RECOMMENDATION(S): (CONT'D)
-
APPROVE and AUTHORIZE the Director of Public Works, or designees, to EXECUTE, on behalf of the County, an amended and restated lease between the County, as landlord, and Michael J. Oakes, as tenant, which modifies the terms of the existing long-term ground lease of the property located at 1500 Sally Ride Drive, Concord.
-
APPROVE and AUTHORIZE the Director of Public Works, or designees, to execute, on behalf of the County, a Consent to Leasehold Encumbrance and Estoppel between the County, as Landlord, Michael J. Oakes, as Tenant, and Scott Valley Bank, as the Leasehold Mortgagee, for leased premises, commonly known as 1500 Sally Ride Drive, at the Buchanan Field Airport.
FISCAL IMPACT:
The Airport Enterprise Fund will continue to receive lease and other revenues provided for in the Lease. The County General Fund will continue to receive property, sales and possessory interest tax revenues from the Lease.
BACKGROUND:
The County entered into a ground lease with Roger A. Picchi in 1992 for undeveloped property at Buchanan Field Airport that is currently known as 1500 Sally Ride Drive, Concord (the Lease). Through an Assignment and Assumption of Ground Lease dated as of April 28, 1999, Roger A. Picchi assigned the Lease to the Picchi Family Revocable Trust (the “Picchi Family Trust”). The Lease permitted the tenant to construct and operate a corporate hangar facility on the property.
The Picchi Family Trust now desires to assign all of its interest in the lease to Michael J. Oakes. An assignment of the Lease requires the written consent of the County. This action authorizes (1) consent to the assignment, (2) the execution of an amended and restated lease, and (3) the execution of an estoppel certificate and consent to encumbrance.
The Lease has certain terms that are inconsistent with the terms of other airport leases. The proposed amended and restated lease will modify various provisions, such as those relating to the use of the premises, the rent and other additional rent, the type of operations permitted, and the property maintenance requirements. The amended and restated lease will also include current County and FAA standard language that will make the terms of the Lease consistent with the terms of other corporate and specialty aviation service leases that are in effect at the Buchanan Field and Byron Airports. The amended and restated lease will also extend the term of the lease and includes a lease extension payment and facility improvement requirements.
The Lease permits the Tenant to borrow money for the improvements and to secure the loan with a leasehold mortgage, provided only leasehold mortgage is outstanding at any time. The Tenant desires to secure a loan from Scott Valley Bank and has requested the County’s consent.
CONSEQUENCE OF NEGATIVE ACTION:
The Picchi Family Trust will not be able to assign its interest in the Lease, the Lease will not be amended and it will continue to have provisions that are not consistent with those of other comparable leases, and if the County fails to grant its consent, the Bank may not be willing to complete the refinancing, jeopardizing the Tenant’s ability to meet its obligations under the lease.