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HomeMy WebLinkAboutR-2024-206 Resolution approving Lease Agreement between the City of Yakima and Makito Aviation, LLC - Fuel Farm RESOLUTION NO. R-2024-206 A RESOLUTION authorizing a Lease Agreement with Makito Aviation, LLC for property located at 2401 S. 21st Ave, Yakima Air Terminal-McAllister Field. WHEREAS, the City owns and operates Yakima Air Terminal-McAllister Field in accordance with applicable Federal, State and Local regulations; and WHEREAS, the airport has property available for lease within parcel number 18120221004, which property is located at 2401 S. 21st Ave, Yakima, Washington 98903; and WHEREAS, the 2015 Airport Master Plan adopted by City Council identifies the need for additional hangar development in order to meet increasing demands within the aviation industry; and WHEREAS, Makito Aviation has indicated the needs for additional fuel storage facility and has proposed a location for the fueling operations and storage that is consistent with the Airport Master Plan; and WHEREAS, the City of Yakima and Makito Aviation, LLC have negotiated a Lease that would authorize Makito Aviation to occupy the property and to develop a fuel farm, thus providing the aviation community with additional fueling areas and fuel storage all of which is set forth in the "Airport Land Lease Agreement" attached hereto and incorporated herein by this reference; and WHEREAS, the City Council has determined that approval of the attached Lease agreement is in the best interests of the City of Yakima and will promote the purposes of the Yakima Air Terminal-McAllister Field, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized and directed to execute the attached Lease with Makito Aviation, LLC., for a lease of Yakima Air Terminal-McAllister Field property located at 2401 S. 21st Ave, Yakima, Washington 98903 in accordance with the terms set forth therein. ADOPTED BY THE CITY COUNCIL this 19th day of November, 2024. n .(„peg' Patricia Byer;, Mayor ATTEST: ;_'�PKl rnA\``y� s • kh *— IP , • • * •: SEAL- 1 i ..*- Rosalinda Ibarra, City Clerk \`SHI.NG"\O' AIRPORT GROUND LEASE AGREEMENT BETWEEN CITY OF YAKIMA AND MAKITO AVIATION, LLC THIS AIRPORT LEASE AGREEMENT BETWEEN THE CITY OF YAKIMA, the owner and operator of YAKIMA AIR TERMINAL - McALLISTER FIELD, AND MAKITO AVIATION, LLC (hereinafter referred to as "Lessee"), is executed this 19 day of November, 2024. WITNESS ETH: WHEREAS, LESSOR operates the Yakima Air Terminal—McAllister Field which is a Department of the City of Yakima, hereinafter both referred to as "Lessor". McAllister Field may be referred to herein as the "Airport"; WHEREAS, Lessor has approved property available for lease as provided by this Lease, and Lessee desires to occupy and use such property in accordance with the Lease; and NOW THEREFORE, in consideration of the concession rights granted and the mutual covenants and agreements hereinafter contained, the parties agree, for themselves, their successors and assigns, as follows: 1. PREMISES: Lessor does herby lease and let unto Lessee, and Lessee does hereby lease and take from Lessor, approximately 35,000 square feet of land in the City of Yakima, Washington, as that property is depicted in Exhibit A (hereinafter the "Premises"), attached hereto and by this reference made a part hereof, together with the right of ingress to and egress from the Premises and the public use areas/facilities used in connection therewith, over designated Airport property and roadways, subject to federal, state and local rules, regulations and laws governing the use of the Airport and as the same may be promulgated by Lessor and/or any governmental entity from time to time. The Premises is a section of land which is located on a portion of the real property known as Yakima County Assessor's Parcel No. 18120221004 holding the address of 2401 S. 21st Avenue, Yakima, WA 98903. A legal description of the Premises is attached hereto as Exhibit A and is fully incorporated into the terms of this Lease. In addition to the terms outlined in this land lease agreement, the Lessee shall be granted the first right of refusal on any adjacent parcels to the leased property, per Exhibit A. In the event the Lessor receives a bona fide offer to lease or sell any of these adjacent parcels, the Lessor must provide the Lessee with written notice of such offer, including all material terms. If the Lessee exercises the first right of refusal, the Lessee shall have a period of sixty (60) days from the date of receipt of such notice to better the offer and secure the adjacent parcel through an established lease and provide construction timelines acceptable to the Lessor. Should the Lessee decline or fail to exercise this right within the specified period, the Lessor may proceed with the third-party transaction as proposed. Yakima Airport—McAllister Field Master Ground Lease Agreement 1 2. TERM: A. The tenancy created by this Lease shall commence on the 20th of November, 2024, and continue for a period of Thirty (30) years, terminating on the 20th of November, 2054, unless otherwise terminated as provided herein. B. Lessee and the Lessor shall have the mutual option to extend the initial term by four (4) additional five (5) year terms that, if so extended, would each extend the term of the lease five (5) years. Each mutual option shall be exercised by (a) Lessee delivering to Lessor, not less than thirty (30) days before the expiration of the initial term or the expiration of any option term written notification of its intent to extend the term; and (b) Lessor, after receipt of the Lessee's written notification, agreeing to the extension in writing within fifteen (15) days of the receipt of Lessee's written notification. Unless Lessee timely delivers its written notification to Lessor and Lessor timely agrees in writing to the extension after receipt of Lessee's notification, the option shall automatically expire and shall terminate. 3. RENT: A. Lessee promises and agrees to pay Lessor rent for the property at the Airport's current Aviation Land rate per square foot of the Premises, to be paid in advance on or before the 10th day of each month. Payments shall be made to the City of Yakima, Accounts Receivable, 129 N. 2' St., Yakima, WA 98901. The Airport's Aviation Land rate per square foot, as of the date of this Lease, is listed in Section 3(B) of this Lease. Each payment shall contain the following notation "Rent & Fees for Airport Ground Lease Agreement." Any rental payments/fees past due shall accrue a delinquency charge of twelve percent (12% per annum.) (1) Lessor shall be entitled, at its sole and complete discretion, to either accept or reject a tender of payment of rent or any fee which is not paid within the time required by this Lease. In the event Lessor elects to accept a tender of payment of rent or fee after the time required by this Lease, Lessor may do so without thereby waiving Lessee's continuing obligation to make such payments when required under the terms of this Lease. Lessee hereby acknowledges that this constitutes a waiver by Lessee of any argument that by accepting a late payment of rent or fees, Lessor has waived any default which is based upon such late payment or has waived Lessee's continuing obligation to make such payments when and as required by the terms of this Lease. (2) In the event Lessor elects to provide written notice of delinquency or other violation of the Lease, Lessee agrees to pay Lessor's cost and attorneys' fees reasonably incurred in providing such notice in addition to the late charge and all other payments and obligations called for herein. B. The lease rental rate provided for above shall be determined by the Airport Rates and Fees which are established and approved by Yakima City Council. These Rates and Fees are outlined in the City of Yakima Master Fee Schedule. For the purposes of this lease, the rental rate will be adjusted based on the Aviation Land rate set in the Airport Rates and Charges. This rate Yakima Airport—McAllister Field Master Ground Lease Agreement 2 is subject to review and modification upon the anniversary of this lease. The current rate is $0.22 per square foot/year at a monthly rate of$641.67 (1) The term "fair market value" means the most probable annual rate in terms of money which the Premises, (which excludes those improvements owned by the Lessee), would bring if exposed for lease in the open market for similarly situated properties, with a reasonable time allowed to find a Lessee, and with full knowledge of the highest and best use to which the Premises could be put consistent with the then most current Airport Master Plan and Federal Aviation Administration ("FAA") regulations. (2) Airport Rates and Fees are reviewed and adjusted on an annual basis and approved via resolution by the Yakima City Council. Rental rates are subject to increase or decrease based on modifications made to the Airport Rates and Fees. C. All Lease rates identified above are Lease payment rates for property only and do not include any taxes of any sort. All applicable taxes, including leasehold taxes, shall be paid by Lessee and shall by computed on the basis of the Lease rate in effect at the time the tax is imposed (see Section 6, below). Any taxes paid by Lessee shall be in addition to the rent due as described herein. D. In the event the Lease term commences on a date that is not the first day of the month, respectively, Lessee shall pay a pro-rated amount for the first month of the Lease. E. Failure to calculate and apply the rental increase for any year shall not be considered a waiver of an increase for any succeeding year and Lessee will be subject to back-pay if determined by the Lessor, based on the rental increase. F. Personal Guaranty: ("Guarantor") [NO GUARANTOR IF LEFT BLANK] shall executed an unconditional personal guaranty of all amounts and sums due from Lessee to Lessor under the terms of this Lease and any amendments, modifications, or extensions of the same. The unconditional personal guaranty shall be in the form attached hereto as Exhibit_ [NO ATTACHMENT IF NO GUARANTOR]. 4. ARBITRATION SECTION: N/A 5. DEPOSIT: Upon execution of this Lease by both parties, Lessee shall deposit with Lessor the amount of one month's rent plus leasehold tax thereon ("Deposit"), as a guarantee of Lessee's performance of this Lease and the timely payment of the Lease payments provided for herein; in the event Lessee shall fail to pay the Lease payments as provided herein, or otherwise breach this Lease then the Lessor may apply such Deposit, or any part thereof as may be necessary, to the payment of the Lease or to the payment of damages for such breach or pursue any other remedies provided herein or by law. Nothing herein shall prevent the Lessor from pursuing any and all available remedies for a breach of the Lease. Any amount of the Deposit that is expended as payment of past due Lease payment obligations shall be repaid ("Deposit Cure Payment") to the Lessor by the Lessee, in order to maintain the required Deposit value at all times during the Lease term. Yakima Airport—McAllister Field Master Ground Lease Agreement 3 The Deposit Cure Payment shall be made within five (5) days of any expenditure by the Lessor of the deposit amounts as provided in this paragraph. Contemporaneously with making the Deposit Cure Payment, Lessee shall send written notice to the current Airport Director that the Deposit Cure Payment has been made. The failure to maintain the Deposit amount or to timely make the Deposit Cure Payment and written notification thereof shall constitute a material default by Lessee under the terms of this Lease. 