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Home My WebLink AboutAddendum - 11LAG-10-001, Adden #11-23 AME NDMENT NO. 11 TO LEASE AGREEMENT LAG-10-001 (City of Renton to The Boeing Company) THIS AMENDMENT No. 11 to Lease Agreement LAG-10-001 ("Amendment No. 11") is entered into by the City of Renton, a Washington municipal corporation, and The Boeing Company, a Delaware corporation, with reference to that certain lease designated as LAG-10-001 as amended as of the date of entry of this Amendment No. 11, which is the __ day of ___ _, 20_ (the "Lease"). RECITALS: 1.WHEREAS, under the Lease, the City of Renton ("Landlord") has leased to The Boeing Company ("Tenant") certain land areas, facilities, and buildings (the "Premises") on the Renton Municipal Airport, Renton, Washington (the "Airport"), until May 31, 2030; and 2.WHEREAS, Tenant is obligated to pay rental amounts as shown in the Lease's table in Section 4.a., Minimum Monthly Rent; and 3.WHEREAS, The Lease contemplates that the Minimum Monthly Rent will be adjusted from time to time based upon the fair market value of the Premises; and 4.WHEREAS, Landlord, pursuant to the Lease section 4.b.2, notified Tenant by certified letter in February 2022 that the Minimum Monthly Rental rates would be readjusted on June 1, 2022;and 5.WHEREAS, Landlord and Tenant did not agree on the amount of the adjustment of the Minimum Monthly Rent; and 6.WHERAS, Landlord and Tenant proceeded to an arbitration process to determine the fair market value of the Premises so that a new Monthly Minimum Rent amount could be established in accordance with Section 4.c of LAG-10-001 (The Master Lease); and 7.WHEREAS, that arbitration process has concluded, resulting in a rate change for Tenant's Minimum Monthly Rent obligations; and Land Rental Rate Adjustment 8.WHEREAS, on November 1, 2022, a new land rental rate was established through the arbitration process to be $1.595 per square foot per year; and 9.WHEREAS, as of June 1, 2022, the land rental rate was due for adjustment using the arbitrated lease rate of $1.595 per square foot per year, and continuing until the next Adjustment Date; and 10.WHEREAS, Tenant is also responsible to Landlord for a rental rate back payment for the period between June 1, 2022 and the date of entry of this Amendment No. 11; and Page 1 5th April 23 LAG-10-001AmendmentNo.11BuildingRentalRateAdjustment11.WHEREAS,asofJune1,2022,thebuildingrentalamountwasdueforadjustment;and12.WHEREAS,inNovember2022,theArbitrationdeterminedthefairmarketrentforTenant’sbuildingsistobe$730,000annually;Theadjustedbuildingrentalratesshallbesetbaseduponthesevalues,plusLeaseholdExciseTax;and13.WHEREAS,TenantisalsoresponsibletoLandlordforabuildingrentalratebackpaymentfortheperiodbetweenJune1,2022andthedateofentryofthisAmendmentNo.11;andOrderofAmendmentstotheMasterLease14.WHEREASadraftrentadjustmentamendmentwaspreviouslycirculatedbetweenthePartiesasAmendmentNo.8totheMasterLease,butthatdocumentwasnotexecuted,andthePartiessubsequentlyexecutedadditionalAmendmentstotheMasterLease.Toavoidconfusion,theParties areproceedingwiththisamendmentasAmendmentNo.