Title
Resolution to Approve the First Amendment and Extension to the Lease Agreement between the City and AvFuel Corporation for a Corporate Hangar Located at the Ann Arbor Municipal Airport
Memorandum
Attached for your review and approval is a resolution to approve the First Amendment and Extension to the July 1, 2000 lease agreement between the City of Ann Arbor and AvFuel Corporation for the corporate aircraft hangar located at 903 Airport Drive.
The original 2000 lease agreement with AvFuel is set to expire on June 30, 2020. The tenant has leased the facility for its corporate flight department for the last 20 years and has recently renovated the office area to provide additional office space for staff from their corporate offices due to the current pandemic. The lease extension is for a one year term with three additional one year options available. All other terms and conditions of the original 2000 lease agreement, unless specifically changed in the First Amendment and Extension, would still be in force.
Lease rates for both the land and building are consistent with current rates being charged at the Ann Arbor Airport. Like all airport land leases, the land rate is subject to an annual CPI based increase. The building rate is consistent for the initial term and all subsequent options available under this First Amendment and Extension.
Under the existing lease, the airport is responsible for a number of components in the building, including the HVAC system. The air conditioning system in the office area of this hangar needed replacement and the airport secured a quote for that work. To expedite the installation of this system, needed to allow "social distancing" of the AvFuel office staff due to the coronavirus pandemic, AvFuel requested that they be allowed to install the new air conditioning unit at their cost. Upon approval of this First Amendment and Extension, the airport would reimburse AvFuel the actual cost of this replacement, not to e...
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