6. TAXES AND LIENS: In addition to the Lease payments identified above, Lessee promises and agrees to pay, as the same become due and payable, all licenses, fees and taxes, including but not limited to the leasehold excise tax, required to be paid by Lessee by reason of the Lease and by reason of Lessee's use and occupancy of the Premises and by reason of Lessee's construction of improvements on the Premises. Lessee shall neither suffer nor permit the attachment of any lien or other encumbrance on the Premises by reason of Lessee's occupancy thereof. Lessee agrees to indemnify Lessor and shall hold Lessor harmless from any such taxes and liens. In the event that any lien is placed upon the Lessor's property as a result of any action or inaction of the Lessee, including, without limitation, the negligence or willful misconduct of the Lessee, the Lessee shall at once cause the same to be dissolved and discharged by giving bond or otherwise. 7. USE: A. Lessee agrees to use the leased Premises only for aeronautically oriented activity as reflected in FAA Policy on the Non-Aeronautical Use of Airport Hangars, or for any other use allowed by the Master Plan and the zoning of the property by the appropriate jurisdiction as approved by the Lessor. The possession and use of the Premises are expressly conditioned upon there being no conflict between the Lessee's operations, and the FAA rules and regulations or the Airport operations. In the event of conflict, as determined by the Lessor in its sole discretion, the matter shall be resolved in favor of FAA rules and regulations or Airport operations. For example, conflicts may arise due to the application of Airport safety zones, and the laws and regulations adopted or administered by the Federal Aviation Administration. As a material part of the consideration to Lessor for entering this Lease, the Lessee hereby waives any and all claims arising from or associated with a conflict arising with the FAA rules and regulations or the Airport operations. The use of the property for any purpose, not aeronautically oriented or allowed by the Lessor under the terms and conditions of this Lease, shall be deemed a material breach of this lease constituting grounds for its termination. This provision shall apply to any assignment of this Lease, whether voluntary or due to mortgage foreclosure or for any other reason. Failure of the Lessee to comply with this Section shall be reasonable cause for Lessor to withhold approval of consent to assignment. B. Lessee covenants and agrees as follows: (1) To not use the Premises for any purpose except that stated in this Lease. (2) To conform to all applicable laws and regulations of any public authority affecting the Premises, including but not limited to the Federal Aviation Administration and all rules promulgated by the Lessor. 'N,117.111&ENN mow,.... ._ N ,el,t Yakima Airport—McAllister Field Master Ground Lease Agreement 4 (3) To refrain from any use which would be reasonably offensive to the Lessor, other lessees or owners or users of adjoining property adjoining the Premises, or which would tend to create a nuisance or interfere with the use of the Airport for aviation purposes. (4) To keep and maintain the Premises, improvements and any aircraft or other materials placed on the Premises in a safe, clean, and orderly manner. Premises shall be free of clutter. (5) To operate in accordance with the obligations of the Lessor to the Federal Government under the terms and restrictions contained in any deed to or contract with Lessor from the U.S. Government to Airport property or any part thereof. C. Lessor reserves the right to take any action it considers necessary to protect the aerial approaches of the Airport against obstruction, together with the right to prevent the Lessee from erecting, or permitting to be erected, any building or other structures on the Airport which, in the opinion of the Lessor, would limit the usefulness of the Airport or constitute a hazard to aircraft. Lessor reserves the right to develop or improve the Airport as it sees fit, without interference or hindrance on the part of the Lessee. D. This Lease shall be subordinate to the provisions of any existing or future agreement entered into between the Lessor and the United States to obtain federal aid for the improvement or operation and maintenance of the Airport. E. Lessee and its invitees shall have the right to use, in common with the Lessor and other parties authorized by the Lessor, (i) all public Airport facilities and improvements ("Airport Public Facilities") and (ii) such public roads, ways and areas at the Airport as may be necessary for access to and from the Premises, which are now or hereafter provided by the Lessor for public use. The Airport Public Facilities and other areas described in the previous sentence are referred to as the "Common Areas." No aircraft, vehicle, equipment or machinery shall be left in an inoperable condition or stored in the Common Areas by Lessee, its invitees or contractors or suppliers, without prior written consent of the Lessor. Nothing stated in this Lease shall prohibit the Lessor from banning from the Lessor's property any person or entity which fails to comply with applicable laws, ordinances and rules and regulations, including those adopted by the Lessor. In addition to any other right granted by law, Lessor reserves the following specific rights with respect to the Common Areas: (1) To establish reasonable rules and regulations for the use of Common Areas; (2) To use or permit the use of the Common Areas by others to whom the LESSOR may grant or may have granted such rights in such manner as LESSOR may from time-to-time grant; (3) To close, alter or relocate all or any portion of the Common Areas; to make repairs or changes to the Common Areas; to take any action preventing a dedication of Yakima Airport—McAllister Field Master Ground Lease Agreement 5 the Common Areas or the accrual of any rights to any person or the public; and to take any action regarding the unpermitted use of the Common Areas; (4) To construct additional buildings and to alter or remove buildings or other improvements in the Common Areas and to change the layout of such Common Areas, including the right to add to or subtract from their shape and size or to change their locations; (5) To exercise any of the Lessor's governmental or proprietary powers over the Common Areas; (6) The right to take any action it considers necessary to protect the aerial approach of the Airport against obstruction, together with the right to prevent the Lessee from erecting, or permitting to be erected, any building or other structures on the Airport which, in the opinion of the Lessor, would limit the usefulness of the Airport or constitutes a hazard to aircraft; (7) The right to develop or improve the Airport as it sees fit, without interference or hindrance on the part of the Lessee; (8) The sole right to determine the level methods and schedules of any maintenance or improvements at the Airport; and shall have the right to close the Airport whenever the Lessor deems it necessary for reasons of public safety or convenience. 8. UTILITIES: Unless otherwise specified herein, Lessor shall not be required to furnish to Lessee any utilities of any kind. Lessee shall be responsible for all utility services including, but not limited to, power, natural gas, water, sewer, communication, and garbage and shall hold the Lessor harmless therefrom including, without limitation, costs for installation and maintenance of appropriate sewage, water, electrical and any other services. 9. PREMISES CONDITION: Lessee has made a full inspection of the Premises, is fully aware of its condition, except with respect to environmental conditions and latent defects, and accepts the Premises on an "AS-IS" basis. Lessor makes no representation or warranty, express or implied, regarding the premises or the condition of the same. Any warranty of fitness for a particular purpose and/or merchantability are specifically disclaimed. Lessee agrees to pay for any improvements, repairs and/or modifications necessary to the operation of Lessee's business. Improvements, repairs and/or modifications shall be approved in writing by Lessor before any work is commenced. Any such approval shall not be unreasonably withheld. Notwithstanding anything herein to the contrary, as between Lessor and Lessee, (i) Lessee shall bear the risk of complying with Title III of the Americans with Disabilities Act of 1990, any state or Yakima Airport—McAllister Field Master Ground Lease Agreement 6 local laws governing handicapped access or architectural barriers, and all rules, regulations, and guidelines promulgated under such laws, as amended from time to time (the "Disabilities Acts") in the Premises, and (ii) Lessor shall bear the risk of complying with the Disabilities Acts in the common areas of Airport, other than compliance that is necessitated by the use of the Premises as a result of any alterations or additions, including any initial tenant improvement work, made by or on behalf of Lessee (which risk and responsibility shall be borne by Lessee). 