AIRPORT COMMITTEE MEETING AGENDA February 05, :00 PM 1st Floor Boardroom - Moorhead City Hall

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1 AIRPORT COMMITTEE MEETING AGENDA February 05, :00 PM 1st Floor Boardroom - Moorhead City Hall 1. Call to Order 2. Agenda Amendments 3. Approval of Minutes 4. Citizens to be Heard 5. New Committee Appointments and Election of Officers 6. Airport Capital Improvement Program 7. Private Hangar Leases A Private Hangar Lease - K. Dahl B Private Commercial Hangar Lease - M. Fletcher 8. Amendment to Primary Fixed Base Operator (PFBO) Agreement 9. Request for Qualifications (RFQ) - Engineering Services 10. Reports/Information A Fuel Report 11. Adjournment

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3 Moorhead Airport Committee November 14, 2012 Minutes Page 1 of 2 Members Present: Newzad Brifki Bruce Emmel Chris Lerdahl Konrad Olson Randy Harms Members Absent: Mike Hulett Dale Neimi MOORHEAD AIRPORT COMMITTEE Meeting Minutes Wednesday, November 14, 2012 Moorhead Airport 1. Roll Call 2. Agenda Amendments 3. Meeting Minutes: Action Taken: Olson moved, seconded by Emmel, to approve the minutes of February 8, Motion carried by unanimous vote. 4. Citizens to be Heard: Emmel inquired as to whether the fly-in and pancake breakfast could be moved to another date so as not to conflict with area churches traditional fall back to church Sunday. 5. Capital Improvement Plan: Leshovsky provided an overview of the Capital Improvement Plan (CIP) proposed projects, timeline and City, MnDOT and FAA funding. The board reviewed and discussed the CIP, the proposed 2013 pavement rehabilitation, in particular. Action Taken: Emmel moved, seconded by Olson, to approve the CIP as presented for submittal to MnDOT and for staff to take actions necessary for pavement rehabilitation and tie-down installation in Motion carried by unanimous vote. 6. Election of Chair and Vice Chair: This item was tabled for the next meeting.

4 Moorhead Airport Committee November 14, 2012 Minutes Page 2 of 2 7. Other Business: Roger Olson stated that he would like to see the private side of the airport promoted. Leshovsky outlined past actions relating to private development that the Airport Committee has taken, including the installation of the taxiway behind the existing private hangars and land lease template. Leshovsky thanked out-going board members Olson and Harms for their years of service on the Airport Committee. 8. Adjournment: Meeting was adjourned at 4:30. Interested parties were given a tour of the airport by Edner. Respectfully Submitted by: Dawn Fuxa, Office Specialist

5 To: Moorhead Airport Committee Subject: New Committee Members and Election of Officers Date: February 5, 2014 Prepared By: Kristie Leshovsky, City Planner Kim Citrowske, Assistant Planner AIRPORT COMMITTEE REPORT NEW COMMITTEE MEMBERS The Moorhead Airport Committee oversees the operation, growth and promotion of the Moorhead Airport. The Committee is comprised of seven voting members; one representativee to be appointed from each of the four wards, two representatives appointed by the Mayor and one Council Member serving as a liaison. The following table outlines the Airport Committee membership and their respective terms. Name Representing Term Newzad Brifki Roger Olson VACANT Chris Lerdahl Bruce Emmel Wayne Lougheed Mike Hulett At-Large At-Large Ward 1 Ward 2 Ward 3 Ward 4 Council 5/29/2012 to 1/31/2015 9/9/2013 to 1/31/2016 3/26/2012 to 1/31/2015 3/12/2012 to 1/31/ /14/2013 to 1/31/2016 1/27/2014 to 12/31/2014 ELECTION OF OFFICERS The previous Chair and Vice Chair of the Airport Committee were at the end of their terms and new members have been appointed; therefore new officers must be elected. The Airport Committee Chair is responsible for presiding at all meetings, preserving the order and decorum, preventing attacks on personalities, and confining members to debate on the question under discussion. The Vice-Chair is responsible for performing the duties of the Chair in their absence, incapacity, in cases of conflict of interest, or their resignation.

6 To: Moorhead Airport Committee Subject: Capital Improvement Program Date: February 5, 2014 Prepared By: Kristie Leshovsky, City Planner Kim Citrowske, Assistant Planner AIRPORT COMMITTEE REPORT CAPITAL IMPROVEMENT PROGRAM Each year, the Minnesota Department of Transportation (Mn/DOT) Office of Aeronautics requires airports update and submit their five year Capital Improvement Program (CIP). This process provides the Mn/DOT Office of Aeronautics and Federal Aviation Administration (FAA) budgetary information when evaluating funding needs and priorities with long range planning and budgeting for airports. PROJECTS COMPLETED & PROPOSED In 2013, pavement rehabilitation and tie down replacement was completed at the Airport. There has been interest expressed (Land Lease included later in the Agenda) to construct a new 80x88 hangar at the airport in This hangar construction would require the extension of the taxiway, as shown on the diagram below (orange taxiway). The construction of the taxiway would allow additional opportunities for private and possibly public hangar construction at the airport. Staff is recommending that the Airport Committee recommend approval to proceed with design, site work and construction of the taxiway extension in PROJECT: TAXIWAY DESIGN & EXTENSION

7 The CIP also includes a line item for the construction of a public hangar in 2015/2016. The 34 public hangars at the Airport continue to remain at full capacity with a waiting list (15 on the list; 8-any hangar available, 3-interested in public hangar with larger door width; 4-interested in south facing hangar only). With the construction of the proposed taxilane, there is an area available that would allow for north facing hangars. As north facing hangars are not as desirable as south facing hangars, there is an option to construct a 1-2 unit public hangar with north facing door(s) that are wider than a traditional t-hangar stall. Staff is requesting comments from the Committee on this proposed approach. SUGGESTED ACTION Recommend Approval of the Capital Improvement Program for submittal to Mn/DOT Office of Aeronautics and recommend pursuing design, site work and construction of a taxi lane in 2014 and public hangar in

8 To: Moorhead Airport Committee Subject: Private Hangar Leases Date: February 5, 2014 Prepared By: Kristie Leshovsky, City Planner Kim Citrowske, Assistant Planner AIRPORT COMMITTEE REPORT BACKGROUND Public t-hangar space at the Moorhead Airport continues to be at capacity with a waiting list of interested tenants. Two parties have expressed interest in building private hangars at the Moorhead Airport and wish to enter into private land lease agreements with the City. PRIVATE HANGER LEASES DAHL K. Dahl has requested a land lease to construct an 80x88 foot private non-commercial hangar. A copy of the draft land lease is attached (based on the draft lease agreement previously approved by the Airport Committee) and includes: Construction requirements mirroring that of the existing private hangars 25 year lease with option for 25 year extension Lease rate of 10 cents per square foot with annual 3% increase rate table K. Dahl Land Lease Location SUGGESTED ACTION Recommend Approval of the Non-Commercial Hangar Land Lease Agreement for K. Dahl at the location noted above to the City Council.

9 PRIVATE HANGER LEASES - FLETCHER M. Fletcher has requested a land lease to construct an 80x120 foot private hangar and attached 40x50 foot office for both commercial (including flight instruction) and aircraft storage use. A copy of the draft land lease is attached and includes: Construction requirements mirroring that of the existing private hangars 25 year lease with option for 25 year extension Lease rate of 15 cents per square foot with annual 3% increase rate table The construction of this hangar in the location noted required an Amendment to the previously approved Airport Layout Plan (ALP). The ALP Amendment included the addition of this hangar and a resignation and reconfiguration of aircraft taxilane areas (existing pavement north of private hangars designated for vehicular traffic only new taxiway and vehicular areas added). The ALP Amendment has been approved by the U.S. Federal Aviation Administration (December 2013) and Minnesota Department of Transportation Office of Aeronautics (January 2014). The proposed lease area covers a portion of a taxiway paid for with Federal and local funds. The costs associated with this area must be paid by the applicant to the City, as the FAA will deduct this amount from the next grant request. Staff has calculated the area impacted (4,430 square feet) and taxiway construction costs ($152,064.28) which would require the lessee to pay $34, to the City (95% to be returned to the FAA during the next grant project-$33,226.04; $1, City-Airport CIP fund). The FAA has been sent this analysis, but have not yet responded/approved the proposed calculations. M. Fletcher Commercial Land Lease Location SUGGESTED ACTION Recommend Approval of the M. Fletcher Commercial Hangar Land Lease Agreement to the City Council.

