Fill and Sign the No Lease Renewal Form

COMMISSION MEMBERS: PETE BROWN JEFF HELMERICKS DAVID EARL ALLAN LINN MIKE MEEKIN JOYCE MOMARTS JOHN LEE AIRPORT ADVISORY COMMISSION MEETING 7 P.M. THURSDAY, MAY 28, 2009 CITY COUNCIL CHAMBERS 231 W. EVERGREEN AVENUE, PALMER www.cityofpalmer.org EX-OFFICIO MEMBER: CHRIS GATES, AIRPORT MANAGER AIRPORT ADVISORY COMMISSION AGENDA A. Call to Order B. Roll Call C. Pledge of Allegiance D. Approval of Agenda E. Audience Participation F. New Business: 1. Palmer Municipal Airport Master Plan – Lease Form discussion 2. Palmer Municipal Airport Master Plan – Ordinance Change discussion 3. Palmer Municipal Airport Master Plan – Appraisal discussion 4. Palmer Municipal Airport Master Plan – City Council Comments/tasks 5. Palmer Air Fair – Update 6. FAA Airport Assurances - Compliance project G. Managers Report H. Audience Participation I. Commission Member Comments J. Adjournment City of Palmer, Alaska May 28, 2009 City of Palmer, Alaska Memo To: Airport Advisory Commission From: C.H. Gates, Airport Manager CC: City Manager Date: 5/26/2009 Re: Appraisals for Airport Rate Setting The City of Palmer is ready to determine Fair Market Rental rates for its leased and leasable land. We have delayed initiating an appraisal: 1. Until we could use it for FAA Compliance purposes (determining FMR (Fair Market Rental) for aeronautical and non-aeronautical use land), 2. Until we could use it for setting new lease rates –and lease update rates according to recent suggestions contained in our Master Plan, and 3. until we had some indication from the Palmer City Council that they were comfortable with the general direction and tone of the Airport Master Plan. (Based on their comments at the Special Meeting of May 19, 2009 I believe that we have that direction.) I plan to initiate an appraisal for both FAA Compliance and 2009 lease rate setting. Your comments will help me to articulate the proper appraisal question to our appraiser. Discussion: The 2008 FAA compliance inspection suggested that there were parcels of FAA purchased land that were not being used for aeronautical purposes. After review, the City concurred with some of their determinations and disagreed with others. Since we do believe that some of FAA purchased land is being used for nonaeronautical purposes we need to set a Fair Market Rental and immediately change our invoice for those parcels – (along with seeking formal permission from the FAA to use the land for non-aeronautical purposes.) Towards this end we are ready to determine what the non-aeronautical use Fair Market Land Rental rate should be. Also, we are ready to get a Fair Market Rental rate for land that is being used properly for aeronautical uses. This will allow us to make sure that our $.06/ft2 rate is, in fact an incentive rate for airport leases. Two issues remain. Our Master Plan consultant, as you will note below, suggests obtaining one number for aeronautical use land at the airport, and another number for non-aeronautical use land. This was the process used by the state to set the lease rate implementation schedule for +250 rural Alaska airports in 2007. These two numbers could be used to set new lease rates and to update lease rates for 6 year intervals – using CPI adjustments between ‘re-appraisals.’ Another view would be to perform individual appraisals on each lot at the airport –both currently leased and vacant land. The individual appraisals would be expensive, but may establish a more accurate estimate of Fair Market Rental than performing an airport wide appraisal. The question is should we do one ‘Master Appraisal’ or many individual appraisals? 1 The second issue is best explained using an excerpt from a note that Commissioner Lee sent earlier this month: “…the FMR (Fair Market Rental) is still an unknown and it is the basis for just about any revenue calculation / budget balance. I understand it is being done by an isolated appraisal method rather than by consideration of competitive responses. That really concerns me as to the eventual marketability of airport leases.” Commissioner Lee asks the very good question – do we want an appraisal of the Fair Market Rental of the land – just looking at Palmer development costs and comparables, or should we ask the appraiser to evaluate the Fair Market Rental of Palmer Airport land in light of what other airports are charging – in addition to Palmer specific attributes – marketability, cost to develop, distance from users, etc. The City would appreciate your comments. 1. Master Airport appraisal for aeronautical and non-aeronautical, or individual appraisals on each leased and leasable lot on the airport, and 2. Establish FMR looking at Palmer specific data, or Palmer specific data and “consideration of competitive responses” (the responses of possible lessees in light of competition with other airports.) Below are excerpts from our Master Plan consultants with regard to appraisals: Our master Plan Consultant wrote: Regarding Lease Rates: Having lower land rent for aeronautical leases than other comparable public airports in the area would be a competitive advantage for Palmer in marketing its airport. But, airport self-sufficiency must still be achieved. A solution consistent with the FAA’s policies would be to (1) establish, by appraisal, the FMR for aeronautical use land on the airport; (2) adopt a rental rate that is discounted below FMR. The amount of the discount should be calculated to result in a rate that is equal to, or lower than, those of competing airports without jeopardizing Palmer’s financial self-sufficiency; “ Regarding Lease updates: A more efficient and cost-effective approach is to conduct an airport-wide appraisal every five years (not necessarily timed to coincide with any particular lease), in which the fair market rent (FMR) is determined for all occupied lease lots and vacant land that’s available for lease. The FMR thus determined is used to establish the rent for all new leases and for all five-year rent adjustments that become due within the first year following the date of the appraisal. Annually thereafter, the FMR is adjusted up or down according to generally accepted inflation index (Consumer Price Index, etc.). The resulting figure is used to establish the rent for all new leases and for all five-year rent adjustments that become due during the second year; and so on, until a new appraisal is conducted again in the sixth year. An airport-wide appraisal of all lots is usually a great deal less expensive than the aggregate total of a series of individual lease appraisals. The existing option for the lessee - to present a counterappraisal for the City’s consideration- can be continued under this alternative. However, because the City rent adjustment would be appraisal-based, it’s unlikely that many lessees would submit a counter-appraisal because of the cost of an individual lot appraisal and the small chance to achieve any significant rental savings.  Page 2 City of Palmer, Alaska Memo To: Airport Advisory Commission From: C.H. Gates, Airport Manager CC: City Manager, Bill Allen Date: 5/26/2009 Re: Lease Form Discussion Attached is the last draft of a revised lease form that we received from our Master Plan consultants. My hope for our upcoming May and June meetings are to have you review this form and let me know what issues need to be addressed or improved. I will make a short presentation about the form and our goals at the start of our discussion. 1 Land Lease Form Palmer Municipal Airport 5/10/09 draft PALMER MUNICIPAL AIRPORT LEASE OF AIRPORT LAND THIS LEASE AGREEMENT, entered into this ________ day of ___________, 20__, by and between the CITY OF PALMER, 231 West Evergreen, Palmer, AK 99645 (“City”) and __________________, whose address is _________________________________ ("Lessee"). Definitions For the purposes of this Lease the following terms are defined as follows: 1. Airport - the Palmer Municipal Airport, including all the runways, taxiways, aprons, and all Cityowned real estate located within the boundaries of the Airport as described in MSB Plat:________. Airport Manager – the official to whom the City Manager of the City has delegated the authority 2. and responsibility of managing and directing the activities of the Airport. “Airport Manager” includes that person’s authorized representative. 