10. MAINTENANCE: Lessee agrees to keep and maintain the Premises in at least as good a condition as the condition of the Premises at the beginning of Lessee's occupancy, normal wear and tear excepted. Lessee shall be solely responsible to maintain all leased areas, trade fixtures and other improvements, existing and future, in an attractive and usable manner as determined by the Airport Director and consistent with other properties at the Airport. Maintenance shall include, but is not be limited to, weed control, landscaping, garbage, debris and clutter removal, ash removal, painting, pavement maintenance and snow removal. In case of any dispute which may arise at any time between the Lessor and Lessee as to the standard of care and maintenance of the PREMISES, the standard and care of the Premises and the adjoining areas shall conclusively be determined by the Airport Director of the Yakima Air Terminal —McAllister Field acting in good faith and exercising reasonable judgment. The Lessor, by its authorized representatives, shall have the right to enter the Premises at any reasonable time for the purposes of maintenance inspection conducted in a manner such that it will not unreasonably interfere with or disrupt Lessee's operation. The Lessee may, from time to time, at its own expense, make such improvements in and about the Premises, whether structural or otherwise, and may install such machinery, equipment and facilities therein as may be considered proper and necessary in connection with the use and operation of the Premises. All such construction and improvements shall be done according to plans drawn up by a qualified architect or engineer and shall be submitted in advance to the Airport Director of Yakima Air Terminal — McAllister Field for approval prior to commencement of construction. Written approval by the Airport Director and all necessary permits will be issued by the City of Yakima or any other governing agency prior to commencing any construction or demolition on the Premises. 11. IMPROVEMENTS: All buildings, trade fixtures and other improvements installed on the leased property by Lessee shall conform to applicable rules, regulations and codes, and Lessee shall procure all building and other permits therefore.All buildings, trade fixtures and other improvements shall be designed with a view toward aesthetic considerations and installation shall not commence until plans and specifications therefore have been submitted to and approved in writing by the Airport Director. Approval of LESSEE's improvements shall be deemed granted thirty (30) days after submission in writing to the Airport Director if no response has been received by Lessee within that time period. Yakima Airport—McAllister Field Master Ground Lease Agreement 7 Lessor makes no representation or guarantee as to the suitability of the leased area for construction of buildings, roads, ramps, etc., and is not responsible for the costs of excavation and/or removal of any object found either above or below ground level except for hazardous materials and archaeological artifacts existing prior to tenancy. 12. SIGNS: Lessee, at Lessee's own expense, may erect a sign(s) of a type, number and location suitable to Lessor and as permitted by applicable City of Yakima ordinances. Sign(s) shall not cause safety concerns with the Air Traffic Control Tower's line of sight as aircraft depart and arrive from the Yakima Air Terminal — McAllister Field. No signs or other advertising matter or devices shall be used or displayed in or about the leased Premises or upon any portion of the Airport without the prior written approval of the Airport Director. 13. REVERSION OF IMPROVEMENTS: Upon termination of this Lease for any reason, Lessor may, at its option, either accept ownership of the improvements constructed or installed on the Premises, except for trade fixtures, or require Lessee to remove such improvements within sixty (60) days of such termination. Such removal shall include removing the foundation, utilities and other land improvements and restoring the land and Premises to pre-lease condition and grade level. Lessor shall notify Lessee of its intent within sixty (60) days of the termination, cancellation or expiration of the lease. Prior to the expiration of this Lease, Lessee shall remove all such trade fixtures and repair any damage to the Premises caused by removal of trade fixtures to the reasonable satisfaction of the Airport Director. Trade fixtures not removed within thirty (30) days after cancellation, expiration or termination shall become the property of the Lessor unless other arrangements have been previously approved in writing by the Airport Director. Any hangar or like construction shall not be considered a removeable trade fixture. Lessee shall, as additional consideration for grant of this Lease, insure that all liens, security interest and other encumbrances against said improvements and structures, except those created or suffered by Lessor, whether consensual or involuntary, shall be paid, discharged or satisfied prior to time for reversion thereof to Lessor; and, in any event,the parties acknowledge that Lessor shall not, by virtue of termination of the leasehold interest nor reversion of the structures, trade fixtures or other improvements, be liable for any debt or encumbrance associated therewith, whether now existing or hereafter incurred, levied or attached. 14. LESSOR'S OPTION TO PURCHASE Lessor shall have the right of first refusal on all improvements or structures on the Premises as stated herein. If at any time during the term, Lessee shall receive a bona fide offer from a third person for the purchase of any or all improvements or structures on the Premises, which offer Lessee shall desire to accept, Lessee shall promptly deliver to Lessor a copy of such offer and Lessor may, within thirty (30) days thereafter, elect to purchase the Premises on the same terms as those set forth in such offer. rufzqf Yakima Airport—McAllister Field Master Ground Lease Agreement 8 If Lessor shall not accept such offer within the time herein specified, said right of refusal shall cease to exist, but this lease shall continue otherwise on all the other terms, covenants, and conditions set forth in this lease. This right of refusal shall be inapplicable to a transfer, by way of sale, gift or devise, including a trust, to or for a party related to a Lessee, or to any transfer, in whole or in part, from one such related party to another, but shall apply to any subsequent transfer to a third person. For the purpose of this Article, if the then Lessee shall be an individual, a related party shall include a spouse, lineal descendant or spouse of such descendant, ancestor or sibling (whether by the whole or half-blood), a partnership or limited liability company of which such owner is a member, a joint ownership or ownership in common, which includes the then Lessee, or a corporation, the majority of whose shares is owned by the Lessee, or any one or more of the foregoing parties. If the then Lessee shall be a corporation, a related party shall include an affiliate, subsidiary or parent corporation, a successor by merger or consolidation, or the holder or holders of the majority of the shares of such corporation. 15. REGULATIONS & FAA GRANT ASSURANCE COMPLIANCE: A. Lessee agrees to comply with all applicable laws, ordinances, rules, regulations, minimum standards, federal grant assurances, and policies of all governmental authorities having jurisdiction over the Airport, including policies adopted by Lessor, as such laws, ordinances, rules, regulations and policies apply to the use and operation of Airport property,facilities and operations as those laws, ordinances, rules, regulations and policies now exist or may hereafter become effective. Lessee further agrees to accept responsibility for not allowing unauthorized persons access to the Airport Operations Area ("AOA"). Lessee understands and agrees that Lessor is responsible, as an airport sponsor, for compliance with the Federal Aviation Administration ("FAA") grant assurances ("Grant Assurances"). A copy of the Grant Assurances is attached hereto as Exhibit and is fully incorporated by this reference. Lessee agrees that it has read and is familiar with the Grant Assurances. Lessee shall use and occupy the Premises in a manner that is consistent with and in compliance with the Grant Assurances. If at any time the terms of this Lease or the actions or inactions of Lessee are not in compliance with the Grant Assurances, this shall be deemed a material default under the terms of this Lease and Lessor may immediately terminate the Lease. B. Lessee shall comply with all laws and shall observe all applicable present or future ordinances, rules and regulations, including any rules and regulations adopted by the Lessor, and any future amendments thereto (which rules and regulations may include, without limitation, an Airport Security Plan, restrictions as to storage, noise, prohibited activities, and design standards), which are made part of this Lease and shall have the same effect as though written herein. Lessee understands and agrees that Lessor may amend the rules and regulations applicable to Airport property (of which the Premises is a part), and that such amendments shall be binding upon Lessee. If there is a conflict between the rules, regulations, ordinances or minimum standards of the Lessor and this Lease, the rules, regulations, ordinances, or minimum standards shall control. Specifically, and not by way of limitation, the Lessee shall also comply with the following rules and regulations pertaining to fuel storage: Yakima Airport—McAllister Field Master Ground Lease Agreement 9 (1) The use of the Premises shall be limited solely to the fueling of aircraft on the Premises; (2) Lessee agrees to keep the Premises secured at all times when not in use; (3) Lessee shall keep the Premises clean and free of debris and clutter Lessee shall not park or leave an aircraft, vehicle, or other items of personal property on the pavement adjacent to the Premises, including taxilane and areas of common use with other Lessees of the Lessor; (4) Lessee, and any employees, agents, or representatives of Lessee, must apply for and obtain a complete Airport Badge and any other training reasonably required by the Airport prior to obtaining access to the Premises. Lessee and any employees, agents, or representative of Lessee, must also successfully pass a Federal Security Threat Assessment (STA). C. Lessee, at Lessee's sole expense, shall comply with all laws, orders and regulations of Federal, State and municipal authorities, and shall specifically comply with all health, safety and security codes applicable to the use of the Premises, and shall comply with any direction of any public officer, pursuant to law, which shall impose any duty upon the Lessor or the Lessee with respect to the Premises. The Lessee, at Lessee's sole expense, shall obtain all licenses or permits which may be required for the conduct of Lessee's business within the terms of this Lease, or for the making of repairs, alterations, improvements, or additions at the discretion of the Lessor, Lessor, at Lessee expense and when appropriate and reasonably necessary, may join the Lessee in applying for such permits or licenses. D. The access to the Premises may be shared and is non-exclusive. In addition, the Lessee agrees that the access may be gated at a location determined by the Lessor, which may be relocated by Lessor, as Lessor determines, so long as Lessee continues to have reasonable access to and from the Premises. E. In order to comply with Homeland Security requirements or other considerations, the Lessor may install fencing, which due to topography, or other practical considerations (at the sole discretion of the Lessor), may encroach into the Premises or alter the current access to the Premises. As a material part of the consideration to Lessor for entering this Lease, the Lessee hereby waives any and all claims arising from or associated with the installation or future relocation of any such fence. 