10 NON-COMMERCIAL HANGAR LAND LEASE THIS LEASE is made and entered into this day of, 2014, by and between the City of Moorhead, Minnesota, a Minnesota political subdivision (the "City"), and Kevin Dahl, Moorhead, MN ( Lessee ). RECITALS A. The City owns an airport known as the Moorhead Municipal Airport (the Airport ). B. Lessee wishes to lease land at the Airport from the City and to construct a hangar on the lease land for the sole purpose of storing Lessee s aircraft. C. The City desires to lease Lessee a portion of the Airport premises subject to the rights and obligations contained in this Lease. D. Lessee acknowledges that the taxiway required to access the proposed land lease area is not constructed. The City will work with the Minnesota Department of Transportation (MnDOT) Office of Aeronautics and the U.S. Federal Aviation Administration (FAA) to construct the hangar in The City will use its best efforts to construct the taxiway in 2014; however this date may change due to available City funds, MnDOT and FAA funding, reviews and/or approvals. Lessee agrees and acknowledges that the construction of the taxiway in 2014 may be delayed. (Initials of Lessee) In consideration of the mutual covenants contained in this Lease, the parties agree as follows: AGREEMENT 1 Premises: The City leases to Lessee the exclusive use of the portion of the Airport as shown on Exhibit A (the Premises ). Lessee has inspected the premises, and accepts it in an as is condition. 2. Hangar: Lessee may own, construct and maintain a hangar on the Premises subject to the following conditions: A. The design of the hangar, materials to be used, and other construction related matters must be approved in writing by the City prior to construction. Lessee shall provide to City a site plan of any proposed construction. Such site plan shall indicate the drainage plan for the site, the placement of utilities, hangar location and the presence of hard surfacing. The building color, including trim, shall match nearest existing hangars at the Airport. 1

11 B. Lessee agrees to keep the interior and exterior of the hangar and the interior and exterior surfaces of the hanger in good condition and to make timely repairs, if necessary, to keep the hangar in good condition. C. Lessee will be responsible for any property taxes associated with the hangar, and for the cost of all utilities to service the hangar. 3. Utilities, Services and Taxes: Lessee shall be responsible for obtaining at its sole costs and expense, all utilities and services for the Leased Premises including but not limited to, electricity, garbage removal, custodial services, sewer and water. Lessee shall be responsible for the payment of all taxes due and owing on any building, structure or hanger occupying the premises. The failure of Lessee to pay all fees, charges associated with the utilities and taxes shall be a breach of this lease and the City may terminate this lease at its option upon 10 days notice to Lessee. If a secured party of Lessee has a security interest in the hangar, the secured party will be given notice to terminate and have the same right to cure as the Lessee. If this lease is terminated due to Lessee s failure to pay utilities, services and taxes, Lessee shall surrender the leased Premises in as good condition as it was at the date of the commencement of this Lease. Lessee shall, at Lessee s own expense, remove the hangar described in Section 2 of this Lease, as well as any other improvements placed on the Premises by Lessee. Lessee must repair any damage to the Premises caused by the removal within thirty (30) days. 4. Construction Requirements: In the event that Lessee determines that it shall desire to construct and own a hangar on the premises, any and all improvements must be located on the premises and include but not be limited to the following: A. A ten-foot concrete private drive connected to asphalt private drive that is at least as wide as the bi-fold hangar door must connect the taxiway to the hangar apron. B. An automatic 500-watt all night yard light must be mounted above the front door of each hangar. C. For a distance of five feet around the hanger, fabric and rock as approved by the city must be used to cover all surfaces that are not hard surfaced or improved with a hangar. D. Hangar addresses numbers must be at least 8 inches tall and visible from the taxiway. 5. Proof of Aircraft Ownership: Lessee shall provide in general that the hangar will be used for aviation purposes limited to the storage of aircraft and aircraft related items. The Lessee shall maintain appropriate registration and certifications on all 2

12 airworthy aircraft that are stored in hangar as described in Section 2. If Lessee does not own an aircraft at the time of the commencement of this Lease or sells all airworthy aircraft, Lessee has one hundred twenty (120) days to obtain an aircraft. The City may allow the Lessee a single one hundred twenty (120) day extension to obtain an aircraft. Lessee shall have proof that the Lessee is working toward acquiring an airworthy aircraft during periods when the Lessee does not own and operate one. 6. Aircraft Registration: Lessee agrees that any aircraft that is based at, stored at, or utilizes the facility under the Lease, shall be currently in compliance with the airport registration requirements set forth in Minnesota Statutes Chapter Airport Use: Lessee may use, in common with others similarly authorized, the Airport, together with all facilities, equipment, improvements, and services which have been or may hereafter be provided at or in connection with the Airport from time to time, including, but not limited to, the landing field, roadways, runways, aprons, taxiways, floodlights, landing lights, signals, radio aids, and all other conveniences for flying, landings, and takeoffs. 8. Term: Subject to earlier termination as provided in this Lease, the term of this Lease shall be for a period of twenty-five (25) years from and after the first day of, 2014, the term of this Lease ending on the 30 th day of December, In the event the City is unable to deliver possession of the Leased Premises on the Commencement date of this lease, Lessee shall have no claim against City and Lessee shall have no right to terminate this Lease, but in such event the Commencement date shall be delayed until possession of the Leased Premises is delivered to Lessee. The Lessee shall have the right to extend the Term hereof (the Extension Option ) upon all the same terms, conditions, covenants and agreements herein contained, other than the Rent which shall be governed by Section 8 below, for one period of twenty-five years, provided that Lessee is not in default at either the time of the Exercise Notice or the commencement of the Extended Term. If Lessee desires to exercise the Extension Option, Lessee shall give notice (the Exercise Notice ) to Landlord not later than three months nor more than six months prior to the expiration of the initial term. Nothing in this lease or agreement shall be constructed as obliging City to maintain and operate the public portions of the airport during the entire term of this lease. It is specifically understood and agreed between Lessee and City that City has the right and power to discontinue and terminate all public airport activities at the airport at any time it deems advisable and upon such discontinuance and termination, would not be liable to Lessee in damages and would have no obligations to Lessee. In the event City discontinues and terminates all public airport activities on the airport, Lessee shall have the right to terminate this lease effective on the date of such discontinuance and termination as effective on the first day of any month thereafter by giving Lessor sixty (60) days written notice of such termination. 9. Rent: Rent for the Premises during the term of this Lease shall be ten cents (10 ) per square foot per year with the first payment due the 1 st day of, 2014, (the commencement date) and each subsequent payment due on or before the first day of each year, 3

13 payable to the City at the address listed in Section 27 of this Lease. During the first year of this lease the rent for the premises shall be pro-rated by dividing the amount of yearly rent by the number of months remaining in the year. Each year thereafter during the Term and Extended Term, the Rent will be adjusted annually on the first day of any such year during the Term and Extended Term by a flat rate of three percent (3%) annually as outlined in the following table. Hangar Info 80' x 80' hanger = 6400 sq. ft sq. ft. x $0.10/sq. ft = $640.00/base rent Year Annual Rent Due 2014 $640.00* 2015 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, * This may be prorated per Lease Agreement 4