3. City - the City of Palmer, Alaska, a home rule municipal corporation of Alaska. 4. City Manager - the official to whom the Palmer City Council has delegated the responsibility of managing and directing all operating departments of the City of Palmer, Alaska. 5. Contamination - the unpermitted presence of any Hazardous Substance. Environmental Assessment - an assessment of property, prepared in a manner consistent with 6. generally accepted professional practices, that is supported by reports and tests that determine the environmental condition of property and the presence, type, concentration, and extent of a Hazardous Substance in, on, and under the surface of the property. 7. Environmental Law - any applicable federal, state, or local statute, law, regulation, ordinance, code, permit, order, decision, judgment of any governmental entity relating to environmental matters, including littering and dumping. 8. Environmental Liability Baseline - a document based on an Environmental Assessment that identifies Contamination in, on, or under the surface of the Premises that was neither caused nor Materially Contributed To by the Lessee, nor assumed by the Lessee by reason of assignment. If an Environmental Assessment determines the presence of Contamination in, on, or under the surface of the Premises that was Materially Contributed To by the Lessee, the Environmental Liability Baseline will include only that portion of the Contamination not caused or Materially Contributed To by the Lessee or the Lessee’s operations, nor assumed by the Lessee by reason of assignment. 1 City: _____ Lessee: _____ Land Lease Form 9. Palmer Municipal Airport 5/10/09 draft FAA – the abbreviation for the Federal Aviation Administration. 10. Hazardous Substance - any substance that is defined under an Environmental Law as hazardous waste, Hazardous Substance, hazardous material, toxic, pollutant, contaminant, petroleum, petroleum product, or oil. 11. PMC – the abbreviation for the Palmer Municipal Code. 12. Materially Contributed To - to cause the release or migration of a Hazardous Substance in a reportable quantity as defined under applicable Environmental Law. 13. Permanent Improvement - a fixed addition or change to land that is not temporary or portable, including a building, building addition, gravel fill, paving, retaining wall, storage tank, and well. Article I Premises Leased a. PREMISES: In consideration of Lessee’s payment of the rents and performance of all the covenants of this Lease, the City leases to the Lessee, and the Lessee leases from the City, the following described property (“Premises”) in the Palmer Recording District, State of Alaska and located on the Airport; to wit: Lot___, Block ___, ______________________as shown on the attached drawing, designated as Exhibit A., or Metes and Bounds: b. NO WARRANTY: Except as may be provided in this Lease, the City makes no specific warranties, expressed or implied, concerning the condition of the Premises including its title, survey, soils, utilities, wetlands, access, and suitability for any use including those authorized by this Lease, its environmental condition, or the presence or absence of Hazardous Substances in, on, and under the surface. The Lessee takes the Premises on an “as is” basis, and without warranty, subject to any and all of the covenants, terms, and conditions affecting the City's title to the Premises. 2 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft Article II Rights and Uses a. AUTHORIZED USES 1. USE OF PREMISES: The City authorizes the Lessee to use the Premises for the following FAA-defined aeronautical uses: Lessee agrees to continuously maintain a FAA approved “Aeronautical Use” of the parcel. The FAA defines Aeronautical use as : An activity which is either a direct, supportive, or complementary aeronautical activity. Lessee must investigate and determine if their proposed operation meets the FAA definition of Aeronautical Use. (NOTE: The description of land uses the City authorizes should be clear and explicit. For example, if the City approves the applicant’s proposal to operate air carrier and aircraft repair businesses on a lot, don’t say the authorized use is “a commercial aviation business”. Instead, the City’s authorization should be explicit and clear, such as: “the operation of an air carrier business providing cargo and passenger services, and an aircraft repair business providing aircraft maintenance and repair services”.) CONTINUOUS OPERATIONS: Unless the City approves otherwise in writing, the 2. Lessee will operate its business on the Premises on a continuous basis, uninterrupted by any period of closure over 60 consecutive days or 140 aggregate days within any 12-month period of the term of this lease. The Lessee will give the City written notice before closing the Lessee’s business on the Premises for more than 30 consecutive days. The notice must state the reason for the closure and the date on which the Lessee will re-open for business. This provision does not apply to any period during which the Lessee is unable to operate its business as a result of an act or directive of the City, or as a result of a closure of the Airport or loss of the Lessee’s buildings on the Premises due to fire or natural disaster. (Something like Provision #2 above should be included in all commercial leases, but especially in leases issued for aviation business purposes. Although inactive aviation businesses may continue to pay rent, it is not in an airport’s long-term best interest to have inactive businesses tying up land. Inactive leaseholds do nothing to foster activity in the economy of the airport or the local community. More importantly, they tend to give the airport a depressed look that discourages other potential aviation businesses from investing in new facilities and operations on the airport. A continuous operations provision also strengthens the City’s financial recovery position if the lessee files bankruptcy.) 3 City: _____ Lessee: _____ Land Lease Form b. Palmer Municipal Airport 5/10/09 draft RIGHTS RESERVED TO THE CITY. 1. RIGHT TO GRANT TO OTHERS: The City reserves the right to grant to others any rights and privileges not specifically granted to the Lessee. The rights and privileges granted to the Lessee in this Lease are the only rights and privileges granted to the Lessee by this Lease. 2. EASEMENTS: The City reserves the right to make grants to third parties or reserve to the City easements or rights of way through, on, or above the Premises. Without the Lessee’s written grant or consent, the City will not grant or reserve any easement or right of way that unreasonably interferes with the Lessee’s authorized use of the Premises. 3. INGRESS, EGRESS AND INSPECTION: The City reserves the right of ingress to and egress from the Premises and the right to enter any part of the Premises, including buildings, for the purpose of inspection or environmental testing at any time. Except in the case of an emergency, all inspections and environmental testing will be coordinated with the Lessee to minimize interference with the Lessee’s authorized uses of the Premises. 4. RIGHT OF FLIGHT: There is hereby reserved to the City, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Premises. This public right of flight will include the right to cause in the airspace any noise inherent in the operation of any aircraft used for navigation or flight through the airspace or landing at, taking off from, or operation on the Airport. c. PROHIBITED USES Unless specifically authorized by this Lease or an amendment to this Lease, the following are prohibited: 1. Any use of the Premises other than those authorized in this Lease. 