HomeMy WebLinkAbout03/18/2008 07 Airport Property City/County Lease-Purchase Agreement BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 7
For Meeting Of /l 8/0$
ITEM TITLE: Consideration of resolution authorizing joint City /County lease- purchase
agreement for airport property
SUBMITTED BY: Dave Zabell, Assistant City Manager
CONTACT PERSON/TELEPHONE: Dave Zabell, 509 - 575 -6040
SUMMARY EXPLANATION: By operation of the Joint Air Terminal Operations
Agreement, the subject Lease With Option To Purchase Agreement requires approval of the
City of Yakima and Yakima County as joint owners of the Yakima Air Terminal. If approved
the agreement would provide for the lease of and potential for purchase of approximately one
. hundred acres of property adjacent to the Yakima Air Terminal (YAT) for purposes of potential
airport expansion and airport purposes.
The YAT Board is requesting this action on the part of the City and County as part of their
effort and planning toward protection of and provision for the future growth of the airport as
well as the safety of the surrounding public.
Resolution Ordinance Other (Specify)
Contract Mail to (name and address):
Phone:
Funding Source
APPROVED FOR SUBMITTAL: C City Manager
STAFF RECOMMENDATION: Staff recommends approval of the resolution.
BOARD /COMMISSION RECOMMENDATION:
COUNCIL ACTION:
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RESOLUTION NO. R -2008-
A RESOLUTION concerning the Yakima Air Terminal - McAllister Field, an agency of the
City of Yakima and Yakima County as joint owners; approving and
ratifying a Lease With Option To Purchase agreement for
approximately one hundred acres of property adjacent to the Yakima
Air Terminal for purposes of potential airport expansion and airport
purposes; agreeing to a lease for a specified period of time and
reserving an option to purchase said property at such time as the
owners of the Yakima Air Terminal and the Yakima Air Terminal Board
determine said purchase is appropriate and funding for said purchase is
identified.
WHEREAS, the Yakima Air Terminal (hereafter "YAT ") is an agency of the
City of Yakima and Yakima County, as joint owners of YAT; and
WHEREAS, YAT is managed by a Board appointed by the City of Yakima
and Yakima County, which Board's responsibilities include the operation and
preservation of the YAT, the oversight of necessary expansion and development of
the YAT and the protection of the land users, citizens and occupants on and around
the YAT resulting from the use of the YAT for aviation purposes; and
WHEREAS, the YAT Board, in an ongoing effort to fulfill its management
responsibilities, by signature of William Wheeler as Chairman of the YAT Board,
tentatively entered into a Lease With Option To Purchase agreement with Congdon
Development Company, LLC, a Washington limited liability company (hereafter
"Congdon ") on September 27, 2007 for the lease with option to purchase
approximately one hundred (100) acres of land lying adjacent to the west side of the
YAT property as legally described and in accord with the terms and conditions set
forth in said Lease With Option To Purchase agreement, attached hereto and
incorporated herein by this reference as Exhibit "A "; and
WHEREAS, on February 28, 2008 Chairman Wheeler's tentative acceptance
of said Lease With Option To Purchase was ratified by the full YAT Board during a
publicly noticed meeting of said Board, under the condition that said agreement
would not become effective until fully approved and ratified by the City of Yakima
and Yakima County legislative bodies representing the City and County ownership
interests in the YAT; and
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(jc)res/YAT- Congdon Lease 1
Option Agreement
WHEREAS, the City Council of the City of Yakima understands and agrees
with the YAT Board that it is important to the City and the best interest of the citizens
therein to protect, preserve and provide for the future growth of the YAT and to
provide safety to the citizens on and around the YAT that may be impacted by the
inherent hazards of aviation activities; and
WHEREAS, the Yakima City Council is the legislative body of the City of Yakima and
as such, by operation of the Joint Air Terminal Operations Agreement, must approve land
acquisitions proposed by the YAT and reserves the right to do so under the terms of the
attached and incorporated Lease With Option To Purchase agreement prior to any exercise
of the purchase option included within said agreement, which approval of purchase is not
herein conveyed by action of approval and ratification of this lease- option agreement but
rather must be accomplished through a further specific purchase approval process; and
WHEREAS, the Yakima City Council finds it to be in the best interests of the City to
approve and ratify the attached and incorporated Lease With Option To Purchase for the
purpose of leasing the property as legally described in said agreement and reserving an
opportunity to later consider purchase of said property by further legislative action; Now,
Therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The attached and incorporated Lease With Option To Purchase agreement identified
as Exhibit "A" is hereby approved and ratified for the purpose of leasing the property as
legally described in said agreement and reserving an opportunity to later consider purchase
of said property by further legislative action.