14 Lessee shall make all payments of Rent to the City at the address set forth in paragraph 27 or to such other party or to such other address as the City may designate from time to time by notice to Lessee. Lessee shall incur a five percent late fee if Rent is not paid by the 5 th day of January of the year during the Term or Extended Term. 10. Soil Testing and Correction: The parties understand and agree that the soils at or near the Airport have a history of shifting and having load bearing issues. Soil testing is required to be completed by the Lessee and a plan submitted by a qualified person addressing the soil conditions must be submitted in addition to a drainage plan and detailed building plans before a building permit will be issued. In the event that Lessee constructs a hangar and incurs costs associated with remedying existing soil conditions at the site, the Lessee may request that the rent be reduced by an amount equal to the costs associated with remedying such conditions in accordance with the following conditions: A. Lessee expressly agrees and acknowledges that under no circumstances shall the rent by reduced by an amount greater than the sum of five thousand dollars ($5,000.00) or one hundred (100) percent of the rental rate paid by Lessee during the next reduction rate. (Initials of Lessee) B. Lessee expressly agrees and acknowledges that it shall provide evidence in a form acceptable to the City of the amount of the sums referenced in subsection A of Section 10 of this Agreement. Lessee expressly agrees and acknowledges that it shall provide documentation of such costs to the City, prior to being issued a building permit in order to be eligible to receive the above described rent reduction. In the event that the initial costs are less than the sum of five thousand dollars ($5,000.00), Lessee may submit evidence of additional costs associated with remedying the soil conditions referenced in this section after it has completed construction of the hangar. These sums shall be evaluated by the City and if the City determines that such sums are related to the correction of soil conditions, such amounts will be counted towards the maximum reduction of five thousand dollars ($5,000.00). C. Any rent reduction authorized by the terms of this contract shall not begin until the second year of this Lease a period of up to a total of six years of rent reduction. Lessee agrees and acknowledges that it shall be required to pay the first year of rent as provided under this lease. 11. Right to Assignment or Sublease: Lessee shall not assign or sublet its rights under this Lease without the prior written consent of the City, which the City may not unreasonably withhold. Any assignee or sub-lessee shall be subject to all of Lessee s obligations under this Lease. The term of this Lease shall not extend by virtue of any assignment or subletting of this Lease. Alternatively, any assignee or sub-lessee may request by written notice to the City that the parties renegotiate a new lease. The City and assignee or sub-lessee will have the opportunity to evaluate existing structures compared to similar structures at the Airport. 5

15 12. Lease Contingent on Construction: This Lease shall become null and void if Lessee does not commence construction of the hangar by, and have it substantially completed by, unless a time extension is given in writing by the City. 13. Inspection: The City, or its designated representative, retains the right of access to the Premises for inspection of the Premises at all times during this Lease. 14. Commercial Operations: Lessee shall not conduct any commercial operations from the Premises. 15. Compliance with building, zoning, and fire codes: Lessee shall not store fuel or any other flammable substance in the hangar or anywhere on the Premises. Lessee may use a propane tank for purposes of heating the hangar. The City must approve the location of such tank. Lessee shall at all times comply with the City of Moorhead s zoning, fire and building codes. 16. Snow Removal: The Lessee shall be responsible for snow removal in the leased area during the lease period. Snow can be placed on the taxiway if placed before the taxiway has been cleared. 17. Mowing: The Lessee shall be responsible for mowing grass in the leased area. 18. Outside Storage: The Lessee shall not store any items outside of the rented hangar. 19. Termination of Lease: Lessee shall have the right to terminate this Lease on the first day of any month upon ninety (90) days' written notification to the City. If a secured party of Lessee has a security interest of record in the hangar, the secured party must also sign the termination notice. In Lessee s written notice, Lessee shall explicitly state that Lessee will remove the hangar described in Section 2 of this Lease within the ninety (90) day notice period. Alternatively, Lessee may request in its written notice that the hangar become the property of the City, in which case the City shall give Lessee written notification of its acceptance or denial of Lessee s request within two (2) weeks of receiving the request. If the City denies Lessee s request, Lessee must remove the hangar pursuant to Section 20 of this Lease. The City may terminate this Lease upon sixty (60) days' written notice if the Lessee, or any sub-lessee of Lessee, violates the terms of this Lease. If a secured party of Lessee has a security interest in the hangar, the secured party will be given notice to terminate and have the same right to cure as the Lessee. Lessee shall be deemed not to have violated the terms of this Lease unless the City has provided written notice to Lessee, and any secured party, of a violation of the Lease and such violation is not cured within thirty (30) days, or a similar violation occurs within ninety (90) days of the notice of the first violation. The secured party will also receive written notice of the termination if the default is not cured in a timely manner and have the right to take over the Lease as provided in paragraph 31. 6

16 In the event that City determines that the leased premises are necessary for a public project, including but not limited to runway expansion or economic development of the airport the city may terminate this agreement upon 120 days written notice to Lessee. In the event that City exercises this option, the city will pay to Lessee the value of the remaining term of the lease. The remaining term of the lease will be determined using straight line amortization. The percentage of the remaining lease will be multiplied by the current taxable assessed value of the land and improvements (example: remaining lease term divided by total lease term equals the remaining percentage of the lease 10 years remaining / 50 year lease term = 20% remaining of the lease. 20% multiplied by the current assessed value of $100,000 would equal $20,000). In the event that City exercises this option, Lessee shall be entitled to no additional compensation and shall be responsible for the surrender of the Premises in accordance with section 20 of this agreement. In the event City decides to abandon the airport, City may terminate this agreement upon thirty (30) days written notice to the Lessee. In the event that the City exercises this option the Lessee shall be responsible for the removal of the premises in accordance with section 20 of this agreement. In the event the Hangar is destroyed to extent that the cost of repairing the hangar exceeds 50 percent of the value of the Hangar, this agreement may be terminated by either party upon sixty (60) days written notice. 20. Surrender of Premises: At the expiration of the term of this Lease and any renewal or extension, or sooner termination, Lessee shall surrender the leased Premises in as good condition as it was at the date of the commencement of this Lease. Lessee shall, at Lessee s own expense, remove the hangar described in Section 2 of this Lease, as well as any other improvements placed on the Premises by Lessee, unless the parties agree. Lessee must repair any damage to the Premises caused by the removal within thirty (30) days. 21. Construction on Leased Premises: Other than the hangar described in Section 2 of this Lease, Lessee shall not construct or place on the Premises any structure or improvement without the written consent of the City, both as to the location and type of structure to be constructed or placed on the Premises. Lessee must submit to City a formal application describing the improvement to be made. 22. Indemnification: Lessee agrees to indemnify and hold the City harmless against any and all liability, loss, and shall not be liable for damage to Lessee's property, which relates to Lessee s occupancy of the Premises. Lessee also agrees to indemnify the City from any and all liability, loss, or damage the City may suffer as the result of claims, demands, costs (including reasonable attorney fees), or judgment against the City arising from the operation of Lessee's aircraft, or from the occupancy of Lessee's aircraft on the Premises, or Lessee's use of the Moorhead Municipal Airport, except any damages directly and proximately caused by the negligence or an affirmative act of the City or its agents. 7

