COUNCIL COMMUNICATION
TO: Honorable Mayor and Council
FROM: Kelly Garry, City Attorney
SUBJECT:Title
Discussion and Action: Amendment to Airport Fixed Based Operator Lease Site 6, Consent to Assignment of Leases, and Estoppel Certificates Regarding the Transfer of Airport Sites 3, 4 and 6 Fixed Based Operator Leases and Sublease Related to Fueling of Sites 1 and 2 from Havasu Air Center, LLC, to Velocity Havasu Holdings, LLC (Kelly Garry)
Body
FUNDING SOURCE:
N/A
PURPOSE:
To consider an Addendum to the FBO Lease for Site 6 and Lessor Consent to Assignment and Assumption of Leases and Estoppel Certificates to allow the transfer of Airport Sites 3, 4 and 6 Fixed Based Operator Leases and Sublease related to fueling of Sites 1 and 2 from Havasu Air Center, LLC, to Velocity Havasu Holdings, LLC.
BACKGROUND:
Lake Havasu City received a request to consent to the transfer of the Fixed Base Operator (FBO) Leases for Sites 3, 4 and 6, and a Sublease related to fueling of Sites 1 and 2 at the Lake Havasu City Municipal Airport from Havasu Air Center (HAC), LLC, to Velocity Havasu Holdings, LLC (Velocity).
The Site 3 FBO Lease was originally executed in 1992 and assigned to HAC in 2025. It expires on September 30, 2027. Site 3 includes a restaurant, hangars, and office space as shown on the attached map.
The Site 4 FBO Lease was originally executed in 2008 and assigned to HAC in 2025. It expires in 2033 and has a ten-year extension option. Site 4 includes hangars, office space, and a pool.
The Site 6 FBO Lease was executed in 2006 with HAC. It expires in 2036 and has a ten-year extension option. Site 6 includes hangars, office space, conference rooms, maintenance facility, and fuel services.
The Sublease for the Fuel Island located on Sites 1 and 2 was executed in 2003 between D2 Aero, LLC, and HAC. It runs with the Master Lease for Sites 1 and 2, which expires 2043. The Sublease allows fueling activities from the fuel tanks located on the sites.
Certain amendments to the FBO Lease for Site 6 are requested at this time and prior to any assignment. The amendments include provisions regarding liens and mortgages and Federal Aviation Administration (FAA) grant assurances. Attached are Addendum to the FBO Lease for Sites 6.
HAC and Velocity request the City’s consent to the assignment of Sites 3, 4 and 6 and the Sublease related to fueling of Sites 1 and 2 from HAC to Velocity. Attached are Consents to Assignment and Assumption of Lease for Sites 3, 4 and 6 and Sublease related to Sites 1 and 2. If approved, this action would transfer the FBO Leases for Sites 3, 4, and 6, and Sublease related to Sites 1 and 2, from HAC to Velocity for the remainder of lease terms.
HAC also requests the City to execute Estoppel Certificates for Sites 3, 4 and 6 and Sublease related to fueling for Sites 1 and 2. Estoppel certificates serve to confirm the accuracy of lease terms between a tenant and landlord for a third party, such as a potential buyer or lender. Attached are Estoppel Certificates for the Sites.
COMMUNITY IMPACT:
N/A
FISCAL IMPACT:
N/A
ATTACHMENTS:
Map of Airport
Addendum No. 5 to Fixed Based Operator Lease Site 6
Consent to Assignment of Lease Site 6
Estoppel Certificate Site 6
Consent to Assignment of Lease Site 4
Estoppel Certificate Site 4
Consent to Assignment of Lease Site 3
Estoppel Certificate Site 3
Consent to Assignment of Sublease Sites 1 and 2 Related to Fueling
Estoppel Certificate Sites 1 and 2
SUGGESTED MOTION:Recommended Action
I move to approve Addendum No. 5 to Airport Fixed Based Operator Lease Site 6, Consent to Assignment of Leases, and Estoppel Certificates Regarding the Transfer of Airport Sites 3, 4 and 6 Fixed Based Operator Leases and Sublease related to fueling of Sites 1 and 2 from Havasu Air Center, LLC, to Velocity Havasu Holdings, LLC.