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AGENDA
Transportation Committee Regular Meeting
4:15 PM - Monday, May 18, 2020
Videoconference
1. Rainier Flight Service Lease Amendment
a) AB - 2635 Transportation Systems Division requests approval to execute Amendment 1-20
to LAG-19-001, lease with Rainier Flight Services, LLC, which results in an initial annual
economic impact of $22,577.40 by bringing the land rental rate current; and benefits all
parties by extending the organization's opportunity to meet construction deadlines.
2. Emerging Issues in Transportation
- ADA Transition Plan Update
- Ace Aviation Improvements
- Airport Transition Plan
a) ADA Transition Plan Presentation
AB - 2635
City Council Regular Meeting - 04 May 2020
SUBJECT/TITLE: Amendment No. 1-20 to LAG-19-001 with Rainier Flight Service, LLC
RECOMMENDED ACTION: Refer to Transportation (Aviation) Committee
DEPARTMENT: Transportation Systems Division
STAFF CONTACT: Jason Anderson, Interim Airport Manager
EXT.: 7476
FISCAL IMPACT SUMMARY:
Execution of Amendment 1-20 to LAG-19-001 between Rainier Flight Service, LLC (Rainier) and the City will
result in annual lease revenue of at least $178,695, with scheduled increases based on CPI adjustments and an
appraisal to determine the value of the 800 Parcel. This is a $22,577.40 annual increase from the current lease
structure. In addition the original lease includes language that provides a lump sum payment to the City upon
demolition of the 800 Parcel building, if appropriate. This Amendment leaves those provisions intact.
SUMMARY OF ACTION:
As provided for in the original lease, Rainier and Airport staff mutually desire to see the 800 Parcel
redeveloped. In addition, Rainier and Airport staff mutually desire to see the 820 Parcel developed to
include a single large combination hangar and office building, landside parking lot and adequate
ramp space for parked aircraft.
The terms and conditions in Section 10 of Appendix 1 in the original lease included deadlines for
Rainier to reach milestones toward constructing improvements on the 800 and 820 Parcels. Section
9.d of Appendix 1 anticipates that a deadline will only be adjusted if Rainier demonstrates that
despite its “good faith efforts” the deadline will not be met. The 820 Parcel’s deadlines began with a
requirement to submit for complete permit application no later than December 1, 2019 and to
commence construction no later than February 29, 2020.Rainier did not meet those deadlines.Under
the terms of the original lease, failure to meet these deadlines means that the lease will expire on
February 28, 2022, unless the lease is amended.
Before the deadlines expired, in July and August 2019 Rainier approached the City with a request to
consider granting an extension to their deadlines asserting the following reasons:
• Rainier stated that it had advanced well into the design phase for the 820 Parcel.
• Rainier stated that it was struggling to complete the survey work necessary to ensure all building
and code requirements were met. Rainier specifically stated that its engineers could not pull core
samples until the end of October 2019, preventing finalization of the foundation plan until later in
the fall. Rainier stated that prior to such work, they could only make assumptions regarding utility
work and final floor plan.
• Rainier stated that beginning foundation work in the month of February is not ideal because the
water table is high, driving up costs.
AGENDA ITEM #1. a)
In addition Rainier expressed its desire to extend the existing February 28, 2020 termination date of
a sublease they have with The Boeing Company on the 820 Parcel as an accommodation to Boeing
during the pendency of the anticipated construction.
City staff considers Rainier’s construction-related reasons as “good faith efforts” justifying a
renegotiation of certain of the original deadlines.Based on this and Rainier’s willingness to
immediately commence payment to the City at the current Airport land rental rate of $1.10 per
square foot, City staff recommends that the City Council agree to amend the lease to extend the 820
Parcel construction deadlines, lease back an office space area, amend the rental rates and make
other necessary corrections and amendments, all as set forth in Amendment 1-20.