17 Any assignment or sublease by Lessee shall include a provision of indemnification in which the assignee or sub-lessee agrees to indemnify the City in the identical manner that Lessee must indemnify the City as set forth in this clause. 23. Insurance: Lessee shall procure and maintain in force during the term of this Lease, at Lessee s expense, general liability, aircraft liability, and premises liability insurance in an amount equal to or greater than required by Minnesota law. The City and Lessee grant to each other, on behalf of any insurer providing fire and extended coverage to either of them, a waiver of any right of subrogation any insurer or one party may acquire against the other by virtue of payment of any loss under such insurance, and the waiver shall be effective so long as each is empowered to grant a waiver under the terms of the party s insurance policy or policies involved without payment of additional insurance premiums. Any waiver shall stand mutually terminated as of the date either the City or Lessee ceases to be empowered. 24. Hangar Financing: Lessee may secure financing for the construction of the hangar from a financial institution or other party. Lessee is required to give Lessor notice of the secured party, and the address of the secured party for purposes of notices. If a financial institution, or another party, has a security interest in this Lease or the property constructed on it, in the event of termination of this Lease, the financial institution shall have the option, within thirty (30) days of the termination of the Lease, to notify in writing the City of its intent to take over the Lease and be subject to all the terms of the Lease, including the right to sublease the Premises to another party for the purposes of storage, with the prior written consent of the City. If the Lessee is going to give a security interest in the hangar, the Lessee is responsible for a survey of the hangar site to determine a legal description of the site, if required by the secured party. 25. Airport Regulations: Lessee agrees to be bound by all airport regulations adopted by the City, the State of Minnesota, or the United States Government in effect at the time of the execution of this Lease or as those parties may enact or amend in the future. Any violation of any statutes, ordinances, rules, and regulations shall be a violation of this Lease and grounds for termination pursuant to Section 19 of this Lease. 26. Security/Parking: The parties shall keep all gates closed on Airport property. Lessee shall keep hangar doors closed and internal building lights off except when using the hangar. Vehicles must be parked so as not to interfere with aircraft or snow removal operations. 8

18 27. Notice: Any notice under this Lease must be in writing and must be sent by registered or certified mail to the last address of the party to whom the notice is to be given, as designated by each party in writing. The City designates its address as: Moorhead City Hall ATTENTION: City Manager 500 Center Avenue P.O. Box 779 Moorhead, MN Lessee designates its address as: 28. Entire Agreement: This Agreement supersedes all prior written and oral agreements or negotiations between the parties. 29. Amendment: This Lease may only be amended in a writing executed by both parties to this Lease. 30. Severability: If any provision of this Lease shall be declared invalid or unenforceable, the remainder of the Lease shall continue in full force and effect. 31. Successors and Assigns: The covenants, terms, conditions, and provisions in this Lease or in any renewal or extension shall extend to and be binding upon the legal representatives, successors, and assigns of the parties to this Lease. (Signatures appear on the following page.) 9

19 CITY OF MOORHEAD LESSEE BY: Del Rae Williams Kevin Dahl Its: Mayor By: Michael J. Redlinger Its: City Manager STATE OF MINNESOTA ) ) ss. COUNTY OF CLAY ) On this day of, 2014, before me personally appeared Del Rae Williams and Michael J. Redlinger, known to me to be the Mayor and City Manager, respectively, of the City of Moorhead, and that they executed the within and foregoing instrument, and acknowledged that they executed the same as Mayor and City Manager of the City of Moorhead. (SEAL) Notary Public, Clay County, MN My Commission Expires: STATE OF MINNESOTA ) ) ss. COUNTY OF CLAY ) On this day of, 2014, before me, a Notary Public within and for said County and State, personally appeared Kevin Dahl, known to me to be the person(s) described in and who executed the foregoing instrument and acknowledged to me that he/she/they executed the same. (SEAL) Notary Public, Clay County, MN My Commission Expires: 10

20 COMMERCIAL HANGAR LAND LEASE THIS LEASE is made and entered into this day of, 2013 by and between the City of Moorhead, Minnesota, a Minnesota political subdivision (the "City"), and, ( Lessee ). RECITALS A. The City owns an airport known as the Moorhead Municipal Airport (the Airport ). B. Lessee wishes to lease land at the Airport from the City and to construct a hangar on the lease land to conduct certain commercial aeronautical activities at the Airport. C. The City is willing to lease Lessee a portion of the Airport premises subject to the terms and conditions contained in this Lease. In consideration of the mutual covenants contained in this Lease, the parties agree as follows: AGREEMENT 1. Premises: The City leases to Lessee the exclusive use of the portion of the Airport as shown on Exhibit A (the Premises ). Lessee has inspected the premises and accepts it in an as is condition. A. Lessee acknowledges that a portion of the leased premises includes an existing taxiway which was financed by the U.S. Federal Aviation Administration and City of Moorhead. The cost associated with construction of said portion of taxiway is $34, Lessee agrees to provide payment in the amount of $34, to the City, the receipt of which is hereby acknowledged by the Lessor. 2. Hangar: Lessee may own, construct and maintain a hangar on the Premises subject to the following conditions: A. The design of the hangar, materials to be used, and other construction related matters must be approved in writing by the City prior to construction. Lessee shall provide to City a site plan of any proposed construction. Such site plan shall indicate the drainage plan for the site, the placement of utilities, hangar location and the presence of hard surfacing. The building color, including trim, shall match nearest existing hangars at the Airport. 1

21 B. Lessee agrees to keep the interior and exterior of the hangar and the interior and exterior surfaces of the hanger in good condition and to make timely repairs, if necessary, to keep the hangar in good condition. C. Lessee will be responsible for any property taxes associated with the hangar, and for the cost of all utilities to service the hangar. 3. Utilities, Services and Taxes: Lessee shall be responsible for obtaining at its sole costs and expense, all utilities and services for the Leased Premises including but not limited to, electricity, garbage removal, custodial services, sewer and water. Lessee shall be responsible for the payment of all taxes due and owing on any building, structure or hanger occupying the premises. The failure of Lessee to pay all fees, charges associated with the utilities and taxes shall be a breach of this lease and the City may terminate this lease at its option upon 10 days notice to Lessee. If a secured party of Lessee has a security interest in the hangar, the secured party will be given notice to terminate and have the same right to cure as the Lessee. 4. Construction Requirements: In the event that Lessee determines that it shall desire to construct and own a hangar on the premises, any and all improvements must be located on the premises and include but not be limited to the following: A. A concrete private drive that is at least as wide as the bi-fold hangar door must connect the taxiway to the hangar apron. B. An automatic 500-watt all night yard light must be mounted above the front door of each hangar. C. For a distance of five feet around the hanger, fabric and rock as approved by the city must be used to cover all surfaces that are not hard surfaced or improved with a hangar. D. Hangar addresses numbers must be at least 8 inches tall and visible from the taxiway. 5. Proof of Aircraft Ownership: Lessee shall provide in general that the hangar will be used for aviation purposes limited to the storage of aircraft and aircraft related items or as otherwise contained within this Agreement. The Lessee shall maintain appropriate registration and certifications on all airworthy aircraft that are stored in hangar as described in Section 2. If Lessee does not own an aircraft at the time of the commencement of this Lease or sells all airworthy aircraft, Lessee has one hundred twenty (120) days to obtain an airworthy aircraft. The City may allow the Lessee a single one hundred twenty (120) day extension to obtain an aircraft. Lessee shall have proof that the Lessee is working toward acquiring an airworthy aircraft during periods when the Lessee does not own and operate one. 6. Aircraft Registration: Lessee agrees that any aircraft that is based at, stored at, or utilizes the facility under the Lease, shall be currently in compliance with the airport registration requirements set forth in Minnesota Statutes Chapter

