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TO: Mayor and City Council
FROM: The Mayor's Office
The Law Department
Special Counsel, Klein, Thorpe & Jenkins, LTD.
DATE: December 29, 2021
SUBJECT:
Consideration and approval of a proposed new lease for Fixed Based Operator ("FBO") Carver Aero, LLC. ("Carver"), that has assumed the prior lease for premises at the Airport from Lumanair Aviation Services, Inc. ("Lumanair").
PURPOSE:
This new lease requires Carver to perform significantly greater infrastructure improvements than required under the present lease. The City will benefit from gaining significant upgrades to this FBO facility, while attracting future additional development at the Airport.
BACKGROUND:
The Council approved a consent to assign the former Lumanair lease to Carver in on July 27, 2021 via Resolution 21-0564. Since that time, outside counsel has been negotiating the terms of a new lease with Carver, as required by a term of the assignment. The parties have agreed on a total new infrastructure investment by Carver of $10,000,000, along with a specific timeline to make these improvements.
DISCUSSION:
Carver's investment in the Airport will include significant upgrades to the former Lumanair FBO site, including the construction of an above-ground fuel storage facility, updated hangar and lobby space and refreshed exterior appearances. Carver has committed to making these significant investments in its leasehold in exchange for the abatement of ground rent for the underlying property on which its buildings are located. This arrangement is similar to the lease structure used to stimulate development at the Joliet Air Center ("JA") leasehold. Carver is also required to pay additional rent and fuel flowage fees, as the City requires from JA.
IMPACT STATEMENT:
The execution of a new lease for the Carver leasehold will aid in continuing Carver's commitment to redevelop the former Lumanair facility with a more modern and attractive FBO facility at the Airport. This new lease will allow Carver to upgrade and modernize its leasehold, to the benefit of all that utilize the Airport.
RECOMMENDATIONS:
The attached summary sheet provides the general agreed-upon terms of the attached lease. The recommended action is to approve the attached lease, so that the new lease can commence immediately.
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution authorizing the execution of a lease agreement with Carver Aero, LLC for the former leasehold of Lumanair, Inc. at Aurora Municipal Airport.
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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, it is the desire of the City of Aurora ("City") to lease land at the Aurora Municipal Airport to qualified persons or companies to build and operate compatible aviation-oriented facilities; and
WHEREAS, the City and Lumanair Aviation Services, Inc. ("Lumanair") previously entered into a series of leases whereby the City permitted Lumanair to occupy certain real estate at the Aurora Municipal Airport and serve as a fixed base operator (FBO); and
WHEREAS, the City and Lumanair consolidated and restated Lumanair's leases in 2019 ("the Lumanair Lease"); and
WHEREAS, in the spring of 2021, Lumanair negotiated and completed the sale of its assets to Carver Aero, Inc. "Carver"); and
WHEREAS, by Resolution 21-0564 adopted July 27, 2021, the City consented to the assignment of the Lumanair Lease to Carver (the "Assignment"); and
WHEREAS, certain terms of the Assignment required Carver and the City to execute a new lease for the former Lumanair leasehold within a reasonable period of time of the execution of the Assignment; and
WHEREAS, the City and Carver have successfully negotiated the terms of a new lease, attached hereto as Exhibit A, which includes a requirement by Carver to invest significantly in the former Lumanair leasehold, to modernize its operations at the Airport (the "Carver Lease"); and
WHEREAS, upon execution of the Carver Lease, the parties desire that the Lumanair Lease assigned to Carver under Resolution 21-0564 be declared null and void; and
WHEREAS, it is in the best interest of the City to enter into the Lease with Carver.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the Carver Lease attached to this Resolution as Exhibit A shall be and hereby is approved; and further
BE IT RESOLVED, that the Mayor is authorized and directed to execute the Carver Lease on behalf of the City and deliver the same to Carver; and
BE IT RESOLVED, that upon the execution of the Carver Lease by both parties, the City shall be deemed to release Carver of its obligations under the Lumanair Lease and the City shall regard the Lumanair Lease as being without further force or effect.