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Planning and Building Department, Airports Division, recommending the Board approve and authorize the Chair to sign County of El Dorado Airport Ground Lease 2072, between the County and Lessee, Richard Moorhouse, with a Sublease to the El Dorado County Sheriff’s Office, for a privately-owned hangar, Space TP-25, for helicopter storage. Rental fees are due at commencement of the lease and paid annually thereafter in accordance with fees established by the Board Resolution in effect at the time payment is due (currently Board Resolution 183-2019 approved by the Board on October 22, 2019, Item 31, Legistar 19-0663). (4/5 vote required)
FUNDING: General Fund.
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DISCUSSION / BACKGROUND
Airport users with portable hangars must enter into a lease with the County for the use of Airport property, in accordance with County Ordinance Code § 3.08.021. Each new ground lease includes language required by the County and the Federal Aviation Administration.
The proposed lease represents a renewed ground lease for Richard Moorhouse, with the addition of an integrated sublease to the El Dorado County Sheriff’s Office (EDSO). The lease and sublease is for a privately-owned portable aircraft storage hangar occupying Placerville Airport Space TP-25 with owner Richard Moorhouse (Moorhouse Lease).
The Moorhouse Lease includes a term effective upon Board execution and expiring ten (10) years thereafter. Upon expiration of the initial term, Lessee shall have the right to extend the term for an additional two (2) ten (10) year lease options under such terms and conditions as may be agreed upon at such time. After expiration, the County may issue a written notice authorizing the Lessee to holdover as a holdover tenant with a month-to-month term under the same lease terms and conditions, including Section 3 regarding payment of a prorated share of the annual rent due. The County may terminate at any time the holdover period upon thirty (30) days written notice.
In accordance with County Ordinance Code § 18.04.100, Fees and Charges, fees for airport ground leases are set by a Board Adopted Resolution; therefore, lease fees are not negotiated. Current Airport fees are in accordance with Resolution 183-2019 (Attachment C) adopted by the Board on October 22, 2019, which establishes per Exhibit A the rental fee for Lease 2072 (Moorhouse Lease) with an annual fee of $2,911.66 for a hangar utilizing 2,959 square feet of designated Airport property. This lease provides for an annual adjustment of the rental fee amount should the Board adopt different rates in the future.
Lessee desires to sublease its rights to use the premises to EDSO for the storage, maintenance, and use of a helicopter, crew work and standby, and other related or incidental activities for operation of a law enforcement and public safety facility. The integrated EDSO Sublease is detailed in Section 14 of the Moorhouse Lease, and there are also necessary references to the EDSO Sublease throughout the Moorhouse Lease. Following are some of the terms and conditions in the EDSO Sublease:
• The term of the sublease is two years from the commencement date of the sublease and may be extended for one additional year with the mutual consent of both parties.
• EDSO will pay a rental rate of $1,500.00 per month less the amount deducted for costs to repair a hangar door, estimated at $9,000.00, which will be amortized equally over 24 months such that EDSO will reduce the monthly rental amount by $375.00 for the first 24 months of the sublease.
• EDSO will not pay any late fees or interest on late payments, and is not responsible for the payment of any real property taxes related to the premises.
• In the event that EDSO holds over at the end of the initial term or the term as extended with the permission of Lessee, the hold over will create a tenancy from month to month at the monthly rental rate of $1,500.00.
• Lessee agrees to vacate and surrender the premises no later than October 9, 2023, and remove its aircraft from the premises by that surrender date.
• If Lessee does not remove its aircraft by that surrender date, Lessee agrees to have deducted from the monthly rental amount due to Lessee a penalty of $50.00 per day that Lessee’s aircraft remains on the premises.
• EDSO understands that Lessee may not be able to remove all personal property by the October 9, 2023 surrender date, and if that is the case, Lessee agrees to have $300.00 per month deducted from the monthly rental amount due to Lessee for the cost to store Lessee’s personal property on the premises, and Lessee further agrees to remove all personal property no later than January 30, 2024.
• If Lessee does not remove all personal property from the premises by January 30, 2024, Lessee agrees to have deducted from any rent due to Lessee a penalty of $50.00 per day that any personal property remains on the premises.
• Lessee may not store any additional personal property whatsoever on the premises after the October 9, 2023 surrender date.
• EDSO may terminate the sublease for its convenience upon 30 days written Notice of Termination, and if the sublease is terminated, EDSO will pay the prorated portion of any rent due, consistent with the terms of the sublease.