22 7. Airport Use: Lessee may use, in common with others similarly authorized, the Airport, together with all facilities, equipment, improvements, and services which have been or may hereafter be provided at or in connection with the Airport from time to time, including, but not limited to, the landing field, roadways, runways, aprons, taxiways, floodlights, landing lights, signals, radio aids, and all other conveniences for flying, landings, and takeoffs. 8. Term: Subject to earlier termination as provided in this Lease, the term of this Lease shall be for a period of twenty-five (25) years from and after the first day of, 2013, the term of this Lease ending on the day of, In the event the City is unable to deliver possession of the Leased Premises on the Commencement date of this lease, Lessee shall have no claim against City and Lessee shall have no right to terminate this Lease, but in such event the Commencement date shall be delayed until possession of the Leased Premises is delivered to Lessee. The Lessee shall have the right to extend the Term hereof (the Extension Option ) upon all the same terms, conditions, covenants and agreements herein contained, other than the Rent which shall be governed by Section 8 below, for up to two consecutive periods of twenty-five (25) years each, provided that Lessee is not in default at either the time of the Exercise Notice or the commencement of the Extended Term. If Lessee desires to exercise the Extension Option, Lessee shall give notice (the Exercise Notice ) to Landlord not later than three months nor more than six months prior to the expiration of the initial term. Nothing in this lease or agreement shall be constructed as obliging City to maintain and operate the public portions of the airport during the entire term of this lease. It is specifically understood and agreed between Lessee and City that City has the right and power to discontinue and terminate all public airport activities at the airport at any time it deems advisable and upon such discontinuance and termination, would not be liable to Lessee in damages and would have no obligations to Lessee. In the event City discontinues and terminates all public airport activities on the airport, Lessee shall have the right to terminate this lease effective on the date of such discontinuance and termination as effective on the first day of any month thereafter by giving Lessor sixty (60) days written notice of such termination. 9. Rent: Rent for the Premises during the term of this Lease shall be $0.15 per square foot per year for the 80 x160 (12,800 square feet) leased area, illustrated in Exhibit A with the first payment of $1, due the 1 st day of, 2013, (the commencement date) and each subsequent payment due on or before the fifth day of each calendar year, payable to the City at the address listed in Section 27 of this Lease. During the first year of this lease the rent for the premises shall be pro-rated by dividing the amount of yearly rent by the number of months remaining in the year. Each year thereafter during the Term and Extended Term, the Rent will be adjusted annually on the first day of any such year during the Term and Extended Term by a flat rate increase of three percent (3%). Lessee shall incur a five percent late fee if Rent is not paid by the 15 th day of the year during the Term or Extended Term. 3

23 The following table outlines the payments for the agreement term. Year Rent Due 2013 $1, $1, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, $3, $3, $3, $3, $3, $3, $3, $3, $3, $4, Right to Assignment or Sublease: Lessee shall not assign or sublet its rights under this Lease without the prior written consent of the City, which the City may not unreasonably withhold. Any assignee or sub-lessee shall be subject to all of Lessee s obligations under this Lease. The term of this Lease shall not extend by virtue of any assignment or subletting of this Lease. Alternatively, any assignee or sub-lessee may request by written notice to the City that the parties renegotiate a new lease. The City and assignee or sub-lessee will have the opportunity to evaluate existing structures compared to similar structures at the Airport. 11. Lease Contingent on Construction: This Lease shall become null and void if Lessee does not commence construction of the hangar by, and have it substantially completed by, unless a time extension is given in writing by the City. 4

24 12. Inspection: The City, or its designated representative, retains the right of access to the Premises for inspection of the Premises at all times during this Lease. 13. Commercial Operations: Lessee shall use the Premises solely for the following specific commercial purposes, and for no other purpose without the written consent of the City. A. Flight Instruction B. Aircraft Engine, Avionics and Component Repair and Maintenance C. Charter Services D. Aircraft and/or Instrument Rental and Sales E. Vehicle Rental (as it directly relates to aeronautical services) 14. Compliance with building, zoning, and fire codes: Lessee shall not store fuel or any other flammable substance in the hangar or anywhere on the Premises. Lessee may use a propane tank for purposes of heating the hangar. The City must approve the location of such tank. Lessee shall at all times comply with the City of Moorhead s zoning, fire and building codes. 15. Snow Removal: The Lessee shall be responsible for snow removal in the leased area during the lease period. Snow can be placed on the taxiway if placed before the taxiway has been cleared. 16. Mowing: The Lessee shall be responsible for mowing grass in the leased area. 17. Outside Storage: The Lessee shall not store any items outside of the rented hangar. 18. Termination of Lease: Lessee shall have the right to terminate this Lease on the first day of any month upon ninety (90) days' written notification to the City. If a secured party of Lessee has a security interest of record in the hangar, the secured party must also sign the termination notice. In Lessee s written notice, Lessee shall explicitly state that Lessee will remove the hangar described in Section 2 of this Lease within the ninety (90) day notice period. Alternatively, Lessee may request in its written notice that the hangar become the property of the City, in which case the City shall give Lessee written notification of its acceptance or denial of Lessee s request within two (2) weeks of receiving the request. If the City denies Lessee s request, Lessee must remove the hangar pursuant to Section 20 of this Lease. The City may terminate this Lease upon sixty (60) days' written notice if the Lessee, or any sub-lessee of Lessee, violates the terms of this Lease. If a secured party of Lessee has a security interest in the hangar, the secured party will be given notice to terminate and have the same right to cure as the Lessee. Lessee shall be deemed not to have violated the terms of this Lease unless the City has provided written notice to Lessee, and any secured party, of a violation of the Lease and such violation is not cured within thirty (30) days, or a similar violation occurs within ninety (90) days of the notice of the first violation. The secured party will also receive written notice of the termination if the default is not cured in a timely manner and have the right to take over the Lease as provided in paragraph 31. 5

25 In the event that City determines that the leased premises are necessary for a public project, including but not limited to runway expansion or economic development of the airport the city may terminate this agreement upon 120 days written notice to Lessee. In the event that City exercises this option, the city will pay to Lessee the value of the remaining term of the lease. The remaining term of the lease will be determined using straight line amortization. The percentage of the remaining lease will be multiplied by the current taxable assessed value of the land and improvements (example: remaining lease term divided by total lease term equals the remaining percentage of the lease 10 years remaining / 50 year lease term = 20% remaining of the lease. 20% multiplied by the current assessed value of $100,000 would equal $20,000). In the event that City exercises this option, Lessee shall be entitled to no additional compensation and shall be responsible for the surrender of the Premises in accordance with section 20 of this agreement. In the event City decides to abandon the airport, City may terminate this agreement upon thirty (30) days written notice to the Lessee. In the event that the City exercises this option the Lessee shall be responsible for the removal of the premises in accordance with section 20 of this agreement. In the event the Hangar is destroyed to extent that the cost of repairing the hangar exceeds 50 percent of the value of the Hangar, this agreement may be terminated by either party upon sixty (60) days written notice. 19. Surrender of Premises: At the expiration of the term of this Lease and any renewal or extension, or sooner termination, Lessee shall surrender the leased Premises in as good condition as it was at the date of the commencement of this Lease. Lessee shall, at Lessee s own expense, remove the hangar described in Section 2 of this Lease, as well as any other improvements placed on the Premises by Lessee, unless the parties agree to allow the hangar to remain in place. Lessee must repair any damage to the Premises caused by the removal within thirty (30) days. 20. Construction on Leased Premises: Other than the hangar described in Section 2 of this Lease, Lessee shall not construct or place on the Premises any structure or improvement without the written consent of the City, both as to the location and type of structure to be constructed or placed on the Premises. Lessee must submit to City a formal application describing the improvement to be made. 21. Indemnification: Lessee agrees to indemnify and hold the City harmless against any and all liability, loss, and shall not be liable for damage to Lessee's property, which relates to Lessee s occupancy of the Premises. Lessee also agrees to indemnify the City from any and all liability, loss, or damage the City may suffer as the result of claims, demands, costs (including reasonable attorney fees), or judgment against the City arising from the operation of Lessee's aircraft, or from the occupancy of Lessee's aircraft on the Premises, or Lessee's use of the Moorhead Municipal Airport, except any damages directly and proximately caused by the negligence or an affirmative act of the City or its agents. Any assignment or sublease by Lessee shall include a provision of indemnification in which the assignee or sub-lessee agrees to indemnify the City in the identical manner that Lessee 6