2. Any use of the Premises that is violation a City Ordinance or regulation. 3. The establishment or maintenance of any kind of living quarters on the Premises. 4. The outside storage on the Premises of salvage aircraft or vehicle parts, except those stored in a visually screened enclosure approved by the City; or junk, trash, solid waste, or debris, except in appropriate containers awaiting scheduled pick up. 5. The disposal on the Premises or the Airport of waste materials generated by the Lessee, including any Hazardous Substance, slash, overburden, and construction waste. 6. The stripping, wasting, or removing of any material from the Premises without the prior written approval of the City. 7. Erecting structures or allowing growth of natural objects that would constitute an obstruction to air navigation, or allowing any activity on the Premises that would interfere with or be a 4 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft hazard to the flight of aircraft, or interfere with air navigation or communication facilities, serving the Airport. 8. Soliciting donations anywhere on the Airport, or operating any kind of commercial enterprise on the Airport that is off the Premises and beyond the authorization of this Lease, without the written authorization of the City. 9. Any use or activity that is prohibited by applicable law or regulation. Article III Term & Holdover a. TERM: The term of this Lease is for ____ years, from the ___ day of ________, 20____ to the ____day of _________, 20____. (NOTE: The term would be based on the amount of the lessee’s proposed investment in permanent improvements on the Premises with the number of years derived from a lessee investment vs. lease term table provided in the PMC.) b. HOLDOVER: If the Lessee holds over and remains in possession of the Premises after the expiration, cancellation or termination of this Lease, the holding over will not operate as an extension of the term of this Lease, but only creates a month-to-month tenancy, regardless of any rent payments accepted by the City. The Lessee's obligations for performance under this Lease will continue during the month-to-month tenancy. The City or Lessee may terminate the Lessee’s holdover with ten (10) days’ advance written notice. (A holdover provision is useful to have in cases where the lease expires while the City and tenant are negotiating a renewal or where the City overlooks the lease expiration due to administrative error. The provision makes clear that all Lessee obligations under the lease continue until the Lessee vacates the Premises. It also limits the holdover tenancy to one month at a time.) Article IV Rents and Fees a. RENT: The rent for the Premises is $______________ per year, as established by the City pursuant PMC XX* and is subject to adjustment under Article V of this Lease, plus applicable sales tax. The rent shall be payable annually in advance of the first day of each year of the term of this Lease. All payments required by this Lease must be made in U.S. dollars. *(It is best to anchor the basis for setting and adjusting rent in municipal ordinances rather than spell out all the details in the lease. This allows the City to change rate-setting methodology from time to time (in the code) without having to amend every lease.) b. RENT PRORATED: Rental for any period less than one (1) year shall be prorated on the basis of the rent payable under this Lease in last full year previous to the prorating. 5 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft c. ADDITIONAL RENT: In addition to the rent specified in (a) of this Article, Lessee agrees to pay to the appropriate parties all levies, assessments, and charges as follows: (1) Taxes pertaining to the leasehold interest of the Lessee. (2) Sales tax now enforced or levied in the future, computed upon rent payable in monthly installments whether the Lessee pays rent under this Lease on a monthly or annual basis. (3) All taxes and assessments levied in the future by the City, as if Lessee was the legal owner of record of the Premises. (4) PMC XX*. The airport revenue shortfall surcharge, calculated and prorated to the Premises under *(I recommend that the essentials of the shortfall surcharge, including the shortfall determination formula, revenue & expense definitions, prorating process, and surcharge limits be covered in the municipal code rather than including all of that in individual leases. This would allow the City to make adjustments to the program, from time to time, without having to amend every lease. Also, it provides assurance to every leaseholder that all aspects of the program will apply uniformly to all lessees.) d. PAYMENTS: The Lessee shall make checks, bank drafts, or postal money orders payable to the City of Palmer and deliver payments to City of Palmer, 231 West Evergreen, Palmer, AK 99645 or any other address the City may designate in writing to the Lessee. e. INTEREST: Beginning the day after payment is due, all unpaid rents, charges, and fees required under this Lease will accrue interest at the rate of two percent above the prime rate as of the date payment was due. Interest on disputed amounts will not be charged to the Lessee if the dispute is resolved in the Lessee’s favor. (This interest rate may not be consistent with the City’s current practice.) f. LATE PAYMENT PENALTY: In addition to any interest payable under Provision (e) of this Article, each time the Lessee fails to pay any rent or fee by the date required in this Lease, the City will charge, and the Lessee shall pay, an administrative penalty of ten percent (10.0%) of the amount due and unpaid. (I understand the City currently charges an administrative penalty of $100 for late lease payments. However, setting the penalty as a percentage of the sums owed makes the penalty proportionate to the amount unpaid.) g. COURTESY BILLINGS: Lessee acknowledges that any billing statement issued by the City is provided only as a courtesy. The Lessee is obligated to pay all rents and fees when due, regardless of whether or not the Lessee receives a billing statement from the City. 6 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft h. LIEN AGAINST LESSEE: Any rent, charge, fee, or other consideration which is due and unpaid at the expiration, termination, or cancellation of this Lease will be a lien against the Lessee’s property, real or personal. i. PAYMENT OF CITY’S COSTS: The Lessee will pay all reasonable actual expenses, costs, and attorney fees City may incur, with or without formal action, to enforce, defend, or protect this Lease or City's rights under this Lease, including any expense incurred with respect to environmental compliance, bankruptcy or any proceeding that involves the Lessee, the Lease, the Premises, or improvements or personal property on the Premises. The Lessee will make payment within 30 days of the date of each notice from City of any amounts payable under this provision. (This kind of provision isn’t always 100% successful, especially in bankruptcy cases, but having it in a lease certainly strengthens the City’s hand in collection actions. It also helps to discourage lessees from committing breaches of their leases.) j. PAYMENT FOR SPECIAL SERVICES: Lessee agrees to pay the City a reasonable fee for any special services or facilities, which the City is not otherwise obligated by this Lease to provide and which the Lessee requests from the City in writing. Article V Adjustment of Rent and Fees a. RENT OR FEE ADJUSTMENT: Not less than one (1) year after the beginning date of the term of this lease and, thereafter, at intervals of not less than one (1) year, the City may, in its sole discretion, increase or decrease the rent or a fee payable by the Lessee under Article IV or other provision of this lease. The amount to which the City increases or decreases any rent or fee shall be established in accordance with PMC XX**. It is the intent of the City no rent adjustment by the City will result in rent that exceeds fair market rent, considering 1. the Premises