EXHIBITS:
A. Amendment 1-20 to Lease Agreement
STAFF RECOMMENDATION:
Authorize the Mayor and City Clerk to execute Amendment 1-20 to LAG-19-001 with Rainier Flight
Service, LLC. Such authorization will have an initial increased annual economic impact of $22,577.40, and
would benefit the City and Rainier respectively by bringing current the land rental rate earlier than the
original lease required and re-establishing Rainier’s opportunity to meet the 820 Parcel construction
deadlines so as to prevent the lease from expiring on February 28, 2022.
AGENDA ITEM #1. a)
AMENDMENT NO. 1 TO LEASE AGREEMENT
City of Renton to Rainier Flight Service, LLC (Parcels 800 and 820)
THIS AMENDMENT No. 1 (the “Amendment”) to Lease Agreement No. LAG-19-
001 is dated for reference purposes as _______________, 2020, and is made by and
between the CITY OF RENTON, a Washington municipal corporation (“Landlord” or the
“City”) and RAINIER FLIGHT SERVICE, LLC, a Washington limited liability company
(“Tenant”). This Amendment amends that certain lease agreement filed under City file
number LAG-19-001 dated February 28, 2019 (the “Lease Agreement” or “LAG-19-001”).
This Amendment is effective as of the last date executed.
WHEREAS, under LAG-19-001, Tenant is leasing from the City the two parcels
identified as 800 and 820 West Perimeter Road (the “800 Parcel” and the “820 Parcel,”
respectively) at the Renton Municipal Airport (the “Airport”); and
WHEREAS, as originally established via an amendment to a prior lease
agreement between Landlord and Tenant, Landlord desires to sublet from Tenant, and
Tenant desires to sublet back to Landlord a 1,326-square foot office room known as the
Northwest Corner Room located on the 800 Parcel, as depicted in Exhibit 1-A attached
hereto; and
WHEREAS, Appendix 1 to LAG-19-001 allows Tenant to construct improvements
on the 800 and 820 Parcels, pursuant to the terms and conditions of said Appendix 1;
and
WHEREAS, the terms and conditions in Section 10 of Appendix 1 include
deadlines for Tenant to reach milestones toward constructing improvements on the 800
and 820 Parcels. Section 9.d of Appendix 1 anticipates that a deadline will only be
adjusted if Tenant demonstrates that despite its “good faith efforts” the deadline will
not be met; and
WHEREAS, the 820 Parcel’s deadlines began with a requirement to submit for
complete permit application no later than December 1, 2019 and to commence
construction no later than February 29, 2020; and
WHEREAS, in July and August 2019, Tenant informally requested that Landlord
considering granting an extension to these deadlines, asserting the following reasons:
AGENDA ITEM #1. a)
Amendment 1 to LAG-19-001 Page | 2
• Tenant stated that it had advanced well into the design phase for the 820
Parcel;
• Tenant stated that it was struggling to complete the survey work
necessary to ensure all building and code requirements were met.
Specifically, Tenant stated that its engineers would not pull core samples
until the end of October 2019, enabling subsequent finalization of the
foundation plan. Tenant stated that prior to such work, Tenant could
only make assumptions regarding utility work and final floor plan; and
• Tenant stated that beginning foundation work in the month of February
is not ideal because the water table is high, driving up costs.
