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AGENDA
Transportation Committee Regular Meeting
4:00 PM - Monday, November 7, 2016
Council Conference Room, 7th Floor, City Hall – 1055 S. Grady Way
1. LANE AIRPORT LEASE ADDENDUM
a) AB - 1768
2. 540 RENTON HANGAR AIRPORT LEASE ADDENDUM
a) AB - 1771
3. ATT AIRPORT EASEMENT AGREEMENT AMENDMENT
a) AB - 1770
4. EMERGING ISSUES
AB - 1768
City Council Regular Meeting - 17 Oct 2016
SUBJECT/TITLE: Addendum to Airport Lease Agreement LAG-99-003 with Lane Hangar
Condominium Association, Inc.
RECOMMENDED ACTION: Refer to Transportation (Aviation) Committee
DEPARTMENT: Transportation Systems Division
STAFF CONTACT: Jonathan Wilson, Airport Manager
EXT.: 7477
FISCAL IMPACT SUMMARY:
Lease revenue increase of $2,697.06 per year for ground lease on the Airport. Total new annual lease revenue
is $29,998.62.
SUMMARY OF ACTION:
Lane Hangar Condominium Association, Inc. (Lane Hangar) has a ground lease on the Airport for the purpose
of aircraft hangar storage. Lane Hangar owns the buildings and leases the ground from the City under lease
agreement LAG-99-003. The lease allows for a periodic rate adjustment every three years on the anniversary
date of the effective date of the original lease. The current periodic rate adjustment date was August 1, 2016.
Lane Hangar was notified by certified letter on March 10, 2016 of the City’s intent to adjust their rate effective
August 1, 2016. The method used to adjust the rate was based on the Pro-Flight Aviation lease arbitration
process that established the ground lease rate as $0.7252 per square foot per year. This rate is the current
standard ground lease rate for all Airport leases.
This addendum to LAG-99-003 will increase the ground lease rate from $0.66 per square foot per year to
$0.7252 per square foot per year for the 41,366 square feet of lease ground space. This calculates to an
annual increase of $2,697.06 and a total new lease revenue amount of $29,998.62. This ground lease rate is in
effect until August 1, 2019. Lane Hangar’s lease agreement expires July 31, 2028.
EXHIBITS:
A. Addendum 6-16 to lease agreement LAG-99-003
STAFF RECOMMENDATION:
Authorize the Mayor and City Clerk to execute Addendum 6-16 to lease agreement LAG-99-003 with Lane
Hangar Condominium Association, Inc. for a periodic rate adjustment from $0.66 to $0.7252 per square foot
per year effective August 1, 2016.
AGENDA ITEM #1. a)
LAG99-003
Addendum 6-16
ADDENDUM TO LEASEAGREEMENT
(City of Renton to Lane Hangar Condominium Association Inc.)
THIS ADDENDUMto Lease Agreement LAG99-003 is effective as of August 1,
2016.
RECITALS:
WHEREAS,under LAG 99-003,effective August 1,1998,the City of Renton
(Lessor)had leased to Lane Hangar Condominium Association Inc.(Lessee)certain land
on the Renton Municipal Airport,Renton,Washington,until July 31,2018;and
WHEREAS,under LAG 99-003,Lessee leases approximately 41,366 square feet of
ground space;and
WHEREAS,on August 1,2013,the land rental rate for the approximately 41,366
square feet of land area leased by Lessee was determined to be $0.66 per square foot
per year and continuing until July 31,2016;and
WHEREAS,on January 8,2015,a new land rental rate was established,through
the lease arbitration process,at a rate of $0.7252 per square foot per year;and
WHEREAS,pursuant to LAG99-003 section 3e,in a letter dated March 10,2016,
Lessee was notified by certified letter that the lease rate would be readjusted using a
means other than the Consumer Price Index-Urban;and
WHEREAS,on August 1,2016,the land rental rate was adjusted using the lease
arbitration process,to a rate of $0.7252 per square foot per year for the 41,366 square
feet of leased land,resulting in an annual rental amount of $29,998.52 (41,366 x
30.7252),and continuing until July 31,2019.
