HomeMy WebLinkAboutC2015-011 - 1/13/2015 - Approved CORPUS CHRISTI INTERNATIONAL AIRPORT
AMENDED AND RESTATED HANGAR AND
FIXED BASE OPERATOR'S LEASE
STATE OF TEXAS §
COUNTY OF NUECES §
This Corpus Christi International Airport Amended and Restated Hangar and Fixed Base
Operator's Lease (hereinafter"Lease" or"Lease Agreement") is entered into by and between the
CITY OF CORPUS CHRISTI ("Lessor"), a Texas home-rule municipal c rporatio , acting by and
through its City Manager pursuant to Ordinance No. f(?)0:41 _, and
SIGNATURE FLIGHT SUPPORT CORPORATION ("Lessee"), a Delawa a corporation
authorized to do business in Texas, acting by and through its duly authorized officers. The initial
addresses of the parties are as follows:
City Lessee
Director of Aviation Attn: General Counsel
City of Corpus Christi Signature Flight Support Corporation
1000 International Drive 201 South Orange Avenue, Suite 1100
Corpus Christi, Texas 78406 Orlando, Florida 32801
WHEREAS, on August 29, 1959, Lessor leased certain sites at the Corpus Christi International
Airport for commercial hangar and fixed base aviation operations, herein referred to as the
"Master Lease;" and
WHEREAS, on July 14, 1960, a lease agreement covering certain of the Master Lease sites, or
portions thereof, was assigned to Gault Aviation and
WHEREAS, said lease agreement was later amended on July 14, 1960, February 14, 1961, May
27, 1964, May 25, 1966, and November 15, 1966; and
WHEREAS, on February 20, 1980, an assignment of said lease agreement from Gault Aviation
to Air Associates, Inc., later known as Van Dusen Airport Services Company, was approved by
Lessor; and
WHEREAS, said lease agreement was later amended and/or modified on December 7, 1983 and
December 17, 1985; and
WHEREAS, said lease agreement was assigned on December 16, 1986 from Van Dusen Air, Inc.
to Van Dusen Air Services Company, Limited Partnership, and was later amended and assigned
from Van Dusen Airport Services, L.P. to Page Avjet Airport Services, Inc., a wholly owned
subsidiary of Page Avjet Corporation (Page) on October 31, 1990; and
WHEREAS, Page Avjet Airport Services, Inc_changed its name to Signature Flight Support
Corporation pursuant to a Certificate of Amendment of Certificate of Incorporation dated October
1, 1992; and
WHEREAS, Lessee is a current tenant pursuant to the above-referenced lease agreement,
together with all assignments, amendments, modifications, and name changes thereof.
2015-011
1/13/15
Ord. 030394
Signature Flight Support Corp. INDEXED
WHEREAS, the parties hereto desire to modify the provisions of said lease agreement; and
NOW, THEREFORE, the following Amended and Restated Hangar and Fixed Base Operator's
Lease is hereby entered into by and between the parties hereto in complete substitution for the
previous lease agreement and all amendments and modifications thereto, as heretofore
amended:
ARTICLE 1. DEFINITIONS
As used herein, the following words and phrases shall have the meanings set forth below:
1.01 Affiliate. "Affiliate" is any corporation or other entity which directly or indirectly controls or
is directly or indirectly controlled by or is under common control with Lessee; "control" shall mean
the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership of voting securities or by
contract or otherwise.
1.02 Airport. "Airport" means Corpus Christi International Airport.
1.03 AOA. "AOA" means Aircraft Operating Area.
1.04 Appraisal. "Appraisal" means the process to arrive at a property valuation based on rental
rates for similar property at the Airport and at similar nearby airports and consistent with airports
included in the appraisal done by Aviation Management Consulting Group, dated November 18,
2011, identified in EXHIBIT 2, attached hereto and incorporated into this Lease that will be utilized
to set rental rates during the term of this Lease.
1.05 Aviation Director. "Aviation Director" means the Aviation Director of the City of Corpus
Christi or Assistant Aviation Director.
1.06 Capital Improvement. "Capital Improvement" means an expenditure for a project or
improvement at the Leased Premises that increases the value of the Leased Premises or extends
its life expectancy by(i) returning the Leased Premises to its originally efficient operating condition
if it has deteriorated to a state of disrepair and is no longer functional for its intended use, (ii)
rebuilding Leased Premises to a like-new condition after the end of its economic useful life, or (iii)
replacing or adding a major component or substantial structural part of the Leased Premises.
