TO: Mayor Thomas J. Weisner
FROM: John C. Banbury, Outside Legal Counsel
DATE: September 4, 2013
SUBJECT: title
Ordinance Authorizing the Execution of a Land Lease at the Aurora Municipal Airport between the City of Aurora and Chicago Jet Maintenance, LLC (Chicago Jet) and Consent to Leasehold Mortgage and Agreement with Mortgagee.
body
PURPOSE:
To obtain City Council Approval of a lease with Chicago Jet for twenty (20) years.
BACKGROUND:
The City of Aurora previously entered into a Lease with Diamas Real Estate Holdings, LLC for a hangar at the Airport. That Lease authorized by O04-33 on March 23, 2004 granted a twenty (20) year lease to Diamas with a ten (10) year option to extend. The original term of that Lease would expire March 1, 2024 and with the extension would have been March 1, 2034. That Lease had an annual cost of living increase tied to the Consumer Price Index.
Diamas evidently went bankrupt and that Lease was acquired by First Midwest Bank. First Midwest Bank has agreed to loan Chicago Jet money to acquire its interest in the Lease. Chicago Jet will obtain an SBA Loan. Per Chicago Jet's attorney the SBA required a minimum twenty (20) year Lease.
Chicago Jet has a current Lease at another hangar at the Airport. Chicago Jet is expanding its business and needs this additional hangar to be able to service its customers. Under the proposed Lease the term will be twenty (20) years the ground rent will be 37.296 cents the same rent as currently paid by all tenants at the Airport. The Lease has an annual escalator of 3%. The Lease also provides for additional rent of 1.5% of all business conducted by the Lessee at the Airport. Attached to the Lease is a Consent to allow the Leasehold Mortgagee with the SBA. The other terms of the Lease are consistent with numerous prior Leases at the Airport.
Evidently the Diamas Lease (O04-33) was acquired by First Midwest Bank. First Midwest will be required to reassign the Lease...
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