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10. CARP AIRPORT -
OPTION TO PURCHASE AGREEMENT aéroport de carp - entente PRÉVOYANT UNE option d’achat |
Committee Recommendations
That
Council approve:
1. Amendments to the Option to Purchase Agreement for the transfer of the
Carp Airport property between the City and West Capital Developments (WCD),
dated 31 May 2004, and the provisions for other related Lease Agreements for
tenants at the Carp Airport as outlined in this report and the provisions set
out in Annexes “B”, “C”, “D”, “E”, & “F” of this report.
2. The Delegation of Authority to the Chief Corporate Services Officer to
finalize and execute the amended Option to Purchase Agreement with West Capital
Developments (WCD) and other related Lease Agreements for tenants at the Carp
Airport as set out in Recommendation #1 of this report.
3. The conveyance of 0.3m reserves
abutting the Core Airport Area, as shown on Annex “D”, to the Carp Airport
Authority (CAA) as outlined in this report and as set out in Annex “B”.
Recommandations
du comité
Que
le Conseil approuve :
1. modifications
ŕ l’entente avec option d’achat conclue le 31 mai 2004 par la Ville d’Ottawa et
West Capital Developments (WCD) pour le transfert de propriété de l’aéroport de
Carp, et modifications aux baux connexes signés avec les locataires de l’aéroport
de Carp; ces modifications sont énoncées dans le présent rapport ainsi qu’aux
annexes B, C, D, E et F.
2. délégation au chef des Services
généraux du pouvoir de finaliser et de signer l’entente avec option d’achat
modifiée négociée avec West Capital Developments (WCD) ainsi que les baux
connexes modifiés signés avec les locataires de l’aéroport de Carp, dont il est
question ŕ la recommandation 1 du présent rapport.
3. cession de réserves de 0,3 m (jouxtant
le secteur central de l’aéroport et illustrées ŕ l’annexe C) ŕ l’administration
aéroportuaire de Carp de la maničre décrite au présent rapport et ainsi qu’il
est prévu ŕ l’annexe B.
Documentation
1. Chief Corporate Services Officer's report dated 15 February 2005 (ACS2005-CRS-RPR-0010).
2. Extract of Draft Minute, 01 March 2005, to be issued separately prior to Council meeting of 09 March 2005.
Report to/Rapport au :
Corporate Services and
Economic Development Committee
Comité des services organisationnels et du
développement économique
and Council/et au Conseil
15 February 2005 / le 15 février 2005
Submitted
by/Soumis par : Greg Geddes, Chief Corporate Services Officer/
Chef des Services généraux
Corporate Services/Services généraux
Contact Person/Personne ressource : Douglas
McCaslin, Manager
Real Property Asset Management/Gestion des actifs
et des biens immobiliers
(613) 580-2424 x 22595,
douglas.mccaslin@ottawa.ca
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SUBJECT: |
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OBJET : |
aéroport de carp -
entente PRÉVOYANT UNE option d’achat |
REPORT RECOMMENDATIONS
That the
Corporate Services and Economic Development Committee recommend Council
approve:
1. Amendments to the Option to Purchase Agreement for the
transfer of the Carp Airport property between the City and West Capital
Developments (WCD), dated 31 May 2004, and the provisions for other related
Lease Agreements for tenants at the Carp Airport as outlined in this report and
the provisions set out in Annexes “B”, “C”, “D”, “E”, & “F” of this report.
2. The Delegation of Authority to
the Chief Corporate Services Officer to finalize and execute the amended Option
to Purchase Agreement with West Capital Developments (WCD) and other related
Lease Agreements for tenants at the Carp Airport as set out in Recommendation
#1 of this report.
3. The
conveyance of 0.3m reserves abutting the Core Airport Area, as shown on Annex
“D”, to the Carp Airport Authority (CAA) as outlined in this report and as set
out in Annex “B”.
RECOMMANDATIONS DU
RAPPORT
Que le
Comité des services organisationnels et du développement économique recommande
que le Conseil approuve :
1. modifications
ŕ l’entente avec option d’achat conclue le 31 mai 2004 par la Ville d’Ottawa et
West Capital Developments (WCD) pour le transfert de propriété de l’aéroport de
Carp, et modifications aux baux connexes signés avec les locataires de l’aéroport
de Carp; ces modifications sont énoncées dans le présent rapport ainsi qu’aux
annexes B, C, D, E et F.
2. délégation au chef des
Services généraux du pouvoir de finaliser et de signer l’entente avec option
d’achat modifiée négociée avec West Capital Developments (WCD) ainsi que les
baux connexes modifiés signés avec les locataires de l’aéroport de Carp, dont
il est question ŕ la recommandation 1 du présent rapport.
3. cession de réserves de
0,3 m (jouxtant le secteur central de l’aéroport et illustrées ŕ l’annexe C) ŕ
l’administration aéroportuaire de Carp de la maničre décrite au présent rapport
et ainsi qu’il est prévu ŕ l’annexe B.
BACKGROUND
The City and West Capital Developments (WCD) entered into an Option Agreement, dated 31 May 2004, that currently provides WCD with an Option, until 31 May 2005, to acquire the approximately 967-acre Carp Airport property for the purpose of developing a self-contained aviation community based on WCD’s Business Plan that provides for the following elements:
- Core Airport Area on approximately 385 acres to allow a widening and an extension of the runway to 6000 ft. with provision for instrument controlled (all-weather) landings, additional airport support and service facilities, and expanded test-bed operations and for the retention and expansion of existing airport tenants;
- The acquisition and use of a portion of privately owned lands, abutting the north west corner of the airport lands and designated Agricultural Resource, to accommodate the new airport development infrastructure that would necessitate amendments to the Official Plan;
- Aerospace Business Park on approximately 181 acres to provide over 1,000,000 sq. ft. of industrial and office space to be promoted and developed for aerospace related businesses on the basis that Ottawa is the centre for aerospace research and regulation in Canada, and is a major centre for technology development in North America;
- Airport Accessory Residential Community on approximately 401 acres to provide for 150 estate homes with attached aircraft hangars and 600 other types of homes ranging from condos to single family dwellings with communal hangars for airport users and business park employees; and
- Water and Sewer Services connected to the Municipal systems in the Village of Carp consistent with the provisions of the Official Plan for the potential establishment of a Public Services Area at the Carp Airport, subject to maintaining sufficient capacity for the Village and to Environmental Assessment requirements.
Under the provisions of the
Option Agreement, WCD can only exercise its Option and acquire the airport if
WCD executes a Municipal Capital Facility Agreement with the City to ensure
that the planning, development, management and operation of the airport remains
consistent with City objectives as follows:
· Ensure the proposed development will be compatible with the City’s planning policies, and compatible with the Community Plans for the Carp Village and Carp Road Corridor;
- Require WCD to fully fund all approval and development costs associated with implementing the modified Business Plan;
- Eliminate any financial risk for the City; and
- Ensure that the existing airport operations and tenancies will not be adversely affected should the WCD Business Plan not be fully implemented for whatever reason.