26 must indemnify the City as set forth in this clause. 22. Insurance: Lessee shall procure and maintain in force during the term of this Lease, at Lessee s expense, general liability, aircraft liability, and premises liability insurance in an amount equal to or greater than required by Minnesota law. The City and Lessee grant to each other, on behalf of any insurer providing fire and extended coverage to either of them, a waiver of any right of subrogation any insurer or one party may acquire against the other by virtue of payment of any loss under such insurance, and the waiver shall be effective so long as each is empowered to grant a waiver under the terms of the party s insurance policy or policies involved without payment of additional insurance premiums. Any waiver shall stand mutually terminated as of the date either the City or Lessee ceases to be empowered. 23. Hangar Financing: Lessee may secure financing for the construction of the hangar from a financial institution or other party. Lessee is required to give Lessor notice of the secured party, and the address of the secured party for purposes of notices. If a financial institution, or another party, has a security interest in this Lease or the property constructed on it, in the event of termination of this Lease, the financial institution shall have the option, within thirty (30) days of the termination of the Lease, to notify in writing the City of its intent to take over the Lease and be subject to all the terms of the Lease, including the right to sublease the Premises to another party for the purposes of storage, with the prior written consent of the City. If the Lessee is going to give a security interest in the hangar, the Lessee is responsible for a survey of the hangar site to determine a legal description of the site, if required by the secured party. 24. Airport Regulations: Lessee agrees to be bound by all airport regulations adopted by the City, the State of Minnesota, or the United States Government in effect at the time of the execution of this Lease or as those parties may enact or amend in the future. Any violation of any statutes, ordinances, rules, and regulations shall be a violation of this Lease and grounds for termination pursuant to Section 19 of this Lease. 25. Security/Parking: The parties shall keep all gates closed on Airport property. Lessee shall keep hangar doors closed and internal building lights off except when using the hangar. Vehicles must be parked so as not to interfere with aircraft or snow removal operations. 26. Notice: Any notice under this Lease must be in writing and must be sent by registered or certified mail to the last address of the party to whom the notice is to be given, as designated by each party in writing. The City designates its address as: Moorhead City Hall ATTENTION: City Manager 500 Center Avenue P.O. Box 779 Moorhead, MN

27 Lessee designates its address as: 27. Entire Agreement: This Agreement supersedes all prior written and oral agreements or negotiations between the parties. 28. Amendment: This Lease may only be amended in a writing executed by both parties to this Lease. 29. Severability: If any provision of this Lease shall be declared invalid or unenforceable, the remainder of the Lease shall continue in full force and effect. 30. Successors and Assigns: The covenants, terms, conditions, and provisions in this Lease or in any renewal or extension shall extend to and be binding upon the legal representatives, successors, and assigns of the parties to this Lease. (Signatures appear on the following page.) 8

28 CITY OF MOORHEAD LESSEE BY: Mark Voxland Its: Mayor By: Michael J. Redlinger Its: City Manager STATE OF MINNESOTA ) ) ss. COUNTY OF CLAY ) On this day of, 2013, before me personally appeared Mark Voxland and Michael J. Redlinger, known to me to be the Mayor and City Manager, respectively, of the City of Moorhead, and that they executed the within and foregoing instrument, and acknowledged that they executed the same as Mayor and City Manager of the City of Moorhead. (SEAL) Notary Public, Clay County, MN My Commission Expires: STATE OF MINNESOTA ) ) ss. COUNTY OF CLAY ) On this day of, 2013, before me, a Notary Public within and for said County and State, personally appeared Marvin Fletcher, known to me to be the person(s) described in and who executed the foregoing instrument and acknowledged to me that he/she/they executed the same. (SEAL) Notary Public, Clay County, MN My Commission Expires: 9

29 Exhibit A Proposed Building Area Proposed Lease Area 10

30 To: Moorhead Airport Committee Subject: Amendment to Primary Fixed Base Operator Agreement Date: February 5, 2014 Prepared By: Kristie Leshovsky, City Planner AIRPORT COMMITTEE REPORT BACKGROUND In 2011, the City of Moorhead entered into a three-year (July 2011-June 2014) Primary Fixed Based Operator Agreement with Flight Development, LLC to provide services including: 1. Courtesy service to airport customers 2. Unicom Radio Advisory Assistance and Issuance of NOTAMs (Notice to Airmen) 3. Fuel and Oil Sales, fuel servicee records 4. Snow and grass removal (City equipment) 5. Minor Repairs and maintenance 6. Runway and pavement inspection 7. Aircraft engine/accessory repair and maintenance. Flight Development has requested an Amendment to the PFBO Agreement to accommodate increased expenses incurred with the snow and grass removal at the Moorhead Airport. They would continue providing the services noted above. PROPOSAL REVIEW FLIGHT DEVELOPMENT PFBO AMENDMENT Overview of Current Preferred Fixed Based Operator Agreement with Flight Development: - 3 Year Agreement (July 1, 2011 June 30, 2014) - Flight Development payments to City July 1, 2011 June 30, 2012 No Payment July 1, 2012 June 30, 2013 $500/month; $6,000/year July 1, 2013 June 30, 2014 $1,000/month; $12,000/year - PFBO responsible for snow and grass maintenance o City provides equipment - PFBO operates fuel services - PFBO provides various airport services (noted above) - PFBO utilizes PFBO hangar and Hangar #1 for no fee - City provides water, electricity and sanitary (septic) service

31 Proposed Amendment to the Preferred Fixed Based Operator Agreement with Flight Development: - 3 Year Agreement (January 1, 2014 December 31, 2016) - City monthly payments to Flight Development January $2,000 February $2,000 March $1,200 April $800 May $800 June $800 July $800 August $800 September $800 October $1,000 November $2,000 December $2,000 Annual Total $15,000 - PFBO responsible for snow and grass maintenance o City provides equipment - PFBO operates fuel services - PFBO provides various airport services (noted above) - PFBO utilizes PFBO hangar and Hangar #1 for no fee - City provides water, electricity and sanitary (septic) service POLICY CONSIDERATIONS For many years, the Airport Operating Budget required a transfer from the City s General Fund to balance the budget, as shown on the chart below. Throughout the years, numerous strategies were utilized to balance the Airport budget and in , no General Fund transfers were required. The airport has been generating revenues in excess of expenditures in 2012 and 2013 (in 2013, the airport generated $23,345 in revenue above expenditures), however, due to previous years of the airport operating at a deficit, there is still a small cash deficit which needs to be before the revenue may be used for other Airport related expenditures (exp: local share for Federal or State grant projects, etc.).

32 Based on the request of Flight Development, $15,000 would be required from the Airport Operating Budget to compensate Flight Development for snow and grass removal for the years After analyzing the Airport Operating Budget, it appears the payment to Flight Development could be made while maintaining a balanced Airport Budget. SUGGESTED ACTION Review and discuss recommendation for Amendment to the Primary Fixed Base Operator (PFBO) Agreement with Flight Development, LLC. ATTACHMENTS Primary Fixed Base Operator (PFBO) Agreement 2. Draft Amendment #1 to 2011 PFBO Agreement