1.07 DOT. "DOT" means the United States Department of Transportation, and any federal
agency succeeding to its jurisdiction.
1.08 FAA. "FAA" means the Federal Aviation Administration of the United States government,
and any federal agency succeeding to its jurisdiction.
1.09 FBO. "FBO" is an abbreviation for Fixed Base Operator, which is further defined in the
Minimum Standards for Commercial Aeronautical Service Providers.
1.10 Fiscal Year. "Fiscal Year" means a period of twelve (12) consecutive months commencing
on October 1 and ending on September 30.
1.11 Leased Premises. "Leased Premises" means those certain premises at Airport more
particularly described in Article 2.
Page 2 of 36
1.12 Maintenance. "Maintenance" means a repair of less than $100,000 that keeps the Leased
Premises in proper working condition but does not add to the value or extend the life expectancy
of the Leased Premises. Maintenance merely keeps the Leased Premises in an operating
condition over its probable useful life for which it was acquired.
1.13 Sign. "Sign" means any advertising sign, billboard, identification sign or symbol, or other
similar device, regardless of content.
1.14 Subsidiary. "Subsidiary" shall mean any corporation or other entity not less than fifty
percent (50%) of whose outstanding stock (or other form of equity ownership) shall, at the time,
be owned directly or indirectly by Lessee or the entity owning directly or indirectly 50% or more of
Lessee, as applicable.
1.15 Trade Fixtures. "Trade Fixtures" shall mean, but shall not be limited to, any signs(electrical
or otherwise) used to identify Lessee's business; all shelves, bins, racking, machinery and
equipment used in connection with Lessee's required or permitted activities pursuant to this
Lease, whether or not such machinery or equipment is bolted or otherwise attached to the Leased
Premises; and all other miscellaneous office equipment, furnishings, and personal property.
1.16 TSA. "TSA" means the Transportation Security Administration, and any federal agency
succeeding to its jurisdiction.
ARTICLE 2. DESCRIPTION OF LEASED PREMISES
2.01 Lessor, for and in consideration of the rents, covenants and promises herein contained to
be kept, performed and observed by Lessee, does hereby lease unto Lessee, and Lessee does
hereby accept from Lessor, the property, including all structures and improvements erected on
the property existing and in operation as of the Commencement Date of this Lease (collectively
referred to as "Leased Premises") located at 574 Hangar Lane, at the Airport, identified in
EXHIBIT 1, attached hereto and incorporated into this Lease.
ARTICLE 3. RENTAL
3.01 Lessee agrees to pay Lessor the rental as indicated on the tables (entitled "Premises
Rent" and "Fuel Farm Rent") below, monthly in advance (without notice or demand, both of which
are expressly waived)for the use and occupancy of the Leased Premises, at the times and in the
manner hereinafter provided. During the Term, any change in rent will be based on an Appraisal
by a third party appraiser, pursuant to the Appraisal process defined herein and described in
section 3.03 herein. Initial values will be determined by the amount set by the appraisal done by
Aviation Management Consulting Group, dated November 18, 2011, identified in EXHIBIT 2,
attached hereto and incorporated into this Lease.
All rentals shall be calculated based on the Appraisal and shall be paid by Lessee to
Lessor in advance without invoicing, notice or demand, in equal monthly installments on or
before the first day of each calendar month beginning on the Commencement Date and
continuing throughout the remainder of the term of this Lease and any extension(s) hereof. In
the event that the term of this Lease shall commence on the day other than the first day of any
calendar month or expire on a day other than the last day of a calendar month, then, and in
such event, the rent will be prorated for the first or last month as the case may be.