The specific terms and conditions for the Option Agreement were approved by City Council on 12 May 2004 (Report No. ACS-CRS-RPR-0016). These provisions included WCD having an Option Period from 1 June 2004 until 31 May 2005 and required WCD to provide a financial guarantee/option fee totalling $150,000 to cover the cost to the City for airport administration, operations and maintenance for the period from 1 January 2004 to 31 May 2005 equivalent to the estimated subsidy that would have otherwise have been provided by the City to the Carp Airport Authority (CAA) for the same period.
The provisions approved by City Council on 14 May 2004 also included for the following:
· The Carp Airport Authority (CAA) to surrender its Head Lease and assign existing sub-leases for the Airport to the City and to enter into a new agreement between the City and the CAA for the CAA to act as an advisory board and service provider to the City during the Option Period;
· Provisions for ground lease extensions for existing tenants and for new ground leases at the airport; and
· A Management Agreement between the City and WCD for WCD to assist the City in managing the Carp Airport during the Option Period.
The City executed, as required, the Lease Surrender and Assignment Agreements with the CAA and the Option and Management Agreements with WCD, dated 31 May 2004. WCD then paid to the City the required amount of $150,000 for the Option which was deposited to a specific Carp Airport operating account in accordance with the provisions of the Transport Canada Agreements that transferred the airport to the City (RMOC) in 1997 and are in force until 14 March 2007.
In December 2004, WCD notified the City that, as a result of findings from its development planning and due diligence processes since 31 May 2004, WCD has modified its Business Plan with the significant differences being as follows:
·
Inclusion of a
Fixed Base Operations (FBO) facility
(Airport Terminal, Aircraft Maintenance and Fuelling) to address
critical infrastructure currently absent at the airport;
·
Increased focus on serving existing and future small General Aviation
aircraft rather than larger business jets precluding the need for expanding the
main runway on a proactive basis and for acquiring lands designated
Agricultural Resource for the runway expansion;
·
Water supply and sewage to be handled by well and septic or communal
systems instead of extending the public system from the Village of Carp;
·
Reduction in the scale of the Airport Accessory Residential Community
from 750 lots to approximately 280 lots;
·
Higher emphasis on selling as opposed to leasing lands in the Aerospace
Business Park; and
·
Purchase of the airport property in phases rather than upfront purchase
of all airport lands;
On 10 December 2004, based on its continuing commitment of significant financial and other resources to develop an integrated aviation community consistent with the one set out in its Expression of Interest (EOI) submitted to the City in October 2002, WCD requested amendments to the terms and conditions of the Option to Purchase Agreement dated 31 May 2004 to accommodate the changes proposed to its Business Plan including an extension of the Option Period to one year after the date upon which City Council approves the amendments to the Option Agreement.
DISCUSSION
The modified Business Plan put forward by WCD in December 2004 is not only more consistent with its original EOI submission than the plan currently set out in the 31 May 2004 Option Agreement but is also considered by City staff to be a more realistic and achievable plan. Nonetheless, the modified plan still involves substantial risk to WCD with respect to market absorption and revenues for what is essentially a niche market development.
Therefore, City staff has negotiated the provisions for amending the Option Agreement taking into account the change in risks by, and rewards to, WCD in undertaking the development on the basis of its modified Business plan and also the relative degree of benefit to the City. The changes in provisions between the 31 May 2004 Option Agreement and the proposed amended Option Agreement are summarized in Annex “A” and detailed in Annex “B” of this report.
The provisions of the modified WCD Business Plan and the proposed changes to the Option Agreement, as set out in Annexes “A” & “B”, are considered to be a better alternative for maintaining an independent and self-sustaining General Aviation Airport than the provisions of WCD’s original plan and the associated provisions in the 31 May 2004 Option Agreement. This is a case where planning less development will result in more benefits to the City for the following reasons:
1.
The smaller
size residential component, as now proposed, is considered to be more in
balance with the scale of the business park component of the airport, the rural
location of the airport, and current market absorption in nearby estate lot
subdivisions;
2. Maintaining the
existing length and width of the main runway precludes the need to use lands
designated Agricultural Resource for the airport development and for amending
the Official Plan to accommodate the airport use on those lands;
3. The expansion
of the main runway was not a high priority for either the City or the CAA given
that the Core Airport Area has been established to provide for expansion in the
long term if such an expansion is required, and is financially supportable, by
a specific but as yet unidentified demand;
4. WCD will still
pay fair market value for the airport and the $150,000 amount paid by WCD as an
Option Fee will now be in addition to the fair market value as opposed to a
credit;
5. WCD will fund
any further operational deficit at the airport until 28 February 2006 by
providing an additional financial guarantee of $75,000 bringing its total
commitment to $225,000 for subsidizing the airport operations for the period
from 1 January 2004 to 28 February 2006;
6. WCD will lease
land and construct the needed Fixed Base Operations (FBO) facility as a
prerequisite to exercising the Option with the Airport Terminal facility
portion of the FBO being provided by WCD on a nominal net rent basis;
7. The exercising
of the Option and purchase of the property on a staged basis, with specific
performance dates and repurchase options for the City, will provide for
additional Monthly Option Fees and ensure that undeveloped land will not be
tied up for any longer than a reasonable amount of time;
8. WCD will
contribute a portion of the proceeds from each lot sale to a maximum of
$800,000 to a life cycle reserve fund for sustaining the airport’s
infrastructure;
9. The retention
of Helicopter Transport Services (Canada) Inc. (HTSC) as a major tenant at the
airport by providing for a lease/purchase arrangement for an additional
6.03-acre site to accommodate the expansion needs of HTSC including a 32,000
sq. ft. new hangar facility that is to be built immediately;
10.
The
location of the new FBO facility will preclude the need to relocate tenants on the
Thomas Argue Road side of the airport and allows for lease extensions to be
negotiated with these tenants (Westair, Roots, Long Hangar) and provide for
quiet enjoyment of their premises for a 10 year term and a further 10 year
renewal term;
11. The lack of an immediate requirement to expand the
main runway
provides more security of tenure for those existing tenants who would otherwise
need to be relocated if the runway is expanded;
12.
The less
ambitious development project now proposed by WCD is likely to result in at
least the first phase of the development actually proceeding; and
13.
The
provisions of the proposed amended Option Agreement will result in sufficient
additional operating revenue from the first phase of the development to cover
the current operating cost deficit ($40,000/year) as well as providing for a
substantial contribution from the proceeds of lot sales to a life cycle costs
reserve fund for maintaining the airport’s infrastructure over the long term
even if the remainder of the development does not proceed.
