Broward County Commission Regular Meeting

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AI-16891

Meeting Date:	06/24/2014
Director's Name:	Kent George
Department:	Aviation	Division:	Operations

Information

Requested Action

MOTION TO APPROVE Agreement of Lease between Broward County and North Perry Central, LLC at the North Perry Airport to lease a parcel measuring approximately 7.5 acres, effective upon Board approval for a total term of 20 years; and authorize Mayor and Clerk to execute same.

ACTION: (T-10:23 AM) Approved.

VOTE: 9-0.

Why Action is Necessary

Chapter 2, Section 2-40(a) of the Broward County Code of Ordinances, requires that the Broward County Board of County Commissioners (Board) authorize any commercial activities or occupation of any portion of the airport.

What Action Accomplishes

Allows North Perry Central, LLC (NPC) to lease and renovate existing Broward County (County) owned facilities, establish new facilities, and to provide general aviation services at North Perry Airport (HWO).

Is this Action Goal Related

Previous Action Taken

None.

Summary Explanation/ Background

THE AVIATION DEPARTMENT RECOMMENDS APPROVAL OF THE ABOVE MOTION.

This action allows North Perry Central, LLC (NPC) to lease and renovate existing County-owned facilities, establish new facilities, and provide general aviation services at North Perry Airport (HWO).

This proposed Lease Agreement (Agreement) between the County and NPC is for a parcel located on the south side of HWO which measures approximately 328,875 square feet (7.5 acres), and provides for a total term of 20 years (Term).
The premises will be leased by NPC for the purpose of providing general aviation services. NPC is required to renovate existing facilities and construct new aviation assets utilizing a minimum capital expenditure of $790,000. The new assets will include an assortment of aircraft shade hangars, aviation fuel farm, tie-down spaces and aviation office spaces to allow NPC to operate as a full service Fixed Base Operator (FBO), within the guidelines of the Minimum Standards for Commercial Operation established for HWO.

NPC is required to have construction of the premises complete within 36 months from the effective date. NPC may perform the construction of the premises in two phases. Phase 1 shall be complete 24 months from the effective date; Phase 2 shall be complete 36 months from the effective date. NPC must enter into a contract with at least one general contractor for construction of the improvements for all phases of construction within 12 months following the effective date.

NPC has 180 calendar days after the Board approves the proposed Agreement to prepare the parcel for development. During this due diligence period, NPC will be expected to supply full plans for development of Phase 1 of the project to the Broward County Aviation Department (BCAD) in preparation to secure necessary building permits for renovation of existing structures and new construction.

NPC may submit in writing to BCAD, 30 calendar days prior to the expiration of the due diligence period, any objections to the parcel it discovers which materially affect the use and development of the parcel. If BCAD and NPC fail to resolve the objections within the time period established by the proposed Agreement, NPC may submit written notice to BCAD terminating the proposed Agreement, or NPC may accept the parcel in its "AS-IS" condition.

Due to the poor existing condition of the structures, NPC has been allotted 12 months to make the buildings habitable. Therefore, rent payments will commence 12 months from the effective date.

NPC is required to post a rent security deposit equivalent to three months' rent or $31,625 plus applicable taxes. Additionally, NPC is required to post a security deposit for due diligence and construction of improvements in the amount of $40,000, which represents 10% of the Phase One Minimum Capital Expenditure requirement.

The proposed Agreement includes several disincentives in the event NPC fails to meet the Minimum Capital Expenditure requirement by the completion date. If NPC does not complete construction of all Phase 1 improvements on or before the Phase 1 completion date, the annual rent then in effect for the entire parcel will double until construction of Phase 1 is complete. Subsequently, if NPC does not complete construction of all Phase 2 improvements on or before the Phase 2 completion date, the annual rent then in effect for the entire parcel will double until construction of Phase 2 is complete. In addition to the rent increases, the Term of the proposed Agreement will be reduced by six months for each $25,000 of shortfall in construction expenditures for any phase.

The County has the right and option to terminate the proposed Agreement at any time, if the premises are needed for Airport purposes. The Agreement has been reviewed by the Risk Management Division and approved as to form by the Office of the County Attorney.

The amount referenced in this agenda has been rounded to the nearest whole dollar. NPC's payments will be based on the actual amount payable under this proposed Agreement. The Agreement Summary Sheet reflects the actual amount payable.

Fiscal Impact

Fiscal Impact/Cost Summary:

The anticipated annual rental payable during the second lease year of the term is $126,502, plus applicable sales taxes. Rent will be adjusted annually by the greater of 3% or the United States Consumer Price Index over the 20 year term, for an estimated total of $3,177,334.

Attachments
Exhibit 1 - Agreement Summary
Exhibit 2 - Lease Agreement