Page 3 of 36
From Commencement Date through Initial Term:
PREMISES
RENT
Premises Area SF Acreage Rent per sf/yr Annual Monthly Rental
Rental
Hangar 2 15,000 0.34 $1.50 $ 22,500.00 $ 1,875.00
Hangar 3 30,800 0.71 $1.65 $ 50,820.00 $4,235.00
Office 3 5,770 0.13 $5.65 $ 32,600.50 $ 2,716.71
Office 4 5,032 0.11 $5.65 $ 28,430.80 $ 2,369.23
Office 5 7,464 0.17 $5.65 $42,171.60 $ 3,514.30
Terminal 4,900 0.11
$6.00 $ 29,400.00 $ 2,450.00
Parking Lot 1.18
51,602 $0.30 $ 15,480.60 $ 1,290.05
Apron 62,000 1.42 $0.325 $ 20,150.00 $ 1,679.17
Undeveloped 22,944 0.53 $0.30 $ 6,883.20 $ 573.60
Fuel Farm 0.11
Pad 4,776 $0.30 $ 1,432.80 $ 119.40
TOTAL 210,288 4.81 $249,869.50 $20,822.46
FUEL FARM RENT
Capacity Rent per Annual Rent
Description (Gallons) GAL/YR
JETA 36,000 $0.750 $27,000
AVGAS 12,000 $0.750 $9,000
UNLEADED 2,000 $0.750 $1,500
DIESEL 2,000 $0.750 $1,500
TOTAL 52,000 $0.750 $39,000
3.02 All rent and payments that become due and payable by the Lessee shall be made to the
City of Corpus Christi, Office of the Aviation Director, Corpus Christi International Airport, 1000
International Drive, Corpus Christi, Nueces County, Texas, 78406 unless otherwise notified in
writing. All rent and payments unpaid for ten (10) days after the date due shall bear interest at the
rate of eighteen (18) percent per annum from that date.
3.03
(a) At the City's sole expense, the Appraisal shall be updated by the City approximately
every five (5) years after the date ofthe previous Appraisal, to arrive at an updated property rental
valuation that will be utilized to set rental rates for any subsequent five (5) year period,
irrespective of whether or not one or more Options are exercised by Lessee. Following the
Commencement Date of this Lease, any increase(s) will (i) be based on the most current
Appraisal, (ii) be implemented on a continuing five-year cycle, utilizing the 2011 Appraisal as the
base date for the five-year cycle, and (iii) take effect upon the date next following 30-days
advance notice, as set out in this paragraph. Such continuing five-year cycle is unaffected by the
exercise of an Option or by any number of Options that may be exercised by Lessee at any one
Page 4 of 36
time. The City shall provide Lessee with not less than 30 days advance written notice of the
amount of the increase(s) and the date the rental rate increase(s) will take effect.
(b) The appraiser shall be a qualified and impartial member of the Appraisal Institute or
a person with equivalent credentials, experienced in airport property appraisals.
ARTICLE 4. USE OF LEASED PREMISES
Lessee shall use the Leased Premises solely for operating an FBO as defined Section 15 of the
current Minimum Standards dated October 17, 2012, for Commercial Aeronautical Service
Providers and as the same may be amended from time to time, which includes performing and/or
subleasing to qualified tenants to perform full aircraft servicing facilities including but may not be
limited to the sale of aircraft and aircraft parts; aircraft maintenance and repair; servicing of aircraft
engines, instruments, propellers and accessories in connection with said business, aircraft
storage, aircraft training, aircraft charter and rentals, aviation school instruction, classroom and
flight simulator instruction, and other flight instruction provided only to those persons already
holding an aircraft pilot license and seeking a certification towards an aircraft being manufactured
or sold on the Leased Premises, and such other activities reasonably incidental thereto and such
business directly related thereto or as may be set forth in the Minimum Standards as amended
from time to time. Such use may also include any other activity or services normally performed or
offered by an FBO at the Airport, as adopted in the Minimum Standards, as they may be amended
from time to time, and such other aviation related uses as may be included in the Minimum
Standards as amended from time to time. Provided Lessee is a holder of a valid aviation fuel
dispensing permit issued by the City of Corpus Christi and not in default of any other provision of
this Lease, Lessee may also conduct fueling operations as authorized under said fuel dispensing
permit on the Leased Premises.
In connection with such use and occupancy, Lessee shall have the right to occupy and maintain,
as required by this Lease, all buildings, shops, hangars and other improvements existing on the
Leased Premises as of the Commencement Date of this Lease.
The City reserves the right to replace or repair portions of the apron included in the Leased
Premises. During any such replacement or repair work, if Lessee cannot use portions of the apron
due to the work being done, the City will provide Lessee alternate space of substantially the same
size of said portions and as close to the Leased Premises as is practical. Prior to the award of
any contract for such replacement or repair, the City shall consult with Lessee on alternative
space options and use its best efforts to provide an alternative that has the least impact on
Lessee's operations. Following the completion of any such replacement or repair, Lessee's
Leased Premises will be restored to its original layout. Lessee waives any claims for
compensation for loss caused by such temporary relocation provided the steps identified herein
are followed.
The Lessee shall not at any time leave the Leased Premises vacant, but shall in good faith
continuously throughout the term of this Lease conduct and carry on in the entire Leased
Premises the type of business for which the Leased Premises are leased, except during periods
in which the Leased Premises may not be occupied as a result of fire or other casualty, or
reasonable periods for repairs and alterations, all such repairs and alterations to be diligently
pursued to completion.