The existing agreements between the City and Transport Canada provide for the City to sell lands that are surplus to Airport Master Plan requirements. However, Transport Canada did not have an approved and up-to-date Airport Master Plan at the time the airport was transferred to the City (RMOC) in March 1997. The development planning undertaken by WCD now provides for a Core Airport Area, as shown on Annex “D” of this report, that City staff believes meets the Airport Master Plan requirements for a General Aviation Facility in this location consistent with the existing provisions of the City’s Official Plan.
As a result, it is recommended that the City, in
order to provide for the sale of the lands outside the Core Airport Area in
accordance with the provisions set out in the agreements with Transport Canada, establish separate
parcels for the Core Airport Area, Airport Accessory Residential Community, and
Aerospace Business Park parts of the property, as shown on Annex “D”, by
conveying 0.3m reserves outside, and abutting, the Core Airport area to the
Carp Airport Authority (CAA) with the reserves to be held in trust by the CAA
as set out in the provisions of Annex “B”.
The rent and purchase price set out in lease/purchase provisions for the additional parcel required by Helicopter Transport Services (Canada) Inc. (HTSC), as detailed in Annex “F” of this report, were based on current fair market values established from an independent appraisal by a certified real estate appraiser. Based on these fair market values, it was also determined that the current rent for ground leases of $0.0567/ sq. ft. of leased area for other existing tenants are well below the market rent of $0.0975/sq. ft. established from the appraisal.
As a result, the provision of land lease extensions to tenants with more favourable terms with respect to relocation of the tenants unit/facility, as detailed in Annex “B”, is based upon these tenants agreeing to pay the ground lease rent at the current fair market rate.
Existing land leases at the airport must be in good standing (financial, building condition, and environmental compliance) or make specific undertakings to be in compliance before the City will provide any Land Lease Extensions as outlined in this report and set out in Annex “B”.
The other terms and conditions of the Land Lease Extension Agreements
will be consistent with the Land Lease Extension Agreement, dated 9 February
2004, for Bradley Air Services Limited (c.o.b. as First Air) and any subsequent
amendments made prior to the 28th day of February 2005.
Minor amendments will be made to the First Air
Lease, before 28 February 2005 to reflect changes to some of the normal
commercial terms of the Lease prior to a proposed assignment of this lease to
the Federal Government who is in the process of acquiring First Air’s interests
in the property for an Aircraft & Motor Vehicle Training Facility being a
use at the airport which was approved by the City in May 2003 (Ref. #ACS203-CRS-RPR-0045).
First Air, as part of its current corporate business plan, is proposing to consolidate its Ottawa area facilities in locations on, or near, the Ottawa International Airport. If the transaction between the First Air and the Federal Government is concluded, the City will consent to the assignment of the land lease as provided for in the existing First Air Land Lease Agreement. The City will then enter into a further lease amendment agreement with the Federal Government to change some of the normal commercial terms of the lease to be compatible with the statutory and process requirements of the Federal Government but only for such time that the facility is used by the Federal Government.
ENVIRONMENTAL IMPLICATIONS
The development planning for the
Carp Airport will evaluate and address all environmental related issues
associated with existing and proposed development on this property. During the
option period, the City and WCD will also carry out Environmental Site Assessment
investigations as required to complete the due diligence requirements of both
parties in finalizing a Municipal Capital Facility Agreement for the Carp
Airport.
RURAL IMPLICATIONS
The recommendations in this report are based on
ensuring that any proposed development supports the relevant Official Plan
policies for the rural area and the objectives of the rural community,
including protecting and adding to the employment base in this location, and is
compatible with, and supports, the Community Design Plans being evolved for the
Village of Carp and the Carp Road Corridor.
CONSULTATION
The recommendations in this report are based on
the results of negotiations and discussion with the West Capital Developments
(WCD) and Helicopter Transport Services (Canada) Inc. (HTSC). The proposed
provisions for the amended Option Agreement, Airport Management Agreement,
Municipal Capital Facility Agreement, and tenant lease agreements, as set out
in Annex “B”, “E”, & “F” of this report, were agreed to in writing by WCD
on 23 December 2004. HTSC agreed in writing on 22 December 2004 to the proposed
provisions for the lease extension and additional lease area lease/purchase
agreement as set out in Annex “F”.
The Planning and Infrastructure Approvals
Branch of the Planning and Growth Management Department were involved in
consultations with WCD regarding planning and infrastructure approvals
associated with implementing the Land Use Plan as shown on Annex “C” of this
report. The results were then recorded in a memorandum of understanding dated
15 December 2004 that is attached to this report as Annex “E”.
Some of the Carp Airport’s (CAA’s) sub-tenants
made presentations to the Corporate Services and Economic Development
Committee, on 17 February 2004 and again on 4 May 2004, when Reports
#ACS2004-CRS-RPR-0020/0016 were considered by the Committee. The concerns of
these tenants have been acknowledged and addressed where possible in preparing
the recommendations of this report and negotiating the provisions for the
agreements with WCD as set out in Annex “B”.
The Real Estate Services Division
has also continued to receive advice and services of the CAA regarding the
operation of the airport. The Board of Directors of the CAA has endorsed the
intent of the provisions of this report and passed a motion, at its meeting on
20 January 2005, to accept the conveyance of the 0.3m reserves as outlined in
this report and set out in Annexes “B” & “D”.
The Real Estate Services Division continues to
cooperate with First Air and the Federal Government with respect to the
proposed transaction between those parties.
FINANCIAL IMPLICATIONS
As required by the provisions of the existing Option Agreement, WCD paid $150K as an option fee that was deposited to a specific City account, as required by the Transport Canada Agreements currently governing the airport, to be used by the City to cover any cost deficit related to operations and maintenance of the airport for the period from 1 January 2004 to 31 May 2005. Approval of the recommendations in this report will allow staff to finalize and execute an amended Option Agreement for the Carp Airport that will result in WCD underwriting any operating deficit for the airport from 1 January 2004 until 28 February 2006, to a total amount of $225K.
The 2004 budget reconciliation for the Carp Airport operations currently indicates expenses of $297K and revenues of 216K. As a result, the $81K deficit in the 2004 budget is being subsidized from the $150K option fee leaving a balance of $69K for 2005. Action, with respect to major maintenance, equipment replacement and airport improvements identified as 2004 needs, was deferred to 2005 until such time that WCD made a decision as to whether to exercise the Option.
