Hangar Site A8/DNRCKALISPELL AIRPORT ASSOCIATION, INC.
HANGAR SITE LEASE
THIS HANGAR SITE LEASE, made and entered into this 01 day of � L , 20 f Q, by
and between Kalispell Airport Association, Inc. a Montana not -for -profit corporation, hereafter referred to
as "KAA", and the following named individual, whose mailing address appears as follows:
(Printed Name of Tenant(s)) A8: DNRC
(Mailing Address of Tenant(s)) Northwestern Land Office
655 Timberwolf Parkway, Kalispell MT 59901
hereafter referred to as "TENANT", whether one or more:
WITNESSETH:
WHEREAS, the KAA operates the Kalispell City Airport, in accordance with and pursuant to the
terms, covenants and conditions of a certain Kalispell Municipal Airport Lease and
Agreement to Assign, dated the 0_ day of APP L- , 2018 (hereinafter
referred to as "KAA-City Airport Lease"); and
WHEREAS, the TENANT represents that TENANT has read and reviewed the said KAA-City Airport
Lease and is fully aware of its contents and the contents of a certain Novation, dated the
day of ()PR.\%. , 2018, related thereto; and further TENANT desires to
undertake and enter into this agreement with KAA being fully advised of the foregoing
instruments; and
WHEREAS, the KAA 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 and maintain structures and related appurtenances thereto for
the storage and protection of aircraft based at said airport.
NOW, THEREFORE IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:
The KAA does hereby agree to lease to TENANT, and TENANT hires from KAA, those
certain premises located at the Kalispell City Airport, Kalispell, Montana, which are more
particularly described in Exhibit "A", which is attached to this Lease and by this reference
is fully incorporated herein.
2. The term of this Lease shall be for twenty (20) years, commencing on the 0 1 day of
hp f-,�,t_ , 20 t'6 and ending on the L�1 day of �(� �� L , 20
unless sooner terminated by mutual agreement of the parties or by one of the parties under
the specific provisions hereof or by those events or circumstances more particularly
described in the KAA-City Airport Lease, should KAA's authority to operate the airport
KAA Hangar Site Lease Page 1 of 10
cease in accordance therewith. TENANT shall have the option to renew the lease term for
up to two (2) additional successive terms of ten (10) years each, provided that such
extensions are then available to KAA as the operator of said airport in accordance with
paragraph 2 of the KAA-City Airport Lease. KAA shall give TENANT sixty (60) days
written notice prior to the end of each term and TENANT shall give KAA 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, provided that such extended term is then
available in accordance with the KAA-City Airport Lease.
3. TENANT agrees to pay to the KAA for the use and benefit of the KAA the sum of
$1231.97. ( cents) per square foot per year for the existing or 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:
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 any and all available
subsequent ten-year term(s), the annual lease payment shall be reviewed and reset
by KAA prior to such extension.
e. The KAA or its 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 paragraph 3(d)
above.
4. TENANT agrees to properly maintain the structure described on Exhibit "A" for the
purpose of housing light aircraft on said land, and TENANT further agrees to maintain
said building, together with access to runway and appurtenances related thereto, in
accordance with the specifications contained in hangar construction and design standards
on file with the City of Kalispell and/or KAA and any and all other standards, regulations
KAA Hangar Site Lease Page 2 of 10
or requirements the KAA, City of Kalispell, State of Montana or other applicable federal
law and regulation.
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 twelve (12) months, pursuant to paragraph 7(b) of the KAA-City Airport
Lease and shall leave the premises in a restored condition, except that any paving
shall be left, reasonable wear and tear excepted.
b. If TENANT does not remove said building within such allotted time, it shall then
become the property of KAA without further action on the part of the KAA.
C. TENANT may expand the square footage of any building constructed on the
Airport site, subject, however, to the prior written consent of KAA. In the event
KAA 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 paragraph 3 above.
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 KAA and the City of Kalispell, when applicable. Any
such sublease shall be in writing and shall be reviewed by KAA prior to approval
of such proposed subletting agreement.
b. KAA'S approval of any sublease shall not relieve TENANT and/or leasee of
TENANT of any obligation imposed by this agreement or controlling standards or
regulation discussed herein. TENANT shall provide to KAA a signed copy of the
final sublease agreement for its file and shall notify KAA of any terminations of
said sublease within fourteen (14) days thereof, in writing. TENANT shall also
provide to KAA the name, address, preferred telephone number and email address
of any such sublesee of TENANT, in writing, on submitting the approved
sublease to KAA.