in its condition on the term beginning date stated in Article III; plus 2. any improvements made by the City subsequent to that date, the cost of which is not reimbursed by the Lessee. ** (I recommend the essentials of the rent adjustment procedure be covered in the municipal code rather than including it in individual leases. This would allow the City to make adjustments to the program, from time to time, without having to amend every lease. Also, it provides assurance to every leaseholder that all aspects of the program will apply uniformly to all lessees.) No rent or fee change shall be effective until 30 days after the date of the City’s written notice to the Lessee. If the Lessee believes that any changed rent exceeds the fair market rent for the Premises, the Lessee may appeal the rent change to the City under PMC XX. 7 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft b. CITY-CONSTRUCTED IMPROVEMENTS: Improvements constructed by the City on, or in connection with, the Premises shall not be considered a part of the Premises for the purpose of establishing the rent under (a) of this Article, if the Lessee, as a condition of this lease, reimburses the City for the City’s construction costs. Article VI Assignment & Subletting a. INVALID WITHOUT CITY’S CONSENT: The Lessee may not assign, sublet, or grant a security interest in, by grant or implication, the whole or any part of this Lease, the Premises, or any improvement on the Premises without the written consent of the City. Any proposed assignment, sublease, or security interest shall be subject to the requirements of PMC XX and must be submitted in writing to the City bearing the original, notarized signature of all parties. The Lessee may submit unsigned draft documents for the City’s conceptual review. However, the City’s conceptual approval of a draft document may not be construed as the City’s consent to any assignment, sublease, or security interest. b. NO WAIVER OF CONSENT: The City’s consent to one assignment, sublease, or security interest will not waive the requirement for the Lessee to obtain the City’s consent to any other assignment, sublease, or security interest. c. ASSIGNEE / LESSEE OBLIGATIONS: An assignment must include a provision stating that the assignee accepts responsibility for all of the assignor’s (Lessee’s) obligations under this Lease, including environmental liability and responsibility. However, unless the City specifically releases the Lessee in writing, the City may hold the Lessee responsible for performing any obligation under this lease that an assignee fails to perform. d. TRANSFER OF OWNERSHIP INTEREST REQUIRES CONSENT: Any single or cumulative transfer of more than 50 percent interest in a joint venture, partnership, limited liability company, corporation, or other multi-party entity which is a Lessee under this Lease shall constitute an assignment of an interest subject to the consent of the City under (a) of this Article VI. e. OCCUPANCY BEFORE CITY CONSENT: An assignee or sublessee may not occupy the Premises before the City consents to the assignment or sublease in writing. f. CONFLICT OF PROVISIONS: In the event of a conflict between this Lease and an assignment or a sublease, the terms of this Lease control. g. LESSEE NOT RELIEVED OF OBLIGATIONS: The City’s consent to any sublease does not relieve or otherwise alter the Lessee’s obligations under this Lease. 8 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft Article VII Maintenance, Snow Removal & Utilities a. MAINTENANCE 1. At no cost to the City, the Lessee will keep the Premises and all improvements on the Premises clean, neat and presentable, as reasonably determined by the City. 2. At no cost to the City, the Lessee will provide for all maintenance and services at the Premises as may be necessary to facilitate the Lessee's compliance with this Lease and the Lessee’s use of the Premises. 3. The Lessee shall comply with all regulations or ordinances of the City that are promulgated for the promotion of sanitation. At no cost to the City, the Lessee shall keep the Premises in a clean and sanitary condition, and control activities on the Premises to prevent the pollution of water. 4. The Lessee agrees to comply with all decisions and directions of the City's Airport Manager regarding maintenance and operation of the Airport, and the use of the Airport by the Lessee. b. UTILITIES Unless specifically provided otherwise in this Lease, the Lessee shall, at no cost to the City, provide for all utilities at the Premises necessary to facilitate the Lessee's use of the Premises. c. SNOW REMOVAL 1. At no cost to the City, the Lessee is responsible for snow removal on the Premises. The Lessee shall dispose of snow in an off-Premises location approved in writing by the City or provide suitable snow storage within the boundaries of the Premises in accordance with all applicable federal, state or local laws. At the request of the Airport Manager, the Lessee shall submit a snow removal plan for the Premises to the Manager for review. Upon approval of the Lessee’s plan by the Airport Manager, the Lessee shall conduct all snow removal operations on the Premises in accordance with the approved plan. 2. Lessee shall not deposit snow on an apron, taxiway, or other aircraft maneuvering surface provided for common use by others without the prior written approval of the Airport Manager. 3. Lessee agrees to not allow an accumulation of snow on the Premises that would cause interference with adjoining leaseholders or other users of the Airport. 9 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft Article VIII Operations a. OPERATIONS ON THE AIRPORT: The Lessee will ensure that the Lessee, its employees, guests, contractors, sublessees, and vendors that perform any activity or function authorized under this Lease shall do so in a manner that ensures the safety of people, the protection of public health and the environment, and the safety and integrity of the Airport and the Premises. b. LESSEE'S CONTROL AND RESPONSIBILITY 1. The Lessee will assume full control and sole responsibility as between Lessee and City for the activities of the Lessee, the Lessee's personnel and employees, and anyone else acting by, on behalf of, or under the authority of the Lessee on the Airport, including the Premises. 2. The Lessee will immediately notify the City of any condition, problem, malfunction or other occurrence that threatens the safety of people or the Airport, harm to public health or the environment, or the safety or integrity of the Premises. c. RADIO INTERFERENCE: The Lessee will discontinue the use of any machine or device that interferes with any government-operated transmitter, receiver, or navigation aid until the cause of the interference is eliminated. d. WILDLIFE: The Lessee acknowledges that a concentration of birds or other wildlife on an airport constitutes a significant hazard to aircraft operations. The Lessee agrees to keep the Premises clean of fish slime, fish waste, or any other material that might attract birds or other wildlife. The Lessee agrees to maintain the Premises, control operations, and take all reasonable measures to prevent a concentration of birds or other wildlife on the Premises. e. PARKING: The Lessee will provide adequate vehicle, equipment, and aircraft parking space on the Premises for Lessee’s business or activities, or confine parking to such other places on the Airport as may be approved or designated in writing by the Airport Manager. Article IX Environmental Provisions (The following environmental provisions were adapted from the State of Alaska DOT&PF rural airport land lease form. Of the environmental provisions I’ve read in airport lease forms, this is the most comprehensive, yet reasonably condensed (as environmental provisions go.).) a. HAZARDOUS SUBSTANCE 1. If Hazardous Substances are handled on the Premises, the Lessee agrees to have properly trained personnel and adequate procedures for safely storing, dispensing, and otherwise handling