The 2005 draft budget for the Carp Airport operations was accepted by the CAA Board on 20 January 2005 and is based on the recommendations of this report. The budget indicates projected expenses of $305K, revenues of $261K, and a $44K operating deficit. There is also an identified need in 2005 to provide additional equipment (water treatment/testing, runway skid resistance testing, and airport vehicle replacement) as well as repairs to airport roads, runways and taxiways at a total estimated cost of approx. $75K (includes the items deferred from 2004). The total subsidy requirement for airport operations and maintenance in 2005 is, therefore, currently projected at $119K ($44K operating deficit & $75K equipment and repairs).
If City Council approves the amended Option Agreement in February 2005, the total amount of funding available from WCD to subsidize the operating and maintenance costs at the airport from 1 January 2005 to 28 February 2006 will be $144K ($69K balance from original option fee and $75K from proposed 31 May 2005 additional financial guarantee). This will be sufficient to cover the projected $119K subsidy for 2005 as well as a further subsidy towards operating costs in the first 2 months of 2006 and a contingency for additional maintenance if required.
Beyond 28 February 2006, if WCD exercises its option, WCD will be responsible for covering any further cost deficits associated with operating and maintaining the airport with the annual operating budgets being approved by the City based on the 2005 budget experience with the intent that future increases in the annual maintenance charges (AMC) rate to airport tenants will be generally based on the increase in the CPI and the existing operational deficit. Any further additional costs will then be offset by the AMC contribution resulting from additional development at the airport.
In addition, the proposed amended Option Agreement will provide for the establishment of a reserve fund from the proceeds of lot sales to be used for life cycle costs related to maintaining the existing airport infrastructure to a high standard to meet City Council’s objective of an independent and self-sustaining airport for the long term.
Should WCD subsequently be successful in meeting the terms and conditions of the option agreement and complete the purchase, it will pay the current market value of the property to the City. If Helicopter Transport Services (Canada) Inc. exercises its option to purchase the additional 6.03-acre parcel, the proceeds of the sale, in the amount of $252,480, will be available for improvements to Airport Facilities or for credit to the Airport Replacement Reserve Fund.
SUPPORTING DOCUMENTATION
Annex “A” - Summary of changes between Existing and Proposed Option Agreements
Annex “B” - Proposed Amendments to Option Agreement
Annex “C” - Land Use Plan
Annex “D” - Core Airport Area Plan
Annex “E” - Memorandum of understanding for Planning and Infrastructure approvals.
Annex “F” - Proposed Lease Terms for HTSC Ground Lease
DISPOSITION
The Real Estate Services Division, Legal
Services Branch, and the Chief Corporate Services Officer of the Corporate
Services Development Department will facilitate and coordinate the finalization
and execution of the amended option to purchase agreement with West Capital
Developments (WCD), the conveyance of the 0.3m reserves to the Carp Airport
Authority, the lease and Municipal Capital Facility Agreement with WCD for the
Fixed Base Operations facility, the lease extension/lease-purchase agreement
with Helicopter Transport Services (Canada) Inc., and any other lease extension
agreements with existing tenants at the airport including the proposed lease
amendment/assignment agreements with respect to the First Air Lease.
The Real Estate Services Division will obtain
the real estate appraisals required to establish the market value of the
property and, upon agreement by WCD as to the value, will apply to Transport
Canada for all consents and approvals needed under the provisions of the option
agreement.
Upon execution of the amended Option Agreement,
WCD will, in consultation with the Planning and Growth Management Department,
prepare the terms and reference for all studies, set out in and required, by
the provisions of Annex “D” of this report.
WCD will also be responsible, solely at its cost, to make application
for all planning and infrastructure approvals for review and processing by the
Planning and Growth Management Department.
ANNEX A
CARP AIRPORT
OPTION AGREEMENT – SUMMARY OF PROPOSED CHANGES
AgreementItem
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Provisions Existing Agreement |
Provisions Proposed Agreement |
Comments |
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Option Period |
1 June 2004 to 31 May 2005 |
1 June 2004 to 28 February 2006 |
9 months additional |
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Core Airport Area |
385 acres |
369 acres |
16 acres smaller |
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Aerospace Business Park |
181 acres – no internal taxiways |
187 acres – proposed internal taxiway |
6 acres larger - 50+ acres more airside access land |
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Airport Accessory Residential Community |
401 acres - 750 residential units |
411 acres - 280 residential units |
10 acres larger – 470 fewer units |
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Option Fees |
$50K (paid) |
$150K |
Increase of $100K reflects amounts paid to date |
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Financial Guarantee |
$100K (paid) |
$75K payable by May 31/05 |
$25K less |
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Total Option Fee & Financial Guarantee |
$150K (paid) |
$225K |
$75K additional |
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Use of Option Fee & Financial Guarantee |
Underwrite City’s cost for airport operations Jan. 1/ 04 to May 31/05 |
Underwrite City’s cost for airport operations from Jan. 1/ 04 to Feb 28/06 |
Additional subsidy from WCD to cover operating costs to Feb. 28/ 06 |
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Purchase Price |
Nominal Value for Core Airport Area + Fair Market Value of remaining lands |
Nominal Value for Core Airport Area + Fair Market Value of remaining lands + Option Fee |
Increase of $150K from option fee + value of 15 acres developable lands (approx. $450K). |
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Partial Options |
Core Airport option to extend to 14 March 2007 if required |
As per existing for Core Airport area + option to purchase remaining lands in up to 4 stages |
Partial options for remaining lands will require payment of monthly option fee based on value of lands being optioned and an interest rate of prime + 1% - first option must be exercised by Feb. 28/06 and all options by Feb. 28/09 |
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Repurchase Options by City |
Right to repurchase Core Airport Area at nominal cost if WCD in default of MCFA for airport |
As per existing for Core Airport Area + right to repurchase remaining lands at original purchase price paid by WCD if servicing of first phase not commenced by Mar. 14/07 and for any lands not serviced as of Dec. 31/14 |
Ensures City has ability to repurchase lands for other uses if WCD development not successful |
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Fixed Base Operations Facility (FBO) |
N/A |
WCD to enter into ground lease for 2.23 acres + apply for site plan for FBO by May 31/05 as condition precedent for maintaining/exercising Option |
FBO to provide a minimum of 12,000 sq. ft., including a 2,400 sq. ft. Airport Terminal facility be provided at WCD’s cost (approx. $250K) under an MCFA |
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Airport Improvements |
Extend main runway 10/28 to 6000 ft. & widen to 150 ft. – provide precision landing approach system (ground based ILS) |
Retain main runway 10/28 at existing 4000 ft length and 100 ft. width - provide near provision approach system (GPS based system) + Airport Terminal Facility |
Existing main runway is similar to, and has potential to be operated and maintained to attract air traffic like, Buttonville main runway (10th busiest airport in Canada in air traffic) |
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Infrastructure Servicing |
Extend municipal services from Village of Carp |
Individual private servicing (well/septic) or communal services |