6. TENANT shall have the right and privilege of sale, assignment or transfer of this Lease
for the purpose defined in paragraph 5 hereof, upon written notice to the KAA stating the
name and address of the proposed buyer, assignee, or transferee.
a. If the KAA 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 receipt of said written notice.
KAA Hangar Site Lease Page 3 of 10
b. The KAA 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 fully completed sale or assignment by TENANT of its interest here and the
receipt of written notice described herein, TENANT shall be relieved from
liability for rental payments accruing thereafter, 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 KAA with proof of insurance coverage as required by
paragraph 7.
7. TENANT To the extent of its liability for negligent acts covered by the Montana Tort
Claims Act (Section 2-9-101, MCA,et.seq.), the State of Montana will indemnify and hold
harmless KAA and its representatives against demands, claims, or liabilities arising from
the use authorized under this Agreement.
a. As evidence of TENANT's covenant herein, TENANT at TENANT'S sole
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 KAA
against all liabilities, judgments, costs, damages and expenses which may accrue
against, be charged to, or recovered from the KAA, 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. Tenant is self -insured with statutory limits in the amounts of Seven Hundred and
Fifty Thousand Dollars ($750,000.00) with respect to each claim, and One Million
and Five Hundred Thousand Dollars ($1,500,000.00) with respect to each
occurrence.
C. Proof of insurance coverage required by this Lease shall be provided by TENANT
to KAA at the time of execution of this agreement. KAA reserves the right at any
time during the primary lease term or any extension thereof, to require TENANT
to provide to KAA proof of continued insurance coverage.
d. Policy limits are subject to change in accordance with §2-9-108, MCA,
"Limitations on Governmental Liability for Damages in Tort." TENANT shall
file certificates of said insurance with the KAA, and said insurance shall be in full
force and effect, throughout the primary term of this Lease and any and all
extensions thereto.
KAA Hangar Site Lease Page 4 of 10
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, KAA, 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.
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 KAA 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 KAA incident thereto.
b. All losses suffered by TENANT resulting from criminal activity or others shall be
promptly reported to the police. The KAA assumes no responsibility for such
losses.
9. In the event that soils or other material are found on the leased site that are caused by
TENANT and 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 KAA 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 in TENANT'S possession on the lease site must be
appropriately labeled and stored.
C. In the event Hazardous Materials are spilled upon the property by TENANT, 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
KAA Hangar Site Lease Page 5 of 10
contaminated by TENANT, it will be the responsibility of TENANT to clean up
those systems.
d. TENANT must comply with all state, federal and local laws pertaining to the
handling and storage of hazardous materials.
10. No construction or installation of any underground fuel storage tank dispensing system
shall be allowed upon the premises.
11. Any utility services required by TENANT's building or for its use shall be obtained by
TENANT at TENANT's sole expense.
12. TENANT further agrees to the following terms and conditions:
a. TENANT agrees that the building and any improvements made thereto will be
maintained in good order, repair and safe condition and in compliance with the
law and all applicable standards and regulations. 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, KAA may,
in its discretion, following written notice, undertake to do or have done such, and
any expenses incurred by KAA shall be paid by TENANT.
TENANT shall not store personal property, equipment of any kind, or vehicles,
outside of the hangar.
13. TENANT is exempt from taxes and agrees to the greatest extent legally permissible to
maintain such tax-exempt status. The land is owned by the City of Kalispell, but leased to
KAA as a not -for -profit operator, and is exempt from taxes, and the KAA, to the greatest
extent legally permissible, agrees to maintain such tax exempt status.
14. TENANT shall comply with all State and Federal laws and regulations and with the
Operating Regulations of the City of Kalispell and the KAA. KAA 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.
15. Notices to KAA shall be sent by certified mail, postage prepaid to the KAA Airport
Manager, KAA Airport, c/o Red Eagle Aviation, 1880 Hwy 93 South, Kalispell, MT
KAA Hangar Site Lease Page 6 of 10
59901, and notices to TENANT shall be sent by certified mail, postage prepaid to the
name and address of TENANT set forth above.
16. TENANT shall have the right to cancel and terminate this Lease and any obligations
arising hereunder by written notice to the KAA delivered within (60) days hereafter;
termination, however, shall not relieve TENANT of any then -existing obligations it may
have to KAA at such termination, to include, without limitation, obligations for the
payment of tardy fees and expenses for maintenance undertaken by KAA in connection
with the covenants set forth herein.