In addition, Tenant expressed its desire to extend the existing February 28, 2020
termination date of a sublease that Tenant has with The Boeing Company on the 820
Parcel as an accommodation to Boeing during the pendency of the anticipated
construction; and
WHEREAS, on November 14, 2019, Tenant representatives met with Landlord
representatives to elaborate on Tenant’s request for extension to the 820 Parcel
construction deadlines. During that meeting Tenant re-raised its desire to extend
additional time to The Boeing Company on the 820 Parcel. Tenant also asserted that the
geotechnical information it received in October 2019 regarding the 820 Parcel’s soil
conditions would increase construction costs significantly beyond what Tenant had
planned. In addition, Tenant asserted that utility work to support Tenant’s 820 Parcel
construction would also exceed Tenant’s original plan; and
WHEREAS, Landlord considered the information Tenant presented at the
November 14, 2019 meeting; and
WHEREAS, Landlord observes that Tenant’s desire to extend time to The Boeing
Company’s sublease of the 820 Parcel is not, in and of itself, a basis for extending the
820 Parcel construction deadlines; and
WHEREAS, Appendix 1’s first 820 Parcel construction deadline to submit for
complete permit application no later than December 1, 2019 has now expired such that,
without a Lease amendment, the Lease will expire on February 28, 2022 per Section 9.a.
of Appendix 1; and
AGENDA ITEM #1. a)
Amendment 1 to LAG-19-001 Page | 3
WHEREAS, Landlord had Valbridge Property Advisors prepare an Appraisal
Report for the Renton Municipal Airport, report dated May 29, 2019, which established
the current land rental rate for the Airport at $1.10 per square foot; and
WHEREAS, in exchange for Tenant agreeing to immediately commence payment
to Landlord at the current Airport land rental rate of $1.10 per square foot, Landlord is
willing to amend the Lease to extend the 820 Parcel construction deadlines as set forth
in this Amendment. Such extension would benefit both Landlord and Tenant,
respectively, by (1) bringing current the land rental rate early and (2) re-establishing
Tenant’s opportunity to meet the 820 Parcel construction deadlines so as to prevent the
Lease from expiring on February 28, 2022; and
WHEREAS, Tenant has now further requested that Landlord also modify Tenant’s
construction obligations as to the 800 Parcel to give Tenant more flexibility in
determining whether to rebuild on the 800 Parcel, and Landlord is willing to amend as
long as the 800 Parcel’s interests timely return to Landlord and at no cost to Landlord as
set forth in this Amendment;
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, LANDLORD AND TENANT
AGREE TO AMEND THE LEASE, LAG-19-001, AS SET FORTH BELOW:
1. Tenant hereby sublets back to Landlord a 1,326-square foot office room known as
the Northwest Corner Room, as depicted in Exhibit 1-A attached hereto, and
Landlord accepts the same. This amendment shall be incorporated into the Lease
Agreement’s definition of the Premises.
2. Landlord and Tenant do hereby agree that Section 10.a of Appendix 1 of the Lease
Agreement is amended to read as follows:
10.a. Schedule Milestones for the 800 Parcel Improvements.
10.a.(1). Milestone #1 - Tenant will submit a complete permit application for the
demolition portion of the 800 Parcel Improvements no later than December 1, 2029,
and shall complete demolition no later than April 1, 2030. (The date that the City
determines that demolition is complete is the “Demolition Date.”)
AGENDA ITEM #1. a)
Amendment 1 to LAG-19-001 Page | 4
10.a.(2). Milestone #2 - Tenant will submit a complete permit application for the
construction portions of the 800 Parcel Improvements to the City’s Department of
Community and Economic Development (“CED”) no later than December 1, 2029.
10.a.(3). Milestone #3 - Tenant will commence construction no sooner than June
1, 2020 and no later than June 1, 2030. (The date that construction commences is the
“800 Parcel Construction Date.”) Tenant shall notify the City of the 800 Parcel
Construction Date.
10.a.(4). Milestone #4 - Tenant will complete all 800 Parcel Improvements
within 18 months after the 800 Parcel Construction Date.
10.a.(5). Alternative Milestone - At Tenant’s option, as an alternative to the
milestones set forth in Sections 10.a.(1) through 10.a.(4), above, if the Demolition Date
occurs on or before April 1, 2030, Tenant may elect to terminate the Agreement as to
the 800 Parcel only with such termination taking effect on the Demolition Date.