Ability to service and type of service will now be based on hydrogeology and terrain analysis rather than capacity of existing municipal system |
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Planning Considerations and Compliance |
OP and zoning amendments require for runway extension/ access road for residential community on agricultural lands |
Encroachment onto lands designated agricultural resource not needed nor associated OP zoning amendments |
Approvals to divert creek on agricultural land also no longer required for runway extension – fewer residential units can allow for 2 access roads to Diamondview Rd. |
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Management Agreement |
Existing agreement provides for WCD to assist City in managing airport during Option Period |
City and WCD to negotiate further provisions of agreement to extend term to Feb. 28/06 and provide for direct management by WCD as of Dec. 31/05 subject to WCD providing Financial Guarantee and committing to FBO facility by May 31/05 |
Negotiations for amendments to management Agreement to be completed by March. 31/05 and direct management of airport by WCD also subject to concurrence by Transport Canada |
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Airport Operating Budget |
Airport Operating Budgets for Airport to be established by WCD based on experience during option period subject to approval by City -Lots in WCD development to pay relative share of operating costs |
Airport Operating Budget to be based on 2005 Budget with intent of future increases consistent with CPI - Specific provisions now included for deeming portion of each type of lot that will be used in calculating the relative share of operating costs – WCD to subsidize any deficit |
Airport Budget provisions including deemed lot areas will ensure airport operations will be sustainable for long term and existing cost deficit will be eliminated by WCD only by increasing development base. |
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Life Cycle Costs |
N/A |
WCD to establish reserve fund for life cycle costs from proceeds of each lot sold to a limit $800K |
Life cycle proceeds: - $3,200/ estate hangar lot - $2,400/communal hangar lot - $2,500/acre/airside business park lot - $1,250/acre/non-airside business park lot |
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Land Lease Extensions |
City may provide land lease extensions to existing tenants based on a 10 year term and a 10 year renewal term subject to relocation at City expense until Mar. 14/07 and at tenants expense after Mar. 14/07 – 20 year term available if tenant provides new or extended facilities |
As per existing agreement except that Long Hangar, Westair, and Roots tenants no longer subject to relocation clause and will have quiet enjoyment provided they pay current market rent (975 cents / sq. ft.) rather than existing 5.6 cents / sq. ft. (cont’d next page) Dilawri & Experimental Aircraft Association tenants will still be subject to relocation but will be allowed depreciated value of building if relocated after March 14/07 |
Location of FBO facility and retention of existing dimensions for runway 10/28 allows for further security of tenancy for existing tenants provided they are in good standing and pay current market rent. Additional rent will help eliminate operational deficit |
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Helicopter Transport Services (Canada) Inc. (HTSC) Lease/Option to Purchase Agreement |
N/A |
Lease extension for a 20 year term and a 20 year renewal term for existing 52,000 sq. ft. site at current market rent (9.75 cents/sq. ft.) subject to entering into a lease/purchase agreement for an additional 6.03 acre site with an option to purchase the additional site on, or before, Mar. 31/07 at market value (approx. $253K) provided that HTSC has commenced construction of the hangar facility by Sept. 30/05 |
Allows for retention of major airport tenant; Provides approx $40K additional revenue to airport operating budget in 2005; $253K purchase price to accrue to airport life cycle account or other airport improvements not to WCD |
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Conveyance of 0.3m Reserves to Carp Airport Authority (CAA) |
N/A |
Conveyance of 0.3m reserves, as shown on Core Airport Area Plan, to CAA will allow City to take proactive position with Transport Canada with respect to portion o lands deemed surplus to airport master plan needs |
Conveyance of reserves to be made under trust agreement for conveyance back on terms established by City; Conveyance of reserves will establish distinct parcels for the Core Airport Area (Brownfield) and Aerospace Business Park/Airport Accessory residential Community (Greenfield) to facilitate approvals and transfer processes. |
ANNEX B
PROPOSED
AMENDMENTS TO OPTION AGREEMENT
The 31 May 2004 Option Agreement between the City of Ottawa (the City) and West Capital Developments (WCD) shall be amended to revise such existing terms and conditions, or to add such new terms and conditions, as are necessary to include for the following provisions:
1. Option Period - The Option Period shall be extended until the 28th day of February 2006 and all other performance dates in the agreement shall be extended by an additional ten (10) months.
2. Land Use Plan - Land Use Plan shall mean Drawing # 102085-LUP Rev.6/Dec.21/04 prepared by Novatech Engineering Consultants Ltd. for WCD, attached hereto as Annex “C”.
3. Core Airport Area - Core Airport Area shall mean that portion of the Carp Airport containing a Municipal Airport Facility and Land Lease areas and having an area of approximately 369 acres as shown on the Core Airport Area Plan attached hereto as Annex “D”; (Drawing # 102085-CAA Rev.7/Dec.21/04 prepared by Novatech Engineering Consultants Ltd. for WCD).
4. Aerospace Business Park - Aerospace Business Park shall mean that portion of the Carp Airport, containing an area of approximately 187 acres, shown and described on the Land Use Plan.
5. Airport Accessory Residential Community - Airport Accessory Residential Community means that portion of the Carp Airport, containing an area of approximately 411 acres, consisting of hangar estate lots, communal hangar lots, communal hangars, and open space as so identified and designated on the Land Use Plan.
6. Development
and Infrastructure Approval Requirements - Schedule ‘D’ of the 31 May 2004
Option Agreement is a memorandum of understanding, dated 14 April 2004, between
WCD and the City that sets out the anticipated development and infrastructure
approval requirements associated with implementing WCD’s Business Plan.
The memorandum dated 15 December 2004, attached as Annex “E” hereto, supersedes and replaces the 14 April 2004 memorandum and sets out the anticipated development and infrastructure approval requirements associated with implementing the Land Use Plan submitted by WCD to the City in December 2004.
7. Planning
Compliance - WCD acknowledges that the City has a requirement to ensure
that the intended use of the Carp Airport is compatible with, and conforms to,
the City’s overall planning policies, the City’s specific planning policies and
economic development objectives for the Carp Airport and Community Design Plans
being developed for the Village of Carp and the Carp Road Corridor and WCD
hereby acknowledges and agrees that the following conditions shall also apply
to its proposed development as follows:
i)
To ensure
that each Residential Lot will have either provision for a hangar on the same
site or have access to a hangar unit in a communal hangar facility as defined
by a zoning amendment for accessory dwelling units and the number of hangars
units in a communal hangar facility for each phase of the development shall be
based on the market need as determined by WCD provided that in no case shall
there be less than one (1) hangar unit for every four (4) Communal Hangar Lots;
ii)
To apply
for no more than two (2)
accesses/egresses on Diamondview Road except where otherwise required by
the Planning Approvals process;
iii)
That WCD’s
applications for Planning and Infrastructure Approvals will indicate that the
perimeter of the Carp Airport will be fenced, and access points secured from
time to time as, may be required by airport operations for the security of the
public, and, as a minimum, the fencing associated with each phase of the
development shall be provided with that phase and any capital, maintenance, and
operating costs for the fencing/security will be assumed by WCD, as part of its
development/operations at the Carp Airport.
