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AGENDA
Transportation Committee Regular Meeting
5:00 PM - Monday, August 21, 2017
Council Conference Room, 7th Floor, City Hall – 1055 S. Grady Way
1. AERODYNE, LLC AMENDMENT TO LEASE AGREEMENT
a) AB - 1976 Transportation Systems Division recommends approval of an amendment to
the Aerodyne, LLC. Lease Agreement (LAG-84-006) for an automatic lease rate adjustment
that will increase the annual leasehold amount from $58,747.53 to $62,378.80.
2. RAINIER FLIGHT SERVICE, LLC AMENDMENT TO LEASE AGREEMENT
a) AB - 1975 Transportation Systems Division recommends approval of an amendment to
the Rainier Flight Service, LLC. Lease Agreement (LAG-14-005) for an automatic lease rate
adjustment that will increase the leasehold amount from $93,482.64 to $99,253.77.
3. EMERGING ISSUES IN TRANSPORTATION
AB - 1976
City Council Regular Meeting - 14 Aug 2017
SUBJECT/TITLE: Amendment to Lease Agreement LAG 84-006 with Aerodyne LLC
RECOMMENDED ACTION: Refer to Transportation (Aviation) Committee
DEPARTMENT: Transportation Systems Division
STAFF CONTACT: Harry Barrett, Jr., Airport Manager
EXT.: 7477
FISCAL IMPACT SUMMARY:
Execution of the Aerodyne LLC lease amendment will result in an Airport annual revenue increase of $3,631.27
for the 300 Airport Way leased parcel on the Airport grounds. Total annual leasehold revenue for this lease is
$62,378.80.
SUMMARY OF ACTION:
Aerodyne LLC has a lease agreement for the tenant-owned building at 300 Airport Way, and surrounding
ground area and parking lots. Aerodyne’s lease agreement LAG 84-006 provides for automatic lease rate
adjustments using the Consumer Price Index-Urban every 3 years. The next automatic lease rate adjustment
period is September 1, 2017 through August 31, 2020.
Aerodyne’s lease agreement LAG 84-006 has an expiration date of August 31, 2026.
The Consumer Price Index-Urban (CPI-U) in April 2017 of 261.560 increased over the CPI-U in April 2014, by 6%
(261.560/246.616 = 1.06 or 6%). Applying the 6% increase in the CPI-U to the ground lease rates (inside and
outside the fence) results in a leasehold increase from $58,747.53 to $62,378.80, plus leasehold excise tax.
EXHIBITS:
A. AMENDMENT 16-17 TO LEASE AGREEMENT LAG 84-006
STAFF RECOMMENDATION:
Authorize the Mayor and City Clerk to execute Addendum 16-17 to lease agreement LAG 84-006 with
Aerodyne LLC for an automatic lease rate adjustment that will increase the annual leasehold amount from
$58,747.53 to $62,378.80, effective September 1, 2017.
AGENDA ITEM #1. a)
LAG84-006
Amendment 16-17
AMENDMENTTO LEASEAGREEMENT
(Cityof Renton to Aerodyne LLC)
THISAMENDMENTto Lease Agreement LAG84-006 is effective as of September
1,2017.
RECITALSZ
WHEREAS,under lease agreement LAG84-006 (also known as LAG006-84)(the
Lease),executed September 1,1984,and assigned under Addendum 12-06,as
subsequently amended,the City of Renton (Lessor)leased to Aerodyne LLC(Lessee)
certain land on the Renton Municipal Airport,Renton,Washington;and
WHEREAS,the Lease was extended to August 31,2026 under the operation of
the terms of Addendum 02-97 to permit agreement PAG-97-003;and
WHEREAS,Aerodyne LLCleases two parcels inside the airport perimeter fence,
consisting of 42,936 square feet and 34,112 square feet,for a total leased area inside
the fence of 77,048 square feet;and
WHEREAS,Aerodyne LLCalso leases two parking lot parcels outside of the
perimeter fence,consisting of a west parking lot of 4,518 square feet and an east
parking lot of 1,466 square feet,for a total parking lot leased area of 5,984 square feet;
and
WHEREAS,on September 1,2014,through a lease arbitration process,a new
land rental rate for the 77,048 square feet of land area inside the perimeter fence was
established at $0.7252 per square foot per year,and continuing until September 1,
2017;and
WHEREAS,through the same lease arbitration process,a new land rental rate
for the two parking lot areas,consisting of 5,984 square feet outside the perimeter
fence,was established at $0.48 per square foot per year,or 66%of the land rental rate
because of their limited marketability ($0.7252 x .66 =$0.48),and continuing until
September 1,2017;and
WHEREAS,the land rental rate is subject to a three-year adjustment based on
Consumer Price |ndex—Urban (CPI-U)pursuant to Sections 6 and 7 of LAG84-006 ADD
13-09;and
Amendment to Lease Agreement LAG 84-006 0RfGIN
City of Renton to Aerodyne LLC
AGENDA ITEM #1. a)
LAG84-006
Amendment 16-17
WHEREAS,Lessor and Lessee agree that the difference between the CPI-U of
April 2017,as compared to April 2014,is 6%(261.560/246.616 =1.06),and this results
in a ground lease rate increase from $0.7252 to $0.77 per square foot inside the
perimeter fence per year ($0.7252 X 1.06:$0.77),and a ground lease rate increase
from $0.48 to $0.51 per square foot of parking area outside the perimeter fence per
year ($0.48 x 1.06:$0.51);and
WHEREAS,Lessor and Lessee agree that on September 1,2017,and for the
ensuing three (3)year period,the land rental rate for the ground area inside the
perimeter fence should be adjusted to a rate of $0.77 per square foot per year for the
77,048 square feet of leased area,resulting in an annual rental amount of $59,326.96
(77,048 x $0.77),and a monthly rental rate of four thousand nine hundred forty-three
dollars and ninety-one cents ($4,943.91)($59,326.96/12:$4,943.91),and continuing
until September 1,2020;and
WHEREAS,Lessor and Lessee agree that on September 1,2017,and for the
ensuing three (3)year period,the land rental rate for the ground area outside the
perimeter fence should be adjusted to a rate of $0.51 per square foot per year for the
5,984 square feet of leased area,resulting in an annual rental amount of $3,051.84
(5,984 x $0.51),and a monthly rental rate of two hundred fifty-four dollars and thirty-
two cents ($3,051.84/12:$254.32).