16. SUBLETTING: Lessee shall not sublet any part of the Premises without the prior written notification to the Lessor. The Lessor will have 15 days to deny the sublease after receiving notice from Lessee of its intent to sublease. Such notice shall include a copy of the proposed sublease. Any approved subleases shall give preference to aeronautical activities and all subtenants shall comply with all terms of this Lease, together with all laws, ordinances, rules, regulations and policies applicable to the use and operation of Airport property, facilities and operations as those laws, ordinances, rules, Yakima Airport—McAllister Field Master Ground Lease Agreement io regulations and policies now exist or may hereafter become effective. A consent to sub-lease by Lessor shall not be construed to be a consent to any subsequent sub-lease. The Lessor, in determining whether or not to approve a sub-lease, shall consider the extent of the aeronautical activities performed on the Premises. The lessor will not unreasonably withhold consent to a proposed subtenant. 17. ASSIGNMENT AND TITLE: Lessee shall not assign this Lease without the prior written approval of Lessor, such approval to be at the sole discretion of Lessor. Such assignment shall be in conformance with all applicable local, state and federal laws, ordinances, rules, regulations and policies. Any approved assignments shall give preference to aeronautical activities and all assignees shall comply with all terms of this Lease, together with all laws, ordinances, rules, regulations and policies applicable to the use and operation of Airport property, facilities and operations as those laws, ordinances, rules, regulations and policies now exist or may hereafter become effective. A consent to assignment by Lessor shall not be construed to be a consent to any subsequent assignment. The title to any such buildings or improvements placed on the Premises by the Lessee, without regard to their attachment to the underlying land, shall remain in Lessee during the term of this Lease or any extensions thereof; provided, however, that the Lessee must comply with Sections 11 and 12, regarding alteration, construction or removal as to such buildings, maintenance and improvements. The title may not be transferred to another entity without prior written consent of the Lessor. Ownership of any such buildings or improvements is subject to Section 14 upon termination of this Lease. The Lessor and Lessee hereby agree that all personal property belonging to or placed by the Lessee on the Premises, whether such property consists of furniture, machinery, equipment, appliances, or trade fixtures shall be and remain the personal property belonging solely to the Lessee and remain subject to the Lessee's right of removal, provided, however, that the heating, plumbing, air conditioning, lighting, and other utility fixtures shall be considered real property and may not be removed by the Lessee without the Lessor's express prior written consent, and shall not entitle the Lessee to surrender possession of the Premises, terminate this Lease, violate any of its provisions, or cause any abatement in rent under the terms of this Lease. 18. MISCELLANEOUS PROVISIONS: A. The parties agree that Lessor, through its Airport Director or other person authorized by the Airport Director, may enter upon the Premises at any reasonable time, and without notice to Lessee, to make such inspections as Lessor may deem necessary to the proper enforcement of any term, provision or condition of this Lease. No such entry or inspection by Lessor is required by this provision, and the failure of Lessor to enter and make inspection shall not alter the relationship of the parties and their respective rights and duties provided by this Lease. Lessee shall be granted the right of quiet enjoyment upon performance of all terms of this Lease. ,4.4"VIR. .a Yakima Airport—McAllister Field Master Ground Lease Agreement 11 B. Lessor may further develop or improve Airport property and facilities, regardless of the desire or views of Lessee regarding any such development or improvement, and without interference or hindrance on the part of Lessee and without liability to Lessee, provided the operations of the Lessee are not unreasonably interrupted. C. Lessor reserves the right, but shall not be obligated to Lessee, to maintain and keep in repair the landing area of the Airport and all publicly owned facilities of the Airport, together with the right to direct and control all activities of Lessee in that regard. D. Lessor reserves the right to take any action necessary or desirable by Lessor to protect the operations of the Airport against obstruction, or any other activity interfering with the efficient operation of the Airport, together with the right to prevent Lessee from erecting, or permitting to be erected, any building or other structure on the Airport which, in the opinion of the Airport Director, would limit the usefulness of the Airport or constitute a hazard to aircraft. E. The full risk of destruction or damage to any building, improvement, or personal property on the Premises by fire, windstorm or any other casualty rests solely with the Lessee. F. The Lessor and its representatives may enter the Premises, together with any buildings and improvements thereon, upon twenty-four (24) hours advance notice to Lessee, for the purpose of performing any work which the Lessor elects to undertake (including but not limited to work made necessary by reason of the Lessee's default under the terms of this Lease), or exhibiting the Premises for sale or lease. In case of emergency (as determined by Lessor in its sole discretion), Lessee may enter the Premises for the purposes stated in this Section at any time without notice to Lessee. G. In the event that any building or improvement on the Premises (including underground improvements) not made or constructed by Lessee is damaged or destroyed during the term of this Lease, Lessee shall have the option to either promptly repair and restore, at the sole expense of Lessee, the building or improvements (by complying within Sections 11 and 12, above) or terminate this Lease. If the Lease is terminated by Lessee by reason of damage or destruction under this Section, the Lessee shall not be released from any obligation to pay Lessor any rent or other cost or fee provided herein accruing prior to the date of termination. For the purposes of this Paragraph, the date of termination shall be the date upon which Lessor receives written notification from Lessee of its intention not to repair and restore the damaged or destroyed building or improvements, or any date on which a default occurs, or the expiration of the Lease term, whichever first occurs. H. Nothing stated herein shall be construed as to limit in any way the general power and right of Lessor to exercise its governmental or proprietary powers in any way, including such as may affect the Airport, the Premises, the Common Areas, or any other area under the jurisdiction of Lessor. I. This Lease may be modified or amended only upon the Parties' mutual written consent. J. During time of war or national emergency, Lessor shall have the right to lease the landing area or any part thereof to the United States of America for military use, and, if any such lease is Yakima Airport—McAllister Field Master Ground Lease Agreement 12 executed, the provisions of this Lease shall be suspended insofar as they are inconsistent with the provisions of the lease agreement with the United States of America. K. This Lease shall be subordinate to the provisions of any existing or future agreement between Lessor and the United States of America relative to the operation or maintenance of the Airport, the execution of which has been or may be required as a condition to the expenditure of federal funds for the development of the Airport. L. If the Premises or any interest therein is taken as a result of the exercise of the right of eminent domain, this Lease shall terminate as to such portion as may be taken. If the portion taken does not feasibly permit the continuation of the Lessee's operations, Lessee shall have the right to terminate this Lease. Such termination shall be effective as of the date Lessee's operations cease. Lessee shall be entitled to a portion of the award representing its interest in the Premises. Lessor shall be entitled to the remainder of the award. M. This Lease has been submitted to the scrutiny of all parties and their counsel, if desired, and it shall be given a fair and reasonable interpretation in accordance with its words, without consideration to or weight given to its being drafted by any party or its counsel. Paragraph headings are for convenience only and shall not be considered when interpreting this contract. All words used in the singular shall include the plural; the present tense shall include the future tense; and the masculine gender shall include the feminine and neuter genders. N. The Lessee agrees not to discriminate in its business dealings or hiring practices on the grounds of race, color, national origin or sex. O. The waiver by any Party of a breach of any provision of this Lease shall not be deemed a continuing waiver or a waiver of any subsequent breach of this Agreement. P. If any provision of this Lease shall be declared invalid or unenforceable, the remainder of the Lease shall continue in full force and effect. 