ADOPTED BY THE CITY COUNCIL this day of _, 2008.
ATTEST: David Edler, Mayor
City Clerk
(jc)res/YAT- Congdon Lease 2
Option Agreement
LEASE WITH OPTION TO PURCHASE
EFFECTIVE DATE: May 1, 2007.
PARTIES: Congdon Development Company, LLC, a Washington
limited liability company, hereinafter "Lessor,"
Yakima Air Terminal - McAllister Field, an agency of the
City of Yakima and Yakima County, Washington,
hereinafter "Lessee" when referencing the entity, and the
"Airport" when referencing its public function.
RECITALS: Lessor owns certain vacant real property in close
proximity to Lessee, being Yakima County Assessor's
Parcels 181334- 44001, 181334 - 42002, and 181335 - 33001,
comprising approximately 100.38 acres (the "Property ").
The legal description for the Property is set forth on the
attached Exhibit "A ". For several years Lessor and
Lessee have been working in good faith towards a means
by which Lessee could acquire the Property for utilization
in conjunction with future development of the Airport,
together with protection of land users and occupants from
the inherent hazards of aviation. In order to provide
Lessee the opportunity to obtain Federal Aviation
Administration ( "FAA ") approval and funding for this
acquisition, the parties have agreed to enter into a
landlord/tenant relationship with regard to the Property,
granting Lessee the option of purchasing, the Property
during the lease term if, and when, FAA approval and
funding is forthcoming, all in accordance . with the terms
and conditions set forth hereinbelow.
NOW, THEREFORE, in consideration of the mutual rights and obligations
contained herein, the parties agree as follows:
1. Description of Leased Property: The real estate situate in the
County of Yakima, State of Washington, consisting of approximately 100.38 acres,
more or less, and more particularly described on the attached Exhibit "A" attached
hereto, shall be referred to herein as the "Property."
2. Term of Lease: This Lease shall commence on May 1, 2007, and,
shall terminate at midnight on May 31, 2010, provided, however, that the Lease
shall automatically renew for successive one -year terms, subject to the parties'
rights to terminate as set forth in Paragraph 11, below.
3. Rent: Lessee shall pay to Lessor, as rent for the Property the sum of
$5,000.00 per year payable on, or before, June 1 of each year during the lease,
beginning June 1, 2007, for the 2007 -08 lease year; provided, however, that the
Lease price shall increase five percent (5 %) per annum on each anniversary, May 1,
of the Lease, commencing May 1, 2008.
4. Taxes, Assessments and Utilities: Lessee agrees to pay all real
estate taxes and assessments levied against the Property, and Lessee agrees to pay
for all utilities, water, and other services used on or in connection with the said
Property, as well as all personal property taxes and other charges to Federal, State •
or Municipal governments or agencies, incurred in connection therewith, all of the
same to be paid promptly when due.
5. Care and Maintenance of the Property: Lessee has inspected the
property and accepts it in its present condition. Lessee shall not commit or permit
waste, damage or injury to the Property. Lessee shall keep the grounds in good
order and not let or permit any rubbish to be deposited upon it. Lessee shall make
no alterations, additions or improvements in or to the Property without Lessor's
prior written consent.
6. Indemnity, Property /Liability Insurance: Lessee agrees to and
shall defend, indemnify, and save Lessor harmless from any and all loss, liability
and expense of any kind which may be incurred by reason of any accident, damage,
or injury arising from or in any way growing out of the use, misuse, or neglect of the
subject Property; provided that such indemnity shall not apply to any act of Lessor
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or negligence on the part of Lessor. Lessee shall promptly notify Lessor of
casualties or accidents occurring on the Property. Lessee shall carry general
liability insurance coverage with a minimum limit of $1,000,000 per occurrence,
covering the Property, and including coverage for anyone injured on the Property.
All liability insurance policies shall name Lessor as an additional insured and the
property insurance shall naive Lessor as the sole named insured and shall be with
companies and with loss -payee clauses reasonably satisfactory to Lessor. Copies of
all policies or certificates evidencing such insurance shall be delivered to Lessor by
Lessee prior to Lessee's occupancy of the Property. All policies shall bear
endorsements requiring thirty (30) days written notice to Lessor prior to any change
or cancellation.