3. Landlord and Tenant do hereby agree that Section 9.b of Appendix 1 of the Lease
Agreement is amended to read as follows:
9.b. The following shall apply unless Tenant proceeds with the Alternative
Milestone set forth in Section 10.a.(5), below: If Tenant does not complete all 800
Parcel Improvements within 18 months of the 800 Parcel Construction Date (as defined
below), the following will automatically apply and supersede any conflicting term or
condition in LAG 19-001, Section 3: Tenant agrees to complete demolition on the 800
Parcel, and after such demolition is complete Tenant and Landlord will as soon as
practicable amend the Lease to remove the 800 Parcel from the Lease by removing it
from the definition of the term Premises and making all other related amendments to
the Lease.
4. Landlord and Tenant do hereby agree that Sections 9.a. of Appendix 1 of the Lease
Agreement is amended to delete the clause appearing in that section that reads
“LAG 18-_____, Section 3” and to replace that clause with the following: “LAG 19-
001, Section 3”.
5. Landlord and Tenant do hereby agree that Section 10.b of Appendix 1 of the Lease
Agreement is amended to read as follows:
10.b. Schedule Milestones for the 820 Parcel Improvements.
AGENDA ITEM #1. a)
Amendment 1 to LAG-19-001 Page | 5
10.b.(1). Milestone #1 - Tenant will submit a complete permit application for the
820 Parcel Improvements to CED no later than January 31, 2021.
10.b.(2). Milestone #2 - Tenant will commence construction no later June 30,
2021. (The date that construction commences is the “820 Parcel Construction Date.”)
Tenant shall notify the City of the 820 Parcel Construction Date.
10.b.(3). Milestone #3 - Tenant will complete all 820 Parcel Improvements
within 18 months after the 820 Parcel Construction Date.
6. Landlord and Tenant do hereby agree that Subsection 4.a of the Lease Agreement is
amended to read as follows, which reflects an increase to $1.10/square foot/year of
land rent rate and a reduction in building rent for the office room sublet on the 800
Parcel:
4.a. Minimum Monthly Rent: Tenant shall pay to Landlord a Minimum Monthly Rent
in the sums listed below, PLUS Leasehold Excise Tax as described in Section 5, 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, Renton, Washington 98057. The Minimum Monthly
Rent, beginning on the Commencement Date, is computed as follows:
Monthly Rent – Land Component (Parcels 800 and 820), Applicable During Periods 1, 2,
and 3, as defined below
Fourteen Thousand Eight Hundred Ninety-One and 25/100 Dollars ($14,891.25),
which amount is one-twelfth (1/12) of the annual land rent of One Hundred
Seventy-Eight Thousand Six Hundred Ninety-Five and 00/100 Dollars ($178,695.00)
(162,450 square feet x $1.10 per square foot per year) PLUS, leasehold tax.
Monthly Rent – Building Component, Parcel 800, Applicable During Period 1 (“Period 1”
means the period beginning on the Commencement Date and ending the day before the
Appraisal Submittal Date, as defined in Section 4.f, below).
Two Thousand Four Hundred Fourteen and 64/100 Dollars ($2,414.64), which
amount is one-twelfth (1/12) of the annual building rent of Twenty-Eight Thousand
Nine Hundred Seventy-Five and 70/100 Dollars ($28,975.70) ((20,020 square feet,
less 1,326 square feet of office space = 18,694 square feet) x $1.55 per square foot
per year); PLUS, leasehold tax.
AGENDA ITEM #1. a)
Amendment 1 to LAG-19-001 Page | 6
Monthly Rent – Building Component, Parcel 800, Applicable During Period 2 (“Period 2”
means the period commencing on the Appraisal Submittal Date and ending on the
Demolition Date)
[Amount to be determined by Landlord via appraisal as further described in Section
4.f, below.]
