HomeMy WebLinkAboutAddendum - 10ADDENDUM TO LEASE AGREEMENT
(City of Renton to 540 Renton Hangar LLC)
LAG-99-002
Addendum 10-25
THIS ADDENDUM to Lease Agreement LAG-99-002, is effective as of the date of
execution by the City of Renton, as indicated on the last page of this addendum.
RECITALS:
WHEREAS, 540 Renton Hangar LLC (hereinafter "Lessee") has a Lease Agreement with
the City of Renton (hereinafter "Lessor"), known to Lessor and Lessee (collectively, the
"Parties") as LAG-99-002, executed on August 1, 1998 and subsequently amended by and
through its addendums, Addendum 01-04, Addendum 02-08, Addendum 03-09, Addendum 04-
10, Addendum 05-13, Addendum 06-16, Addendum 07-18, Addendum 08-24, and Addendum
09-24 (hereinafter, collectively, the "Lease"); and
WHEREAS, on August 1, 2022, the land rental rate was adjusted using Consumer Price
Index-Urban (CPI-U), to a rate of $0.93 per square foot per year for the 35,595 square feet of
leased land, resulting in an annual rental amount of $32,925.48 (35,595 x $0.93), and
continuing until July 31, 2025; and
WHEREAS, on March 14, 2025, the Lessor conducted an independent market appraisal
of all Airport leased areas to determine the fair market value (hereinafter "market appraisal").
The market appraisal determined the fair market ground lease rate to be $1.65 per square foot
per year; and
WHEREAS, Lessor intends to use the most recent market appraisal study to adjust the
annual land rental rate to its fair market value; and
WHEREAS, pursuant to LAG-99-002, Section 3e, in a letter dated May 6, 2025, Lessee
was notified that the rental rate would be readjusted using a means other than the CPI-U; and
WHERAS, The Lessor and Lessee do hereby agree to amend Section 3a of LAG-99-002 to
provide an annual land rent of $58,731.75 (35,595 x $1.65), PLUS leasehold excise tax, for the
35,595 square feet identified in lease LAG-99-002, effective August 1, 2025, through July 31,
2028;and
WHEREAS, Lessee shall make a lump sum payment to Lessor of the back payment of
rent at the new land rental rate for the period beginning on August 1, 2025, upon execution of
this Addendum, if necessary; and
WHEREAS, pursuant to Section 3.6.7 of the Airport Regulations and Minimum Standards,
Lessee is required to provide insurance coverage in a manner and form acceptable to the City
and its Risk Manager; and
Addendum to Lease LAG-99-002 1
City of Renton to 540 Renton Hangar LLC
LAG-99-002, Adden #10-25
LAG-99-002
Addendum 10-25
WHEREAS, it is necessary and desirable to amend this lease by updating certain sections
as detailed below; and
WHEREAS, pursuant to Section 10 of the Lease Agreement, the buildings and
improvements become the property of the Lessor upon the expiration of the lease on August 1,
2028; and
WHEREAS, all other terms and conditions of the Lease and the addenda thereto shall
remain in full force and effect;
NOW, THEREFORE, IN CONSIDERATION OF THE TERMS AND CONDITIONS HEREIN CONTAINED
AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF
WHICH IS HEREBY ACKNOWLEDGED, LESSOR AND LESSEE AGREE TO AMEND THE LEASE AND
LEASE ADDENDA AS SET FORTH BELOW:
WITNESSETH:
1. The Lessor and Lessee do hereby agree to amend Section 3a of LAG-99-002 to establish
an annual land rent of $58,731.75 (35,595 x $1.65), PLUS leasehold excise tax, for the 35,595
square feet identified in lease LAG-99-002, effective August 1, 2025, through July 31, 2028.
Effective on the date of this Addendum, Section 3a of LAG-99-002 is hereby amended to
read as follows:
3a. Minimum Monthly Rent: Lessee shall pay to Lessor a Minimum Monthly Rent in
the sum of four thousand eight hundred ninety-four dollars and thirty-one cents
($4,894.31), PLUS Leasehold Excise Tax as described in Section 4, below, without
deduction, offset, prior notice or demand, payable promptly in advance on the
first day of each and every month. All such payments shall be made to the City of
Renton, Attention: Fiscal Services, 1055 South Grady Way, Renton, Washington
98057; or (2) By electronic payment using the payment portal available at
https://www.rentonwa.gov/payments. Automatic recurring payments can be set
up through the payment portal. For portal questions or assistance, please email
financeAR@rentonwa.gov or call 425-430-6859. The Minimum Monthly Rent, is
computed as follows:
(35,595 square feet)($1.65 per square foot per year) = $58,731.75 /yr,
($58,731.75/12 months = $4,894.31 per month) PLUS, leasehold excise tax.
3. Following the execution of this Addendum, Lessee shall pay to Lessor a lump sum of the
back payment in an amount equal to the new Minimum Monthly Rent rate for the period
beginning August 1, 2025, and ending with the first day of the month AFTER this Addendum 10-
25 is entered into, PLUS Leasehold Excise Tax.