Hazardous Substances in accordance with all applicable federal, state, and local laws. 10 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft 2. Lessee will promptly give the City notice of proceedings to abate or settle matters relating to the presence or release of a Hazardous Substance on the Premises or from the Lessee's operations on the Airport. The Lessee will allow the City to participate in any such proceedings. b. ENVIRONMENTAL LIABILITY BASELINE Unless expressly provided otherwise in this Lease or an amendment to this lease, the Lessee has the sole responsibility under this Lease to determine the environmental condition and presence of Hazardous Substance existing in, on, and under the surface of the Premises, and is conclusively presumed to have caused or Materially Contributed To any contamination of or originating on the Premises except as identified in an Environmental Liability Baseline accepted in writing by the City. 1. Lessee may, upon written approval from City, perform an Environmental Assessment to determine if any Contamination of the Premises exists. The Environmental Assessment will be provided to the City and will be performed according to acceptable industry procedures. (It’s not an uncommon practice for airport operators to require a lessee to perform an environmental assessment at the beginning of a lease. That’s a bit heavy-handed in favor of the airport operator. Palmer’s existing airport leases don’t appear to address environmental issues, at all. That may be favorable to the lessee, but is not very prudent environment risk management practice for the City. The above two paragraphs represent a more “middle-of-road” approach by providing adequate protection for the City without forcing a lessee to performed an entry assessment. As written, the first paragraph (b) makes the lessee responsible for all contamination on the premises unless a baseline assessment has been performed demonstrating otherwise. The second paragraph (1) allows the lessee to protect himself by performing an assessment. If the lessee chooses not to perform an assessment to establish a baseline before using the premises, he assumes all environmental liability for all past contamination, as well as any he may generate during the term of the lease. Either way, it’s the lessee’s choice.) 2. If the Lessee caused or Materially Contributed To the presence or release of a Hazardous Substance in, on or under the surface of the Premises, the Lessee's Environmental Liability Baseline report must indicate the portion of the Contamination not attributed to the Lessee or its operations. If Lessee discovers Contamination in, on, or under the surface of the Premises the Lessee must prove by clear and convincing evidence to the satisfaction of the City that the Contamination was not caused or Materially Contributed To by the Lessee or Lessee’s operations nor assumed by the Lessee by reason of an assignment. 3. When the City receives the Lessee's Environmental Assessment to establish the Environmental Liability Baseline, the City, in its sole discretion, will do one of the following: A. accept the findings of the Lessee's Environmental Assessment as the Environmental Liability Baseline for that portion of the Premises being assessed; or B. reject the findings and require the Lessee to perform additional environmental testing(s) if the City determines in writing that the findings of the Environmental Assessment are inadequate to develop an Environmental Liability Baseline for that portion of the Premises being 11 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft assessed. The City's written rejection of the Lessee's submittal(s) will be based on generally accepted professional practices necessary to determine the environmental condition and presence of any Hazardous Substance in, on, or under the surface of the Premises or failure to demonstrate the portion of the Contamination not attributed to the Lessee or its operations. c. SUPPLEMENTS TO THE ENVIRONMENTAL LIABILITY BASELINE If, after an Environmental Liability Baseline is established for any portion of the Premises, the Lessee discovers additional Contamination or the presence of any Hazardous Substance in, on, or under the surface of that portion of the Premises having an Environmental Liability Baseline that has not, by clear and convincing evidence to the satisfaction to the City, been caused by the Lessee or its operations, the Lessee may, at its own cost, submit an Environmental Assessment reflecting this to the City for the City's consideration to add to the Environmental Liability Baseline. The Lessee's Environmental Assessment must prove by clear and convincing evidence, to the satisfaction of the City that the additional Contamination or presence of any Hazardous Substance on the Premises was not caused or Materially Contributed To by the Lessee or the Lessee’s operations. 1. If the Lessee Materially Contributed To the presence or release of any Hazardous Substance on the Premises, the Lessee's Environmental Assessment must indicate the portion of the Contamination not attributed to the Lessee. 2. The Environmental Liability Baseline may only be amended to include that portion of Contamination not attributed to the Lessee or its operations. 3. When the City receives the Lessee's Environmental Assessment to add to the Environmental Liability Baseline, the City, in its sole discretion, will do one of the following: A. accept the findings of the Lessee's Environmental Assessment to add to the Environmental Liability Baseline; or B. reject the findings and require the Lessee to perform additional environmental testing(s) if the City determines in writing that the findings of the Environmental Assessment are inadequate to determine if additional Contamination or the presence of any Hazardous Substance should be added to the Environmental Liability Baseline. The City's written rejection of the Lessee's submittal(s) will be based on generally accepted professional practices necessary to determine the environmental condition and presence of any Hazardous Substance in, on, or under the surface of the Premises or failure to demonstrate the portion of the Contamination not attributed to the Lessee or its operations. 4. If, after the Environmental Liability Baseline for any portion of the Premises is established, it is discovered that the presence of a Hazardous Substance identified in the Environmental Liability Baseline was caused or Materially Contributed To by the Lessee or its operations, the Environmental Liability Baseline may be amended to delete that portion of the Contamination that is attributed to the Lessee or its operations. The City will have the burden of proof in establishing that the Lessee caused or Materially Contributed To this Contamination. 12 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft 5. If Contamination not attributed to the Lessee is discovered, or if it is discovered that the Contamination identified in the Environmental Liability Baseline is attributed to the Lessee, the parties agree to negotiate a supplement to the Environmental Liability Baseline. d. ENVIRONMENTAL INDEMNIFICATION 1. If Contamination of the Premises or other properties by a Hazardous Substance occurs from the Lessee's operations on the Premises that is not in Lessee’s Environmental Baseline, the Lessee will indemnify, defend, and hold the City harmless from any and all claims, judgments, damages, penalties, fines, costs, liabilities, or losses, including, but not limited to, sums paid in settlement of claims, attorney's fees, consultant fees, and expert fees, which arise during or after the term of this Lease as a result of such Contamination. This indemnification of the City by the Lessee includes, but is not limited to, costs incurred in connection with any investigation of site conditions or any cleanup, remediation, removal, or restorative work required by any federal, state, or local governmental agency because of a Hazardous Substance being present in the soil or groundwater on or under the Premises or other properties affected by the Contamination. 