REQUEST FOR PROPOSALS FOR PROFESSIONAL SERVICES AIRPORT DEVELOPMENT. RFP No. 1762

Transcription

1 REQUEST FOR PROPOSALS FOR PROFESSIONAL SERVICES AIRPORT DEVELOPMENT RFP No ISSUED BY City of Riverside General Services Department Riverside Municipal Airport 3900 Main Street Riverside, California PROPOSAL DUE FEBRUARY 15, 2018 MANDATORY PRE-PROPOSAL MEETING JANUARY 3, 2018

2 RFP No Request for Proposals Table of Contents Section 1. Introduction/Purpose 2. Schedule of Events 3. Background 4. Prerequisites 5. Scope of Services 6. General Terms and Conditions 7. Inquiries 8. Completion of Proposal 9. Delivery/Submission of Proposals 10. Alternative Proposals 11. Proposal Format and Content 12. Examination of RFP and Sites of Work 13. Addenda 14. Withdrawal of Proposal 15. Public Records 16. Evaluation of Proposals 17. Rejection of Proposals 18. Protest Procedures 19. Contract Term 20. Contract Documents 21. Execution of Agreement 22. Failure to Execute Agreement 23. Cancellation Exhibit A Scope of Services Exhibit B Sample Professional Services Agreement

3 1. Introduction/Purpose The City of Riverside ( City ) is seeking a qualified entity or individual ( Company ) to develop up to 18 acres of land at Riverside Municipal Airport. The City may select more than one firm to perform the services. Proposals are requested from Companies that have a demonstrated ability to perform the tasks identified in this Request for Proposal ( RFP ). 2. Schedule of Events It is the goal of the City to select and retain a Company(ies) by March In preparation for that action, the following tentative schedule of events has been prepared: Event Date Time Request for Proposals Released December 6, 2017 N/A MANDATORY Pre-Proposal Meeting January 3, :00 a.m. PST Final Questions Due January 22, 2018 Before 5:00 p.m. PST Responses to Questions Released January 29, 2018 Before 5:00 p.m. PST Proposals Due February 15, 2018 Before 5:00 p.m. PST Notification of Tentative Selection(s) March 5, 2018 N/A Tentative City Council Transportation Cmte April 12, 2018 N/A Tentative City Council Meeting to Award May 8, 2018 N/A The City reserves the right to amend, withdraw and cancel this RFP. The City reserves the right to request or obtain additional information about any and all submittals before making an award. The City also reserves the right to seek clarification from any Proposer about any statement in its proposal that the City finds ambiguous. 3. Background Riverside Municipal Airport provides passengers and crew ideal access to the fastest growing economic region in the nation. Riverside Airport is centrally located in the heart of the Inland Empire, only four miles north of State Highway 91, 7 miles south of State Highway 60, 5 miles east of US Highway 15 and 6 miles west of US Highway 215. The Airport is bounded by three major cross-town commercial boulevards; Arlington and Central Avenues as well as Jurupa Boulevard. In addition, the Airport lies adjacent to the busiest northsouth commercial corridor in western Riverside county, Van Buren Boulevard. Riverside Airport is served by an FAA contract Air Traffic Control Tower, with full service runways featuring ILS, GPS, and VOR approaches for all weather arrivals and departures. The main runway, RWY 09-27, measures 5,401 x 100 feet and accommodates GV, Falcon 50, Challenger, Citation X, and all similar business-class aircraft. Runway is also served by a Precision Approach Path Indicator (PAPI) system. The proposed site is bounded on the east by a crosswind runway, RWY 16-34, measuring 2,850 x 50 feet, and is perfectly suited for small 1

4 cabin-class aircraft and smaller in crosswind conditions from the north. This runway (RWY 34) is also served by a Precision Approach Path Indicator (PAPI). Riverside Municipal Airport is home to nearly 200 based aircraft, six flight schools offering advanced fixed wing and helicopter training, and two full-service aircraft maintenance facilities. Riverside Municipal Airport is home to the Civil Air Patrol Squadron 5, Embry-Riddle Aeronautical University aviation campus, California Baptist University School of Aviation Sciences, and the Commemorative Air Force featuring a historic aircraft museum and aviation art. Riverside Municipal Airport offers a full-service Fixed Base Operator (FBO). 4. Prerequisites Proposals will only be considered from Companies that meet the following prerequisites: Can demonstrate a successful history of developing and managing facilities of a similar type and scope as described in the Scope of Services ( Services ) (Exhibit A ). Have not filed for bankruptcy under any business name over the past five (5) years. Have registered as a Planholder on the City s electronic Current Planholders List. Companies can register at: Once registered, Companies must subscribe to this RFP under their name in order to appear on the Bidder s List as a Prospective Bidder. Companies that fail to specifically subscribe to this RFP will not appear on the Bidders List and will be unable to participate or be considered for this RFP. All prospective Companies must attend the MANDATORY pre-proposal meeting on Wednesday, January 3, 2018, at 10:00 AM PST, at the Riverside Municipal Airport Terminal Building Conference Room. Attendance is mandatory at the pre-proposal meeting. The meeting will begin promptly at the time listed above. Proposals from prospective Proposers not in attendance at this mandatory meeting will not be considered. If applicable, Company and/or its key personnel, shall hold an appropriate license for the Company s discipline and the Services on the date the Proposal is submitted. 5. Scope of Services The City is seeking to develop approximately 18 acres of undeveloped land for aviation use. The aviation facilities developed may include aircraft hangars, aircraft maintenance facilities, a fuel farm, a Fixed Base Operator, and aircraft ramp parking. The selected Company(ies) shall develop and manage the facilities constructed as required in Exhibit A, Scope of Services, attached hereto and incorporated herein. 6. General Terms and Conditions The successful company will be required to execute a Master Lease Agreement ( Agreement ). A sample is attached as Exhibit B. The successful company must meet all insurance 2