4. Effective on the date of this Addendum, Section 18 of LAG-99-002 is hereby amended to
read as follows:
Addendum to Lease LAG-99-002
City of Renton to 540 Renton Hangar LLC
LAG-99-002
Addendum 10-25
18. INSURANCE:
18a. Personal Property: Lessee, at its expense, shall maintain in force during the
Term a policy of special form — causes of loss or all risk property insurance on all of Lessee's
alterations, improvements, trade fixtures, furniture and other personal property in, on or about
the Premises, in an amount equal to at least their full replacement cost. Any proceeds of any
such policy available to Lessee shall be used by Lessee for the restoration of Lessee's
alterations, improvements and trade fixtures and the replacement of Lessee's furniture and
other personal property. Any portion of such proceeds not used for such restoration shall
belong to Lessee. It is agreed that Lessor shall not be held liable in any manner for, or on
account of, any loss or damage to personal property of the Lessee, Lessee's invitees or other
persons, which may be sustained by fire or water or other peril, or for the loss of any articles by
burglary, theft or any other cause from or upon the Premises. It is acknowledged that Lessor
does not cover any of the personal property of Lessee, Lessee's invitees or other persons upon
the Premises through its insurance. Lessee, its invitees and other persons upon the Premises
are solely responsible to obtain suitable personal property insurance.
18b. Liability Insurance: Lessee, at its expense, shall maintain in force during the
Term the following types of insurance (or equivalents): a policy of commercial general liability
insurance (including premises liability), with the following minimum limits: $1,000,000 per
occurrence, $2,000,000 annual aggregate. Lessor shall be named as an additional insured on
Lessee's liability insurance solely with respect to the operations of the named insured (i.e.,
Lessee) and that coverage being primary and non-contributory with any other policy(ies)
carried by, or available to, the Lessor. The Lessee shall provide the Lessor with written notice of
any policy cancellation, within two business days of their receipt of such notice.
18.c. Pollution and Remediation Liability: Tenant, at its expense, shall maintain in force
during the Term the following insurance and/or Errors & Omissions applicable to underground
or above ground fuel storage tanks, fueling or refueling operations with a limit no less than
$2,000,000 per claim or occurrence and $2,000,000 aggregate per policy period of one year.
This policy shall include coverage for bodily injury, property damage personal injury and
environmental site restoration.
18d. Insurance Policies: Insurance required hereunder shall be written by a company
or companies acceptable to Lessor. Lessor reserves the right to establish and, from time -to -
time, to increase minimum insurance coverage amounts. Insurance required herein shall
provide coverage on an occurrence basis, not a claims -made basis. Notice of increased
minimum insurance coverage amounts shall be sent to the Lessee at least forty-five (45) days
prior to the annual renewal date of the Lessee's insurance. Prior to possession the Lessee shall
deliver to Lessor documents, in a form acceptable to Lessor, evidencing the existence and
amounts of such insurance. Lessee shall, prior to the expiration of such policies, furnish Lessor
with evidence of renewal of such insurance, in a form acceptable to Lessor. Lessee shall not do
or permit to be done anything which shall invalidate the insurance policies referred to above.
Lessee shall forthwith, upon Lessor's demand, reimburse Lessor for any additional premiums
Addendum to Lease LAG-99-002
City of Renton to 540 Renton Hangar LLC
LAG-99-002
Addendum 10-25
for insurance carried by Lessor attributable to any act or omission or operation of Lessee
causing such increase in the cost of insurance. If Lessee shall fail to procure and maintain such
insurance, then Lessor may, but shall not be required to, procure and maintain the same, and
Lessee shall promptly reimburse Lessor for the premiums and other costs paid or incurred by
Lessor to procure and maintain such insurance. Failure on the part of the Lessee to maintain
the insurance as required shall constitute a material breach of the Lease, upon which the Lessor
may, after giving five business days notice to the Lessee to correct the breach, terminate the
Lease or, at its discretion, procure or renew such insurance and pay any and all premiums in
connection therewith, with any sums so expended to be repaid to the Lessor on demand.
18e. Waiver of Subrogation: Lessee and Lessor each waives any and all rights of
recovery against the other, or against the officers, employees, agents and representatives of
the other, for loss of or damage to such waiving Party or its property or the property of others
under its control, where such loss or damage is insured against under any insurance policy in
force at the time of such loss or damage. Lessee shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.
Effective on the date of this Addendum, Section 22. of LAG-99-002 is hereby amended
to read as follows:
22. NOTICES: All notices or requests required or permitted under this Lease shall be
in writing; shall be personally delivered, delivered by a reputable express delivery service such
as Federal Express or DHL, delivered by email, or sent by certified mail, return receipt
requested, postage prepaid. Any notice given by hand, by courier, or by email shall be deemed
given when delivered and any notice sent by mail shall be deemed to have been received when
three days have elapsed from the time such notice was deposited in the U.S. mail. All notices or
requests to Lessor shall be sent to Lessor at Lessor's address set forth below and all notices or
requests to Lessee shall be sent to Lessee at Lessee's address set forth below:
Lessor's Address: City Clerk
Attn: Airport Director
1055 South Grady Way
Renton, Washington 98057
cityclerk@rentonwa.gov and rentonairport@rentonwa.gov
Lessee's Address: Keith Vernon, Manager
540 Renton Hangar LLC
999 Third Avenue, Suite 3050
Seattle, WA 98104
keith@clariusgroup.com
6. All other terms and conditions of the original Lease Agreement and Addenda thereto,
insofar as they are not inconsistent herewith, shall remain in full force and effect.
Addendum to Lease LAG-99-002
City of Renton to 540 Renton Hangar LLC
6/18/2025
Approved by Alex Tuttle via email 5/14/2025