2. If the Lessee discovers Contamination or the presence of a Hazardous Substance in, on, or under the surface of the Premises, the Lessee must prove by clear and convincing evidence, to the satisfaction of the City, that the Contamination or presence of the Hazardous Substance was not caused, or Materially Contributed To, by the Lessee or its operations. e. REMEDIATION 1. In the event of a Hazardous Substance spill on the Premises, the Lessee will immediately notify the City and the Alaska Department of Environmental Conservation and act promptly, at its sole expense, to contain the spill, repair any damage, absorb and clean up the spill area, and restore the Premises to a condition satisfactory to the City and otherwise comply with the applicable portions of any environmental law, including PMC XX. (This assumes that the PMC will be amended to include a basic provision relating to environmental liability on the airport and the City’s ability to perform or allow others to perform assessments and clean-up.) 2. In addition to any notices required by this Lease, the Lessee will immediately notify and copy the City in writing of any of the following: A. any permit, enforcement, clean up, lien, removal or other governmental or regulatory action instituted, completed, or threatened pursuant to any Environmental Law; B. any claim made or threatened by any person against the Lessee or arising from the Lessee's operations authorized by this Lease, relating to damage, contribution, compensation, loss or injury resulting from, or claimed to result from, any Hazardous Substances in, on, or under the Airport; or C. any report made by, or on behalf of, the Lessee to any environmental agency 13 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft arising out of or in connection with any Hazardous Substances in, on, or removed from the Premises, including any complaints, notices, warnings or asserted violation. 3. The City is under no obligation to remediate Contamination identified in an Environmental Assessment; except, the City agrees to remediate, or have responsible parties remediate, the Contamination identified in the Environmental Liability Baseline if the Lessee or City is required to remediate by an agency with such authority. In the event of a required remediation, the City will make a reasonable effort to coordinate the remediation with the Lessee to minimize disruption of the Lessee's operations and damage to the Lessee's improvements and property. 4. Remediation and restoration of the contaminated area must meet all applicable state and federal laws and regulations and must meet the requirements of all governing regulatory authorities. f. ENVIRONMENTAL AUDIT Lessee will provide City all investigative data, test results, reports, and any other information gathered or analyzed as part of or in relation to any Environmental Assessment, characterization or audit on the Premises or the Airport that the Lessee performs or causes to be performed regarding this Lease. The Lessee will submit the data, result, report or information to the City within 15 days following the date on which it becomes available to the Lessee. g. RELEASE OF LESSEE The City releases the Lessee from liability to the City for Contamination and the presence of Hazardous Substances identified by the Environmental Liability Baseline that was not caused or Materially Contributed To by the Lessee. CERCLA!! h. SURVIVAL OF OBLIGATIONS - CITY The City's release of the Lessee and the City's covenant to remediate as discussed in this Article will survive the cancellation, termination or expiration of this Lease. Article X Indemnification & Insurance a. INDEMNIFICATION 1. Subject to Provisions 3 & 4 of this Article X(a), the Lessee will indemnify, save harmless, and defend the City, its officers, agents, and employees from and against any and all liabilities, losses, suits, administrative actions, claims, awards, judgments, fines, demands, damages, injunctive relief or penalties of any nature or kind to the full extent of the loss or obligation for property damage, personal injury, death, violation of any regulation or grant agreement, or any other injury or harm. This indemnification of the City by the Lessee shall include sums paid in settlement of claims, attorney fees, consultant fees, expert fees, or other costs and expenses, directly or indirectly arising from, connected to or on account of this Lease as it relates to the Lessee, the Lessee’s activities at or relating to the Airport, 14 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft or any act or omission by the Lessee, or by any of its officers, employees, agents, contractors or sublessees. These indemnity obligations are in addition to, and not limited by, the Lessee’s obligation to provide insurance, and shall survive the expiration or earlier termination of this Lease. 2. The Lessee shall give the City prompt notice of any suit, claim, action or other matter affecting the City to which Paragraph 1, above, may apply, together with a copy of any letter by an attorney on behalf of a complainant, any complaint filed in court, and any notice or complaint by any regulatory agency. The City shall have the right, at its option, to participate cooperatively in the defense of, and settlement negotiations regarding, any such matter, without relieving the Lessee of any of its obligations under this provision. 3. As to any amount paid to others for personal injury or property damage with respect to which an act or omission of the City is a legal cause, notwithstanding Paragraph 1 of this section, the Lessee and the City shall reimburse each other according to the principles of comparative fault. If liability to a third party is subject to apportionment according to comparative fault under this provision, the Lessee and the City shall seek in good faith to achieve non-judicial agreement as to apportionment of fault as between them. This apportionment of liability between the City and the Lessee shall not be construed to affect the rights of any person who is not a party to this Lease. 4. As to any claim of injury or property damage that is solely between the City and the Lessee, and neither party is adjudicated to have sole liability, each party shall bare financial responsibility only for that party’s adjudicated portion of the claim. (Provision (a) is a very liberal comparative fault provision that provides for the apportionment of liability not only in claims by third parties, but also in claims solely between the lessee and the landlord. A more common, “middle-of-the-road” comparative fault provision would include only provisions 1 through 3, under which comparative fault would only apply to the claims of third parties against the lessee and the landlord.. A common, but heavy handed indemnity provision would eliminate both provisions 3 & 4, making the lessee responsible for the payment of all claims except, perhaps, the landlord’s sole negligence. This liberal provision should be very attractive to lessees. However, the City’s attorney and insurance carrier may not care much for it. ) b. INSURANCE: At no expense to the City, the Lessee will obtain and keep in force during the term of this Lease, insurance of the type and limits required by this provision. Where specific limits are set, they will be the minimum acceptable limits. If the Lessee's policy contains higher limits, the City will be entitled to coverage to the extent of the higher limits. At the time insurance in obtained by the Lessee, all insurance shall be by a company/corporation rated "A-" or better by A.M. Best. The following policies of insurance are required with the following minimum amounts: 1. General Liability, including Premises, all operations, property damage, products (if applicable), and personal injury and death, broad-form contractual, with a per-occurrence limit of not less than $1,000,000 combined single limit. If this lease authorizes the Lessee to engage in the sale or the commercial dispensing or storage of aviation fuel, the policy must include an endorsement under which the insurer extends coverage to the Lessee’s fuel handling activities. This policy must name the City as an additional insured. 