Site A-5/Pete GrossHANGAR SITE LEASE
THIS Lease, made and entered into this t s day of October, 2006,
by and between the City of Kalispell, a municipal corporation,
hereafter referred to as CITY, and J. Peter Gross, PO Box 7276,
Kalispell, MT 59904, hereafter referred to as TENANT:
W I T N E S S E T H:
WHEREAS, the CITY operates the Kalispell City Airport, and
WHEREAS, the CITY desires, in order to provide a source of income for
airport maintenance and to increase the utilization of said
airport, to lease tracts of land to various tenants in order
that the tenants may erect structures for the storage and
protection of aircraft based at said airport.
NOW, THEREFORE IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:
1. 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"(Projected Building
Site A-6) 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 4--� day of October, 2006 and ending on the
day of October, 2026, 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 and fifty percent (150%)
of the actual square footage occupied by the hangar, herein
authorized, payable as follows:
2006 Airport Lease Page 1 of 9
a. Upon the commencement date, TENANT shall pay the pro-
rata portion of the annual rent for the time period
from the commencement date to July 1 next succeeding.
b. On each July 1, TENANT, without demand, shall pay the
annual rental to the next succeeding fiscal year.
C. 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.
d. 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.
e. 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 agrees to construct one building for the purpose of
housing light aircraft on said land, and TENANT further
agrees to construct said building, together with access to
runway, in accordance with the specifications contained in
hangar construction and design standards. TENANT shall
supply to CITY upon completion of the building appropriate
invoices establishing the cost of construction of said
building.
a. TENANT shall have the right, upon the termination of
this Lease, unless a lease for a further term be
negotiated, to remove the hangar structure, but shall
do so within 90 days and shall leave the premises in a
restored condition, except that any paving shall be
left.
b. If TENANT does not remove said building within such
allotted time, it shall then become the property of
CITY without further action on the part of the CITY.
C. TENANT may expand the square footage of any building
constructed on the Airport site, subject however to the
prior written consent of CITY. In the event CITY
2006 Airport Lease Page 2 of 9
approves any building expansion during the primary
lease term or any extension thereof, TENANT'S lease
payments shall be adjusted in accordance with the
criteria set forth in 13.
d. If the construction of a hangar is not commenced by
July 31s, 2007 this lease will become null and void as
to any and all provisions of this lease.
5. TENANT shall use said property for the storage of light
aircraft and other lawful purposes necessarily incidental
thereto and for no other purpose.
a. TENANT may sublet the premises for aviation
purposes, subject however to the prior written
consent of CITY. Any such sublease shall be in
writing and shall be reviewed by CITY prior to
approval.
b. CITY'S approval of any sublease shall not relieve
TENANT of any obligation imposed by this agreement.
TENANT shall provide to CITY a signed copy of the
final sublease agreement for its file.
C. Upon approval by CITY of any sublease, an
administrative fee equal to 2% of the rental fee
imposed by TENANT on the sublessee, shall be paid
by TENANT to CITY throughout the term of the
sublease. This administrative fee shall terminate
upon termination of the sublease.
6. TENANT shall have the right and privilege of sale,
assignment or transfer of this Lease for the purpose
defined in 15, 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.
2006 Airport Lease Page 3 of 9
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 18.
7. If, for any reason, the CITY discontinues aviation
operations on Kalispell City Airport site, the CITY may
terminate this lease and may elect to pay TENANT the
unamortized portion of the cost of the hangar, herein
authorized to be built. That amortization is to be
computed on a straight-line basis over the period from
the completion of the improvement up to 15 years.
8. 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 ($1,500,000.00) 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.
2006 Airport Lease Page 4 of 9
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, ALimitations on Governmental Liability
for 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.
9. 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.
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.
10. In the event that soils or other material are found on the
leased site that are AHazardous or Deleterious Substances@
as defined by the Montana Comprehensive Environmental
Cleanup and Responsibility Act, '75-10-701 et seq. MCA
(ACECRA@), AHazardous Substances@ as defined by the
Comprehensive Environmental Response, Compensation and
Liability Act, 42 USC '9600, et seq. (ACERCLA@), AHazardous
2006 Airport Lease Page 5 of 9
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.
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.
2006 Airport Lease Page 6 of 9
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:
J. Peter Gross
PO Box 7276
Kalispell, MT 59904-7276
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.
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.
2006 Airport Lease Page 7 of 9
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 under &8, 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 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 party 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.
2006 Airport Lease Page 8 of 9
IN WITNESS WHEREOF, said CITY has caused this Lease to be signed on its behalf
by t Manager of said CITY and said TENANT has executed this Lease this day of
C3C3
STATE OF MONTANA )
: ss
County of Flathead )
On this ?, may of';`'�� 2006, before me, a Notary Public in and for
the State of Montana, personally appeared,". VNtiL-' �"A 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
the day ands,yWm4rst above written.
F4/ ®>
., Vr
e
STATE OF j�I8�0iiEl���� ss
County of Flathead )
set my hand and affixed my Notarial Seal,
Notary Public State of Montana
Residing at
My Commission expires'
On this y of �' ''�t� 2006, before me, a Notary Public in and for
the State of Montana, personally appeared _ (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.
Notary Public, State of Montana
Residing at
My Commission expires
2006 Airport Lease Page 9 of 9
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