7. Hazardous Substances: Lessor hereby represents that to the best of
Lessor's actual knowledge, the Property is not now contaminated with any
411 hazardous substance and Lessor agrees to indemnify, defend and hold Lessee
harmless from any and all loss, liability, damage, expense, injury and claims of any
sort whatsoever, involving directly or indirectly the presence on, or under, or the
discharge or release from the Property of any hazardous substance occurring prior
to the commencement date of this Lease. Lessee agrees that it shall not dispose of
or otherwise allow the release of any hazardous substance in, on or under the
Property, except that Lessee may during the term of this Lease bring onto and use
on the Property those chemicals that are customarily used to control weeds and
noxious plants, provided that all such chemicals are used and disposed of in a
manner which fully complies with all applicable federal, state or local statutes,
regulations, rules or ordinances now or hereafter in effect, including, but not limited
to, Federal Comprehensive Environmental Response, Compensation, and Liability
Act (" CERCLA ") and the Washington Model Toxic Control Act, RCW Chapter
70.105D. Lessee acknowledges that it will be. solely responsible for all costs and
expenses related to the clean -up of hazardous materials on the premises resulting
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from Lessee's use or possession of the Property. The phrase "to the best of Lessor's
actual knowledge" shall mean the actual knowledge of Clifford Adams.
8. Encumbrances — Liens: Lessor shall timely discharge any
mortgages, encumbrances or other liabilities created by Lessor affecting the
Property: Lessee shall not suffer or create any liens of any kind against the
Property.
9. Assignment — Subletting: Lessee shall not assign or otherwise
transfer any interest in this Lease or any part of the Property, without first
obtaining Lessor's written consent which shall not be unreasonably withheld or
delayed. No transfer shall relieve Lessee of any liability under this Lease
notwithstanding Lessor's consent to such transfer. Consent to any transfer shall
not operate . as a waiver of the necessity for Lessor's consent to any subsequent
transfer. In the event such approval is sought, Lessor also hereby notifies Lessee
that the reason the below market rental rate of $5,000 per year, for over 100 acres,
has been chosen is in the interest of allowing Lessee to pursue necessary approvals
and funding sources during the lease term in order to purchase the Property, not to
create an additional profit source for Lessee through assignment or subletting.
Therefore, Lessor shall require, as a condition to assignment or subletting that
rents in excess of $5,000 per year for any such assignment or subletting be assigned
to Lessor.
10. Option to Purchase: Provided that Lessee is not in default
hereunder, during the Lease term Lessor hereby grants to Lessee the right and
option to purchase the subject Property, under the following terms and conditions:
10.1 The Purchase Price shall be Two Million Seven Hundred Fifty
Thousand Dollars ($2,750,000.00), payable all cash at closing, subject to
adjustments as follows, and provided, that Lessor will agree to consider, in good
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faith, reasonable terms for an installment purchase offered by Lessee, at an interest
rate mutually agreeable, over a term not to exceed five years.
10.1.1 The purchase price shall be increased three percent (3 %)
on each anniversary, May 1, of the Lease, commencing May 1, 2008.
10.1.2 The purchase price shall be increased by the "'value -
added" for the extension of any sewer, water, or other utilities to the Property or for
any improvements made to the Property, not made by Lessee, between the effective
date of this agreement and the closing date. If the parties are unable to agree upon
the "value- added" for any such utilities or improvements, the increase in the
purchase price shall be determined by appraisal. Lessee shall first submit its figure
for value -added to Lessor from its appraiser, and if Lessor disagrees it shall obtain
its own appraisal, the two appraisers chosen by the parties shall select a third
appraiser who shall also calculate the value - added, and the party coming closest to
the third appraiser shall prevail with respect to its determination of value - added,
and the non - prevailing party shall also be responsible for payment of the third
appraisers fee. In the event Lessee gives notice of its intent to purchase hereunder
it shall, at the same tine, deliver its appraisers calculation of the "value- added ",
and Lessor shall notify Lessee within fifteen (15) days whether it accepts Lessee's
figure.
10.2 As a condition for the exercise of Lessee's option to
purchase hereunder, Lessee shall diligently pursue all reasonably necessary
approvals and financing means to purchase the Property within the Lease term, or
any extension thereof, shall give the attainment of all such approvals its highest
priority in terms of land acquisitions, and shall submit semi - annual written
progress reports to Lessor, beginning June 1, 2007, with regard to steps taken, and
to be taken, to secure such approvals, and a timetable for their completion. In the
event Lessee should reasonably determine during the Lease term that it will be
unable to procure the necessary approvals and/or financing for acquisition of the
Property, it shall provide written notice thereof to Lessor, in which event either
party may treat such notice as grounds for immediate termination of the Lease
under Paragraph 11.