iv) WCD, solely at its cost, will be
responsible for constructing the Servicing, including roadway improvements, water
and sewer services, and utilities as may be required for the development of the
Carp Airport.
v)
As part of, and at the beginning of the first phase of, WCD’s
development of the Carp Airport, WCD agrees that it will, solely at its cost,
undertake the improvements to the Russ Bradley and Huisson Roads and construct
the proposed taxiway within Phase 1 of the Aerospace Business Park, and the
proposed taxiway within the Core Airport Area to Phase 1 of the Airport
Accessory Residential Community, and the communal hangars in Phase 1 all as
shown on the Land Use Plan
8. City’s Costs - WCD shall underwrite and be responsible for all of the City’s costs, set out in the Operating Budgets for the Carp Airport for the period from the 1st day of January 2004 to the 28th day of February 2006, to a maximum $225,000 which obligation will be funded firstly from the $150,000 already paid as an Option Fee by WCD to the City and then by Payments made by the WCD as required by the City from time to time after May 31st, 2005 during the Option Period, which Payments shall not total more than $75,000 Dollars.
9. Financial Guarantee - WCD shall provide to the City by no later than the 31st day of May 2005 an irrevocable letter of credit in the amount of $75,000.00 or a similar Financial Guarantee in a form satisfactory to the Chief Corporate Services Officer to guarantee the Payments.
10. Partial
Options -
The City acknowledges that WCD is proposing to develop the Aerospace Business
Park and Airport Accessory Residential Community in four (4) Phases as set out
on the Land Use Plan and the City agrees to allow WCD to exercise the Option in
up to four (4) stages (“Partial Options”) related to the phases shown on the
Core Airport Area Plan subject to all of the following conditions:
a)
WCD
must exercise the first Partial Option by no later than the 28th day
of February 2006;
b)
the
exercise of the first Partial Option shall include for the purchase of the
Phase 1 areas of both the Airport
Accessory Residential Community and the Aerospace Business Park lands and the
Core Airport Area lands as shown on the Core Airport Area Plan;
c)
each
subsequent Partial Option exercised by WCD shall include for the purchase, by
WCD from the City, of lands for an equal number of phases, as set out on the
Core Airport Area Plan, of each of the Aerospace Business Park and Airport
Accessory Residential Community components of the development; and
d)
at
the time a Partial Option is exercised by WCD, the Option Period and the Option
for the portion of the Lands not included in the exercise of the current, or a
previous, Partial Option (the “Remaining Lands”) will be extended to such date
as is proposed by WCD subject to the Option for all the Lands being fully
exercised by no later than 28th day of February 2009 upon which date
the Option Period and Option shall expire.
11. Monthly Option Fee - In the event that WCD exercises
a Partial Option, WCD agrees to pay to the City, as consideration for extending
the Option with respect to the Remaining Lands at each stage, a non-refundable
fee each month (the “Monthly Option Fee”) during the extended Option Period for
the Remaining Lands and the Monthly Option Fee will be determined as follows:
a)
at
the time WCD exercises a Partial Option, the market value associated with the resulting
Option for the Remaining Lands shall be calculated by subtracting the total
amount paid, or to be paid, by WCD with respect to the current, or previous,
exercise of a Partial Option from the Fair Market Value established for the Airport Accessory Residential Community and Aerospace Business Park
portions of the Carp Airport.
b)
the
Monthly Option Fee will then be established as one twelfth (1/12th)
of the annual amount of interest that would apply to a principal amount equal
to the market value for the Remaining Lands with the interest being calculated
on the basis of the Prime Interest Rate, as charged by the Royal Bank of Canada
to its preferred customers, in effect as of the commencement of the extended
Option Period plus one percent (1%).
12. Purchase Price - The Purchase Price for the transfer of the Carp Airport Lands will be the sum of:
a) the
Fair Market Value of the Airport Accessory Residential Community and Aerospace
Business Park portions of the Carp Airport
b) the
Option Fee; and
c) nominal
consideration for the Core Airport Area.
In the event that WCD exercises a Partial Option, the following provisions shall apply:
a)
the
purchase price for the part of the Lands associated with the exercise of a
Partial Option at each stage shall include an amount calculated by multiplying
the Fair Market Value of the Airport Accessory
Residential Community and Aerospace Business Park portions of the Carp Airport by the ratio determined by
dividing the total amount of area of the Aerospace Business Park and Airport
Accessory Residential Community that is to be purchased by the Vendor at
specific stage by the total area of all stages of the Aerospace Business Park
and Airport Accessory Residential Community.
b)
the
purchase price for the part of the Lands associated with the exercise of a
Partial Option at each specific stage shall also include the total amount of
Monthly Option Fees paid during the extended Option Period for that stage;
c)
the
purchase price for the part of the Lands associated with the exercise of the
first Partial Option shall also include the Option Fee; and
d) the purchase price for the part of the Lands associated with the exercise of the first Partial Option shall also include nominal consideration for the Core Airport Area.
13. Payment - The Purchase Price shall be payable by WCD to the City as follows:
a) WCD shall receive credit in the statement of adjustments for the Option Fee and Payments made by WCD, as received by the City during the Option Period, or approved extension thereof, until such time that WCD exercises the Option; and
b) the balance of the Purchase Price subject to adjustments shall be paid by WCD to the City by certified cheque or bank draft on closing.
In the event that WCD exercises a Partial Option, the Purchase Price for the part of the Lands associated with the exercise of the Partial Option shall be payable by WCD as follows:
a) for the first Partial Option, WCD shall receive credit in the statement of adjustments for the Option Fee and Payments made by WCD, as received by the City during the Option Period, or approved extension thereof, until such time that WCD exercises the first Partial Option and the balance of the Purchase Price for the first Partial Option, subject to adjustments, shall be paid by WCD to the City by certified cheque or bank draft on closing; and
b) for
subsequent Partial Options, WCD shall receive credit for the total amount of
Monthly Option Fees paid by WCD with respect to the specific Partial Option
being exercised by WCD and the balance of the Purchase Price for the specific
Partial Option, subject to adjustments, shall be paid by WCD to the City by
certified cheque or bank draft on closing.