19. INDEMNITY/DUTY TO DEFEND/HOLD HARMLESS: A. Lessee shall take all necessary precautions in performing under this Lease to prevent injury to persons or property. Lessee agrees to release, indemnify, defend, and hold harmless Lessor, its elected and appointed officials, officers, employees, agents, representatives, insurers, attorneys, and volunteers from all liabilities, losses, damages, and expenses related to all claims, suits, arbitration actions, investigations, and regulatory or other governmental proceedings arising from or in connection with this Lease or the acts, failures to act, errors or omissions of the Lessee, or any Lessee's agent or subcontractor, in performance of this Lease. B. Industrial Insurance Act Waiver. It is specifically and expressly understood that the Lessee waives any immunity that may be granted to it under the Washington State industrial insurance act, Title 51 RCW, solely for the purposes of this indemnification. Lessee's indemnification shall not be limited in any way by any limitation on the amount of damages, compensation or benefits payable to or by any third party under workers' compensation acts, disability benefit acts or any other benefits acts or programs. Lessee shall require that its Yakima Airport—McAllister Field Master Ground Lease Agreement 13 subcontractors and agents, and anyone directly or indirectly employed or hired by Lessee, and anyone for whose acts Lessee may be liable in connection with its performance of this Lease, comply with the terms of this paragraph, waive any immunity granted under Title 51 RCW, and assume all potential liability for actions brought by their respective employees. The parties acknowledge that they have mutually negotiated this waiver. C. Should a court of competent jurisdiction determine that this Lease is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Lessee, on the one hand, and Lessor, on the other hand, the Lessee's liability, including the duty and cost to defend, shall be only to the extent of the Lessee's negligence. D. Nothing contained in this Section (including its subparts) or this Lease shall be construed to create a liability or a right of indemnification in any third party. E. The terms of this Section (including its subparts) shall survive any expiration or termination of this Lease. F. Lessee agrees to reimburse Lessor for any damage to the Premises caused by the occupancy of Lessee, its employees, agents, servants, invitees, independent contractors or any other person acting on behalf of Lessee or under its direction. G. Lessee shall keep and hold the Lessor and its elected and appointed officials, officers, employees, agents, representatives, insurers, attorneys, and volunteers, free and harmless from any and all claims and actions, loss, damage, expense or cost, including reasonable attorneys' fees, incidental to the investigation and defense thereof, resulting from, arising out of, or caused by Lessee resulting in any liability under the Federal Comprehensive Environmental Response Compensation Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq.; Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq.; Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.; the Clean Water Act, 42 U.S.C. 1251 et seq.; the Washington Environmental Policy Act, RCW Ch. 43.21C; the Washington Water Pollution Control Act, RCW Ch. 90.48; the Washington Hazardous Waste Management Act, RCW Ch. 70.105; the Washington Model Toxic Control Act, RCW Ch. 70.105, and the regulations promulgated thereunder, or under any applicable local or state environmental ordinance, statute, law, rule or regulation, excluding negligence to comply with Federal and State Regulations on the part of said individuals and organizations. H. Lessee agrees to release, indemnify, defend, and hold harmless Lessor, its elected and appointed officials, officers, employees, agents, representatives, insurers, attorneys, and volunteers from all liabilities, losses, damages, and expenses related to all claims, suits, arbitration actions, investigations, and regulatory or other governmental proceedings arising from or in connection to any alleged violation of or compliance with the Disabilities Acts related to or occurring in an area that Lessee has agreed to bear the risk of compliance under Paragraph 10 herein. 20. INSURANCE: Yakima Airport—McAllister Field Master Ground Lease Agreement 14 At all times during performance of the Lease, Lessee shall secure and maintain in effect insurance to protect the Lessor and the Lessee from and against all claims, damages, losses, and expenses arising out of or resulting from the performance of this Lease. Lessee shall provide and maintain in force insurance in limits no less than that stated below. Lessor reserves the right to require higher limits should it deem it necessary in the best interest of the public. Lessee will provide a Certificate of Insurance to Lessor as evidence of coverage for each of the policies and outlined herein. A copy of the additional insured endorsement attached to the policy will be included with the certificate. This Certificate of insurance shall be provided to Lessor prior to Lessee taking possession of the Premises. Failure of Lessor to demand such verification of coverage with these insurance requirements or failure of Lessor to identify a deficiency from the insurance documentation provided shall not be construed as a waiver of Lessee's obligation to maintain such insurance. Lessee's insurance coverage shall be primary insurance with respect to those who are additional insureds under this Lease. Any insurance, self-insurance or insurance pool coverage maintained by Lessor shall be in excess of and in addition to the Lessee's insurance and neither Lessor nor its insurance providers shall contribute to any settlements, defense costs, or other payments made by Lessee's insurance. All additional insured endorsements required by this Section shall include an explicit waiver of subrogation. If at any time during the life of the Lease, or any extension, Lessee fails to maintain the required insurance in full force and effect, this shall be deemed a material breach by Lessee entitling Lessor to its remedies under this Lease and at law. Any failure to maintain the required insurance shall be sufficient cause for Lessor to terminate the Agreement. Failure of Lessor or any of the additional insureds to report a claim under any insurance policy required by this Lease shall not prejudice the rights of Lessor, its officers, employees, agents, and representatives thereunder. Lessor, and its elected officials, officers, principals, employees, representatives, and agents shall have no obligation for payment of premiums because of being named as additional insureds under any policy. The following insurance is specifically required: A. Commercial Liability Insurance. Before this Lease is fully executed by the parties, LESSEE shall provide the City with a certificate of insurance as proof of commercial liability insurance with a minimum liability limit of One Million Dollars ($1,000,000.00) per occurrence combined single limit bodily injury and property damage, and Two Million Dollars ($2,000,000.00) general aggregate. Prior to the start of any construction on the Premises and continuing thereafter at all times while this Lease is in effect, LESSEE shall provide the City with a certificate of insurance as proof of commercial liability with a minimum liability of Two Million Dollars($2,000,000.00) per occurrence combined single limit bodily injury and property damage and Five Million Dollars ($5,000,000.00) general aggregate. For the purposes of this provision "construction" will include all aspects associated with development of any improvement on the Premises, including, without limitation, the delivery of equipment and materials, employees and/or contractors on the Premises, and all other aspects associated with construction of the improvements contemplated by this Lease. The certificate of insurance provided prior to construction shall replace any commercial liability certificate of insurance previously provided to the City hereunder.trilftMit n Yakima Airport—McAllister Field Master Ground Lease Agreement 15 This insurance requirement can be satisfied with a combination of commercial general liability insurance and excess or umbrella liability insurance coverage. If Lessee carries higher coverage limits, such limits shall be shown on the Certificate of Insurance and Endorsements and the City of Yakima and the Yakima Air Terminal, its elected officials, officers, agents, and employees shall be named as additional insureds for such higher limits. The certificate shall clearly state who the provider is, the coverage amount, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Lease. The policy and Endorsements shall name the City of Yakima and the Yakima Air Terminal, its elected and appointed officials, officers, agents, attorneys, volunteers and employees as additional insureds. The policy shall contain a clause providing that the provider will not cancel or change the policy without giving the Lessor prior written notice. The Lessee shall not cancel or change the insurance without first giving Lessor thirty (30) calendar days prior written notice. The insurance shall be with an insurance company or companies rated A-VII or higher in Best's Guide and admitted in the State of Washington. B. Property Insurance. Prior to the completion of construction of any improvement on the Premises, Lessee shall provide the Lessor with a certificate of insurance as proof of property insurance coverage in the minimum of Two Million Dollars ($2,000,000.00) covering loss of use or income due to damage to the subject Premises. The certificate of insurance and additional insured endorsement shall name the Lessor, its elected and appointed officials, employees, agents, attorneys and volunteers as additional insureds. The policy shall contain a clause providing that the provider will not cancel or change the policy without giving the Lessor prior written notice. The Lessee shall not cancel or change the insurance without first giving Lessor thirty (30) calendar days prior written notice. C. Course of Construction Insurance Coverage and Business Interruption Insurance Coverage. In the event Lessee makes improvements to the Premises which, under the Lessor's opinion requires Course of Construction Insurance Coverage and Business Interruption Insurance Coverage, Lessee also shall cause its general contractor to carry $300,000.00 of Course of Construction or Builder's Risk coverage for improvements being made by the Lessee and the existing structure, or more in the event Lessor deems it necessary to require a higher coverage for such improvements. Business interruption or loss of use coverage shall also be provided in an amount not less than $100,000.00, and in an amount agreed upon in advance by the City. The Lessor shall be named as a loss payee on said policies. Lessee shall provide the Lessor with,a certificate of insurance as proof that this insurance coverage has been met before construction on the Premises begins. E. Automobile Liability Insurance. Before this Lease is fully executed by the parties and to the extent Lessee has or will have any vehicles on the Premises or common areas, Lessee shall provide Lessee with a certificate of insurance as proof of automobile liability insurance and personal umbrella liability insurance with a minimum liability limit of Two Million Dollars ($2,000,000.00) per occurrence. The policy will apply to "Any Auto" and be shown on the certificate. The certificate shall clearly state who the provider is, the coverage amount, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Agreement. The certificate of insurance and additional insured endorsement shall name the Lessor, its elected and appointed officials, employees, agents, attorneys and volunteers as additional insureds. The policy shall contain a clause providing that the provider will not cancel or change the policy without giving the Lessor prior written notice. p .,,. Yakima Airport—McAllister Field Master Ground Lease Agreement 16 The Lessee shall not cancel or change the insurance without first giving Lessor thirty (30) calendar days prior written notice. The insurance shall be with an insurance company or companies rated A-VII or higher in Best's Guide and admitted in the State of Washington. The business auto liability shall include Hired and Non-Owned coverage if necessary. F. Employer's Liability (Stop Gap). The Lessee and any and all agents, employees, and representatives of the same shall at all times comply with all applicable workers' compensation, occupational disease, and occupational health and safety laws, statutes, and regulations to the full extent applicable, and shall maintain Employer's Liability insurance with a limit of no less than $1,000,000.00. Lessor shall not be held responsible in any way for claims filed by the Lessee or its employees, agents or representatives for services performed under the terms of this Lease. The Lessee agrees to assume full liability for all claims arising from this Lease including claims resulting from negligent acts of all agents, employees, and representatives. The Lessee is responsible to ensure subcontractor(s), agent(s), and representative(s) have insurance as needed. Failure of subcontractor(s), agent(s), and representative(s) to comply with insurance requirements does not limit the Lessee's liability or responsibility. 