“11,”anditisanticipatedthattherewillbenoamendmentnumbered“8”totheMasterLease;NOW,THEREFORE,INCONSIDERATIONOFTHETERMSANDCONDITIONSHEREINCONTAINEDANDFOROTHERGOODANDVALUABLECONSIDERATION,THERECEIPTAND SUFFICIENCYOFWHICHISHEREBYACKNOWLEDGED,LANDLORDANDTENANTAGREEASSETFORTHBELOW:WITNESSETH:LandlordandTenantagreetoamendtheLease(theMasterLeaseagreement,LAG-10-001,assubsequentlyamended),inthefollowingrespects.1.Definitions.The“MasterLease”meansleaseLAG-10-001butexcludestheamendmentstoLAG-10-001.“Lease”meanstheMasterLeaseandAmendmentNos.1,2,3,4,5, 6,7,9,10,and11totheMasterLease.ThereisnoAmendmentNo.8totheMasterLease.AlltermsusedinthisAmendmentNo.11thataredefinedinthisLeaseareusedhereastheyaretheredefined.2.LandlordandTenantagreetoalandrentalrateof$1.595persquarefootperyearforthelandareassubjecttotheLease;providedthatthelandrentalrateforutilityeasementareasshallbe33.33%ofthelandrentalrateor$0.532per squarefootperyear.3.LandlordandTenantagreethatthefollowingbuildingannualrentalrateof$730,000peryearshallapplytothebuildingareassubjecttotheLease.4.EffectiveJune1,2022,Section4.a.MinimumMonthlyRent,ofLAG10-001isamendedtoreadasfollows:4.RENTANDFEES:4.a.MinimumMonthlyRent:TenantshallpaytoLandlordaMinimumMonthlyRentinthesumofTWOHUNDREDTHIRTY-FIVETHOUSANDDOLLARSANDNOCENTS($235,000.00),whichPage2 LAG-10-001AmendmentNo.11amountisone-twelfthoftheTotalAnnualRentshowninthechartbelow,PLUSLeaseholdExcise TaxasdescribedinSection5oftheLease,withoutdeduction,offset,priornoticeordemand,payablepromptlyinadvanceonthefirstdayofeachandeverymonthduringtheTerm.AllsuchpaymentsshallbemadetotheCityofRenton,AirportAdministrationOffice,RentonMunicipalAirport,616WestPerimeterRoad,UnitA,Renton,Washington98057;or(2)Byelectronicpaymentusingthepaymentportalavailableat:rentonwa.gov/aronlinepayments.TheMinimumMonthlyRentiscomputedasfollows:ExhibitSiteLandAreaSFBuildingAreaSFAnnualRate/SFFairMarketRentALandA-i&5-08,5-091237321.595$197,352.54ABuilding5-082729710.551$288,000.00ABuilding5-09112007.679$86,000.00BLandPositionA-2,A-3&5-501328961.595$211,969.12BBuilding5-50383947.905$303,500.00LandA-4thruA-9&Compass467809CRose1.595$746,155.36DNorthBoeingBridge167781.595$26,760.91EApronB1740731.595$277,646.44SubstationB1(leaseFterminated)GLand5-45571301.595$91,122.356Building5-45325611.978$39,000.00IUtilityInstallationsApronA&B22147.740.5316$11,774.04jLand760569231.595$90,792.19jBuilding7563259.231$3,000.00jBuilding76011748.944$10,500.00KLand770868481.595$138,522.56LLand820(LeaseTerminated)Subtotal(plusLeaseholdExciseTax)=$2,818,172.37TotalAnnualRent(asroundedbyArbitrator)(plusLeaseholdExciseTax)=$2,820,000$271,845.00$24,231.88HeavyDutypavingLightDutypaving5436901938550.5000.125NoterelatingtoExhibitB:ThePartiesacknowledgethatin2009and2010,theTenantmadeasubstantialcapitalinvestmentinimprovementstothe5-50Building,includingnumerousalterationstothestructureaswell asimprovementswithinthebuilding.Tenant’sfinancialinvestmentas