14. Option to
Repurchase - In the event WCD exercises the Option or Partial Options and
purchases all, or a portion, of the Lands, whichever the case may be, and has
entered into a Municipal Capital Facility Agreement with the City and, as of
the 14th day of March 2007, has not commenced construction of the
Servicing for the first phase of development for the Airport Accessory
Residential Community and Aerospace Business Parks as shown on the Land Use
Plan, the City shall have an irrevocable option to repurchase the Lands or the
portion of the Lands including the Core Airport Area, whichever is the case,
for an amount equal to the sum of the parts of the purchase price paid by WCD
to the City with respect to the Fair Market Value of the Airport Accessory
Residential Community and Aerospace Business Parks portions of the Carp Airport
purchased by WCD to that date and nominal value for the Core Airport Area and
the Municipal Capital Facility Agreement will then be terminated.
In the event that WCD exercises the
Option or Partial Options and purchases the Lands or portions of the Lands and,
as of December 31st, 2014, has not commenced construction of the
Servicing for the Airport Accessory Residential Community and/or the Aerospace
Business Park portions of a particular phase as shown on the Land Use Plan, the
City shall have an irrevocable option to repurchase those portions of the Lands
for which Servicing has not commenced for an amount equal to the prorated
portion of the fair market value of those particular portions of the Airport
Accessory Residential Community and/or Aerospace Business Park.
15. Fixed Base Operations Facility - As a prerequisite to exercising the Option and to entering into a Municipal Capital Facility Agreement to acquire the Carp Airport, WCD agrees to develop a Fixed Base Operations (FBO) facility at the Carp Airport on an approx. 2.23 acre site within the Core Airport Area as shown on the Land Use Plan and to submit a site plan application to the City and enter into a ground lease for the facility, by no later than the 31st day of May 2005, with the ground lease to be negotiated in accordance with the provisions of the Management Agreement for new ground leases during the Option Period except as otherwise provided herein.
WCD shall submit to the City, by no later than the 31st day of March 2005, a business plan for the establishment and operation of the FBO facility that, at a minimum, will provide for the construction of a new building, solely at WCD’s cost, containing approximately 12,000 sq. ft. of floor space of which approx. 2400 sq. ft. will be used as the “Airport Terminal” for operations related to the Municipal Airport Facility including an airport reception area, airport administrative facilities, a boardroom / training facility, a pilot lounge / vending machine area, a weather / communication facility, and a washroom / shower facility subject to the Airport Terminal facility.
The provision of the FBO facility will be subject to the Airport Terminal being designated by the City as a Municipal Capital Facility to be operated by WCD under the provisions of a Municipal Capital Facility Agreement such that the Airport Terminal together with that portion of the lands leased for the FBO facility being improved with a parking lot and/or or airport apron, will be operated and maintained as part of the Municipal Airport Facility from the funding provisions of the Operating Budget, except that WCD will provide the Airport Terminal facilities at an annual net rent of $1, and that the Airport Terminal facilities including the any parking lot or aircraft aprons will be exempt from all property taxes and airport land lease and annual airport maintenance fees.
WCD further
agrees to locate, design, and construct the private sewage disposal system for
the FBO facility to provide for a connection from the existing airport
administrative facility (the Borden Building) at WCD’s sole cost provided that
the City allows WCD to connect the FBO facility to the existing water supply
system, at the WCD’s cost, and the City provides a suitable location for the
private sewage disposal system at nominal cost to WCD.
WCD agrees to enter into a Municipal Capital Facility Agreement for the Airport Terminal and commence construction of the FBO facility prior to the 30th day of September 2005.
16. Management Agreement - The provisions of the Management Agreement dated the 31st day of May, 2004 between the City and WCD, whereby WCD has undertaken to assist the City in the management and operation of the Carp Airport during the Option Period, shall continue to remain in effect until the 31st day of May 2005.
The City
agrees to negotiate with WCD, by no later than the 31st of March
2005, amendments to the Management Agreement that will extend the term of the
Management Agreement until the 28th of February 2006 and provide for
WCD to directly manage the Carp Airport by no later than the 31st of
December 2005 subject to further City Council approval for such amendments;
Transport Canada consenting to the management arrangement as may be required;
WCD providing the City with the Financial Guarantee; and the WCD being in
compliance with provisions of the Option Agreement with respect to the
establishment of the FBO facility.
17. Nav Canada Works - WCD acknowledges that Phases 2 & 3 of the Airport Accessory
Residential Community, as shown on the Land Use Plan, may not be able to
proceed without the relocation/removal of the existing Very High Frequency
Omnidirectional Range (VOR) test facility operated by NavCan and WCD agrees
that it will be responsible for undertaking any work, including but not limited
to the relocation of the existing Nav Canada equipment including the VOR,
required by Transport Canada and Nav Canada under the conditions associated
with their consents or approvals with respect to the implementation of the Land
Use Plan under the Municipal Capital Facility Agreement and WCD will bear all
costs of such work.
18. Transport
Canada Agreements - As prerequisites to the preparation and execution of
the Municipal Capital Facilities Agreement by the City and WCD, the City agrees
that it will during the Option Period take action as follows:
A.
Establish the Core Airport Area (369 acres), as shown on the Land Use
Plan, as the Airport Master Plan requirement necessary for the management,
maintenance or operation of the Carp Airport as an undertaking with respect to
the provisions of the Clause 3.02.01 of the Operating Agreement of the
Transport Canada Agreements and, on that basis, establish 0.3 metre reserves
outside and abutting the north and south boundaries of the Core Airport Area as
shown on the Core Airport Area Plan and enter into agreement with the Carp
Airport Authority, by no later than the 30th day of June 2005, to have these reserves transferred to, and
be held in trust by, the Carp Airport Authority until such time that the
Municipal Capital Facility Agreement between the City and WCD has been executed
at which time the Carp Airport Authority shall automatically be required to
transfer its interest in the reserves to the then respective owners of the
Aerospace Business Park and Airport Accessory Residential Community as
established by the provisions of the Municipal Capital Facility Agreement.
B.
Prepare a draft reference plan for the Carp Airport, which will include,
but not necessarily be limited to, parts related to the Municipal Airport
Facility, Core Airport Area, the 0.3 metre reserves, Land Leases, Airport
Accessory Residential Community, Aerospace Business Park, existing easements
and encroachments, together with a building location survey plan by no later
than the 31st day
of May 2005;
C.