• Because EDSO intends to use the premises as a law enforcement and public safety facility for the use of a County-owned helicopter, and EDSO must operate the facility in a safe and secure manner, EDSO will have exclusive control over the premises during the term of the sublease, except that if Lessee needs to access the premises to remove any of Lessee’s personal property consistent with Section 14.D. of the Sublease, Lessee will provide EDSO at least 10 calendar days’ notice and EDSO staff must be present to escort Lessee on or off the premises.
• Lessee understands that for the premises to be used as a law enforcement facility EDSO may have to make alterations or improvements to the premises without prior consent of Lessee, and at the conclusion of the term of the sublease, or on the date that EDSO terminates the Sublease, whichever is earlier, any improvements or fixtures constructed or installed by EDSO that cannot be removed without material damage to the ceiling, walls, roof, or floors of the structure of the premises become sole property of Lessee, and as of that date EDSO has no responsibility to maintain or repair said improvements or fixtures.
A requirement of a ground lease includes proof of insurance per County requirements. The Lessee provided a copy of the required Hangar Keepers insurance which has been reviewed and approved by the County's Risk Management Sr. Risk Analyst. Risk Management approval with the EBIX account for reference is attached (Attachment D). The Lessee will provide aircraft liability insurance for Lessee’s private aircraft upon termination of the Sublease with EDSO.
A 4/5 vote is required in accordance with County Ordinance Code § 3.08.021(B) as authorized by Government Code Section 25536 or any successor statute.
On September 12, 2023, the Board approved the Second Reading and Final Passage of Ordinance 5182 to amend Section 3.08.021 of the El Dorado County Ordinance Code to add the delegation of signature authority on airport ground leases, Temporary Use Agreements, and County-owned hangar leases to the County of El Dorado Director of Planning and Building (item 22, Legistar #23-0736). There is a 30-day waiting period before Ordinance 5182 takes effect, therefore, Airports Division staff are requesting Board approval of the Moorhouse Lease.
ALTERNATIVES
The Board could choose to:
1) Approve the lease with a different term of the Board’s choosing.
2) Approve the lease with modified terms for the EDSO Sublease.
3) Disapprove the EDSO Sublease, which will require EDSO to find another helicopter storage location, which may not offer on-site fueling, or store it outside on a tie-down space at the Placerville Airport, and which will prevent EDSO from operating a law enforcement and public safety facility at the Placerville Airport.
4) Disapprove the lease, which will impact the EDSO Sublease as described above, and which will require removal of the portable hangar from County Airport property, resulting in the loss of lease revenue until such time as a new hangar placement request is received and an airport ground lease is secured.
PRIOR BOARD ACTION
Adoption of Resolution 183-2019 (Attachment C) by the Board on October 22, 2019, (item 31, Legistar 19-0663), titled “Resolution Establishing Chief Administrative Office, Airports Division Fee Schedule,” thereby superseding Resolution 080-2019.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
County Counsel and Risk Management
CAO RECOMMENDATION / COMMENTS
Approve as recommended.
FINANCIAL IMPACT
Upon commencement of the EDSO Sublease, EDSO will pay Lessee $1,500 per month, less the amount deducted for the costs to repair the hangar door discussed in Section 14.B. of the Moorhouse Lease and any amount deducted for storage of personal property or penalties discussed in Section 14.D. of the Moorhouse Lease. The total amount of the EDSO Sublease will not exceed $54,000, inclusive of all costs, taxes, and expenses. Funding for the lease is included in the Fiscal Year 2022-23 Budget for the EDSO. Lease rates are based on hangar type and square footage set by the Board Adopted Resolution 183-2019. Should the Board adjust rates in the future, the annual lease payment reflected below will also adjust commensurate with Board direction. Upon commencement, the Placerville Airport Enterprise Fund will receive annual revenue in the amount of $2,911.66 for use of Space TP-25.
CLERK OF THE BOARD FOLLOW UP ACTIONS
1) Obtain the Chair’s signature on the two (2) original copies of the Moorhouse Lease; and,
2) Return one (1) fully executed original copy of the Moorhouse Lease to the Planning and Building Department, Airports Division, to the attention of Angelic Madson, for transmittal to the Lessee, along with a copy to EDSO.
STRATEGIC PLAN COMPONENT
Public Safety, Economic Development, and Good Governance
CONTACT
Chris Perry, Assistant Director
Planning and Building Department