wellastheseimprovementsandTenant’suseofthebuildingasapainthangarhavemadethisauniquebuilding.Pursuanttoprovisionsinthepriorlease,RentonwillassumeownershipofthisbuildingonJune1,2010.So,whileLandlordwillchargeTenantrentforitsPage3 LAG-b-aOlAmendmentNo.11use,thePartieshaveagreedtotreatthisbuildingdifferentlyfromotherbuildingsincertainprovisionsofthisLease.Therentalrateforthe5-50BuildingshalladjustaccordingtothetermssetoutinthisParagraph4,EXCEPTthatinthoseyearswhentheMinimumMonthlyRentisadjustedtothe“thencurrentmarketrent”,pursuanttoParagraph4.b.2,below,thepartiesagreethattheappraisal(orotherformofanalysistodeterminefairmarketrental)relatingtothe5-50Buildingshallevaluatethebuildingasanaircrafthangar,andasiftheimprovementsmadebyTenantin2009-2010,anddescribedinParagraph4.d,below,hadnotbeenmade.However,thePartiesagreethattheconditionofthebuilding,asitismaintainedbyBoeing,shallbeconsideredintheappraisal(orotherformofanalysis)todeterminethefairmarketrental.5.ThedifferencebetweentheTotalAnnualRentamountof$2,820,000.00showninSection4ofthisAmendmentNo.11andtheTotalAnnualRentamountof$1,512,477.96($1,440,552.97plusCPIincreaseof4.9%onJune2019)showninSection4ofAmendmentNo.10totheLeaseisONEMILLIONTHREEHUNDREDSEVENTHOUSANDFIVEHUNDREDTWENTY-TWODOLLARSANDFOURCENTS($1,307,522.04)or $108,960.17permonth($1,307,522.04!12months)(the“BackpaymentMonthlyRateforRentAdjustment”),PLUSLeaseholdExciseTax.Withinthirty(30)daysofthedateofentryofthisAmendmentNo.11,TenantshallpaytoLandlordalumpsumoftheBackpaymentMonthlyRateforRentAdjustmentfortheperiodbeginningJune1,2022 andendingwiththefirstdayofthemonthAFTERthisAmendmentNo.11isenteredinto(providetotal),PLUSLeaseholdExciseTax.6.Miscellaneousprovisionsapplicableto thisAmendmentNo.11.6.aThisAmendmentNo.11willbeeffectiveonthe dateofentryfirstmadeabove,andthe termshereinshall applyretroactivelywithaneffectivedateofJune1,2022.6.bThisAmendmentNo.11maybeexecutedinmultiplecounterparts,eachofwhichshallbedeemedan original,butallofwhich,together,shallconstitutebutoneandthesameinstrument.6.cThisAmendmentNo.11shallbegovernedbythelawsoftheStateofWashington,withoutreferencetoitschoiceoflawrules.6.dEachindividualexecutingthisAmendmentNo.11onbehalfofLandlordandTenantrepresentsandwarrantsthatsuch individualsaredulyauthorizedtoexecuteanddeliverthisAmendmentNo.11onbehalfofLandlordandTenant.6.eAsamendedbythisAmendmentNo.11,theLeasecontinuesinfullforceandeffectinaccordancewithitsterms.OnandafterthedateofentryofthisAmendmentNo.11,theLeaseshallbedeemedamendedbythisAmendmentNo.11andallreferencesintheLeaseto“thisAgreement,”“thisLease,”“herein,”“hereof,”andthelikeshallbedeemedtobereferencestotheLeaseasamendedbythisAmendmentNo.11.ThisAmendmentNo.11isexecutedbyLandlordandTenantasofthedatefirstwrittenabove.Page4 LAG-1O-OO1AmendmentNo.11THEBOEINGCOMPANYCITYOFRENTONaDelawareCorporationaMunicipalCorporationrintedName:MarcA.PoulinArmondoPavoneTitle:AuthorizedSignatoryMayorDatesigned:2../(o/DZ3Date signed:_________Attest:JasonA.SethCityClerkDateattested:_________Approvedastolegalform:ShaneMoloneyCityAttorneyPage54-5-20234-5-2023Approved by Alex Tuttle via 12/21/2022 email