22. DAMAGE OR DESTRUCTION: A. Lessee Improvements: In the event construction completed in accordance with Section 11 and 12 herein, or improvements thereto, are partially or totally damaged by fire or other casualty, the Lessee shall repair or replace the same solely at its own expense. The new improvements shall be at least the same size, design and quality as that which existed prior to any damage or destruction. Both parties agree that any insurance proceeds shall be first applied to the cost of repair or replacement of improvements. Lessee's insurance proceeds shall first be used for the costs of restoration of the Premises; if the insurance proceeds are insufficient to completely repair the Premises then the remaining repair shall be completed at Lessee's sole cost and expense as necessary to restore the Premises to its pre-fire/casualty condition. B. Other Airport Property: In the event of damage or destruction of Airport property caused by the Lessee, its agents, employees, aircraft or other equipment, Lessee shall repair, reconstruct, or replace the affected property to the condition which existed prior to such damage or destruction. Lessee further agrees to cause such repair, reconstruction or replacement of affected property with due diligence and at the direction of Lessor. 23. DEFAULT, TERMINATION & FORFEITURE: A. The failure by Lessee to pay rent and fees in the amounts and at the times specified herein, or the failure by Lessee to otherwise comply with any term, provision or condition of this Lease, shall constitute grounds for termination of this Lease and forfeiture of all rent paid by Lessee to the time of termination. This Lease and tenancy shall terminate and rent paid shall be forfeited for cause as specified above on written notice by Lessor to Lessee stating the amount of rent in default or otherwise stating the manner in which Lessee fails or has failed to comply with this Lease. Lessee shall make full payment or otherwise comply with this Lease in the manner specified in the notice within thirty (30) days (except ten (10) days for payment of rent) from Lessee's receipt of such notice, otherwise this Lease and tenancy shall be terminated and rent forfeited. Lessor may apply the deposit funds to past-due rent owing, which amount when so applied shall be forfeited. Any required notice shall be given in writing and served on Lessee m.. : w r..... .. n a ,. Yakima Airport—McAllister Field Master Ground Lease Agreement 17 by personal delivery or mailed by certified mail with return receipt requested addressed to Lessee at its address stated below in this Lease or such other address as the parties may advise each other in writing. It is further agreed that after receipt of notices and as an additional condition to avoid forfeiture, Lessee shall pay Lessor's costs and expenses, including attorney's fees, for the preparation and service of such notice. Nothing contained herein shall release or diminish Lessee's obligation to pay rent for the full term of this Lease save such amount as Lessor recovers as rent from any subsequent lessee during the term of this Lease. Notices shall be deemed received three (3) days after mailing to Lessee at the address in this Lease or such other address as the parties may advise each other in writing. B. As additional and not alternative remedy, optional with Lessor and upon thirty (30) days written notice to Lessee, should Lessee be in default hereunder other than default in the payment of rent, Lessor may cure or correct the same and the cost of such action by Lessor shall immediately become due and payable from Lessee, together with late fees on said sum at a rate of twelve percent (12%) per annum, and the non-payment of said sum by Lessee shall be adequate grounds for Lease to invoke the other remedies as provided in this Lease, including, without limitation, termination of the Lease C. Subject to the terms of Section 14 herein, upon termination of this Lease for any reason, Lessee shall immediately surrender the Premises to the Lessor in good condition and repair, ordinary wear and usage excepted; and Lessee shall remove all of Lessee's personal property, trade fixtures, and equipment from the Premises and shall repair any damage to the Premises caused by such removal. Any personal property of Lessee, or anyone claiming under Lessee, which shall remain upon the Premises at the expiration or termination of this Lease shall be deemed to have been abandoned and may be retained by Lessor as Lessor's property or disposed of by Lessor in such manner as Lessor sees fit without compensation to any party. D. Upon default, the Lessor may, upon thirty (30) days (except ten (10) days for payment of rent) written notice to LESSEE: (1) Terminate the Lease and declare all Lessee's rights herein forfeited. Such notice of termination shall be given to the Lessee as set forth in Paragraph 29. Upon termination, the Lessor may immediately, without other notice of process of law, re-enter and take possession of the Premises using such force as may reasonably be necessary to move all persons and property therefrom. The Lessor shall not be liable for any damage or loss to property by reason of such forfeiture and re- entry. The Lessee agrees to pay to the Lessor a reasonable attorneys' fee and costs incurred for the purposes of enforcing any of the provision of this Lease. In addition, the Lessee shall be deemed to have forfeited its rental security or bond which shall be applied toward any damages incurred by Lessor for any such forfeiture or default. (2) Recover damages, immediately and, without waiting until the due date of any future rent or until the date fixed for expiration of the lease term, in the following amounts: a. The unpaid rent and other charges due from Lessee to Lessor up to and including the date of termination; and AV Yakima Airport—McAllister Field Master Ground Lease Agreement 18 b. The reasonable costs of reentry and reletting including without limitation the cost of any clean up, refurbishing, removal of Lessee's property and fixtures, or any other expense occasioned by Lessee's failure to quit the Premises upon termination and to leave the Premises in the required condition, any remodeling costs, attorney fees, court costs, broker commissions, and advertising costs; and c. All rent and charges that accrue as damages between the date of termination and the end of the term, or the re-let, whichever occurs first, together with the difference between the rent and charges paid during the re-let and the rent and charges that accrue as damages under this Lease. The foregoing remedies shall be in addition to and shall not preclude any other remedy available to Lessor under applicable law. 24. INSOLVENCY: In the event (a) Lessee is declared bankrupt by a court of competent jurisdiction; (b) Lessee makes an assignment for the benefit of creditors; (c) Lessee has a receiver appointed over it; or (d) Lessee's leasehold estate is subjected to execution to satisfy any judgement against Lessee, Lessor may immediately or at any time thereafter without notice or demand enter into and upon the Premises or any part thereof and repossess the same and expel Lessee or any person upon the Premise and remove their effects, and thereupon this Lease and the tenancy hereby created shall terminate, without prejudice to any remedies which might otherwise be available to Lessor for collection of past due, future rent, or damages. 25. VENUE & JURISDICTION: A. In the event of litigation to enforce the rights and obligations hereunder, venue shall lie in Yakima County. B. This Lease shall be governed by and construed in accordance with the laws of the State of Washington. 26. NON-DISCRIMINATION CLAUSE: Lessee, for itself, its representatives, employees, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree as follows: A. Lessee shall not discriminate in violation of any applicable federal, state and/or local law or regulation on the basis of race, age, color, sex, religion, national origin, creed, marital status, disability, honorably discharged veteran or military status, pregnancy, sexual orientation, political affiliation, or the presence of any sensory, mental or physical handicap, and any other classification protected under federal, state, or local law. This provision shall include but not be limited to the following: employment, upgrading, demotion, transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, selection for training, and the performance under this Lease. 