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2452 Joinder Agreement/SAA Ground Lease/Burrell Aviation2452 - + - mil �I FORD WS RM X Item No. CITY COMMISSION MEMORANDUM 23-001 .H .JANUARY 9, 2,023 AGENDA To: Honorable Mayor and Members of the City Commission PREPARED BY: Owen Christopher Smith, Project Planner, Urban Design, Development Services, Planning Department SUBMITTED BY: Norton N. Bonaparte Jr., ICMA-CM, City Manager SUBJECT: Joinder To Sanford Airport Authority Ground Lease Number 2022-053 With Burrell Aviation Sanford, LLC; Orlando Sanford International Airport STRATEGIC PRIORITIES: ❑ Unify Downtown & the Waterfront ❑ Promote the City's Distinct Culture Update Regulatory Framework Redevelop and Revitalize Disadvantaged Communities SYNOPSIS: Approval of the City entering a Joinder to the Sanford Airport Authority's ground lease (Ground Lease Number 2022-053) with Burrell Aviation Sanford, LLC, a Delaware limited liability company, relative to property located at the Orlando Sanford International Airport is being requested. FISCAL/STAFFING STATEMENT: The proposed ground lease and development of the site at the Orlando Sanford International Airport would be an economic boost to the City and its environs. The City would continue to operate under the terms and conditions of existing agreements with the Sanford Airport Authority if it enters the joiner to the ground lease. BACKGROUND: The City and the Sanford Airport Authority are parties to a long term lease agreement of City property. As summarized in a recent audit of the Sanford Airport Authority: Airport Lease — The City of Sanford, Florida granted the Authority the exclusive right to occupy, operate, control, maintain and use the Orlando Sanford Airport for a term of 50 years commencing in 2009. The audit report quotes from the lease agreement between the City and the Sanford Airport Authority as follows: The City hereby grants, transfers and conveys unto the Authority the exclusive right and jurisdiction to occupy, operate, control, maintain and use the Airport, for a term of fifty (50) years, and automatically renewing every ten (10) years unless expressly rejected in writing by the City, for public airport purposes subject to easements, deed restrictions, grant assurances with the United State, the State of Florida, applicable laws and ordinances and other restrictions of record, and matter herein. The Sanford Airport Authority has been actively pursuing and high quality development within the Orlando Sanford International Airport. The proposed ground lease would be with Burrell Aviation Sanford, LLC, a Delaware limited liability company. This entity is part of Burrell Aviation, a, national company that has shown an economic development interest in several airports throughout the Nation and in Florida for aviation and aerospace development. The tenant will be building facilities on the leasehold. Burrell Diversified Investments, LLC, the ultimate parent company of Burrell Aviation, has provided a guaranty of the lease, with conditions. The ground lease is for a term of 30 years with 2 potential 10 -year renewal options (at then market facility rent as opposed to ground rent). The Joinder is necessary for the second 10 -year option as the Sanford Airport Authority's underlying lease with the City only covers a portion of that time. The options to renew are at then current fair market facility rental rates. Thus, in view of the above parameters of the lease between the City and the Sanford Airport Authority and the Sanford Airport Authority's ground lease with Burrell Aviation Sanford, LLC, the Joinder of the ground lease by the City is necessitated in order for this real estate matter to close in accordance with generally accepted title underwriting standards and requirements. LEGAL REYIEW: The City Attorney's office has reviewed this matter and has been in communication with Mr. Brett Renton, a partner in the Orlando office of the Shutts & Bowen LLP law firm which serves as General Counsel to the Sanford Airport Authority. The attached Joinder document has been developed by the tenant, the Sanford Airport Authority and the City Attorney's office. RECOMMENDATION: Staff recommends that the City Commission approve the City entering the Joinder to the ground lease between the Sanford Airport Authority and Burrell Aviation Sanford, LLC. SUGGESTED MOTION: "I move to approve the City entering into the Joinder to the ground lease between the Sanford Airport Authority and Burrell Aviation Sanford, LLC." Attachment: Joinder to Ground Lease Number 2022-053 of Sanford Airport Authority. 21'._, JOINDER OF THE CITY OF SANFORD The City of Sanford, Florida, a municipal corporation of Seminole County, Florida (the "City"), as lessor under the Airport Lease Agreement dated February 9, 2009 (the "Prime Lease") with the Sanford Airport Authority, a dependent special district located in the City of Sanford, Florida (the "Authority"), hereby acknowledges and approves the terms of the Ground Lease dated January 1, 2023 (Lease No. 2022- 053, the "Lease") between the Authority as lessor and Burrell Aviation Sanford, LLC, a Delaware limited liability company (the "Lessee"), as lessee, for the Premises described in the Lease, in the City's capacity as fee simple owner and prime lessor of the real property comprising the Premises. The City agrees that, in the event of the expiration or termination of the Prime Lease or other right asserted under the Prime Lease, the City shall succeed to the interest of the Authority in the Lease, and the City shall not, except in the event of default continuing after notice and beyond any applicable grace period or termination otherwise in accordance with the provisions of the Lease, (a) disturb the possession of Lessee (or its successors and assigns) under the Lease during the term of the Lease (or during any option term contained therein and exercised in accordance with the terms thereof), or (b) otherwise terminate or modify the rights of Lessee (or its successors and assigns) under the Lease during the term of the Lease (or during any option term contained therein and exercised in accordance with the terms thereof). Notwithstanding anything to the contrary in the foregoing, unless the City gives its prior written consent, the City shall not be bound by an amendment or other modification of the Lease that (a) decreases the rents or other amounts to be received by the lessor under the Lease, (b) extends the term under the Lease, or (c) otherwise adversely affects the lessor's rights or remedies under the Lease. Further, for so long as the Prime Lease is in effect, the SAA shall solely have all obligations and liabilities thereunder and the City does not accept any obligations or liabilities of the SAA and, hereby, specifically adheres to its protections under the sovereign immunity laws of the State of Florida to include, but not be limited to, the provisions of Section 768.28, Florida Statutes. IN WITNESS WHEREOF, the parties hereto have executed this instrument on the date written. Attest: CITY OF Citi By: r Traci Houchin, MMC, FCRM a rt a City Clerk; ; Mai- or­- Approved as to form and legal sufficiency. ° -t 1 n ' W L. Colbert City Attorney 1AWA66 Al- M, AC14