5 requirements in the Agreement. All terms and conditions of the Agreement are non-negotiable. Companies must possess valid City of Riverside Business License throughout the term on the contract. Failure to execute the Agreement and furnish the required insurance within the required time period shall be just cause for the rescission of the award. If any of the successful Companies refuse or fail to execute the Agreement, the City may award the Agreement to the next most qualified Company. 7. Inquiries If prior to the date fixed for submission of Proposals, a prospective Company discovers any ambiguity, conflict, discrepancy, omission or other errors in this RFP or any of its appendices or exhibits, the Company shall immediately notify the City of such error in writing and request modification or clarification of the document. Modifications shall be made by written Addenda to the RFP. If a Company fails to notify the City, prior to the date fixed for submissions of Proposals, of an error in the RFP known to the Company, or an error that reasonably should have been known to the Company, the Company shall submit its Proposal at its own risk, and if the Company is awarded a Contract, it shall not be entitled to additional compensation or time by reason of the error or its later correction. All requests for clarifications, changes, exceptions, deviations to the terms and conditions set forth in this RFP must be submitted via to Ben Hatheway, at purchasing@riversideca.gov. The subject line should reference the RFP number. The Final day for receipt of questions from the Proposer shall be on or before Monday, January 22, 2018 BEFORE 5:00pm PST. To ensure fairness and avoid misunderstandings, all communications must be in written format and addressed only to the individual set forth above. Any verbal communications will not be considered or responded to. Written communications should be submitted via to the address provided above. All questions received by the due date will be logged and reviewed and if required, a response will be provided via an addendum to the RFP that will be posted on the City s website. Any communications, whether written or verbal, with any City Councilmember or City staff other than the individual indicated above, prior to award of a contract by City Council, is strictly prohibited and the Proposer shall be disqualified from consideration. 8. Completion of Proposal Proposals shall be completed in all respects as required by this RFP. A proposal may be rejected if conditional or incomplete, or if it contains any alterations or other irregularities of any kind, and will be rejected if any such defect or irregularity can materially affect the quality of the proposal. Proposals which contain false or misleading statements may be rejected. If, in the opinion of the City s Selection Committee, such information was intended to mislead the City in its evaluation of the proposal, and the attribute, condition, or capability is a requirement of this RFP, the proposal will be rejected. Statements made by a Company shall also be without ambiguity, and with adequate elaboration, where necessary, for clear understanding. 3

6 Unauthorized conditions, exemptions, limitations, qualifications, or provisions attached to a Proposal will render it non-responsive and will cause its rejection. The Company, in responding to this RFP, must submit Proposals in the format identified in this RFP. The Proposal must address all requirements of the RFP even if a no response is appropriate. Costs for developing Proposals are entirely the responsibility of the Company and shall not be chargeable to the City. The City shall not be liable for any costs incurred in response to this RFP, including but not limited to, costs for any interviews, presentations, or other follow-up information necessary as part of the selection process. All costs shall be borne by the Company responding to this RFP. The Company responding to this RFP shall hold the City harmless from any liability, claim, and expense whatsoever incurred by or on behalf of the Company. 9. Delivery/Submission of Proposals All prospective Companies submitting a proposal must appear on the City s electronic Current Planholders List as a Planholder. Companies can register at Once registered, Companies must download the RFP under their own name and identification number to appear on the Current Planholders List as a Planholder. Companies that fail to download the RFP will not appear on the Current Planholders List and their proposals will be considered non-responsive. If a Company is unable to register or download the RFP from the bidding website, a representative may contact the Purchasing Department at (951) All proposal documents and supplementary documents must be uploaded using the City s bidding website prior to event date and time as instructed in this solicitation. Once file(s) have been uploaded and the Submission Status shows as Submitted the submission is complete. At that point respondents will receive an confirmation from the bidding website. The City reserves the right to reject any and all proposals and to waive information and minor irregularities in any proposal received. Acceptance of Terms and Conditions - Submission of a proposal pursuant to this RFP shall constitute acknowledgment and acceptance of all terms and conditions hereinafter set forth in this RFP. The time and date are fixed, and extensions will not be granted unless specifically stated by the City in an addendum to this RFP. Proposals not received before the bid event time will not be accepted. 10. Alternative Proposals Only one proposal is to be submitted by each Company for this RFP. Multiple simultaneous proposals will result in rejection of all Proposals submitted by Company. A Company may, prior 4

