements at the then cxistin&, usage to TENANT within sixty (60) days ot'the; date of
determination of the fair market value as sot 6orth above,
7, TENANT shall hold harmless and indemnify the CITY from any and all liability claims
of any kind or nature, whatsoever, arising out ofthe erection or expansion of the building
upon the premises contemplated, herein, or the use ol" said premises by TENANT or
TENANT'S invitees or licetasees.
it. As ovidunce 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 iiabilities,,judgmo its, costs, dmnages and expenses which may accrue:
against, be charged to, or recovered from the CITY, by reason of damage to
property 01, injury to or death orany 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 Nifty 'Thousand Dollars
($750,000.00) with. respect to any one person, and One Million and Five Hundred
Thousand 17ol tars ($1,000,000) with respect to airy 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. Proo ro.f i.n.surance coverage required by this Lease shall be provided by TENANT
to CITY at the time of execution of this agreement. CITY reserves the right Lit
any tin'►c 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,
f,imitations on Governmental Liability for DiurcaA,es in Tort. TENANT shall file
certificates 01'said insurance with the CITY, quid said insurance shall be, in full
force and effect, throughout the tenn of this; tease.
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 sale discretion, may terminate this; lxuw without liability to
TENANT hereunder, or elect to obtain like coverage and the cost for such
coverage shall be paid by TENANT.
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8. TENANT shall be responsible for acquiring; whatever insurance TENANT deems
necessary to safeguard T14,NANTIS interest in the TENANT's building;, herein
authorized, wid 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 eovenants and agrees to take whatever steps TENANT sects lit
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.
h. All losses suffbred by TENANT resulting Cretin criminal Utrtivity or others shall be
reported to the police. The CITY assumes no responsibility Bor such losses.
9. In the: event that roils or other material are found on the leased site that are "llazardous"
or "Deleterious Substances" as defined by the Montana C'ompeehenslve Environmental,
Cleanup and Respooisibility Act, §75-10-701 et seq. MCA ("(7FICRA"), "llazardous
Substances" as defined by the C'otnprehensive Environmental Response, Compensation
and Liability Act. 42 USC §9600, ct seq. ("CERCI,A", "Hazardous Waste" as defined by
the Montana lazardous Waste and UnderAround ,titurcrge KwA-. Act, §75-10-401 et seq.,
MCA or the Solid Waste Disposal Act, as amended by the Resource Conservation
RecovcrvArt, 42 1: JSC §6901 c:t seq., or which require special reinediation 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.
In the: event TEINANI` leaves any of the above -described materials on the
property, the CITY may, at its option, have wastes properly disposed of and
assess the cots.~ of removal, storage. transportand 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 Statc and
Fedend laws :end regulution.x. In the event that dramas 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 di-sposing 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.
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11. No construction or installation (Wally underground i'ucl storage tank. dispensing systein
shall be allowed upon the premises.
12. Any utility services .required by TENANT's building or for its use shall be obtained by
TENANT eft TENANT's expense.
13, a. TENANT agrees that upon completion the; building will be maintained in good
order, repair and sale condition and in compliance with the law. 'r'[+."1NANT 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 %hall observe
and comply with all existing, or future public laws, ordinance:, alid regulations
applicable to the land or public airport land upon which the ]cased premises are
located.
b. TENANT shall maintain an arch of ten (10) feet from the exterior walls of the
hangar or of the median point between hangars il'there is less than twenty (20)
feet between hangars, free from. brush and weeds. If TENANT fails to keep and
maintain the lQascd 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 11,1TI ;ir.
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 1`rom taxes, and the CITY agrees to maintain such tax exempt status.
15. TENANT shall comply with all Mate 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, Gor 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:
Mount Cleveland Development, I,1,C
7393 MT HWY 35
Bigfork, MT 59911
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.
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1 if. CITY reserves the right to further develop or ilxaprove, or not develop or improve, the
landing area of the airport as it sees fit, regardless of the: desires or view of the TENANT,
Luad 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 ol'any planned modification or alteration
of any present or future building; or structure situ.Iated on the leased premises.
21. It is mutually agreed and understood that i {'TENANT should lhil to make the annual lease
payments as dcscri bed :above, or fai i to perform ;any condition or covenant or condition of
this Lease or fail to maintain the leased premises in a tnauuier 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 rc-enter and
retake possession of the premises. All buildings and improvements .placed on the
premises `hall thereupon revert to the CITY. This; paragraph shall not apply to failure; of
TENANT to obtain or maintain insunuicc as set forth above.
22. It is mutually agreed that this lease shall inure to the bcnef it of and hG binding upon the
respective parties, their heirs, successors in interest and assigns, It is furtJwr agreed that
time is ofthe essence of this Lease.
23. Any change or mock tication ofthis Lease, in order to be effective, must be in writing and
,signed by the rvspoctivc parties.
24. In the event either party to this Lease shall be required to bring an action against the other
party to cnl'oree t.hi% I,ca.sc, or tiny 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.
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IN WITNESS WHEREOF, said CITY has caused this Lease to be signed on its behalf by the
Mmager of said CITY and said TENANT has executed this Least this [&-Juy otku� Z&P-
STATE OF MONTANA
: SS
County of Flathead
CITY OF KALISPELL
Matrager
Ub- I
Tenant
On this L4day 20o< betbre me, a Notary Public in and for the State of Montana,
personally appeared known to me to be the person whose name is subscribed to the
foregoing instruineDt, and acknowledged to me that he/she executed the same,
IN WITNESS W1 11"RE'01'. I have hereunto set my hand and allixed my Notarial Seal, the day and
year first above written.
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Notary Public, State of Montana
My Commission expires
H—EERF-in- M
STATE OF MONTANA
, ss
C t)unty of llathcad
t)n t)us%!_ day oPi4' _ , 200 r� , before me. , Notary Public in and fir the State. c>f'Mnntana,
personally appear4cl<2-/'1''ila�i��t y�kz�owz� 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, 1 have hercunto set my hand and affixed my Notarial Seal, the day and
year first above written.
►f:y •:LINDA CA "WINS
�. NOTARY pixiur-mONTANA
WNOTARTAL:*:.
RCA �nB at KAu51. Mon1W11
�r My Comm. i:xp r Jan. 27. 24 %.
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n
Notary Public,/State of Montana
Residing ai.L• )
My C:ormnission expires