15 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft 2. Automobile Coverage with not less than $1,000,000 combined single limit per occurrence. This insurance must cover all owned, hired, and non-owned motor vehicles used on the Airport. 3. Workers Compensation Insurance. The Lessee will provide and maintain, for all employees, coverage as required under AS 23.30.045, and, where applicable, any other statutory obligations. The policy must waive subrogation against the City. Products and Completed Operations Liability Insurance. If this lease authorizes the 4. Lessee to engage in the sale or the commercial dispensing or storage of aviation fuel, the Lessee shall provide A. Products and Completed Operations Liability Insurance in at least the following coverage limits: (i). $100,000 bodily injury combined single limit per occurrence; (ii). $300,000 bodily injury aggregate; and (iii). $100,000 property damage combined single limit per occurrence; and B. Pollution Liability Insurance, on an “occurrence basis” with liability limits of at least $1,000,000 per occurrence. (The above coverage requirements are fairly common in airport land lease. However, lessees on state airports, including those in the MatSu Valley, are no longer required to provide any insurance, at all. In light of that, the City may want to consider reducing its insurance requirements for airport leases to a bare minimum in order to remain competitive with state airports.) 5. The Lessee will provide the City with proof of insurance coverage in the form of a certificate of insurance, together with proof that the premiums have been paid, showing the types and monetary limits of coverage secured. All insurance required by this provision must provide that the City be notified at least 30 days prior to any termination, cancellation, or material change in the insurance coverage. 6. If the Lessee's insurance coverage lapses or is canceled, Lessee will immediately, upon written notice by the City, halt all operations on the Airport, including the Premises. The Lessee will not resume operations until the City receives evidence that the Lessee has obtained current insurance coverage meeting the requirements of this Lease. 7. The City may, at intervals of not less than five years from the beginning date of the term of this Lease and upon written notice to Lessee, revise the insurance requirements required of this Lease. City’s determination to revise the insurance requirements will be based on the risks relative to the Lessee's operations, any insurance guidelines adopted by the City, and any change in applicable law. 8. If the Lessee subleases all or any portion of the Premises under the provisions of this Lease, the Lessee will require the sublessee to provide to the insurance coverage required of the Lessee 16 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft under this Article X. Article XI Laws & Taxes a. COMPLIANCE WITH LAW: Lessee shall comply with all applicable laws, ordinances, and regulations of public authorities now or hereafter in any manner affecting the Airport, the Premises, buildings or other structures on the Premises, or the sidewalks, alleys, streets, and ways adjacent to the Premises. b. UNLAWFUL ACTIVITY: The Lessee shall not permit any use, occupation, business, or trade to be conducted on the Premises contrary to any law, ordinance, or regulation, including FAA land use restrictions, zoning ordinances, rules and regulations. c. LICENSES AND PERMITS: The Lessee will obtain all necessary licenses and permits, pay all taxes and special assessments lawfully imposed upon the Premises, and pay other fees and charges assessed under applicable law. Nothing in this Lease prevents the Lessee from challenging any taxes or special assessments to the appropriate authority. d. LITIGATION: The PMC, including any regulations promulgated thereunder, and the laws of the State of Alaska will govern in any dispute between the Lessee and City. If a dispute continues after exhaustion of administration remedies, any lawsuit must be brought in the courts of the State of Alaska, in Palmer, Alaska. e. LESSEE TO PAY TAXES: Lessee shall pay all lawful taxes and assessments which, during the term of this Lease may become a lien upon or which may be levied by the State, Borough, City, or any other tax levying body, upon any taxable possessory right which Lessee may have in or to the Premises or improvements on the Premises by reason of its use or occupancy or the terms of this Lease. However, that nothing in this provision shall prevent Lessee from contesting any increase in a tax or assessment under any applicable law, ordinance, or regulation. f. PARTIAL INVALIDITY: If any term, provision, condition, or part of this Lease is declared by a court of competent jurisdiction to be invalid or unconstitutional, the remaining terms, provisions, conditions, or parts shall continue in full force and effect as though the declaration had not been made. Article XII Lease Termination a. CANCELLATION: The City may, after 30 days’ written notice to the Lessee, cancel this Lease and recover possession of the Premises if any of the following violations occur, unless the violation is completely cured to the City’s satisfaction within the 30 days: 1. The Lessee fails to pay when due the rents, additional rents, charges, or other sums specified in this Lease, including any increases made under this Lease. 17 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft 2. The Lessee's check for payment of any sum due under this Lease is returned for insufficient funds; or if the Lessee’s credit or debit card is not accepted by the issuing financial institution. 3. The Lessee uses, or authorizes others to use, the Premises for any purpose not authorized by this Lease. 4. The Lessee fails to fully perform and comply with any provision in this Lease. 5. The lessee uses the premises for an illegal purpose or otherwise materially violates an applicable law. 6. The court enters a judgment of insolvency against the Lessee. 7. A trustee or receiver is appointed for the Lessee's assets in a proceeding brought by or against the Lessee, or the Lessee files a voluntary petition in bankruptcy. 8. Failure by the Lessee to comply with any land development or permanent improvement construction required by this Lease. b. ENTRY AND RE-ENTRY: In the event that the Lease should be terminated in accordance with this Article XII, or by summary proceedings or otherwise, or upon the Lessee’s abandonment of the Premises or a portion of the Premises, the City or its agents, servants, or representatives may, immediately or any time thereafter, re-enter, and resume possession of the Premises or portion thereof, and remove all persons and property therefrom, either by summary proceedings or by a suitable action or proceeding at law without being liable for any damages therefor. No re-entry by the City shall be deemed an acceptance of a surrender of the Lease. c. CONTINUING OBLIGATIONS UNTIL PREMISES VACATED: The Lessee will continue to pay City rent after the expiration, termination, or cancellation of this lease and to abide by the lease obligations, including payment of rent and providing proof of insurance coverage, through the date Lessee relinquishes possession of and completely vacates the Premises. City will consider the Premises completely vacated if the Lessee has 1. remediated any environmental contamination for which the Lessee is responsible; 2. performed any environmental assessment required of the Lessee by applicable environmental law or this lease; (Note: This provision #2 would not constitute a requirement for a mandatory exit assessment of the premises, unless the PMC was amended to include a mandatory assessment requirement. How common is that? ) 18 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft 3. removed or otherwise disposed of any Lessee-owned permanent or removable improvements and personal property which this Lease allows to be removed or the City directs to be removed; and 4. d. restored the Premises to a neat and clean physical condition acceptable to the City. REASONABLE CURE 1. In the case of a violation that cannot be reasonably cured within 30 days, a notice of cancellation issued by the City to the Lessee under this Article is stayed if, within the 30-day notice period, the Lessee begins and continues expeditious action to cure the violation. The City will determine if a violation cannot be reasonably cured within 30 days and what constitutes expeditious action. 