NOW,THEREFORE,IN CONSIDERATIONOF THETERMS AND CONDITIONS HEREIN
CONTAINED AND FOR OTHER GOOD AND VALUABLECONSIDERATION,THE RECEIPT
AND SUFFICIENCYOF WHICH IS HEREBYACKNOWLEDGED,LESSORAND LESSEEAGREE
TO AMEND THE LEASEAND LEASEADDENDAAS SET FORTH BELOW:
WITNESSETH:
1.The Lessor and Lessee do hereby agree to amend section 3 of LAG99-003 to provide
an annual land rent of $29,998.62 (41,366 x $07252),PLUSleasehold excise tax,for
ORIGINAL
Lease Agreement LAG 99-003 1
City of Renton to Lane Hangar Condominium Association Inc.
AGENDA ITEM #1. a)
LAG99-003
Addendum 6-16
the 41,366 square feet identified in lease LAG 99-003,effective August 1,2016
through July 31,2019.
2.Allother 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.
Lane Hangar Condominium Association inc.
a Washington Corporation
ClTYOF RENTON
a Municipal Corporation
Denis Law
Mayor
BENBUEHLER
President
Title Jason Seth
City Clerk
Date
Approved as to legal form
City Attorney
Lease Agreement LAG 99003
City of Remon to Lane Hangar Condominium Associaiinli Inc.
I.)
AGENDA ITEM #1. a)
AB - 1771
City Council Regular Meeting - 17 Oct 2016
SUBJECT/TITLE: Addendum to Airport Lease Agreement LAG-99-002 with 540 Renton
Hangar, LLC
RECOMMENDED ACTION: Refer to Transportation (Aviation) Committee
DEPARTMENT: Transportation Systems Division
STAFF CONTACT: Jonathan Wilson, Airport Manager
EXT.: 7477
FISCAL IMPACT SUMMARY:
Lease revenue increase of $2,320.79 per year for ground lease on the Airport. Total new annual lease revenue
is $25,813.49.
SUMMARY OF ACTION:
The 540 Renton Hangar, LLC has a ground lease on the Airport for the purpose of aircraft hangar storage. 540
Renton Hangar, LLC owns the building and leases the ground from the City under lease agreement LAG-99-
002. The lease allows for a periodic rate adjustment every three years on the anniversary date of the effective
date of the original lease. The current periodic rate adjustment date was August 1, 2016.
540 Renton Hangar was notified by certified letter on March 10, 2016 of the City’s intent to adjust their rate
effective August 1, 2016. The method used to adjust the rate was based on the Pro-Flight Aviation lease
arbitration process that established the ground lease rate as $0.7252 per square foot per year. This rate is the
current standard ground lease rate for all Airport leases.
This addendum to LAG-99-002 was drafted and approved by legal to increase the ground lease rate from $0.66
per square foot per year to $0.7252 per square foot per year for the 35,595 square feet of leased ground
space. This calculates to an annual increase of $2,320.79 and a total new lease revenue amount of
$25,813.49. This ground lease rate is in effect until August 1, 2019. 540 Renton Hangar’s lease expires
July 31, 2028.
EXHIBITS:
A. Addendum 6-16 to lease agreement LAG-99-002
STAFF RECOMMENDATION:
Authorize the Mayor and City Clerk to execute Addendum 6-16 to lease LAG-99-002 with 540 Renton Hangar,
LLC for a periodic rate adjustment from $0.66 to $0.7252 per square foot per year effective August 1, 2016.
AGENDA ITEM #2. a)
LAG99-002
Amendment 6-16
ADDENDUMTO LEASEAGREEMENT
(City of Renton to 540 Renton Hangar LLC)
THISADDENDUMto Lease Agreement LAG99-002 is effective as of August 1,
2016.