7 to the proposal due date and time, withdraw a proposal and submit a new proposal, so long as the new proposal is submitted before the proposal due date and time. 11. Proposal Format and Content Proposals should be prepared in such a way as to provide a straightforward, concise delineation of capabilities to satisfy the requirements of this RFP. Responses should emphasize the Company s demonstrated capability to perform work of this type. Emphasis should be concentrated on completeness and clarity of content. Proposals shall adhere to the following format for organization and content. Proposals must be typed and arranged/divided in the following sequence to facilitate evaluation: Cover Letter Statement of Understanding and Approach Company Information Company Personnel Experience and References Evidence of Insurance Litigation Financial Means a. Cover Letter The cover letter shall include a brief general statement of intent to perform the services and confirm that all elements of the RFP have been reviewed and understood. The letter shall include a brief summary of Company s qualifications and Company s willingness to enter into a contract under the terms and conditions prescribed by this RFP and in the Sample Agreement. The letter must identify a single person for contact during the RFP review process. b. Statement of Development Approach This section must reflect a clear, detailed description of the proposed development. Artist concepts are preferred of the development layout. If options for expansion beyond initial development are proposed, a description should be included of the future development. c. Company Information This section shall include contact person information, address and telephone number of the company main office and branch offices. Each Company shall identify itself as to the type of organizational entity (corporation, sole proprietorship, partnership, joint venture, etc.). Any supplemental information that Company believes may be pertinent to the selection process may be provided. 5

8 d. Company Personnel This section shall contain names, contact numbers and description of experience, including licenses and/or certifications, of all key personnel who would be assigned to perform the Services. Members of the Company s professional team (managers, contact person, etc.) should be identified by name and title and should include contact phone numbers. Include also major subcontractors (if any) and their degree of involvement in this program. If the Company is including any subcontractors, the Company shall identify how long the Company has worked with the subcontractor. e. Experience and References The Proposal must demonstrate that the Company, or its key personnel, has at least five (5) years of experience with a legally registered business name, that provides services of a similar type and scope as described in the Scope of Services (Exhibit A ). A Company shall not have filed for bankruptcy under any business name over the past five (5) years. f. Evidence of Insurance In addition, the Company shall provide evidence of possession of insurance in the coverage and amounts listed in the Sample Agreement (Exhibit B). g. Litigation The Proposal shall identify any litigation, mediation, or arbitration, regarding the performance of any services similar to the Services, in which the Company has been involved in the past five years. If the Services require a license or certification, the Proposal shall include any claims or disciplinary action taken against Company or any of Company s key personnel within the past five years. h. Financial Means All Companies submitting a response to this RFP shall provide evidence of the financial means necessary to undertake the development, and manage the proposed facilities in their respective proposals. 12. Examination of RFP and Sites of Work The Company shall carefully examine the RFP and all sites, if applicable, of the work contemplated. The submission of a Proposal shall be conclusive evidence that the Company has investigated and is satisfied as to the conditions to be encountered, as to the character, quality, and quantities of work to be performed and materials to be furnished, the difficulties to be encountered, and to the requirements of the Proposal, RFP, and other Contract Documents. By submitting a Proposal, the Company hereby certifies that it has: examined the local conditions, read each and every clause of this RFP, included all costs necessary to complete the 6

9 specified work in its proposed prices, and agrees that if it is awarded the Contract it will make no claim against the City based upon ignorance of local conditions or misunderstanding of any provision of the Contract. Should the conditions turn out otherwise than anticipated by it, the Company agrees to assume all risks incident thereto. 13. Addenda Unless otherwise specified, any addenda issued during the time of bidding must be acknowledged by signing each addendum, which will be made part of the proposal. Addenda notifications will be provided to those subscribed to the Electronic Bidder s List via Withdrawal of Proposal All proposals shall be firm offers and may not be withdrawn for a period of one hundred twenty (120) days following the deadline date for submission of proposals noted herein. Submitted Proposals may be withdrawn at any time prior to the submission deadline. 15. Public Records All Proposals submitted in response to this RFP become the property of the City and pursuant to the Public Records Act (Gov. Code, 6250 et seq.) are public records, and as such may be subject to public review at least 10 days before selection. The Company must notify the City in advance of any proprietary or confidential materials contained in the Proposal and provide justification for not making such material public. The City shall have sole discretion to disclose or not disclose such material subject to any protective order that the Company may obtain. Note that under California law, price proposal to a public agency is not a trade secret. The City reserves the right to make use of any information or idea contained in the Proposal. All materials, ideas and formats submitted in response to this RFP will become the property of the City on receipt. 16. Evaluation of Proposals The City reserves the right to amend, withdraw, and cancel this RFP. The City also reserves the right to reject all responses to this RFP at any time prior to agreement execution. Furthermore, the City reserves the right to request additional information about any and all Proposals, that in City s opinion is necessary to assure that the Company s competence, number of qualified employees, business organization, experience, and financial resources are adequate to perform the Services. All Proposals shall be reviewed to verify that the Company has met the minimum requirements as stated in this RFP. Proposals that have not followed the rules, do not meet minimum content and quality standards, and/or do not provide references will be rejected as non-responsive. After 7

