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HomeMy WebLinkAbout02-07-1975RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL 229: CITY OF ROCHESTER, MINNESOTA S eca al- Meeting of the; ",Common -,Council, No.29A February 7, 1975 Agenda Item I The Special meeting of the Common Council was held in Room 4, in City Hall at 4:00 P.M. February 7, 1975. President Postier called the meeting to order, the following members being present: President Postier, Aldermen Kamper, Larson, Ludowese, McNary, Powers and Strain. Absent: None. President Postier read the call of the special meeting which was called to consider the sale of the controlling interest in the Halvorson Aero to Michael Sheedy, and another business the Council may deem necessary. Mr. M.G. Braatas of the Airport Commission stated that Halvorson Aero was given the opportunity to operate the fixed base operation at the airport about a year and a half ago and was awarded to him on the basis of the bids that were presented. Halvorson Aero has been in financial difficulty since July,1974 to the City of Rochester on rental payments. He stated that Halvorson Aero has done a good job for the City , it was a few bad investments in several aircraft that created financial problems. If he would go out of business, it would take a long time to find another renter and the City would lose money. Michael Sheedy, a local Rochester businessman, has agreed to make a substantial investment in the company at this ti.me, and will assume a majority interest and become general manager if certain conditions can be met. At the present time, the Rochester Airport Company and tI City of Rochester are two of the major creditors, and they are asking relief from some of :this indebtedness as well as a change in the lease. They asked that the gross receipts rental payments be permanen- set at 1% and that aircraft sales be excluded. the basic rent would I set to $1,835. per month now as opposed to three years from now as sei forth in the lease. They ask relief from the $45,017.00 gross receipts rental payments owing as of December 31, 1974 on past aircra- sales. Mr. Lowell Helgerson ; Airport manager was present and stated that Mr. Sheedy would be a Rochester resident, and would be good for the company, which is based in Rochester. The Finance Department of the City of Rochester stated that the financial statement proved that the figures above were correct and that the company was in financial trouble. After discussion by the Council, Larson moved, Kamper secon( to accept the amendment to the.Lease agreement dated this loth day of February, 1975 by the City of Rochester, Minnesota and the Rochestf Airport Company hereinafter jointly and severally referred to as Lessors, and Halvorson, Aero, Inc., hereinafter referred to as Lessee amending the term of the lease shall be for 10 years commencini on the 16th day of July, 1973 and extending to and including the 15th day of July , 1983, unless sooner terminated as hereinafter pro- vided. If lessee has not defaulted in the terms of this lease, upon termination of this lease at the end of the ten-year term, Lessee sha' have the right of first refusal to lease the premises or such portion ly e Fr 230 RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL CITY OF ROCHESTER, MINNESOTA Special Council Meeting No 9 A-, February 7, 1975 Agenda Item thereof as lessors may designate on such terms and conditions as lessors in their sole discretion may determine. Lessee shall exercise its right of first refusal by notifying lessors within 30 days after receipt of the proposed lease agreement from lessors. Less e's right of first refusal under this paragraph shall terminate automatic- ally if lessee fails to so notify lessors, or if after notice of less Ws refusal the proposed,lease agreement is accepted by another party. Section 4 of said lease agreement dated July 6, 1973 is amended to read Rent Beginning with the commencement of the term of this lease, lesse agrees to pay lessors the following rentals: (a) Land: For area A, exclusive of the buildings and improvements ther�e`on, $.06 per square foot per year payable in equal monthly insta l.- ments of $660.00. (b) Buildings and Improvements: Monthly rent for Hangars "A" and "B" and Improvements shall be $1,175.00 per month. (c) Additional Rent Attributable to Both Land'and Buildings Monthly rent in -an amound equal to one percent of Lessee's fixed base operation gross receipts. (d) Gross Receipts Defined: The term "gross receipts" as used herein shall be construed to mean, for all purposes, the aggregate amount of all sales and services made and performed from leased premises, for cash or credit regardless of when or whether paid for or not, less the aggregate amount of all property traded in as part payment of the pur hase price or service charge but excluding therefrom gross receipts from the sale of aircraft and from state and local sales taxes and use tax s. (e) Maintenance of Gross Receipts Records: Lessee agrees to maintain appropriate books and records to show the gross receipts, as defined herein, and to submit to Lessors no later than 60 days following each of Lessee's fiscal years, a certified statement based upon good accounting principles showing such receipts. Lessors have the right to employ at their expense an accountant to make such audit of Lessee's property, books and records as may be reasonably necessary to accurately determine gross receipts, as herein defined, and lessee agrees to cooperate with such accountant for this purpose. Lessors agree that to the extent permitted by law and except in proceedings t enforce the terms of this lease, the accounting information and statements given Lessors concerning Lessee's business activities shall be kept confidential, but this shall not prevent publication by Lesso s of any data concerning payments made by lessee as required by this lease. (f) When Rent Payable The rent provided by subsections (a) and (b) above shall be paid in monthly installments in advance on or before the 10 day of each month during the lease term. The rent provided by subsection (c) above shall be paid monthly on or before the loth day of each calendar month following the month during which the sales and services constituting the gross receipts were made or performed. 2. The amendments to Sections 3 and 4 as above set forth shall take effect and be in force from and after January 1, 1975, subject to the condition that lessee shall first pay lessors the sum of $29,075.00 E Agenda Item I RECORD OF OFFICIAL PROCEEDINGS OF THE. COMMON COUNCIL JL CITY OF ROCHESTER, MINNESOTA Special Council Meeting Np 29A _ Ephruary 7, q7� as full payment and satisfaction of all delinquencies in rent.and duel flowage fees due Lessors for the period from July 16, 1973 to an including December 31, 1974, which payment lessors agree to accept as full payment and satisfaction of said delinquencies. 3. Subject to the amendments to section 3 and section 4 and the payment to be made by lessee as set forth above, said lease agreement dated July 6, 1973 shall remain in full force and effect. Ayes (g) , Nays (`1) •-:Al'dermarr-. Ludowese voted Nay. Motion carried. Having no further business, :Powers moved, Strain seconded to adjourn the;.meeting until 4:45 P.M. February 10, 1975. Ayes (7), Nays (0) . Motion carried. e