RECITALS:
WHEREAS,under LAG99-002,effective May 6,1999,the City of Renton (Lessor)
had leased to the 540 Renton Hangar LLC(Lessee)certain land on the Renton Municipal
Airport,Renton,Washington,until July 31,2018;and
WHEREAS,on August 1,2013,the land rental rate for the approximately 35,595
square feet of land area leased by 540 Renton Hangar LLCwas determined to be $0.66
per square foot per year and continuing until August 1,2016;and
WHEREAS,pursuant to LAG99-002 section 3c,in a letter dated March 10,2016,
Lessee was notified by certified letter that the lease rate would be readjusted using a
means other than the Consumer Price lndex—Urban;and
WHEREAS,on January 8,2015,a new land rental rate was established,through
the lease arbitration process,at a rate of $0.7252 per square foot per year;and
WHEREAS,on August 1,2016,the land rental rate was adjusted using the lease
arbitration process,to a rate of$07252 per square foot per year for the 35,595 square
feet of leased land,resulting in an annual rental amount of $25,813.49 (35,595 x
$0.7252),and continuing until July 31,2018.
NOW,THEREFORE,IN CONSIDERATIONOF THE TERMS AND CONDITIONS HEREIN
CONTAINEDAND FOROTHER GOOD AND VALUABLECONSIDERATION,THE RECEIPT
AND SUFFICIENCYOF WHICH IS HEREBYACKNOWLEDGED,LESSORAND LESSEEAGREE
TO AMEND THE LEASEAND LEASEADDENDA AS SET FORTH BELOW:
WITNESSETH:
1.Effective on the date of this addendum,Section 3c.of LAG 99-002,is hereby
amended to read as follows:
3c.Periodic Rental Ad'ustment:Landlord and Tenant do hereby agree that the
Tenant shall pay to Landlord a Minimum Monthly Rent in the sum of two thousand,
Lease Agreement LAG 99-002 0RIGICityofRcntonto540RemonHangarLLC
AGENDA ITEM #2. a)
LAG99-002
Amendment 6-16
one hundred fifty one dollars and twelve cents ($2,151.13),which amount is one-
twelfth of the Total Annual Rent,PLUSleasehold excise tax as described in Section
4 of lease LAG99-002,without deduction,offset,prior notice or demand,payable
promptly in advance on the first day of each and every month during the Term.All
such payments shall be made to the City of Renton,Renton Municipal Airport,616
West Perimeter Road-Unit A,Renton,Washington 98057.
2.Allotherterms and conditions of the original Lease Agreement and Addenda
thereto,insofar as they are not inconsistent herewith,shall remain in fullforce and
effect.
540 Renton Hangar LLC
a Washington Limited LiabilityCompany
CITYOF RENTON
a Municipal Corporation
Denis Law
Mayor
6&0 TON -U1.’
Title Jason Seth
City Clerk
Date
Approved as to legal form
City Attorney
Lease Agreement LAG 99-002
City of Renton to 540Renton Hangar LLC
N
AGENDA ITEM #2. a)
AB - 1770
City Council Regular Meeting - 17 Oct 2016
SUBJECT/TITLE: Amendment to Airport Easement Agreement PAG-13-007 with AT&T
Corporation for the Right-of-Way Fiber Optics Easement
RECOMMENDED ACTION: Refer to Transportation (Aviation) Committee
DEPARTMENT: Transportation Systems Division
STAFF CONTACT: Jonathan Wilson, Airport Manager
EXT.: 7477
FISCAL IMPACT SUMMARY:
Airport annual revenue increase of $961.58 for the fiber optics right-of-way easement on the Airport. Total
new annual revenue for this easement is $17,540.48.
SUMMARY OF ACTION:
AT&T Corporation (AT&T) has a right-of-way easement on the Airport for their fiber optics trench line. AT&T
was granted the right-of-way easement by the City under easement agreement PAG-13-007. The agreement
allows for a periodic rate adjustment every three years using the Consumer Price Index (CPI). The next
periodic rate adjustment date is November 1, 2016.
AT&T was notified by certified letter on March 10, 2016 of the City’s intent to adjust the annual easement
amount using the CPI effective November 1, 2016. The CPI for the past three-year period increased by 5.8%.
The annual easement amount for the next three year period is being increased from $16,578.90 to $17,540.48
(16,578.90 x 1.058).