33 Amendment #1 to Primary Fixed Base Operator Agreement Between City of Moorhead And Flight Development, LLC THIS AMENDMENT made and entered into this day of 2014, by and between the City of Moorhead, (hereinafter referred to as the City ), and Flight Development, LLC, with a regular place of business at th Street South, Glyndon, MN 56547, (hereinafter referred to as Primary Fixed Base Operator, PFBO ). WHEREAS, the parties previously entered into an Primary Fixed Based Operator Agreement on or about April 1, 2011, a copy of which is attached hereto as Exhibit A (hereinafter referred to as the Agreement ); and WHEREAS, the Agreement provides that Flight Development will provide full time PFBO services; and WHEREAS, Flight Development has requested the existing Agreement be modified in order that Flight Development can continue to provide full-time PFBO services; and and WHEREAS, the City is desirous of granting Flight Development the change requested; WHEREAS, Flight Development and City agree that as a condition precedent to the enactment of the payment schedule in Section 1 of this Agreement, PFBO must make full and complete payment of any and all outstanding obligations PFBO now owes the City through December 31, 2013, which payment must occur on or before January 31, NOW THEREFORE, the parties agree as follows: WITNESSETH, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows; 1. Article 2. COMPENSATION is hereby amended as follows: PFBO PFBO and City agrees that City PFBO shall be compensated by PFBO City for snow removal and grass maintenance in the amount of Six Fifteen Thousand Dollars ($6, ,000) annually for the term of the contract, paid in 12 equal payments of five hundred dollars each starting on July 1, 2012 and through June 30, 2013 and made on or before the first (1) day of each month. PFBO further agrees that City shall be compensated by PFBO in the amount of Twelve Thousand Dollars ($12,000), paid in 12 equal payments of one thousand dollars each starting on July 1, 2013 and through June 30, 2014 and made on or before the first (1) day of each 1

34 month. PFBO and City agree that no compensation is required by either party from July 1, 2011 through June 30, as outlined in the following table: January $2,000 February $2,000 March $1,200 April $800 May $800 June $800 July $800 August $800 September $800 October $1,000 November $2,000 December $2,000 Annual Total $15, Article 3. TERM is hereby amended as follows: The term of this Agreement shall be July 1, 2011 January 1, 2014 through June 30, 2014 December 31, Any violation of any part of this Agreement during the entire term of this Agreement shall be cause for termination. The notice of termination shall provide that the other party has 30 days in which to cure the violation of the Agreement. If the violation is not cured within the 30-day period, the contract shall be terminated; provided, however, if the party in good faith is working to cure the violation of the contract and it cannot be done within 30 days, the termination will not become effective unless the defect is not cured within a reasonable time. The City and Flight Development, LLC, upon mutual agreement, shall have the right to extend this agreement for up to three (3) additional one-year periods upon either parties notice to the other party. In the event that the parties exercise this option, the parties may mutually agree to an adjustment in the amount of compensation. 3. The parties agree that all of the terms and conditions set forth in paragraph one (1) and two (2) of this Amendment which are underlined and bold are terms and conditions which are hereby added to the Agreement, and all terms and conditions which have been struck through are hereby eliminated from the Agreement. 4. WHEREAS, Article 16 of the Agreement provides: This Agreement contains the entire understanding of the parties. It may not be changed orally, but only upon an agreement in writing approved by both the City and 2

35 PFBO. It may be modified as to terms and conditions from time to time upon the mutual consent of the parties; however, such modifications shall be reduced to writing, signed by the parties, and the document appended to and made a part of this Agreement. 5. All other terms and conditions of the Agreement not addressed in this Amendment are hereby reaffirmed by the parties and continue in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment #1 the day and year first above written. PFBO Flight Development, LLC By: Stephen Edner, President CITY City of Moorhead Del Rae Williams, Its Mayor ATTEST: Rex Hammarback Michael J. Redlinger, Its City Manager 3

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55 CAM, LLC th Ave S Fargo, ND February 3, 2014 City of Moorhead Airport Committee 500 Center Ave Moorhead, MN Dear Airport Committee: The City of Moorhead has been an example of growth and prosperity for its residents and visitors for years. Unfortunately there is an underutilized and undervalued representation of the City that is often the first and only impression visitors have of Moorhead. We believe that the Moorhead Airport has fantastic potential, but is not being currently used in its best capacity, or for the optimal purpose. As a company that uses multiple business aircraft for our day to day operations, we realize the utility and benefit that aviation can provide. Although we ve previously flown out of Moorhead before, our current size of equipment does not allow us to hangar there, nor to use this great asset of the City. Further, the level of service that can be provided at the airport for our needs, as well as others, is unfortunately less than those at other airports. We know there are many other companies with the same barriers to use of Moorhead s airport. The inability to service current and prospective tenants or transient aircraft to the basic capability of other airports is preventing the Moorhead airport from thriving. We feel there is great potential for the FBO, airport, and City by operating the facility in a more professional manner. We are pleased to offer the following proposal for the Airport Committee. OBJECTIVE Our proposal is to take over operation of the Moorhead Airport Preferred FBO, expand its capabilities and offerings, and improve the level of service that can be provided for the tenants and transient traffic at the field while serving as a positive and noteworthy promotion of the City and memorable example of Moorhead and its benefits. PROPOSED OPERATION 1. FBO a. Update and refresh current FBO facilities. b. Initiate and/or improve advertising and draw to Moorhead Airport through online, pilot specific, general public, and community benefit avenues. c. Provide on-site attendance with intent on expanding normal hours to allow for better service and increased traffic from 7:30 AM to 10:00 PM, or longer as per demand.

56 City of Moorhead Airport Committee February 3, 2014 Page 2 d. With increased public visibility, capabilities, and services, make Moorhead a destination airport instead of a reliever. e. Provide tug service to/from hangars. f. Full service fuel during operating hours to provide better customer service. 2. Flight Operations a. Provide and promote Flight Instruction at the field to take advantage of Moorhead s unique location and uncontrolled field, while underlying and being able to utilize approach radar services from Fargo. i. Moorhead-based instructors will draw traffic to the field as well as provide current and future tenants with instruction. ii. Outside traffic will be able to utilize Moorhead for training with expanded hours of staffing (UND, for example, cannot allow students to fly cross country flights to an airport that is not staffed during their time of arrival.) b. Offer aircraft for rental for both personal use as well as instruction. 3. Maintenance i. Add newer, more technologically advanced aircraft for rental purposes that will offer a premium over other rental aircraft, thus increasing use and operations at the field. ii. Create a one-stop-shop feel for the airport. Learn to fly here, rent here, then buy an airplane and stay here. a. Hire or contract maintenance to be done on site. 4. Improved field offerings i. Will increase traffic to field due to loyalty and cost savings over other locations and travel time. ii. Will increase tenants and better serve current tenants by offering on-site maintenance. a. Construction of new, large hangar to provide heated storage of larger aircraft than what can currently be hangared on the field. i. Owner also owns a Steel Building Manufacturing Plant and Sales Company. This allows for tremendous ability to construct beautiful, strong, and usable hangars designed by some of the best engineers in the world. Hangar will be a symbol of the strength, growth, and prosperity of

57 City of Moorhead Airport Committee February 3, 2014 Page 3 the City as aircraft visit the field. Owner is exploring the possibility of building a new Steel Building Manufacturing Facility in the FM Metro Area, and the hangar can be used as a model for potential clients of hangars from around the country. Again this will increase traffic to the Moorhead Airport. ii. Larger, more expensive aircraft visiting and hangaring in Moorhead will give the airport a higher-end feel, which will draw even more traffic and tenants to Moorhead. iii. By increasing the size of aircraft that can hangar on the field, it will encourage transient traffic to come to Moorhead instead of Fargo as the level of service will dramatically increase. iv. Increased traffic as well as larger aircraft will increase the amount of fuel purchased at the airport. This in turn will help allow for better fuel prices due to increased bulk prices. With most pilots and owners concerned about costs, competitive and better prices than other FBOs will encourage use of Moorhead as a fuel stop or destination. v. We intend on building this hangar in 2014 in concurrence with taxiway construction already planned. Owner will lease space to tenant and transient traffic. Owner is offering to sell the hangar (and transfer leases)to the City in 2015 if the City can pay for or use FAA funding to purchase the hangar. This will provide an income source to the City, but will not require the City to bear the burden of initial construction cost and time delay during the 2014 construction season. b. Construct additional hangars on the field as demand increases for permanent tenants and/or transient traffic. 5. Airport Operations a. Continue snow removal and mowing using equipment provided by the City. City will continue to maintain and pay for upkeep and operation of the equipment, but actual field maintenance will be taken care of by us. b. FAA and MNDOT coordination, grant requests, licensing requirements, etc for the airport will still be the responsibility of the City of Moorhead. LEASE TERMS 1. City will allow us to use current FBO Building and T-Hangar for FBO Business, allow us exclusive use of fuel tanks, and allow us exclusive use of City-owned Airport equipment to include snow-clearing equipment, mowing equipment, field maintenance vehicles, crew vehicles, aircraft tugs, or other vehicles or equipment owned by the City for use at the airport for its daily operation and maintenance.