Monthly Rent – Building Component, Parcel 800, Applicable During Period 3 (“Period 3”
means the period after the Demolition Date, defined as the date that demolition
activities as contemplated in Appendix 1 are complete, as determined by Landlord)
[Amount to be determined by Landlord via financial analysis supplied by Tenant and
confirmed by Landlord, with such confirmation to be at Tenant’s cost. The amount
will be calculated as follows: A lump sum equal to any loss in net value to Landlord
resulting from the demolition of the existing building and the construction of the
new building, payable monthly over the then-remaining term of the Lease, with any
remaining balance due as a final lump sum payment at the termination of the Lease.
For the purposes of this paragraph, “net value” will be determined by comparing (A)
the appraised value of the existing building as contemplated in paragraph 4f with (B)
the projected appraised value of the newly constructed building as of the date
construction is complete. If such projected appraised value of the new building
exceeds the appraised value of the existing building, the amount due under this
paragraph shall be Zero Dollars ($0.00). For the avoidance of doubt, no rent or “net
value” payment will be payable for the Building Component during the period
between demolition and the appraisal of the new building once constructed. In no
event shall Landlord owe any amount to Tenant.]
Tenant anticipates that it might prefer after demolition on the 800 Parcel to utilize
the Parcel 800 for tie-down parking or other use not allowed under the current
terms of the Lease Agreement (hereinafter, the “Alternative Use”). Tenant
acknowledges that any proposal for Alternative Use is not allowed under the Lease
Agreement and would require an amendment to the Lease Agreement, including its
Appendix 1. Tenant acknowledges and agrees that Landlord has no obligation to
agree to such an amendment and that it is within Landlord’s sole discretion whether
to agree to such amendment. As a courtesy notice to Tenant that is made without
any binding obligation on Landlord, Landlord anticipates that if it were to agree to
such amendment it would require the following regarding the Alternative Use:
• Tenant must first demonstrate via a business case how the Alternative Use
would shield Landlord from long-term adverse revenue impacts; and
AGENDA ITEM #1. a)
Amendment 1 to LAG-19-001 Page | 7
• The Alternative Use will change the land rent rate for Parcel 800. The land
rent rate for the Alternative Use on Parcel 800 will be based on appraised
fair market value as of the Demolition Date, and will be subject to increases
per Landlord’s leasing policy in effect at the time of the Demolition Date;
and
• If the Alternative Use is subleased in whole or in part, and such sublease
reflects a rent that is substantially above a then-current market rate, then in
addition to the land rent the Landlord may require Tenant to pay to
Landlord a percentage of net income from such subleasing; and
• If the Alternative Use results in Tenant making use of Parcel 800 for apron
space, Tenant will guarantee that a definite, but as-yet-undetermined,
number of the spaces will be made available for transient aircraft parking.
For the avoidance of doubt, if Tenant elects not to demolish the building on Parcel
800, the Period 2 building rent rate will continue to apply until such time as the lease
for Parcel 800 terminates.
Total Monthly Rent for Period 1
Monthly Rental – Land Component (Parcels 800 and 820) $14,891.25
Monthly Rental – Building Component (Parcel 800), Period 1 $2,414.64
TOTAL: $17,305.89 per month, PLUS Leasehold
Excise Tax
Total Monthly Rent for Period 2
Monthly Rental – Land Component (Parcels 800 and 820) $14,891.25
Monthly Rental – Building Component (Parcel 800), Period 2 $TBD
TOTAL: $TBD per month, PLUS Leasehold Excise
Tax
Total Monthly Rent for Period 3
Monthly Rental – Land Component (Parcels 800 and 820) $14,891.25
Monthly Rental – Building Component (Parcel 800), Period 3 $TBD
TOTAL: $TBD per month, PLUS Leasehold Excise
Tax
7. All other terms and conditions of the original Lease Agreement, insofar as they are
not inconsistent herewith, shall remain in full force and effect.