1i"..s'1w f tar a ?.i7t 4 tL eg, Yakima Airport—McAllister Field Master Ground Lease Agreement 19 B. In the construction of any improvements on, over or under Lessor land and the furnishing of services thereon, no person shall be discriminated against on the basis of race, age, color, sex, religion, national origin, creed, marital status, disability, honorably discharged veteran or military status, pregnancy, sexual orientation, political affiliation, or the presence of any sensory, mental or physical handicap, and any other classification protected under federal, state, or local law. C. Lessee shall use the Premises in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Non-discrimination in Federally Assisted Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended. D. It is the policy of the Department of Transportation that minority business enterprise as defined in 49 CFR Part 23, i.e., firms owned and controlled by minorities; firms owned and controlled by women and firms owned and controlled by financially disadvantaged persons; shall have the maximum opportunity to participate in the performance of leases as defined in 49 CFR Section 23.5. Consequently, this Lease is subject to 49 CFR Part 23 as applicable. Lessee shall comply with this policy. E. Lessee shall comply with the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq. (ADA) and its implementing regulations and Washington State's anti-discrimination law as contained in RCW Chapter 49.60 and its implementing regulations with regard to the activities or services provided pursuant to this Lease. F. Lessee hereby assures that no person shall be excluded from participation in, denied the benefits of or otherwise discriminated against in connection with the award and performance of any contract, including leases, covered by 49 CFR Part 23 on the basis of race, age, color, sex, religion, national origin, creed, marital status, disability, honorably discharged veteran or military status, pregnancy, sexual orientation, political affiliation, or the presence of any sensory, mental or physical handicap, and any other classification protected under federal, state, or local law. Lessee hereby assures that it will include the above clauses in all sub-leases and cause sub- lessees to similarly include clauses in further sub-leases. 27. AIRPORT SECURITY AND ACCESS CONTROL: A. Vehicular or pedestrian access to any and/or all movement areas, whether active or inactive, is expressly prohibited by this Lease. For the purpose of this Agreement, a movement area is any runway or taxiway utilized for taxiing, takeoffs, and landings of aircraft, exclusive of aircraft loading ramps, aircraft parking areas, and aircraft aprons and tie down spaces. B. Access Identification (ID). Airport Administration will assign one (1) Yakima Air Terminal- McAllister Field identification card to the Lessee's Authorized Signatory only. The cost of the badge is dependent on costs associated with the requisite and mandated background check. Yakima Airport—McAllister Field Master Ground Lease Agreement 20 C. A request by the Lessee for an additional card(s) shall be made in writing stating through the Authorized Signatory providing the reason(s) or rationale why an additional card(s) is/are required. Any request for an additional card may or may not be approved by the Airport Director at their sole discretion. The minimum information required for the issuance of any additional card will include the name, local address, and contact phone number of the individual. The same fees outlined above are applicable for any additional badge. If any card is lost, stolen, or made unusable for any reason, the Lessee will pay the applicable fine and costs associated with the issuance of a new or replacement badge in effect at that time. D. The control and monitoring of access are paramount to Airport security. Accordingly, only authorized users with access to the Airport granted pursuant to this Agreement may hold an ID card to access the Airport. Lost or stolen Airport-issued access cards shall be reported immediately by any means possible to Airport Administration, whereupon the loss or theft will be recorded, and the card will be made"inactive". "Reported immediately" means within twenty-four (24) hours or the next business day, not including weekends or holidays. A new card may then be issued by Airport Administration bearing a number different from the one lost or stolen. E. Fraud and Intentional Falsification of Records. (1) No person may make any fraudulent or intentionally false statement in any application for any security program, access medium, or identification medium. (2) No person may make any fraudulent or intentionally false entry in any record or report that is kept, made or used to show compliance or exercise any privileges. F. Security Responsibilities. No person may: (1) Tamper or interfere with, compromise, modify, attempt to circumvent, or cause a person to tamper or interfere with, compromise, modify, or attempt to circumvent any security system, measure, or procedure. (2) Enter, or be present within a secured area without complying with the systems, measures, or procedures being applied to control access to, or presence or movement in such areas. (3) Use, allow to be used, or cause to be used, any Airport-issued or Airport-approved identification medium that authorizes the access, presence, or movement of persons or vehicles in secured areas in any other manner than that for which it was used by the appropriate authority. G. "Non-Movement Area OR Movement Area Certification of Training - Application for Permit to Operate Ground Vehicles at the Yakima Air Terminal-McAllister Field". Any person given vehicular access to the Airport shall be required to read, apply for and pass the test associated with the current edition of the Airport Driving Rules & Regulations document provided by the Airport to qualify for access to the Airport. A copy of the application and test will be kept in the Lessee's File. w Nmitikrutv,�",tit " x�n �s w�� _.,2� ,.` M Yakima Airport—McAllister Field Master Ground Lease Agreement 21 H. Airport Safety and Security. In the interest of Airport safety and security, in the event Lessee fails to abide by this Lease, the Airport Director is authorized by the City Council to immediately declare this Lease void, to cancel the same without any legal proceeding. 28. PRESENCE AND USE OF HAZARDOUS SUBSTANCES: All hazardous substances shall be stored in accordance with all legal regulations regarding storage of hazardous substances and Lessee shall store on or around the Premises only those amounts of hazardous substances that are necessary for maintenance and operation of aircraft and in no case in amounts greater than permitted by any legal regulation. "Hazardous substances" shall include those substances designated as, or containing components designated as hazardous, dangerous, toxic or harmful and/or which are subject to regulation by any federal, state or local law, regulation, statute or ordinance. For purposes of this Lease, all aircraft fuels shall be considered hazardous substances. A. With respect to any hazardous substance, Lessee shall: (1) Comply promptly, timely, and completely with all governmental requirements for reporting, keeping and submitting manifest, and obtaining and keeping current identification numbers; (2) Submit to Lessor true and correct copies of all reports, manifests and identification numbers at the same time as they are required to be and are submitted to the appropriate governmental authorities; (3) Within five (5) days of Lessor's request, submit written reports to Lessor regarding Lessee's use, storage, treatment, transportation, generation, disposal or sale of hazardous substances and provide evidence satisfactory to Lessor of Lessee's compliance with the applicable governmental regulations; (4) Allow Lessor or Lessor's agents or representatives to enter the Premises, after reasonable notice, to check Lessee's compliance with all applicable governmental regulations regarding hazardous substances; (5) Comply with minimum levels, standards or other performance standards or requirements which may be set forth or established for certain hazardous substances (if minimum standards or levels are applicable to hazardous substances present on the Premises, these levels or standards shall be established by an on-site inspection by the appropriate governmental authorities and shall be set forth in an addendum to this Lease); (6) Comply with all governmental rules, regulations and requirements regarding the proper and lawful use, sale, transportation, generation, treatment and disposal of Hazardous Substances. (7) Lessor shall have the right, at reasonable times and upon reasonable notice to Lessee, to inspect the Premises to monitor Lessee's compliance with this Paragraph. Lessee shall reimburse Lessor for any costs or expenses paid by ..ThWx. SrY TA:As: _, .27.1.r :%..r...$1; Yakima Airport—McAllister Field Master Ground Lease Agreement 22 Lessor to third parties (non-Lessor employees, including Lessor's retained inspectors, engineers, consultants, etc. or representatives of government entities). If an inspection reveals the use or presence of hazardous substances requiring clean-up or other action, then Lessee shall pay, as part of the clean-up costs incorporated in Section 28(B)(3) below, Lessor's actual costs, including reasonable attorney's fees and costs, incurred in making or providing for the clean-up required and any follow-up inspections. B. With respect to any cleanup costs, default and indemnification, Lessee shall: (1) Be fully and completely liable to Lessor for any and all clean-up costs and any and all charges, fees, penalties (civil and criminal) imposed by any governmental authority with respect to Lessee's use, disposal, transportation, generation and/or sale of Hazardous Substances, in or about the Premises. (2) Indemnify, defend and hold Lessor harmless from any and all costs, fees, penalties and charges assessed against or imposed upon Lessor including Lessor's reasonable attorney's fees and costs as a result of Lessee's use, disposal, transportation, generation and/or sale of hazardous substances. (3) Upon Lessee's default under this Paragraph, in addition to the rights and remedies set forth elsewhere in this Lease, Lessor shall be entitled to the following rights and remedies: a. At Lessor's option, to terminate this Lease immediately; and b. To recover any and all damages (including Lessor's expectancy and consequential damages) associated with the default, including, but not limited to clean-up costs and charges, civil and criminal penalties and fees, loss of business, sales and rents, by Lessor and any and all damages and claims asserted by third parties together with reasonable attorney's fees and costs. 29. OFFICIAL NOTIFICATIONS: All notices, requests and other communication under this Lease shall be effectively given only if in writing and sent by United States certified mail, returned receipt requested, postage prepaid, or by nationally recognized and receipted overnight courier service (e.g. FedEx, UPS, DHL, or Airborne Express) guaranteeing next business day delivery, addressed as follows: If to Lessor: AIRPORT DIRECTOR Yakima Air Terminal — McAllister Field 2406 W. Washington Ave, Suite B Yakima, WA 98903 (509) 575-6149 Yakima Airport—McAllister Field Master Ground Lease Agreement 23 If to Lessee: Makito Aviation 17521 44th Ave W Lynnwood, WA 98037 (408) 642-9964 bill@makitoaviation.com 30. INTEGRATION: This document embodies the entire Lease terms conditions and understandings between the parties with respect to the subject matter herein contained. No other understandings, oral or otherwise, regarding the subject matter of this Agreement, are deemed to exist or to bind either of the parties. 31. TIME IS OF THE ESSENCE: Time is of the essence of this entire Lease. 