Notify the Minister of Transport by no later than the 30th day of June
2005, in accordance with the provisions of Clause 3.02.02 of the Operating
Agreement of the Transport Canada Agreements that the City has established:
a)
the Core Airport Area as meeting the Airport Master Plan requirements;
b) the
provisions of a Municipal Capital Facility Agreement to ensure the continued
operation of the Municipal Airport Facility after March 14, 2007; and
c) 0.3m
reserves outside of, and abutting, the Core Airport Area which are being held
in trust by the Carp Airport Authority to ensure the Municipal Capital Facility
Agreement provisions are put into effect,
and the City intends to sell those lands
surplus to the Airport Master Plan requirements with the surplus lands
consisting of the Accessory Residential Community and Aerospace Business Park
portions of the Carp Airport, as shown on the Land Use Plan, at the then fair
market value established the City and WCD from at least two independent real
estate appraisals, and
D. Request the concurrence of the
Minister of Transport with this valuation in accordance with the provisions of
Clause 3.02.03 of the Operating Agreement of the Transport Canada Agreements;
19. Operating Budgets - WCD, in consultation with the City, will prepare an Operating Budget for the first year of operation of the Municipal Airport Facility and an associated five (5) year operating forecast, based upon the Operating Budget approved by the City for the year 2005 and with the intent of limiting, if possible, any increase in the Airport Maintenance Charge to no greater than the increase in the cost of living increase in accordance with Statistics Canada Price Index for all items for Canada (or such other comparable index if the said Index is not available).
The Annual Maintenance Charge, as established from annual budgets approved by the City, for each lot in the Common Element Condominium Corporations, when sold by WCD, will be based on deemed lot areas for each lot as follows:
(i) Aerospace Business Park lots abutting a taxiway - the greater of:
(a) 30% of the lot area, or
(b) the total area of the footprint(s) area(s) of a building(s) on the lot plus the area of a fourteen (14) foot wide strip(s) around the exterior walls of the building(s) and the area of the portion(s) of any aircraft apron(s) on the lot that extends beyond the fourteen foot strip(s).
(ii) Aerospace Business Park lots not abutting a taxiway - the greater of:
(a) 15% of the lot area, or
(b) 50% of the total area of the footprint(s) area(s) of a building(s) on the lot plus the area of a fourteen (14) foot wide strip around the exterior walls of the building(s) and the area of the portion(s) of any aircraft apron(s) on the lot that extends beyond the fourteen foot strip(s).
(iii) Airport Accessory Residential Community:
(a) 10% of lot area for lot with a hangar on same lot (Hangar Estate Lot), or
(b) 5% of lot area for lot having use of a communal hangar on a separate lot (Communal Hangar Lot).
WCD agrees to include appropriate provisions in the Operating Budget and associated five (5) year operating forecast for the Municipal Airport Facility to allow for maintenance and repairs required to maintain the Municipal Airport Facility as required by such regulatory and safety standards that apply to this facility
WCD agrees that the Operating Budget and
associated five (5) year operating forecast, as well as subsequent Operating
Budgets and operating forecasts, for the Municipal Capital Facility shall be
subject to review and approval by the City and, once an Operating Budget has
been approved, that WCD shall be responsible for any operating funding
shortfall and that the City shall have no responsibility for any costs
associated with operating and maintaining the Municipal Airport Facility.
20. Life
Cycle Costs - The Purchaser shall establish a capital reserve fund for
undertaking life cycle work at the Municipal Airport Facility (the “Airport
Facilities Replacement Reserve Fund”) and the Purchaser agrees to contribute to
this fund from the proceeds for each lot sold, up to a total contribution in
the amount of $800,000 based on the type of lot sold as follows:
a)
Estate Hangar Lot - $3,200/lot
b)
Communal Hangar Lot - $2,400/lot
c)
Airside Aerospace Business Park Lot - $2,500/acre
d)
Non- airside Aerospace Business Park Lot - $1,250/acre
21. Land Lease Extensions - Land Lease Extension Agreements will provide for an initial term of 10 years, effective as of the 1st day of January 2005, and a right to renew for one additional 10-year term except where the tenant commits to substantial new development or redevelopment, on or adjacent to the leased lands, in which case the City, subject to the consent of WCD, may provide an initial term of 20 years and a right to renew for an additional 10-year term
The terms and conditions of the Land Lease Extension Agreements will be consistent with the Land Lease Extension Agreement dated the 9th day of February 2004, for Bradley Air Services limited (c.o.b. as First Air) and any subsequent amendments made prior to the 28th day of February 2005 except as follows:
a) The annual rent for Land Lease Extension Agreements will be based on a rate of $0.0975 per sq. ft. for the initial term and a rate of $0.1275 for the renewal term;
b)
Land Lease Extension Agreements will
provide the tenant with the right to quiet enjoyment of leased lands during
both the initial and renewal terms except in those cases where the location and building form of the existing
improvements on the leased lands present potential obstacles to the future
expansion of Runway 10-28 such that the expansion may require the relocation of
certain Land Lease tenants, those specific Land Lease Extension Agreements will
include provisions with respect to the tenants right to quiet enjoyment of the
leased lands as follows:
i) The Vendor, its successors and assigns will have right to relocate the tenant at its cost to a compatible alternate site until March 14, 2007 subject to the consent of the City which will not be unreasonably withheld with such decision and consent being based on WCD, or its successors and assigns, needing the leased lands to expand Runway 10-28.
ii) WCD, its successors and assigns, will have the right to relocate the tenant, at the tenant’s cost subject to compensation from WCD, or its successors and assigns, for the depreciated value of the building or buildings on the leased land as determined by a certified independent real estate appraiser, to a compatible alternate site after March 14, 2007, subject to the consent of the City which will not be unreasonably withheld with such decision and consent being based on WCD, or its successors and assigns, needing the leased lands to expand Runway 10-28.
iii) Subsequent to any such relocation, the tenant
will be entitled to quiet enjoyment of the leased lands for the balance of
initial term and renewal terms.
22. Helicopter Transport Services (Canada) Inc. Lease - WCD agrees to allow the City to enter into a Land Lease Extension Agreement for a term of twenty (20) years and a right-to renew for a further twenty (20) year term with respect to the existing ground lease between the City as “Lessor" and Huisson Aviation (1989) Limited, now carrying on business as Helicopter Transport Services (Canada) Inc., as “Lessee” that will provide for the Lessee to lease an additional area of approx. 6.03 acres (the “Additional Parcel”) in that portion of the Aerospace Business Park, designated as Phases 1A & 1B on the Land Use Plan, and have an option to purchase the Additional Parcel, on before the 31st of March 2007, all in accordance with, and subject to, the terms set out in Annex “F” attached hereto.
WCD and the City agree that all net proceeds from the sale of the Additional Parcel shall be applied to improvements to the Lands and/or the Airport Facilities Replacement Reserve Fund as determined by the mutual agreement of the parties.
23. New Ground Leases - New ground leases negotiated by WCD during the Option Period for the Aerospace Business Park may provide an option for the new tenant to purchase the site upon, or immediately after, the sale of the Lands to WCD and the City agrees to convey the Aerospace Business Park lands to WCD in such separate parcels as are required to facilitate the exercise of the option(s), and the subsequent purchase of the parcel(s), by the tenant(s).
All other terms and conditions of the 31 May 2004 Option Agreement that are not affected by the provisions set out above, shall remain in effect.
ANNEX
C
CARP AIRPORT - LAND USE PLAN