18. KAA reserves the right to further develop or improve, or not develop or improve, the
landing area of the airport as it sees fit, subject to the terms of KAA-City Airport Lease,
regardless of the desires or view of the TENANT, and without interference or hindrance
from TENANT. KAA agrees and covenants that, in developing and improving the
landing area of the airport, it will not interfere with or alter TENANT'S ability to utilize
the existing helipad for rotor wing operations and the existing taxiway and runway for
fixed wing operations.
19. This Lease shall be subordinate to the provisions and requirements of any existing or
future Lease between the KAA and the United States and/or the City of Kalispell, 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 KAA, and
such condition or conditions exist for more than ninety (90) days after written notice is
given to the TENANT, KAA 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 KAA. This paragraph shall not apply to failure of
TENANT to obtain or maintain insurance under paragraph 7 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 and shall be deemed a covenant
running with the land. 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 all the respective parties hereto. This Lease represents the full and complete
agreement of the parties hereto, their heirs, successors and assigns.
KAA Hangar Site Lease Page 7 of 10
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, each party will bear their own costs and
attorneys' fees.
25. TENANT will abide by all rules and regulations established by the KAA for the airport.
26. In the event that this lease is terminated the leasehold shall transfer to the City of
Kalispell, as Lessor, and shall convert to a month to month tenancy. The City of Kalispell
shall be under no obligation to continue to operate the airport. In the event the City of
Kalispell determines thereafter to close the airport, the ground leases shall continue to
operate on a month to month basis for up to twelve (12) months at 50% of current rate.
Lessees shall have the right to remove those improvements they own, but shall do so
within twelve (12) months from notice of the airport's (closure) discontinuance and shall
leave the premises in a restored condition, except that any pavement shall be left.
Improvements left on the airport property thereafter shall then become the property of the
City of Kalispell without further action on the part of the City.
27. This lease shall terminate immediately upon abandonment of the airport as a result of a
voter initiative. If the Ground Lease Lessee elects not to remove the improvements as set
forth above, the CITY shall pay to the Ground Lease Lessee the fair market value of their
leasehold improvements situated on the airport at the then existing usage. The fair market
value of the improvements at the then existing usage shall be determined as follows:
The City and the Ground Lease Lessee shall each hire, at their own
expense, an appraiser to determine the fair market value of the
improvements on the leased site and owned by the Ground Lease Lessees
at the then existing usage. If the two (2) appraisals do not differ by more
than three percent (3%), the fair market value of the improvements 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 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 the Ground Lessee within (60)
days of the date of determination of the fair market value as set forth
above.
IN WITNESS WHEREOF, said KAA has caused this Lease to be signed on its behalf by the
Manager of said KAA and said TENANT has executed this Lease this day of A A,�Ci� ,
20/1?
KAA Hangar Site Lease Page 8 of 10
T ASSOCIATION, INC.
, Airport Manager
Tenant
NOTARY CERTIFICATION FOR AIRPORT MANAGER
STATE OF MONTANA
County of Flathead
On this day of , 201� before me, a Notary Public in and for the State
of Montana, personally appeared B.J. HOLMAN, in his capacity as KAA Airport Manager, known to
me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that
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.
ROBIN E. SILVA
E. S(�V9
NOTARY PUBLIC for the
°s`�"�
State of Montana
SEAL
MontanaYomKalispell,
Residing sIol
Epies
a�
isin
9TFOFMo��a
May 23, 2019
SEAL
Notary Public, tate of Montana
Printed Name:(:
Residing ate
�.-
[Remainder of page left intentionally blank; Notary Public information and seal to immediately follow]
NOTARY CERTIFICATION FOR TENANT(S)
KAA Hangar Site Lease Page 9 of 10
STATE OF MONTANA
County of Flathead
On this Qb day of , 2019, before me, a Notary Public in and for the State
of Montana, personally appeared r R known to me to be the
person whose name is subscribed to the oregoing 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.
AMEN evq CARMEN EVANS
o° �ptAR Yp
NOTARY PUBLIC for the
* SEAL *
State of Montana
Residing at Kalispell, Montana
of Mod
My Commission Expires
August 08, 2020
STATE OF MONTANA
ss
County of Flathead
On this day of
Notary ublic, State of Montana
Printed Name: Q-PL R!9—, k �.\/a.Y1-S
Residing at s rt\T
My Commission expires O 0
20_, before 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 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.