58 City of Moorhead Airport Committee February 3, 2014 Page 4 2. We are not offering lease payment, nor are we asking for any payment in return for field upkeep and basic general maintenance to buildings included in the lease. We are offering a no money exchanged agreement with the City. 3. Lease term to be 36 months from expiration of current operators lease (June 2014) and will automatically renew at the expiration of 36 months, unless the City of Moorhead or our company notify the other party in writing of intent to renegotiate lease terms. 4. We offer to begin the lease earlier that the expiration of the current lease, if the City so requests. CLOSING We believe that the City of Moorhead has a hidden gem that is not being used, promoted, or operated near its capability. While there is currently an operating FBO on the field, it seems that the current owner is using the FBO as an ancillary business, while taking advantage of the current City-owned facilities to expand and decrease the costs of its primary business. We believe that the airport can be turned into a thriving example of the City itself and welcome travelers to the City, while saying a warm Welcome Home to the current and future tenants. We are offering the above proposal to the City in good faith and understanding that the Airport Commission has a planned meeting on February 5 th, We have met with members of the Commission and City Staff regarding our interest in writing the next chapter in the airport s story. We understand the Commission has planned at the February 5 th meeting to consider a renegotiated lease with the current operator. While we understand that this came about at the last minute, we only recently discovered the potential for our stepping in as the new operator at the field. If the Commission needs further time to consider our proposal, we request that the Commission delay voting on operation of the Airport and PFBO until the March meeting. We would be happy to provide more information and details to the Commission upon request for assistance in its decision. We look forward to the Commission s consideration of our Proposal. Sincerely, Jim Lund President, CAM, LLC

59 To: Moorhead Airport Committee Subject: Request for Statement of Qualifications (RFQ)- Engineering, Planning and Architectural Services Date: February 5, 2014 Prepared By: Kristie Leshovsky, City Planner Kim Citrowske, Assistant Planner AIRPORT COMMITTEE REPORT BACKGROUND In 2008, a Statements of Qualifications was issued requesting engineering, planning and architectural consulting services for the Moorhead Airport. Ulteig Engineers was selected and has provided engineering, planning and architectural consulting services under contract for the Moorhead Airport for the last five years. The Federal Aviation Administration (FAA) issued guidance for airports in selection of airport consultants as outlined in Advisory Circular 150/ D. The FAA recommends that airport sponsors complete the airport consultant selection process every five years. This consultant selection process provides a fair and open procedure and opportunity for qualified consulting firms to provide their experience portfolio in a Statement of Qualifications regarding integrity, past performance, airport experience, technical resources and accessibility of resources. Once a consulting firm is chosen, fees for services are negotiated to determine a fair and reasonable price. A draft Request for Qualifications is included for review and comment. Proposed Timeline: - February 6: Issue RFQ - February 21: RFQ deadline - February 24-28: Committee proposal review - March 3-7: Interview firms selected by Committee - Mid- March: Airport Committee Meeting; recommend selected firm - March 24: City Council approval of selected firm SUGGESTED ACTION Recommend Approval of the draft Request for Qualifications for airport engineering, planning and architectural services and direct staff to solicit Statements of Qualifications for review by subcommittee and approval by the Moorhead City Council of the preferred consulting firm. Appoint a Member of the Airport Committee to the RFQ review committee. Please note that meetings will be held during the hours of 8am-5pm. ATTACHMENTS Draft Request for Statement of Qualifications

60 Closing Date February 21, 2014 REQUEST FOR STATEMENT OF QUALIFICATIONS (SOQ) MOORHEAD MUNICIPAL AIRPORT CITY OF MOORHEAD, MN ENGINEERING, ARCHITECTURAL AND PLANNING SERVICES The City of Moorhead, Minnesota is requesting statement of qualifications from airport consulting engineering firms to provide services associated with airport improvements, which may include, but are not limited to the following: - Airport Planning - Airport Buildings - Environmental Assessments - Hangar Area Development - Equipment Procurement - Land Acquisitions and related projects - Business and Operations Plan - Airport Zoning - Airport Security Projects may be added or removed from this list at the discretion of the City. SUBMISSION REQUIREMENTS The Statement of Qualifications (SOQ) should be limited to 40 pages and include the following: 1. Transmittal Letter. 2. Engineering Capabilities: a. Resumes of key personnel with particular reference to airport planning and design, environmental evaluations, construction engineering, pavement inspection, financial analysis, and surveying. (0 20 points) b. In-house engineering expertise and/or areas that will be outsourced (surveying, environmental, electrical, mechanical, testing, ect.) (0 10 points) c. Previous experience with FAA project documentations, standard requirements for design and construction and current knowledge of FAA safety criteria in airspace and airport design. (0 5 points) 3. Construction History and Performance: a. List a minimum of three (3) previous airport engineering projects your firm has completed. List sponsor, type of work or project, construction costs, change orders and dates of projects. (0 20 points) b. Submit a minimum of four (4) references from clients that have received airport engineering services. (0 10 points)

61 c. Describe your firms current workload and whether your firm has the appropriate staffing levels to complete plans and specifications in a timely manor for grants. (0 10 points) d. Please describe your firms availability to attend Airport Committee meetings, City Council meetings and other airport related meetings and the terms (cost, notice, ect.) for attendance at those meetings. (0 15 points) 4. General Information: a. Firms proximity to the geographic location of the airport. (0 20 points) b. Firms understanding of capital improvement planning, pavement rehabilitation, drainage and soils analysis, new pavement construction, environmental analysis, land acquisition, ALP updates and master planning. Past FAA planning and construction success of firm will be considered in the scoring criteria. (0 15 points) c. What is the amount of insurance coverage your firm carries and what are the primary elements of coverage? Does your firm carry professional liability insurance and if so, what amount? (0 5 points) OPTIONAL 5. Interview: The selection board, after scoring the proposals, may at its discretion request interviews with the top 2 or 3 firms. These points will be added to items 1 through 4 for the final ranking. (0 20 points) Design and construction fees shall be negotiated by the City with the selected engineering firm on a project by project basis. Each firm will be judged on a basis of 130 points (items 1 through 4) with the point values as shown above. The selection board may at its sole discretion interview the top 2-3 firms for an additional 20 points (item 5). Deadline: February 21, 2014 Contact: Kim Citrowske 500 Center Avenue PO Box 779 Moorhead, MN Phone: Fax: Kim.Citrowske@cityofmoorhead.com

62 Moorhead Municipal Airport Fuel Sales 100 LL (Gallons) Jet A (Gallons) 2007 Total 37, , Total 29, , Total 25, , Total 22, , January February March 1, April 1, May 1, June 1, July 2, August 3, September 2, October 2, November 1, December 1, Total YTD 21, , January 1, February 1, ,028.0 March 1, ,663.6 April 1, ,461.7 May 2, ,589.6 June 2, ,206.2 July 3, ,401.7 August 3, ,288.1 September 4, ,172.7 October 2, ,796.1 November 2, ,945.1 December 1, Total YTD 28, , January 1, ,283.2 February March 2, April 2, May 2, ,680.9 June 3, July 3, August 2, ,086.9 September 2, ,053.9 October 1, November 1, December Total YTD 23, ,843.2