10 initial evaluations, proposers within a competitive range will be invited to interview with the City. Consultants will be evaluated on the basis of the following criteria: a. Proposed Development (50%) b. Qualifications (10%) c. Experience (Projects of similar size and scope) (20%) d. Professional References (10%) e. Approach and Methodology (10%) The selected Company(ies) shall then enter into exclusive negotiations with the City to formalize the Scope of the project. If the City is unable to obtain a fair and reasonable price or cannot reach agreement regarding the terms for the Scope of Services, then the City will end negotiations with that Company and begin negotiations with the next Company which best meets the needs of the City, and so on until a City and the Company reach agreement. The City intends to select the Company(ies) that offers the best value to the City based on the criteria outlined above. 17. Rejection of Proposals The City may reject any/or all Proposals and may waive any immaterial deviation in a Proposal. The City s waiver of an immaterial defect shall in no way modify this RFP or excuse the Company from full compliance with this RFP and/or the Contract Documents if awarded the Contract. Proposals that include terms and conditions other than City s terms and conditions may be rejected as being non-responsive. The City may make investigations as deemed necessary to determine the ability of the Company to perform the work, and the Company shall furnish to the City all such information and data for this purpose as requested by the City. The City reserves the right to reject any proposal if the evidence submitted by, or investigation of, such Company fails to satisfy the City that such Company is properly qualified to carry out the obligations of the Agreement and to complete the work described herein. 18. Protest Procedures A Proposer not selected by the City for the award of the Contract desiring to protest the City s selection, may do so by following the City s Procurement Protest Procedures in Administrative Manual, section Protests not conforming to this procedure will be rejected as invalid. A copy of the Protest Procedures may be obtained by contacting the Purchasing Department at (951)

11 19. Contract Term The initial term of the Agreement shall be for 20 years with the option to extend for two (2) additional ten (10) terms not to exceed 40 years based upon acceptable performance by the Company, agreed upon development and subject to the same terms and conditions of the Agreement. Rates will remain firm for the initial contract term, with annual adjustments for the greater of CPI or 2% increases for agreed upon rental rates. Should the option to renew for additional years be exercised, City and Company may negotiate any and all price modifications. 20. Contract Documents In submitting a Proposal, the Company agrees to enter into an Agreement with the City without exceptions to the City s standard agreement. The City s standard agreement is non-negotiable, and a copy of the standard agreement is attached hereto as Exhibit B. Any change to the standard agreement will deem the Proposal non-responsive. In the event of a conflict exists between documents the following order of precedence shall apply: Agreement City of Riverside s Request for Proposals Company s Response to the Request for Proposals 21. Execution of Agreement After contract award, the following shall be signed and returned to the City within fourteen (14) calendar days from the date the City mails, or by other means delivers said documents to the Company: Two (2) originals of the Agreement in the form included herein, properly executed by the Company. Certificates of Insurance and Additional Insured Endorsement evidencing coverage as specified in the sample agreement. Confirmation of current business tax certificate. Bonds, if required. In any event that day fourteen (14) of calendar days falls on Saturday, Sunday, a legal holiday for the State of California, or on days when the City is closed, the Contract Documents shall be delivered by the following working day. No Agreement shall be binding upon the City until all documents are fully executed by the Company and the City. 9

12 22. Failure to Execute the Agreement Failure to execute the Agreement and furnish the required insurance and business tax certificate, within the required time period shall be just cause for the rescission of the award. If bonds are also required, failure to furnish sufficient bonds shall cause rescission of the award. If the successful Company refuses or fails to execute the Agreement, the City may award the Agreement to the next qualified Company. 23. Cancellation The City retains the right to cancel this RFP at any time, should it be deemed to be in the best interest of the City. No obligation either expressed or implied exists on the part of the City to make an award based on the submission of any proposals. 10

13 EXHIBIT A Scope of Services Riverside requests the services of a company(ies) to: Evaluate infrastructure in place at the proposed site (the Airport will work with the developer to research plans on file with the City of Riverside). Propose best use of the available land, approximately 18 acres, or any portion of available land in not less than 3 acre parcels. Construct all pavement and pavement connections to adjoining taxiways. Construct/install all necessary lighting for aircraft parking and other buildings on the site. Procure all funding for construction of hangars, pavement, lighting, signage. Secure appropriate approvals from the FAA regarding structure height limitations in proposed construction site. Secure appropriate construction approvals from City. At Proposer option, construct and manage a fuel farm providing appropriate full-service, self-service av-gas, and Jet-A fuel (optional). Provide full-time management and maintenance of the developed land, buildings, hangars, and fuel farm. At Proposer option, construct an aircraft wash rack, with appropriate waste water collection drains, separators, etc. The above requests are not intended to limit the creativity of the proposer. In return for the above investment, Riverside Municipal Airport will agree to: Maintain all lighting not afixed to a building, i.e., ramp/taxiway lighting, following construction and final inspection and acceptance Maintain taxiway guidance signs, following construction and final inspection Maintain all pavement considered common use, i.e., taxilanes, following construction and final inspection and acceptance The Airport will not maintain pavement associated with tenant parking, or that pavement included in the ground lease used to generate additional revenue for the tenant, i.e., aircraft tie-downs the tenant is charging an aircraft owner for the use of.