32. RECORDS, INSPECTION & PRODUCTION: Lessee shall maintain (in accordance with generally accepted accounting practices) books, accounts, records, documents and other materials ("Records") related directly or indirectly to the costs, expenses, and expenditures incurred and/or made pursuant to this Lease. The Records shall, at all times, be subject to inspection by and with the approval of Lessor. The making of (or failure or delay in making) such inspection or approval by Lessor shall not relieve Lessee of responsibility for performance in accordance with this Lease, notwithstanding Lessor's knowledge of defective or non-complying performance, its substantiality or the ease of its discovery. Lessee shall provide Lessor sufficient, safe, and proper facilities, and/or send copies of the requested documents to Lessor. The Lessee's Records relating to this Lease will be provided to Lessor upon the request of Lessor. Yakima Airport—McAllister Field Master Ground Lease Agreement 24 Lessee shall promptly furnish Lessor with such information and records which are related to this Lease as may be requested by Lessor. All records relating to the Lessee's obligations under this Lease must be made available to Lessor, and the records relating to the Lessee's obligations under this Lease are City of Yakima records. Such records must be produced to third parties, if required pursuant to the Washington State Public Records Act, Chapter 42.56 RCW, or by law. All records relating to the Lessee under this Agreement must be retained by the Lessee for the minimum period of time required pursuant to the Washington Secretary of State's records retention schedule. If any litigation, claim or audit is started before the expiration of the of the minimum period of time required pursuant to the Washington Secretary of State's records retention schedule, the records shall be retained until all litigation, claims, or audit findings involving the records have been fully resolved. The terms of this section shall survive any expiration or termination of this Agreement. 33. NO THIRD PARTY RIGHTS: This Lease is entered into for the sole benefit of the parties. It shall confer no benefits or rights, direct or indirect, on any third parties. No person or entity other than the parties hereto may rely upon or enforce any provision of this Lease. 34. COMPLIANCE WITH LAW: In addition to any other obligation under this Lease, Lessee shall comply with all applicable federal, state and local laws, rules and regulations in carrying out the terms and conditions of this Lease. 35. WAIVER OF BREACH: A waiver by either party hereto of a breach of the other party hereto of any covenant or condition of this Lease shall not impair the right of the party not in default to avail itself of any subsequent breach thereof. Leniency, delay or failure of either party to insist upon strict performance of any agreement, covenant, or condition of this Lease, or to exercise any right herein given in any one or more instances, shall not be construed as a waiver or relinquishment of any such agreement, covenant, condition or right. 36. MODIFICATIONS OR AMENDMENTS: The parties may modify this Agreement but no proposed changes or modifications shall have validity or become binding on either party unless such changes or modifications are in writing and executed by both parties. 37. SEVERABILITY: If a court of competent jurisdiction holds any part, term or provision of this Lease illegal or invalid in whole or in part, the validity of the remaining provisions shall not be affected, and the parties' rights and obligations shall be construed and enforced as if the Lease did not contain the particular provision held invalid. Further, if any provision of this Lease is in direct conflict with any statutory provision of the State of Washington, that provision in this Lease which may conflict shall be Yakima Airport—McAllister Field Master Ground Lease Agreement 25 deemed inoperative and null and void insofar as it may conflict, and shall be deemed modified to conform to such statutory provision. 38. SURVIVAL: Any provision of this Agreement which imposes an obligation after expiration or termination of this Agreement shall survive the expiration or termination and shall bind the parties. 39. RECORDING: A copy of this Lease or a memorandum of the same may be recorded with the Yakima County Auditor. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed by their respective authorized officers or representatives as of the day and year below. The term of the Lease commences on the date stated on the top of page 1, which is the date that all parties have executed the Lease. LESSOR: CITY OF YAKIMA Yakima Air Terminal—McAllister Field 2406 W. Washington Avenue, Suite B Yakima, Washington 98903 (509) 575-6149 - phone (509) 575-6185—fax COPY TO CITY OF YAKIMA—CITY MANAGER 129 North 2nd Street Yakima, WA 8901 B • Date: NOV OU Victoria Baker, Ci y Manager S VPKI , ATTES .. Rosalinda Ibarra, City Clerk s �o? CITY CONTRACT NO: RESOLUTION NO: - a d CO STATE OF WASHINGTON ) ) ss County of Yakima ) Yakima Airport—McAllister Field Master Ground Lease Agreement 26 I certify that I know or have satisfactory evidence that Victoria Baker signed this instrument, on oath stated that he is authorized to execute the instrument and acknowledged it as the City Manager of the City of Yakima, Washington to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Date NOV , DO 1 20-4 1/// By: /Q • (-Pi CA—) \ c.;i � SiON E,�ACF �' Notary Publi o the rStrte�YQf�Va hington �7 NOTARY �(r,%. Residing at: t�I� (-�L = NO.1o72s5 _ Appointment pires�.C t a)DS— PUBU� .• 1"1►Hill11 Yakima Airport—McAllister Field Master Ground Lease Agreement 27 LESSEE: Rachel Maclean Makito Aviation 17521 44th Ave W, Lynnwood, WA 98037 (42 802-6677 iL k � 1 ) i )21) NAME Date STATE OF WASHINGTON County of Yakima I certify that I know or have satisfactory evidence that ', A./ I / 'signed this instrument, on oath stated that they are authorized to execute the instrument on behalf of himself and tA,aAk0 kcsicsAa4 , a , and to be the free and voluntary act of such party fq u hctpurposes mentioned in the instrument. eliP•• ante s 7,i •4e- By: �ow _ Notary Public for the: tate of Washington Puss`° a Residing at: 6 /f/-< '•• • ••COMM ,."i°•� � Appointment Expires-, =t 1 2c -� .ck Yakima Airport—McAllister Field Master Ground Lease Agreement 28 EXHIBIT A - PREMISE I E - E - 1.1.1=MilliMil SCALE IN FEET, % \\ I ! \ \ E I ET - LE- - E - E- ,, , ... , BEN ,--- , E E IT FE E • • , 1 1 , Makito FBO Hangar First Right , , , .., Lease 2 of Refusal ,,..„ .,. , -,, trvx.,-, , Hoot • . RE,. i Fuel Farm 150k sq ft I Lease 1 L L _ - Makito FBO Makito FBO Hangar , ill 111 ,_,, Lease 2 Hangar _.1 I Lease 2 Richardson i Parcel Lease 3 ;',,,r.":"---. - . ' Ar............M ANNIMINew- tia Yakima Airport—McAllister Field Master Ground Lease Agreement GqG Mai.., ' • 111111111111 i X X , V i I _.____---11 -'' V , . , -1-7.:4,',2- :;:i7142? 7 , . . . 1 - , 1 i ___I1 1 i 1 i ,4,........... 1.,,_____ ,.. __. . 4,.._..... 4 . Ili, -., ...N 4 1 I / . \ . .„ ... . ,. __.... A .....-' , i /7/2.4 i . . , , , . . , ,__...,... .4 ._',._../i } Yakima Airport—McAllister Field Master Ground Lease Agreement 30 PROPOSED LEASE TRACTS Tract 1 Beginning at the southeast corner of the Northwest Quarter of Section 2.Township 12 North, Range 18 East,W.M.; thence North 90'00'00"West,reference bearing along the south line thereof,542.01 feet to a point hereinafter referenced as Point"A", thence continuing North 90'00'00"West,449.77 feet; thence North 00'19'55"West,883.21 feet to a point that lies on a fence,as said fence was located on November 5, 2024,and the Point of Beginning; thence continuing North 00'19'5S"West,289.14 feet to a point that lies on the southerly edge of a paved taxiway,as said pavement existed on November 5, 2024; thence South 89'20'47" East along the edge of said pavement,240.09 feet to an angle point; thence South 86'30'09" East along the edge of said pavement. 176.33 feet to an angle point; thence South 72°34'46"East along the edge of said pavement,66.45 feet to a point that lies North 01'09'10"East from the aforementioned Point"A"and 1139.17 feet distant therefrom; thence South 01°09'10"West,92.13 feet; thence South 89'47'26"West,276.89 feet; thence South 00°19'55" East, 145.18 feet to a point on the aforementioned fence; thence North 81'18'46"West along said fence,83.81 feet to an angle point; thence South 00°04'16"West along said fence,54.76 feet to an angle point; thence North 78'05'41"West along said fence, 119.55 feet to the Point of Beginning. "ract 2 Beginning at the southeast corner of the Northwest Quarter of Section 2,Township 12 North, Range 18 East,W.M.; thence North 90°00'00"West,reference bearing along the south line thereof,542.01 feet to a point hereinafter referenced as Point"A"; thence continuing North 90'00'00"West,449.77 feet; thence North 00'19'5S"West, 1208.66 feet to a point on the northerly edge of a paved taxiway,as said pavement was located on November 5,2024,and the Point of Beginning; thence continuing North 00'19'55" West, 337.42 feet to a point that lies on a fence,as said fence was located on November 5,2024; thence South 29'11'12" East along said fence,22.34 feet to an angle point; thence South 57'37'16"East along said fence, 304.59 feet to an angle point; thence South 89'30'34"East,218.01 feet to a point that lies North 01'09'10"East from the aforementioned Point "A"and v • � 1361.85 feet distant therefrom; �' thence South 01'09'10"West, 151.93 feet to a point on the northerly edge of the aforementioned paved taxiway, `. I' thence South 73'35'10"West along said pavement,22.25 feet to an angle `ss point; thence North 89'20'47"West along said pavement.459.80 feet to the of- u400, Point of Beginning. II/7/214 • Yakima Airport—McAllister Field Master Ground Lease Agreement 31 r:- � ljlt kiii I I II&1- ii! 'I!I/ ". . r J • • s . BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 7.1. For Meeting of: November 19, 2024 ITEM TITLE: Resolution approving Lease Agreement between the City of Yakima and Makito Aviation, LLC - Fuel Farm SUBMITTED BY: Robert Hodgman, Director of the Yakima Air Terminal SUMMARY EXPLANATION: The 2015 Airport Master Plan adopted by City Council identifies the need for additional hangar development in order to meet increasing demands within the aviation industry. The airport has property available for lease and the City of Yakima and Makito Aviation, LLC have negotiated a Lease that would authorize Makito Aviation, LLC to build a Fuel Farm that would provide fueling storage and aircraft fueling services. Future development includes a Fuel storage facility at the Yakima Air Terminal- McAllister Field, providing the aviation community with additional aircraft fueling abilities and fuel storage services. ITEM BUDGETED: N/A STRATEGIC PRIORITY 24-25: A Resilient Yakima RECOMMENDATION: Adopt Resolution. ATTACHMENTS: Makito Lease -YKM - Fuel Farm v9 Final.docx Resolution Fuel Farm final 99