10.3 To exercise the purchase option, Lessee shall notify
Lessor in writing, within forty -five (45) days of the intended closing date,
whereupon Lessor shall immediately apply for a preliminary commitment for an
ALTA Standard Form Owners Policy with a mutually agreeable title company,
Said preliminary commitment and the title policy to be issued shall contain no
exception other than those provided for in said standard form and conveyance shall
be by Statutory Warranty Deed. Closing shall occur at the mutually agreed upon
title company, closing costs to be apportioned between the parties as is the custom
in Yakima County, Washington, with Lessor paying for the standard policy of title
insurance, real estate excise tax due on the transaction, and any additional costs or
taxes that may be clue should the property be removed from Open Space, or similar
classification.
10.4 Lessee's option to purchase shall not preclude Lessor from
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negotiating purchase and sale of the subject Property with other parties. If Lessor
receives a written offer to purchase during the Lease term, or any extension thereof,
and before receipt of notice of Lessee's exercise of its option rights, which Lessor
wishes to accept, it shall give Lessee thirty (30) days written notice of Lessors intent
to accept, within which time Lessee may give notice of its exercise of its option to
purchase under the terms set forth hereinabove. If Lessee fails to give such notice,
or closing thereon does not occur within forty -five (45) days thereof, through no fault _
of Lessor, then Lessor shall be permitted to complete closing on the third party
offer, provided such closing occurs within ninety (90) days of Lessors notification to
Lessee of its intent to accept such offer. Upon any such third party sale, this Lease
shall terminate, and Lessee and any persons deriving rights or interests in the
Property through Lessee shall be required to immediately vacate and surrender
possession of the Property to Lessor. Notwithstanding the foregoing, this
subsection 10.4 shall not be exercisable by Lessor prior to October 1, 2008, in order
to provide Lessee with reasonable time to seek financing to purchase the Property.
11. Default - Cancellation Right. Lessor may cancel this lease for any
breach of the terms hereof by giving Lessee thirty (30) days within which to cure the
breach or default following written notice of the breach or default claimed by Lessor.
The parties may also cancel the lease by providing written notice to the other party
of intent to terminate the Lease at the end of the then current term, or extension
thereof, with such notice to be delivered not less than ninety (90) days prior to the
end of the then current term, provided, however, that should Lessee reasonably
determine during the Lease term that it will be unable to procure necessary
approvals and/or financing for acquisition of the Property, providing written notice
thereof to Lessor, pursuant to Subparagraph 10.2 above, then either party may
treat such notice as grounds for immediate termination of the Lease. Upon
cancellation, Lessee and any persons deriving rights or interests in the Property
through Lessee shall immediately vacate and surrender possession of the Property
to Lessor.
12. Inspection: Lessor and its authorized representatives shall have the
right to enter upon the Property at all reasonable times for purposes of inspection.
13. Notices: All notices required under this Lease to be given to either
party shall be effective if mailed by certified mail, return receipt requested, postage
pre -paid, and properly addressed to the parties at the address shown below their
signature lines hereto or as the same may be changed from time to time upon
written notice to the other party. Such notices shall be effective as of the date of
mailing, as evidenced by the official United States Post Office date and time stamp
on the said return receipt.
To Lessor: To Lessee:
Congdon Development Company, LLC Yakima Air Terminal
1155 Camino Vallecito McAllister Field
Lafayette, CA 94563 2400 W. Washington Ave.
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Attn: Clifford Adams Yakima, WA 98903
Attn: General Manager
With a copy to: With a copy to:
Michael F. Shinn
1433 Lakeside Ct., Suite 100
Yakima, WA 98902
14. No Waiver: No waiver of any term, condition, default, or breach of
this Lease shall be effective unless in writing and executed by the party making
such waiver; and no such waiver shall operate as a waiver of such term, condition,
or default on any other occasion, or any other term, , condition, or default of this
Agreement. No delay or failure to enforce any provision of this Lease shall operate
as a waiver of such provision or any other provision herein or in any document
related hereto.
15. Binding Effect: This Lease and the terms, covenants, benefits, and
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duties set forth herein shall inure to the benefit of and be binding upon the parties,
their permitted heirs, successors, and assigns.