SEAL
Notary Public, State of Montana
Printed Name:
Residing at
My Commission expires
KAA Hangar Site Lease Page 10 of 10
NOVATION
THE PARTIES AGREE TO THE FOLLOWING FACTS:
1. The City of Kalispell (the "City") has agreed to enter into a municipal airport lease agreement
with the Kalispell Airport Association ("KAA"), as shown in Exhibit "A" attached hereto and
incorporated fully herein by this reference contingent upon all lease holders executing this
novation agreement.
The Term "the Lease, " as used in this Agreement, means that lease of municipal airport property
made between the Leasee and the City before the effective date of this Agreement, whether or
not performance or payment have been completed. The parties intend that the terms of the lease
subject to this agreement ("the Subject Lease) shall effectively terminate the Lease and release
both the City and the Lessee from any remaining rights, duties, or obligations to one another
under the Lease. Included in the term "the Lease" are also any extensions or modifications made
under the terms and conditions of the original lease between the Lessee and the City.
2. The City shall give to KAA all rights and obligations to manage the airport assets of the City
pursuant to the terms of the municipal airport lease agreement described as Exhibit "A" between
the City and KAA.
3. KAA has accepted all the management rights and obligations of the City pursuant to the terms
of the municipal airport lease agreement described as Exhibit "A".
4. KAA has assumed all future obligations and liabilities of the City in the management of the
airport pursuant to the terms of the municipal airport lease agreement described as Exhibit "A".
5. KAA is in a position to fully perform all obligations as they may exist under the municipal
airport lease agreement described as Exhibit "A".
6. A certificate dated the 29 day of December 2017, has been issued by the Secretary of State of
Montana, to the effect that NAME is a registered Limited Liability Company in good standing
with the State of Montana.
7. It is consistent with Lessee's interests to release the City from its obligations under the Lease
and, in consideration of the City releasing Lessee from its obligations under the Lease, to enter
into the Subject Lease herein with KAA.
IN CONSIDERATION OF THESE FACTS, THE PARTIES AGREE THAT BY THIS
AGREEMENT:
1. The City confirms the leasehold rights of KAA under the terms of the municipal airport lease
described as Exhibit "A", and hereby waives any nontax related claims and rights against
Lessee under the terms of the Subject Lease between Lessee and KAA.
2. KAA agrees to be bound by the terms of the municipal airport lease described as Exhibit "A"
and thereby to assume all the management duties, obligations and liabilities owed to Lessee
as the manager of the airport. Likewise, the City agrees that it is bound by the terms of the
municipal airport lease.
3. Except as expressly provided in this Agreement, the Lessee agrees to waive all rights and
claims against the City arising out of the terms of the Lease.
Entire Agreement
This agreement supersedes all previous agreements in respect of its subject matter and embodies
the entire agreement between the parties.
a) The Lessee acknowledges that no representations, warranties, promises, undertakings or
agreements have been made by the City or any person acting, or purporting to act, on
behalf of the City in connection with this novation other than as expressly set out or
referred to in this agreement.
b) KAA acknowledges that it has not relied on any statement, representation, warranty,
promise, undertaking or agreement (whether express or implied, oral or written) resulting
from or implied by conduct made in the course of communications or negotiations in
connection with this lease, which is not set out in this lease or the municipal airport lease
described as Exhibit "A".
No reliance or inducement
Each party warrants and agrees that when entering into this agreement it relied exclusively on the
following matters independently of any statements, inducements or representations made by or
on behalf of any other party, including without limitation, by the officers, employees or agents or
any other person acting on behalf of a party:
a) its own inspections, investigations, skill and judgement;
b) the terms expressly contained in this agreement; and
c) opinions and advice obtained independently of any other party.
Notwithstanding anything in this Novation to the contrary:
1. To the extent that this Novation may compete or conflict with the terms of the
municipal airport lease, the municipal airport lease shall be deemed superior to
and controlling over this Novation.
2. The provisions contained in paragraphs 7(c) and 8 of the municipal airport
lease shall be deemed to be superior to and will supersede any and all
provisions of this Novation to the extent that such provisions which may
conflict with said Paragraphs 7(c) and 8 of the municipal airport lease.
[Remainder of this page left intentionally blank; signature page to immediately follow)
fle
Dated this day of �'lw-G 2018.
,ovL
City of Kalispell
BY:
Name Printed:
Title:
Dated this F day of !E it , 2018.
Kalispell Airport Association, Inc.
BY:
ZAM AjNDERSON, Its President
Leasee (t
BY:
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