MOTION TO AUTHORIZE County Administrator, subject to approval of the Office of the County Attorney, to execute (i) Amendment No. 5 to the Agreement of Lease between Broward County and Embraer Aircraft Holding, Inc., (ii) Termination of the Consent to Sublease, Attornment and Nondisturbance Agreement between County, Embraer Aircraft Holding, Inc., and H. Aviation, Inc. and (iii) Consent to Sublease between Embraer Aircraft Holding, Inc. and Azorra Aviation, or a subsidiary thereof.
ACTION: (T-10:35 AM) Approved.
VOTE: 9-0.
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THE AVIATION DEPARTMENT RECOMMENDS APPROVAL OF THE MOTION ABOVE.
This action authorizes the County Administrator, subject to approval of the Office of the County Attorney, to execute Amendment No. 5 to the Agreement of Lease with Embraer, to terminate H Aviation's tenancy and agreement with Embraer and approve the County's consent to a new sublease between Embraer and Azorra Aviation.
On April 17, 1990 (Item No. 2), the Board approved an Agreement of Lease between County and Embraer (“Agreement”), commencing on April 17, 1990 and terminating April 16, 2020, for 25.2894 acres located on the north side of the Airport, including buildings and structures located, to be located or to be constructed. Embraer was required to expend a minimum of $10 million for the construction of new facilities and rehabilitation of existing facilities.
On April 21, 1992 (Item No 9), the Board approved Amendment No. 1 to the Agreement, modifying Section 19 Assignment or Sublease; Subordination, Section 19 (a) to add specified preapproved sublessees and Section 19 (d) whereby each sublessee is subject to all of the terms and provisions of the Agreement.
On May 13, 1997 (Item No. 2), the Board consented to a Consent to Sublease, Attornment and Nondisturbance Agreement between County, Embraer and H. Aviation, Inc. (“H. Aviation”) covering 10.773 acres of the Embraer leasehold for H. Aviation to construct hangars and an aircraft ramp.
On June 9, 1998 (Item No. 1), the Board approved Amendment No. 2 to the Agreement, modifying Section 19 to include language that no sublessee shall have any right to mortgage or pledge any security interest in the Embraer premises; modifying Section 3 allowing the capital expenditures made by H. Aviation to be applied toward the remaining capital expenditure requirement under the Agreement, with the parties acknowledging that Embraer had previously expended $6.8 million of the capital expenditure requirement; modifying Section 7, subsection 7 (5) preventing the sale of aviation fuels and lubricating oils on the H. Aviation subleased premises; and the inclusion of other standard language provisions to the Agreement.
On September 8, 1998 (Item No. 2A and 2B), the Board approved Amendment No. 3 to the Agreement, to provide for leasing of additional land for the development proposed by H. Aviation. The additional amount of land comprised of 2.82 acres (.82 acres under I-595 and .94 acres of airfield land was subleased to H. Aviation). The remaining 1.06 acres under I-595 was to be utilized by Embraer for an additional automobile parking lot.
On January 1, 2002, Embraer Aircraft Corporation changed their name to Embraer Aircraft Customer Services, Inc. On February 13, 2003, the Director of Aviation consented to an Assignment of Lease from Embraer Aircraft Customer Services, Inc. f/k/a Embraer Aircraft Corporation, Inc. to Embraer Aircraft Holdings, Inc.
On June 21, 2007 (Item No. 42), the Board approved Amendment No. 4 to the Agreement (i) modifying Section 4 by providing for a ten (10) year extension of the lease term from April 16, 2020 to April 16, 2030, with a five year mutual option period thereafter; ii) modifying Section 3 and Section 6 to include a minimum capital expenditure of $8,000,000 for the construction of a new maintenance and repair facility of approximately 40,000 square feet, including shops and office space; (iii) modify Section 5, the annual rental providing that on April 17, 2020 the improvements on the Embraer premises shall revert to the County and annual rental shall be set based on a fair market rental appraisal of the land and the improvements based on certain surveys. Amendment No. 4 also provided County Buy-Out language to buy-out the Agreement and its encumbrance against the entire, or portion, of the leased premises subject to airport purposes.
Proposed Amendment No. 5 amends the Agreement to provide for (i) annual rental to be based on the fair market value appraisal of the improvements existing on the Premises as of April 17, 2020 and adjustments thereafter pursuant to Section 5 of the Agreement; (ii) the sublessee of the premises currently occupied by H. Aviation shall be required to operate as a Specialized Aviation Service Operator and is prohibited from engaging in the retail sale of fuel and lubricating oils from the subleased premises; (iii) the right for sublessee to mortgage its leasehold interest with prior written approval of Embraer and the County; and (iv) updates standard language within the Lease Agreement.
H. Aviation has been operating as an authorized subtenant from the Embraer premises since May 13, 1997. H. Aviation entered into a purchase and sales contract of its assets and leasehold interest at the Embraer premises at the Airport with Azorra Aviation, Inc. subject to Board approval of the proposed Amendment No. 5 to the Agreement; the County’s termination of the Consent to Sublease, Attornment and Nondisturbance Agreement between the County, Embraer and H. Aviation; and the approval of a Consent to Sublease between Embraer and Azorra Aviation, Inc., or a subsidiary thereof.
The final details of the sublease and the ensuing related amendment to the Agreement are in process, however, they will not be complete prior to the Board's summer recess. Therefore this action is seeking to authorize the County Administrator to execute the required documents to effectuate the transactions after approval of the documentation by the Office of the County Attorney.
Embraer is current on rent and insurance obligations.
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