16. Attorney Fees and Venue: In the event any legal action is
instituted through an attorney by either party to enforce the terms of this Lease,
the prevailing party therein, in addition to the costs allowed by law, shall recover a
reasonable sum as attorneys' fees, all of which the other party agrees to pay. The
venue of any such court action shall lie in Yakima County Superior Court, Yakima
County, Washington. Each of the parties will pay their own legal and other fees
and expenses incurred incident to the review and preparation of this Lease and for
any sale that may ultimately occur hereunder.
17. No Brokerage Fees: Each of the parties represents to the other that
there are no brokerage or finder's fees payable in connection with this transaction.
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EXECUTED this 5 4 day of S ` l ktAilt20/1-,, 2007.
LESSEE:
YAKIMA AIR TERMINAL - McALLISTER FIELD
/042
William Wheeler, Board Chairman
LESSOR:
CONGDON DEVELOPMENT COMPANY, LLC
By Congdon Orchards, Inc., Manager
le ttat44 ,-
By: Cli:.Ir, S. Adams, Chairman. and CEO
. STATE OF WASHINGTON )
)ss.
County of Yakima )
I certify that I know or have satisfactory evidence that William Wheeler, is
the person described in and who is the Chairman of YAKIMA AIR TERMINAL -
McALLISTER FIELD, the agency that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said
agency, for the uses and purposes therein mentioned, and on oath stated that he is
authorized to execute the same instrument on behalf of the corporation.
Given under my hand and official seal this S day ofge 0 2007.
J of
NOTAR�� i:. C in and for the State
\ ��� �p r y,, of Washifigton, residing atyrxki`ma L'
Ecni. M Cerruq, �tr�
November i,auo7 : Z
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My commission Expires: i D
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STATE OF WASHINGTON )
)
County of Yakima )
I certify that I know or have satisfactory evidence that CLIFFORD S.
ADAMS, is the person who appeared before me and is the Chairman and CEO of
CONGDON ORCHARDS, INC., Manager of CONGDON DEVELOPMENT
COMPANY, LLC, the limited liability company that executed the foregoing
instrument, and acknowledged the said instrument to be the free and voluntary act
and deed of said limited liability company, for the uses and purposes therein
mentioned, and on oath stated that he is authorized to execute the same instrument
on behalf of said corporation and said corporation is authorized to execute the same
on behalf of the limited liability company. G
Given under my hand and official seal this 4- .r. y o — ! <
All
STATE OF WASHINGTON Agt�isliat...
MICHAEL F. SHINN NO 'Y P ► : and for tae State
NOTARY PUBLIC
COMMISSION EXPIRES
of I ashington, residing at 4,..i .
FEBRUARY 12, 2804 /'y commission Expires: -
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Exhibit "A"
(181334- 44001)
The Southeast 1/4 of the Southeast 1/4 of Section 34, Township 13 North, Range 18
E.W.M., records of Yakima County, Washington.
(181334- 42002)
The Northwest 1/4 of the Southeast 1 4 of Section 34, Township 13, Range 18 E.W.M.,
records of Yakima County, Washington;
EXCEPT the East 20 feet deeded to Yakima County by deed recorded in Volume
358 of Deeds, under Auditor's File Number 955489;
AND EXCEPT beginning at the Northwest corner of the Northwest 1/4 of the
Southeast 1/ of Section 34, Township 13 North, Range 18 E.W.M.; thence easterly
along the North line of said subdivision. 1,320 feet more or less to the Northeast
corner of the Northwest 1 / of the Southeast 1/4 of Section 34, Township 13 North,
Range 18 E.W.M.; thence southerly along the easterly line of said subdivision,
511.03 feet; thence North 70 °03' West 1,402.4 feet, more or less, to the westerly line
of said subdivision; thence northerly along the westerly line of said subdivision 37.1
feet, more or less, to the Point of Beginning.
(181335- 33001)
Beginning at the Northeast corner of the West 1 /2 of the Southeast 1 /4 of the
Southwest 1/ of Section 35, Township 13 North, Range 18 E.W.M., records of
Yakima County, Washington; thence South 87 feet; thence southwesterly to a point
95 feet North of the Southwest corner of the section; thence North to the Northwest
corner of the Southwest % of the Southwest 1/4; thence East to the Beginning;
EXCEPT beginning 300 feet West of the Northeast corner of the Southwest 1/4 of the
Southwest %; thence South 70 °03' East 740 feet, more or less, to the northwesterly
line of the Municipal Airport; thence northeasterly along said property line to a
point 87 feet South of said subdivision; thence North 87 feet; thence West to the
Point of Beginning.
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