14 EXHIBIT B Sample Professional Consultant Service Agreement

15 RIVERSIDE MUNICIPAL AIRPORT GROUND LEASE WEST SIDE DEVELOPMENT PROJECT (Company name) THIS RIVERSIDE MUNICIPAL AIRPORT GROUND LEASE AGREEMENT ( Lease Agreement ) is made this day of, by and between the CITY OF RIVERSIDE, a California charter city and municipal corporation ( City ), and COMPANY NAME, a California limited liability company ( Lessee ) (sometimes individually referred to herein as a Party or collectively, as the Parties ). RECITALS A. City owns certain real property located on the west side of the Riverside Municipal Airport ( Airport ), in the City of Riverside, County of Riverside, State of California, consisting of approximately 18 acres (784,080 sq. ft.) of vacant land as legally described in Exhibit A (Legal Description) attached hereto and incorporated herein by this reference ( Premises ). B. City desires and Lessee desires to lease from City the Premises. Lessee further desires to have the right to construct certain privately-owned facilities on the Premises including, but not limited to, hangars for aircraft, ground support services, on-field fuel services, and aircraft maintenance and storage ( Project ), all as generally depicted and/or described on Exhibit B attached hereto and incorporated herein by reference ( Site Improvements ). C. Lessee has agreed to construct on behalf of City certain improvements, as described in Paragraph B, above, on the Premises that will generally benefit all users of the Airport. An access road and utilities installed as part of prior Airport improvements consist of water, sewer, electrical and the installation of conduit for telephone, cable television, high speed internet and other telecommunications services, are available for use by Lessee as part of final construction of those facilities listed in Paragraph B, above. D. Lessee intends to grade ## acres (## sqft) of Premises and may install additional utilities and other horizontal infrastructure improvements benefiting the entire Premises. However, Lessee also intends to construct the aircraft hangars and other vertical improvements on the Premises in a single phase of construction, as generally depicted on Exhibit C ( Proposed Site Improvements ) attached hereto and incorporated herein by reference. E. City desires and Lessee intends to complete development of all phases of the Site Improvements by not later than December 31, NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Lease Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Lessee agree as follows: 1

16 AGREEMENT 1. PREMISES LEASED. (a) City hereby leases to Lessee the Premises. Prior to the execution of this Lease Agreement, City obtained and provided to Lessee all documents in City s possession relative to prior construction on the Premises. (b) In addition, City has delivered to Lessee the following documents for environmental review and approval of Project: 1) City of Riverside, Planning Department, Negative Declaration (Airport Hangar Project), dated, July 22, 2004, 2) City of Riverside, Planning Department, Approved Mitigated Measures, dated, July 22, 2004, 3) Riverside City Council and Redevelopment Agency Agenda, dated August 24, 2004 (Riverside City Planning Department item #58, Consent Calendar), 4) County of Riverside, Airport Land Use Commission Staff Report, dated December 9, 2004, all as described in Exhibit D attached hereto and incorporated herein by reference ( Environmental Review Documentation ). 2. PURPOSE. The Premises shall only be used for the following uses, and for no other purpose: (a) Sale (retail or wholesale or both), leasing and finance of new and used aircraft, aircraft parts and accessories, including instruments, engines and electronic devices, airman s navigational and personal supplies and accessories; (b) All flight operations, including, but not limited to, flight training, demonstration of aircraft for sale, charter, air taxi and flight testing of aircraft following manufacturing or major modification or both; (c) Servicing of aircraft for the purpose of fueling, supplying engine oil and other necessary lubricants and aircraft fluids, checking tire pressures, providing starting units and battery boosters and any other service usually associated with aircraft servicing operations; (d) Providing aircraft storage and vehicle storage inside hangar buildings in compliance with Title 12, Airport and Aircraft, of the Riverside Municipal Code, as the same may be amended from time to time (provided however, that in no event shall any such amendment limit the number of aircraft that can be stored on the Premises below the number that can be stored pursuant to the current provisions of such Title 12); (e) (f) the Premises; (g) services; (h) Providing ground school instruction associated with flight training; Any commercial or industrial businesses which utilize any aircraft operations on Leasing, renting or parking of automobiles in connection with providing aviation Providing in-flight catering services; 2