NOW,THEREFORE,IN CONSIDERATIONOF THE TERMS AND CONDITIONSHEREIN
CONTAINEDAND FOR OTHER GOOD AND VALUABLECONSIDERATION,THE RECEIPT
AND SUFFICIENCYOF WHICH IS HEREBYACKNOWLEDGED,LESSORAND LESSEEAGREE
AS SETFORTH BELOW:
WITNESSETH:
1.On the effective date of this amendment,Section 2 of the Lease,is hereby amended
to read as follows:
2.Minimum Monthly Rent:Lessee shall pay to Lessor a total minimum monthly
rent (Inside the Fence +parking areas)in the amount of five thousand one hundred
ninety-eight dollars and twenty-three cents ($4,943.91 +$254.32 =$5,198.23),
which amount is one—twelfthof the total annual rent,PLUS leasehold excise tax,
payable promptly in advance on the first day of each and every month during the
term of the lease.Allsuch payments shall be made to the City of Renton,Renton
Municipal Airport,616 West Perimeter Road-Unit A,Renton,Washington 98057.
2.Allother terms and conditions of the original Lease (including Addenda thereto),
insofar as they are not inconsistent herewith,shall remain in full force and effect.
Amendment to Lease Agreement LAG 84-006
City of Renton to Aerodyne LLC
I\J
AGENDA ITEM #1. a)
LAG84-006
Amendment 16-17
Aerodyne LLC CITYOF RENTON
a Washington Limited LiabilityCompany a Municipal Corporation
Dennis Law
Mayor
Title Jason Seth
City Clerk
Date
Approved as to legal form
Shane Moloney,City Attorney
Amendment to Lease Agreement LAG 84-006
City of Renton to Aerodyne LLC
AGENDA ITEM #1. a)
AB - 1975
City Council Regular Meeting - 14 Aug 2017
SUBJECT/TITLE: Amendment to Lease Agreement LAG 14-005 with Rainier Flight
Service LLC
RECOMMENDED ACTION: Refer to Transportation (Aviation) Committee
DEPARTMENT: Transportation Systems Division
STAFF CONTACT: Harry Barrett, Jr., Airport Manager
EXT.: 7477
FISCAL IMPACT SUMMARY:
Execution of the Rainier Flight Service LLC lease amendment will result in an Airport annual revenue increase
of $5,771.13 for the 800 West Perimeter Road leased parcel on the Airport grounds. Total annual leasehold
revenue for this lease is $99,253.77.
SUMMARY OF ACTION:
Rainier Flight Service LLC has a building lease agreement for the city-owned building at 800 West Perimeter
Road, and the ground area under and surrounding the building. Rainier Flight Service’s lease agreement LAG
14-005 provides for automatic lease rate adjustments using the Consumer Price Index-Urban. The next
automatic lease rate adjustment period is effective November 1, 2017 through October 31, 2020.
Lease agreement LAG 14-005 with Rainier Flight Service LLC expires on September 30, 2024.
The Consumer Price Index-Urban (CPI-U) in April 2017 of 261.560 increased over the CPI-U in April 2014 by 6%
(261.560/246.616 = 1.06 or 6%). Applying the 6% increase in the CPI-U to the building lease rate and the
ground lease rate results in a leasehold increase from $93,482.64 to $99,253.77, plus leasehold excise tax.
EXHIBITS:
A. AMENDMENT 05-17 TO LEASE AGREEMENT LAG 14-005
STAFF RECOMMENDATION:
Authorize the Mayor and City Clerk to execute Amendment 05-17 to lease agreement LAG-14-005 with Rainier
Flight Service LLC for an automatic lease rate adjustment that will increase the leasehold amount from
$93,482.64 to $99,253.77, effective November 1, 2017.