An amendment has been signed by AT&T to document this periodic rate adjustment. This rate amount is in
effect until October 31, 2019. AT&T’s easement agreement expires October 31, 2025.
EXHIBITS:
A. Addendum 01-16 to easement agreement PAG-13-007
STAFF RECOMMENDATION:
Authorize the Mayor and City Clerk to execute Amendment 01-16 to easement agreement PAG-13-007 with
AT&T Corporation for a periodic rate adjustment of 5.8% from $16,578.90 to $17,540.48 effective November
1, 2016.
AGENDA ITEM #3. a)
AMENDMENT TO UTILITYEASEMENT AGREEMENT
(City of Renton to AT&TCorp)
THIS AMENDMENT to Utility Easement Agreement PAG 13-007 is effective as of
November 1,2016.
RECITALS:
WHEREAS,in 1987,the City of Renton and AT&T entered into an easement
agreement,PAG 001-87 (the "1987 Easement”);and
WHEREAS,in 2013,PAG 001-87 was replaced with PAG 13-007,effective
November 1,2013;and
WHEREAS,PAG 13-007 amended the square footage to be 61,403.35 square
feet (6,140.35’L X 10‘W);and
WHEREAS,the annual charge for the utility easement for the approximately
61,403.35 square feet of right—ofway was determined to be $16,578,90,and continuing
until the third (3'“)anniversary ofthe Commencement Date,which is determined to be
November 1,2016;and
WHEREAS,under section 3.b.Periodic Adjustment of Annual Easement Payment
(PAG 13-007),the first periodic adjustment is to be calculated using the Consumer Price
Index for AllUrban Consumers for Seattle-Tacoma-Bremerton AllItems (1982—84=100)
(CPI-U);and
WHEREAS,the CP|—U for October,2013 was 242.787 and the CPI-U for August,
2016 is 256.907,and the difference between the CPl—Uof August 2016,as compared
to October 2013,is 5.8%(256307/242.787 =1.058%or 5.8%);and
WHEREAS,on November 1,2016,and for the ensuing three (3)year period,the
utility easement agreement has been adjusted using the Consumer Price Index-Urban,
to an annual utility easement amount of $17,540.48 (16,578.90 x 1.058),and continuing
until the next Adjustment Date,which is determined to be November 1,2019.
NOW,THEREFORE,IN CONSIDERATION OF THE TERMS AND CONDITIONS HEREIN
CONTAINED AND FOR OTHER GOOD AND VALUABLE CONSIDERATION,THE RECEIPT
AND SUFFICIENCYOF WHICH IS HEREBYACKNOWLEDGED,GRANTOR AND GRANTEE
AGREE TO AMEND THE UTILITYEASEMENTAS SET FORTH BELOW:
ORIGINAL
AGENDA ITEM #3. a)
bi’.'Te.4._,lr\niuc.l
WITNESSETH:
1.Grantor and Grantee do hereby agree that the difference between the CPI-U of
August 2016,as compared to October 2013,is 5.8%(256.907/242.787 =1.058%or
5.8%).This results in an annual utility easement increase from $16,578.90 to $17,
540.48 (16,578.90 x 1.058).
2.Grantor and Grantee agree to amend section 3a.of PAG 13-007 as follows:
3.a.Annual Easement Payment:Grantee shall pay to Grantor an Annual
Easement payment (hereinafter "Easement Payment")in the sum of seventeen
thousand five hundred forty dollars and forty eight cents ($17,540.48),without
deduction,offset,prior notice or demand,payable promptly in advance on the
first day of the following month.Allsuch payments shall be made to the City of
Renton,616 West Perimeter Road—UnitA,Renton,Washington 98057.
3.Allother terms and conditions of the original Utility Easement Agreement,insofar as
it is not inconsistent herewith,shall remain in full force and effect.
AT&TCorp CITYOF RENTON
a New York corporation a Municipal Corporation
4%.“;,3 .tQ.(L.,.,¢_
Alvln 5-"KT:_tta.~<ls=<vri Denis Law
Mayor
Title Jason Seth
City Clerk
Date
Approved as to legal form
Lawrence J.Warren,City Attorney
AGENDA ITEM #3. a)