17 (i) Providing meeting rooms and pilot lounges for air crews, but, shall not permit residential style, or long-term residency; and (j) Any other use permitted by the Federal Aviation Administration ( FAA ) and any governmental authority having jurisdiction over the Premises ( Governmental Authority ). The Premises shall not be used for any purposes other than as set forth in this Section without first obtaining the written consent of City, which consent shall not be unreasonably withheld or delayed. 3. TERM. (a) The term of this Lease Agreement ( Term ) shall commence on the date that City delivers the Premises to Lessee pursuant to Section 1(a) above ( Commencement Date ) and shall continue for thirty (30) years after the Commencement Date ( Expiration Date ). Lessee has caused its civil engineer to calculate the aggregate square footage of the Premises (rounded to the nearest square foot) to be developed. Such information shall be incorporated into a Memorandum of Commencement Date and Rent Amounts ( Commencement Date Memorandum ), in the form of Exhibit E ( Commencement Date Memorandum ) attached hereto and incorporated herein by reference, which shall be executed and delivered by the parties within five (5) business days after the Commencement Date. (b) Provided Lessee is not in default under this Lease Agreement, City hereby grants to Lessee a right of first negotiation to lease the Premises following the expiration of the Term on the terms and conditions set forth herein. Not later than eighteen (18) calendar months prior to the expiration of the Term, Lessee shall deliver written notice to City ( Negotiation Notice ) that Lessee desires to exercise its right of first negotiation as set forth herein. Lessee s failure to deliver the Negotiation Notice in a timely manner shall be deemed to be a waiver of its right of first negotiation as set forth herein. If Lessee delivers the Negotiation Notice in a timely manner, then not later than twelve (12) months prior to the expiration of the Term, City shall notify Lessee of the terms and conditions on which City is willing to extend the Term for an additional period of not less than ten (10) years ( Renewal Notice ), which terms and conditions shall be reasonably determined by City to be the then-prevailing market terms and conditions for ground leased property similar to the Premises in Riverside County, California, as determined by an appraisal obtained by the City. If fair market value determines that the rent will decrease, Rent will continue at the then annual payment due amount, and increase annually at the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) for the Los Angeles- Anaheim-Riverside Standard Metropolitan Statistical Area ( Index ) published by the Bureau of Labor Statistics of the United States Department of Labor for the most recent 12-month published index, based upon the corresponding increase, if any, in the Index as it stands on May of that year over the Index as it stood on May of the prior year including utilities therefor, but excluding telephone and janitorial services, or 2% whichever is greater, during the first 10-year extension. Lessee shall have the right, within thirty (30) days after receipt of the Renewal Notice, to elect to renew this Lease Agreement consistent with the terms set forth in the Renewal Notice. If Lessee elects to renew this Lease Agreement, City and Lessee shall, within sixty (60) days after such election, execute an amendment to this Lease Agreement extending the Term and incorporating the terms set forth in the Renewal Notice. If Lessee fails to elect to renew this 3

18 Lease Agreement as set forth in the preceding sentence, then City shall be free to lease the Premises to others at the end of the Term consistent with the terms set forth in the Renewal Notice; provided however, that if City wishes to lease the Premises on terms that are more favorable to Lessee than those set forth in the Renewal Notice, then City shall give Lessee a new Renewal Notice with such revised terms, and the parties shall proceed as set forth above with respect to such new Renewal Notice. At the end of the first 10 year option, Lessee can elect to renew the term for an additional 10 year period ( Second Option ) under the same terms and conditions as set forth in this section for the first additional 10-year term. The Second Option Rent will be based on fair market value, as determined by an appraisal obtained by the City. If fair market value determines that the rent will decrease, Rent will continue at the then annual payment due amount, and increase annually at the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) for the Los Angeles-Anaheim-Riverside Standard Metropolitan Statistical Area ( Index ) published by the Bureau of Labor Statistics of the United States Department of Labor for the most recent 12- month published index, based upon the corresponding increase, if any, in the Index as it stands on May of that year over the Index as it stood on May of the prior year including utilities therefor, but excluding telephone and janitorial services, or 2% whichever is greater, during the second 10-year extension. 4. RENT AND DEPOSIT. During the Term of this Lease Agreement, Lessee shall pay to City the rental rates as set forth below ( Rent ). All Rent hereunder shall be due and payable not later than ten (10) calendar days after the first (1 st ) of each month. Rent for any period during the Term, which is for less than one (1) full calendar month shall be prorated based upon the actual number of days in such calendar month. The Construction Phase shall be understood to commence when City issues a Notice to Proceed, following project design and issuance of construction permits. (a) Design Phase: No Rent due. The Design Phase shall not exceed 180 days without construction having begun. Design requirements exceeding this time period shall be approved by City, and notice shall be given City by Lessee not later than 60 days prior to the end of the 180 day limit. (b) Construction Phase: $0.01/sq. ft. 1) $###/month, $### /year (c) Upon receipt of a Certificate of Occupancy, or not more than twelve (12) months from the beginning of the Construction Phase, whichever occurs first, rent shall be $0.03 per square foot of leased land. (d) Beginning on the date the full payment of $0.03 per square foot is due, twelve (12) months thereafter the full payment shall be increased by: (i) an annual increase of 2% for the first 5 years. Beginning in the sixth year, rent will increase by the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) for the Los Angeles-Anaheim- Riverside Standard Metropolitan Statistical Area ( Index ) published by the Bureau of Labor Statistics of the United States Department of Labor for the most recent 12-month published 4