AGENDA ITEM #1. a)
Amendment 1 to LAG-19-001 Page | 8
RAINIER FLIGHT SERVICE, LLC
a Washington Limited Liability Company
Name: Gordon Alvord
Title: Authorized Member
Date: ______________________
CITY OF RENTON
a Washington Municipal Corporation
Armondo Pavone, Mayor
Date: ______________________
Attest:
Jason Seth, City Clerk
Approved as to form:
Shane Moloney, City Attorney
AGENDA ITEM #1. a)
Amendment 1 to LAG-19-001 Page | 9
EXHIBIT 1-A
[See attached.]
AGENDA ITEM #1. a)
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AGENDA ITEM #1. a)
Barrier Free Mobility
Improving Access
City of Renton Public Rights of Way
City of Renton ADA Transition Plan Update AGENDA ITEM #2. a)
The ADA Transition Plan
The Americans with
Disabilities Act (ADA)
•Signed into law in 1990
•Protects the rights of citizens with disabilities
The Americans with Disabilities Act (ADA) requires that public entities having
responsibility for, or authority over, facilities, streets, roads, sidewalks and/or
other areas meant for public use develop a Transition Plan to make their
facilities meet accessibility standards.AGENDA ITEM #2. a)
An transition plan addresses:AGENDA ITEM #2. a)
An transition plan addresses:AGENDA ITEM #2. a)
A transition plan includes:
Self Evaluation
Physical Inventory
Consider public feedback on
problem areas and priorities
Prioritize for Greatest Impact
AGENDA ITEM #2. a)
What does a transition plan do for a city?
•Outlines how to make City facilities accessible over several years
•Allows the City to receive grant funding from state and federal sources
•Provides residents a way to request services and file grievances
•Puts the City on a path toward limiting legal risk exposure by showing good
faith effort to take steps to remove barriers to accessibility within available
funding AGENDA ITEM #2. a)
Renton ADA Transition Plan (2015)
•Policy and Procedures
•No recommendations for future
changes or specific improvements
•Inventory of Physical Barriers
Two stages:
•Stage One: preliminary evaluation
from aerial imagery (no detail)
•Stage Two: detailed field audit
(incomplete, currently in progress)
•Project Prioritization
•No detailed information
•Funding
•Identifies TIP as funding for Barrier Free
Transition Program
•No specific recommendations
•Schedule
•No specific recommendations
•Requires plan update
What was INCLUDED in 2015 plan? AGENDA ITEM #2. a)
Renton ADA Transition Plan (2015)
What was MISSING from 2015 plan?
•Detailed self-evaluation
•Future replacement schedule per funding programs
•Grievance Policy in multiple accessible formats
•Stakeholder input AGENDA ITEM #2. a)
A Transition Plan is meant to be updated
Why updating this plan is important
Potential Consequences:
•Simply having a plan isn’t adequate
per Department of Justice
•Must show progress toward
implementing plan
Example:
•City of Seattle ADA Transition Plan published
in 2011
•City did not demonstrate adequate progress to
remove barriers
•Legal action taken in 2015
•City of Seattle published ADA Transition Plan
Update in 2017 AGENDA ITEM #2. a)
Renton ADA Transition Plan 2020
This year’s update will include:
Include missing elements from 2015 plan
Limit risk exposure for City by demonstrating transition progress
Implement robust stakeholder outreach strategy and involve stakeholders in prioritization
process
Provide a more detailed prioritization framework and funding strategy for removing barriers
Identify a process for tracking progress towards meeting the barrier removal schedule using
the City’s GIS platform
Bring together internal groups at the City on policies and procedures on how to address ADA
barriers
Use City’s GIS data to guide the City on how to include barrier removal across all project types AGENDA ITEM #2. a)
Timeline
June –Sept 2020
Survey & Community
Outreach
Barrier Removal Evaluation
Fall 2020
Focus Group
Prioritization
Cost Estimating
Transition Schedule
Q4 2020
Draft & Final Plan AGENDA ITEM #2. a)