2. In the case where, in City’s sole determination, Lessee’s violation is considered an imminent threat to the airport, public health or safety, or the environment, City will direct the Lessee to stop the activity immediately and may reduce the period to cure the violation, or the City may correct the violation pursuant to (e) of this Article. e. RIGHT OF CITY TO PERFORM: 1. If, after 30 days following notice the Lessee fails or refuses to perform any action required by this Lease, the City will have the right, but not the obligation, to perform any such actions required by this Lease at the sole expense of the Lessee. The City will not take action if the Lessee begins and continues expeditious action to perform any action required by this Lease that cannot be reasonably completed within 30 days. The City will, at its sole discretion, determine what constitutes expeditious action and if an action cannot be reasonably performed in 30 days. The City will submit to the Lessee an invoice for the expenses incurred by the City in the performance by the City of any required action. The Lessee will pay the amount of each invoice within 30 days from issuance. 2. If Lessee fails or refuses to perform any action that the City determines is an imminent threat to the safety of the public, the airport, or the Premises, the City will have the right, but not the obligation, to perform any or all actions required to expeditiously correct the imminent threat. Lessee shall reimburse the City for any cost, including legal fees and administrative costs reasonably incurred by the City in acting to correct the imminent threat. f. WAIVER: A waiver by the City of any default by the Lessee of any provision of this Lease will not operate as a waiver of any subsequent default. If the City waives a default, the City is not required to provide notice to the Lessee to restore or revive any term or condition under this Lease. The waiver by the City of any provision in this Lease cannot be enforced or relied upon unless the waiver is in writing and signed on behalf of the City. The City's failure to insist upon the strict performance by the Lessee of any provision in this Lease is not a waiver or relinquishment for the future and the provision will continue in full force. 19 City: _____ Lessee: _____ Land Lease Form g. Palmer Municipal Airport 5/10/09 draft AIRPORT CLOSURE: (Although a lengthy closure of the airport is an unlikely prospect, it’s useful to have provisions something like the following to help prevent total chaos or a flurry of lawsuits from ensuing if the event does happen.) 1. If the City closes the airport to aircraft operations for sixty (60) days or less, this Lease will remain in full force and effect without adjustment 2. If the City closes the Airport to aircraft operations for more than sixty (60) days, but not permanently, and this Lease is for aeronautical uses, the Lessee may, upon written notice to the City, either terminate the Lease or retain the Lease and receive a fifty (50%) percent rent reduction or credit for that portion of the closure that exceeds sixty (60) days. 3. If the City permanently closes the Airport to aircraft operations and this Lease is for aviation or direct aviation support uses, the Lessee may terminate this agreement by written notice to the City. h. DISASTERS The Lessee or City may cancel this lease upon written notice to the other party if 1. the Premises becomes unusable through no fault of either party and performance under this lease becomes impossible; or 2. the Airport becomes unusable through no fault of either party and the performance under this lease becomes impossible. If the Lessee elects in writing that it will continue to operate after notice from City to Lessee that the Airport has become unusable, the Lessee’s obligations under the Lease will continue, but City shall be under no obligation to continue to perform. Causes for termination of the lease under this provision (h) include acts of God, the public enemy, and the United States. i. NATIONAL EMERGENCY: If the federal government declares a national emergency, neither party may hold the other liable for any inability to perform any part of this Lease as a result of the national emergency. i. SURRENDER ON TERMINATION: Except as provided otherwise in this Article XII, Lessee shall, on the last day of the term of this Lease or upon any earlier termination of this Lease, surrender and deliver up the premises into the possession and use of City without fraud or delay in good order, condition, and repair, except for reasonable wear and tear since the last necessary repair, replacement, restoration or renewal, free and clear of all lettings and occupancies unless expressly permitted by the City in writing, and free and clear of all liens and encumbrances other than those created by and for loans to City. 20 City: _____ Lessee: _____ Land Lease Form Palmer Municipal Airport 5/10/09 draft (The added introductory phrase is needed to avoid conflict with (c) of this Article under which the City can continue some of the obligations of the Lessee after termination.) Article XIII General Covenants a. USE OF THE AIRPORT: Except as provided herein, any regular use of Airport lands or facilities without the written consent of the City is prohibited. This prohibition shall not apply to use of areas designated by the City for specified public uses, such as automobile parking areas and streets. b. COSTS AND EXPENSES: Costs and expenses incident to this lease, including but not limited to recording costs, shall be paid by Lessee. c. CARE OF THE PREMISES: The Lessee shall keep the Premises clean and in good order at the Lessee’s own expense, allowing no damage, waste, nor destruction thereof, nor removing any material therefrom, without written permission of the City. At the expiration of the term fixed, or any earlier termination of the Lease, the Lessee will peaceably and quietly quit and surrender the premises to the City. LEASE SUBORDINATE TO AIRPORT FINANCING REQUIREMENTS: Lessee agrees that d. City may modify this Lease to meet revised requirements for Federal or State grants, or to conform to the requirements of any revenue bond covenant. However, the modification shall neither act to reduce the rights or privileges granted the Lessee by this neither Lease, nor act to cause the Lessee financial loss. e. RIGHT TO ENJOYMENT AND PEACEABLE POSSESSION: City hereby agrees that the Lessee, upon paying rent and performing other covenants, terms, and conditions of this Lease, shall have the right to quietly and peacefully hold, use, occupy, and enjoy the Premises, except that the following shall not construed as a denial of the right of quiet or peaceable possession: 1. Any inconvenience caused by public works projects in or about the Premises; and 2. Any other entries by the City on the Premises reserved or authorized under other provisions of this Lease. f. NO PARTNERSHIP OR JOINT VENTURE CREATED: It is expressly understood that the City shall not be construed or held to be a partner or joint venturer of Lessee in the conduct of the Lessee’s activities or business on the Premises. The relationship between the City and the Lessee is, and shall at all times remain, strictly that of landlord and tenant, respectively. g. D