19 index, based upon the corresponding increase, if any, in the Index as it stands on May of that year over the Index as it stood on May of the prior year including utilities therefor, but excluding telephone and janitorial services, or 2%, whichever is greater. 5. RIGHTS TO TERMINATE. (a) City shall have the right to terminate this Lease Agreement if Lessee has not obtained a building permit to construct any of the Site Improvements on or before December 31, In the event that City wishes to exercise its right to terminate, it shall provide Lessee with written notice by not later than September 30, In the event that City exercises its right to terminate in a timely manner, this Lease Agreement shall terminate effective as of ninety (90) days after City s exercise of its right of termination. (b) City shall also have the right to terminate this Lease Agreement if: (i) Lessee is in default of the obligations, terms, covenants, or conditions, including the payment of Rent, under this Lease Agreement (subject to any applicable notice and cure rights) as set forth in Sections 27 and 28 below; (ii) Lessee constructs new, or expands existing facilities without the prior written consent of City; (iii) Lessee constructs new facilities not permitted by the FAA or other Governmental Authority; or (iv) Lessee s actions are contrary to any state, federal or local laws, rules, ordinances and/or regulations. (c) Lessee may seek to terminate this Agreement with City prior to end of initial term, subject to the following: (i) All aspects of the developed land, including horizontal and vertical improvements become the sole property of City, and includes all design, construction, and asbuild documents. (ii) Any and all debt, whether obtained through loans, bonds, etc., incurred for project development, up to the time of termination of the agreement, will remain the obligation of Lessee, and shall be released from the Premises. (iii) Lessee shall notify City, in writing, at least one hundred and eighty (180) days in advance of its desire to terminate this Agreement. (iv) Lessee will cooperate in good faith to transfer any and all titles, and other legal documents to the City. 6. NOTICES OF NON-RESPONSIBILITY. City at any time may post and keep posted on the Premises appropriate notices to protect City against the claims of any persons, firms or corporations for work done, labor performed or materials furnished to the Premises. Before 5

20 commencing any work relating to alterations or improvements affecting the Premises, Lessee shall notify City in writing of the expected date of the commencement of such work so that City can post and record the appropriate notices of non-responsibility to protect City from any mechanics liens, materialmen s liens, or any other liens. 7. IMPROVEMENTS BY LESSEE. (a) The Site Improvements may include (at Lessee s option) hangar units, private taxiways, taxi lanes, ramps, aprons, access points and approaches for ingress and egress between the hangar units, and between the hangar units, and the taxiways that may be constructed as part of the Airport Improvements. Nothing in this Lease Agreement shall be construed as an approval by City of any discretionary permits or approvals for the Site Improvements required by applicable laws, ordinances and regulations. All Site Improvements must be constructed substantially in accordance with plans submitted to City, and applicable building codes. All hangar units to be constructed on the Premises must be manufactured by a manufacturer approved by City. (b) Lessee may make additional improvements to the Premises as it deems appropriate, subject to the prior written approval of the City, which approval shall not be unreasonably withheld, conditioned or delayed. Lessee shall submit plans and specifications for such improvements to the City and obtain approval thereof and obtain all permits required prior to commencement of construction. The failure of the City to approve or disapprove such plans and specifications (together with a detailed explanation of the grounds for disapproval, if applicable) within thirty (30) days after Lessee s submission thereof shall be deemed to be approval. Lessee shall construct such improvements in accordance with the approved plans and specifications. Approval by the City shall not relieve Lessee from the obligation of obtaining any other necessary permits or approval from City or other governmental agency having jurisdiction. (c) All hangars constructed on the site shall be of similar design. All paint colors for hangars and buildings shall be pre-approved by City. (d) Development Milestones: (i) Lessee shall complete construction of appropriate buildings, hangars or other aviation use facilities on the balance of the land included in this Lease Agreement not later than December 31, REQUIRED REPAIRS, MAINTENANCE AND CITY S RIGHT TO INSPECT. (a) Lessee shall, at Lessee s expense, either perform or, at Lessee s option arrange to perform the following routine maintenance: (i) maintain and keep the entire Premises and all improvements located thereon or therein, in a good condition and repair, and to keep the Premises, including the landscaping, in an attractive, neat, clean and orderly condition (this includes, but is not limited to, any refuse or waste materials which might be or constitute a fire hazard or a public or private nuisance; the disposal in a safe and proper manner, and in accordance with any applicable law, 6

