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TO: The Honorable Mayor and City Council
FROM: The Law Department
DATE: November 21, 2018
SUBJECT:
An Ordinance authorizing the assignment of a lease between the City of Aurora and Arr-ow Aviation, Inc. to ALB Properties, Inc., the amendment of said lease to include the terms and conditions set forth in the lease authorized by Ordinance O18-087, adopted October 23, 2018., and the cancellation of the lease authorized by Ordinance O18-087.
PURPOSE:
To facilitate the assignment of a leasehold interest in a hangar located at Aurora Municipal Airport (Airport) from one business to another.
BACKGROUND:
On October 23, 2018, the City Council authorized a lease between ALB Properties, Inc. (ALB) at ALB's request for a hangar at the Airport currently leased to Arr-ow Aviation, Inc. (Arr-ow). Arr-ow is in selling its interests at the airport to ALB. ALB initially requested a new lease with the City rather than an assignment of the City's existing lease with Arr-ow.
Shortly after the Council's approval of Ordinance O18-087, counsel for the businesses informed the City that because Arr-ow had two sub-lessees for space at the hangar, the mechanics of the transaction would be greatly simplified if Arr-ow was allowed to assign its lease to ALB. The City's existing lease with Arr-ow expressly provides that Arr-ow may assign the lease with the City's consent. Once the transaction is closed and the lease assigned to ALB, ALB will agree to amend the former Arr-ow lease to reflect the terms and conditions that were part of the lease authorized by O18-087. The City would then cancel the October 23, 2018 lease with ALB leaving the City and ALB in the same position they intended to be at the onset of this process.
DISCUSSION:
While the above explanation may be confusing, the parties are essentially asking the Council to assist them in taking an alternate path to the same destination. While the path the Council authorized by O18-087 was what the parties initially wanted, the presence of the sub-lessees makes cancellation of the Arr-ow lease problematic. From the City's perspective, as long as its eventual lease with ALB contains the language authorized by O18-087, it does not matter whether the language came as part of a new lease or through the amendment of the assigned lease.
IMPACT STATEMENT:
Other than the expenditure of staff time to accomplish essentially the same result twice, approval of this Ordinance will not have any direct impact to the City. It will however assist the City's tenants at the Airport complete their transaction.
RECOMMENDATIONS:
That the Council approve this Ordinance.
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
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An Ordinance authorizing the assignment of a lease between the City of Aurora and Arr-ow Aviation, Inc. to ALB Properties, Inc., the amendment of said lease to include the terms and conditions set forth in the lease authorized by Ordinance O18-087, adopted October 23, 2018, and the cancelation of the lease authorized by Ordinance O18-087.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City of Aurora (City) owns and operates the Aurora Municipal Airport (Airport); and
WHEREAS, there presently exists a lease between the City and Arr-ow Aviation, Inc. (Arr-ow) originally executed on March 27, 2001 and amended on May 22, 2007 for the lease of a hangar facility at the Airport, with such lease terminating on March 31, 2021; and
WHEREAS, Arr-ow desires to assign said lease to ALB Properties, Inc. (ALB) in accordance with Paragraph 19 of the lease; and
WHEREAS, such assignment requires the City's written approval; and
WHEREAS, ALB and the City have agreed to the terms and conditions of ALB's tenancy at the Airport upon the closing of its transaction with Arr-ow pursuant to a lease agreement authorized by Ordinance O18-087 on October 23, 2018;
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows: that the City hereby gives its consent to Arr-ow's assignment of its lease with the City dated March 27, 2001 and amended May 22, 2007 to ALB; and further
BE IT ORDAINED, that the City's consent to the Arr-ow's assignment of the lease is expressly conditioned on the City's receipt of ALB's written agreement (1) to amend said lease to reflect the terms and conditions set forth in the lease authorized by Ordinance O18-087 immediately upon the closing of such assignment and (2) to cancel its lease with the City authorized by Ordinance 18-087 upon the execution of said amended lease; and further
BE IT ORDAINED, that the Mayor is authorized on behalf of the City to execute an amended lease with ALB that substantially conforms to the terms and conditions set forth in O18-087 without any further action by the Council; and further
BE IT ORDAINED, that upon the execution of the amended lease with ALB contemplated by this Ordinance, the Mayor is authorized and directed to cancel the lease authorized by O18-087 without further action by the Council.