AGENDA ITEM #2. a)
BLAG14-005
Amendment 05-17
AMENDMENT TO LEASEAGREEMENT
(City of Renton to Rainier Flight Service,LLC)
THIS AMENDMENTto Lease Agreement BLAG14-005 is effective as of November
1,2017.
RECITALS:
WHEREAS,under lease BLAG14-005,executed November 1,2014,as
subsequently amended,the City of Renton (Landlord)leased to Rainier Flight Service
LLC(Tenant)certain land on the Renton Municipal Airport,Renton,Washington,until
September 30,2024;and
WHEREAS,pursuant to section 4.a.of BLAG14-005,Rainier Flight Service,LLC’s
lease rate is further divided into two sub sections,a land component,and a building
component of the lease;and
WHEREAS,on February 1,2015,through a lease arbitration process,a new land
rental rate for the approximately 88,601 square feet of land area leased by Tenant was
established at $0.7252 per square foot per year,and continuing until February 1,2017;
and
WHEREAS,the land and building rental rate is subject to a three-year
adjustment based on the Consumer Price lndex-Urban (CPI-U)pursuant to Section 4.b
of BLAG14-005;and
WHEREAS,Landlord and Tenant agree that the difference between the CPI-U of
April 2017,as compared to April 2014,is 6%(261.560/246.616 =1.06),and this results
in a ground lease rate increase from $0.7252 to $0.77 per square foot per year ($0.7252
X 1.06:$0.77),and a building lease rate increase from $1.46 to $1.55 per square foot
per year ($1.46 x 1.06:$1.55),and continuing until February 1,2020;and
WHEREAS,Landlord and Tenant agree that on November 1,2017,and for the
ensuing three (3)year period,the land rental rate should be adjusted to a rate of $0.77
per square foot per year for the 88,601 square feet of leased ground area,resulting in
an annual ground rental amount of $68,222.77 (88,601 x $0.77),and a monthly ground
rental rate of five thousand six hundred eighty five dollars and twenty three cents
($5,685.23)($68,222.77/12=$5,685.23),and continuing until November 1,2020.
WHEREAS,Landlord and Tenant agree that on November 1,2017,and for the
ensuing three (3)year period,the building rental rate should be adjusted to a rate of
I
Amendment to Lease Agreement BLAG 14-005 RIGAN
City of Renton to Rainier Flight Service.LLC
AGENDA ITEM #2. a)
BLAG14-005
Amendment 04-17
$1.55 per square foot per year for the 20,020 square feet of leased building area,
resulting in an annual building rental amount of $31,031 (20,020 x $1.55),and a
monthly rental rate of two thousand five hundred and eighty five dollars and ninety two
cents ($2,585.92)($31,031/12=$2,585.92),and continuing until November 1,2020;and
WHEREAS,pursuant to Amendment 01-14,Tenant is permitting Landlord's use
of the Northwest Corner Room,in the Tenant-leased building,on a month—to-month
basis for the sum of one hundred sixty one dollars and thirty three cents ($161.33),per
month toward the Minimum Monthly Rent paid by the Tenant under the Lease.
NOW,THEREFORE,IN CONSIDERATIONOF THETERMS AND CONDITIONSHEREIN
CONTAINED AND FOR OTHER GOOD AND VALUABLECONSIDERATION,THE RECEIPT
AND SUFFICIENCYOF WHICH IS HEREBYACKNOWLEDGED,LANDLORDAND TENANT
AGREE AS SET FORTH BELOW:
WITNESSETH:
1.On the effective date of this amendment,Section 4.a.of LAG09-006,is hereby
amended to read as follows:
4a.Minimum Monthly Rent:Tenant shall pay to Landlord a Minimum Total
(Ground lease +Building lease)Monthly Rent in the sum of eight thousand two
hundred seventy one dollars and fifteen cents ($5,685.23 +$2,585.92 =$8,271.15),
which amount is one-twelfth of the Total Annual Rent,PLUSleasehold excise tax as
described in Section 5 of lease BLAG14-005,without deduction,offset,prior notice
or demand,payable promptly in advance on the first day of each and every month
during the Term.Allsuch payments shall be made to the City of Renton,Renton
Municipal Airport,616 West Perimeter Road-Unit A,Renton,Washington 98057.
Amendment to Lease Agreement BLAG I4-005
City of Renton to Rainier Flight Service.LLC
IAJ
AGENDA ITEM #2. a)
BLAG14-005
Amendment 04-17
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.
Rainier Flight Service LLC CITYOF RENTON
a Washington Limited LiabilityCompany a Municipal Corporation
".-rt.i/—-CV‘:‘
Dennis Law
Mayor
A)&&/V\./L/
Title Jason Seth
City Clerk
Date
Approved as to legal form
Shane Moloney,City Attorney
Amendment to Lease Agreement BLAG I4-005
City of Renton to Rainier Flight Service,LLC
AGENDA ITEM #2. a)