21 ordinance, statute, rule or regulation, of any industrial or hazardous waste including engine oil, paint and other waste placed upon the Premises following the commencement of this Lease Agreement, and any landscaping shall be maintained in a presentable fashion consistent with existing Airport landscaping); and (ii) contract with a City authorized refuse company for the placement and regularly scheduled emptying of a four-yard capacity trash container for every twenty (20) stored aircraft, and at least one four-yard capacity trash container for every occupied building (other than a hangar) with an interior square footage of ten thousand (10,000) square feet or greater. (b) City, through its duly authorized representatives, may, upon not less than twentyfour (24) hours prior notice, enter upon the Premises during regular business hours for the purpose of inspecting the Premises and any improvements and/or facilities thereon throughout the duration of this Lease Agreement. If, after conducting an inspection of the Premises or observing the operation of any businesses thereon, the Airport Manager, or any other duly authorized City representative, determines that any maintenance, repairs or changes, other than routine, are necessary in order to maintain the Premises and any improvements thereon in a manner consistent with the uses contemplated herein, notice of such maintenance, repairs or changes shall be made in writing and delivered or mailed to Lessee. Lessee shall within fourteen (14) days after service of such notice perform any such maintenance, repairs or changes; provided however, that if such maintenance, repairs or changes are of a nature that they cannot be completed within such fourteen (14) day period, then Lessee shall commence such maintenance, repairs or changes within such fourteen (14) day period and shall diligently complete such maintenance, repairs or changes in a commercially reasonable manner thereafter. If Lessee fails to complete or commence (as applicable) such maintenance, repairs or changes in a timely manner, City may cause such maintenance, repairs, or changes to be made without further notice to Lessee. City shall not, however, be precluded from causing repairs to be made to the Premises without prior notice to Lessee where the Premises pose an immediate threat or risk of harm to persons or Premises. City shall invoice Lessee for any and all costs associated with the maintenance, and necessary repairs and/or changes. Lessee shall reimburse City for all such repairs and/or maintenance within thirty (30) days of receiving such invoice. If said costs are not promptly paid by Lessee to City, the Lessee shall be deemed to be in default hereunder, and City shall be entitled to all legal remedies provided hereunder, including the termination of this Lease Agreement. (c) City agrees to maintain the following infrastructure upon completion of construction and acceptance by the applicable City departments: (i) All asphalt/concrete pavement commonly used by all tenants, i.e., taxiways, taxilanes. City will not be responsible for pavement directly associated with Lessee s leasehold, i.e, vehicle parking lots, pavement used by a tenant for aircraft tie-downs. (ii) (iii) All pavement markings (taxiway edge lines, centerlines). All lighting not affixed to a building (ramp lighting). 7

22 (iv) All taxiway guidance signs. 9. FUEL FACILITIES. Subject to Section 10 below, throughout the duration of this Lease Agreement, Lessee is granted the right to construct, run, and operate a fuel/oil service island ( Fuel Facilities ) on the Premises. However, it is anticipated that Fuel Facilities may be constructed on the Premises by an independent third party operator ( Operator ) which will sublease from Lessee and which will operate the Fuel Facilities. Lessee and/or Operator shall enter into a separate Fuel Farm Operating Agreement for the use, operation, maintenance and construction of the Fuel Farm Facilities. 10. FUEL FLOWAGE FEE. At any time that Fuel Facilities are included on the Premises, the Operator thereof shall pay to City a fuel flowage fee for aviation gasoline, jet fuel, oil and hydraulic fluid sold, at said Fuel Facilities. Fuel flowage fees are established by City, and may, from time to time, be adjusted. 11. HOLDING OVER. Any holding over after the expiration of the Term of this Lease Agreement shall result in a month to month tenancy under the terms and conditions of this Lease Agreement at a reasonable monthly market rental rate not to exceed one hundred twenty-five percent (125%) of the Rent in effect for the month immediately prior to such holdover. Holding over is subject to termination on thirty (30) days written notice by the City. 12. INSURANCE. (a) Lessee shall obtain and keep in full force and effect during the entire term of this Lease Agreement, commercial general liability and Premises damage insurance for the Premises in an amount not less than Two Million and No/100 Dollars ($2,000,000.00) per occurrence with an aggregate of Four Million and No/100 Dollars ($4,000,000.00) and auto liability coverage with a minimum limit of One Million and No/100 Dollars ($1,000,000.00). (b) Lessee agrees to deposit with City prior to execution of this Lease Agreement by City, certificates of insurance and additional insured endorsements evidencing the required insurance with coverage at least equal to the above types and amounts as a minimum, and further agrees to file certificates with City during the Term of this Lease Agreement showing continued coverage. No certificate of insurance and additional insured endorsement shall be acceptable unless first approved by City s Risk Manager. (c) To be acceptable, the insurance coverage must meet the following requirements: (i) Such policy must provide that the policy shall not be cancelled or materially changed unless thirty (30) days prior written notice (which notice conforms to the notice provisions set forth in this Lease Agreement) thereof has been given to City. Such policy must contain a waiver of subrogation and provide that the policy shall not be cancelled or materially changed without thirty (30) days prior written notice thereof to City and Lessee. (ii) Such policy must provide that City, its officers and employees, shall be named as additional insureds with respect to all operations of the insured, which insurance shall be primary insurance and not contributing with any other insurance available to City under any other third party liability policy or any self-insurance retention. Endorsement No. CG