All services performed by Lessee shall be in compliance with all applicable state and federal
environmental rules and regulations at Lessee's sole expense.
Page 5 of 36
No other activities shall be conducted on the Leased Premises unless authorized in writing by the
Aviation Director provided, however that such other activities be aeronautical in nature.
ARTICLE 5. LEASE TERM
5.01 The initial term of this Lease shall be five (5) years ("Initial Term") that shall commence on
the sixty-first (61st) day following the date of passage of an Ordinance by the City Council of
Corpus Christi approving this Lease ("Commencement Date") and shall terminate at midnight of
the last day of the 5-year term unless earlier terminated in accordance with this Lease or extended
for additional periods as provided in section 5.02 below. Together the Initial Term and any
extension shall collectively be referred to as the Term of this Lease.
5.02 Lessee shall have the option to extend the Term by up to four (4) additional five (5) year
periods ("Option(s)"), with the maximum term of the Lease not to exceed twenty-five (25) years.
Each five (5) year Option shall be conditioned upon i) a Capital Improvement Plan (as defined
herein in the paragraph below) and related budget, agreed upon by the parties as described
herein, ii) a capital investment by Lessee of not less than One Million One Hundred Thousand
dollars ($1,100,000) for Direct Construction Costs (as defined below) for such Capital
Improvements, and iii) a performance bond or irrevocable standby letter of credit in the face
amount of the agreed upon budget for the Capital Improvement Plan, as described below,
provided however, if the Lessee submits and the City approves a Capital Improvement Plan equal
to or in excess of a multiple of$1,100,000, the Term of this Agreement shall be extended for five
year Option periods equal to the multiple of the Direct Construction Costs in the approved Capital
Improvement Plan. Upon satisfaction of the foregoing three conditions, the Term of this
Agreement shall be extended by amendment to be promptly issued by the City and
countersigned by the Lessee. Failure to meet any of the three conditions stated herein will
invalidate the Option.
As used herein, "Capital Improvement Plan" means a detailed description of the Capital
Improvements including budgetary costs, and intended uses for each item intended to be installed
or constructed at the Leased Premises by the Lessee. "Direct Construction Costs" means all
general contractor and construction related trades required to complete the project in accordance
with the approved drawings as well as related costs associated with architecture, engineering,
testing, permits, and construction management.
Subject to the requirements set forth in Article 13 herein, Lessee will submit the above-
referenced Capital Improvement Plan to the Aviation Director before the end of the thirtieth (30th)
month after the Commencement Date of the Initial Term (or current Option period, in the case of
exercise of the first, second or third Option). The Aviation Director shall have thirty (30) calendar
days after receipt of the Capital Improvement Plan, to approve or to object in writing to any
matter referenced within. If the Aviation Director objects within such 30-day period in writing to any
matter contained within such Plan (including its budget), the Aviation Director and Lessee agree
to work together in good faith to resolve any such objections to the reasonable satisfaction of both
parties. Subject to the approval by the Aviation Director of the Capital Improvement Plan,
Commencement of Construction of such Capital Improvements shall begin no later than the end
of the sixth (6th) month of the fourth (4th) year after the Commencement Date of the Initial Term
(or current Option period, in the case of exercise of the first, second or third Option).
"Commencement of Construction" means (i) to commence the work of constructing the Capital
Improvements or features with all approvals thereof required by applicable governmental
authorities obtained as necessary; (ii) a notice to proceed has been issued to the contractor;
and (iii) onsite construction of the site development components (such as drainage, extensive
grading or utilities) is underway and being pursued.
Page 6 of 36
As security for full and faithful Completion of such Capital Improvements required for each
Option, before the end of the thirtieth (30th) month after the Commencement Date of the Term (or
current Option period, in the case of exercise of the first, second or third Option), Lessee must
furnish to the Aviation Director a performance bond or irrevocable standby letter of credit in the
face amount of the agreed upon budget for the Capital Improvement Plan referenced above, but
in no event less than One Million One Hundred Thousand dollars ($1,100,000), issued by a
surety company or bank authorized and licensed to transact business in the State of Texas, with
the City of Corpus Christi Aviation Department as obligee or beneficiary, respectively, and, if a
bond, not subject to reduction or cancellation except after thirty (30) days' written notice by
certified mail, return receipt requested, to the Aviation Director. Said performance bond or
irrevocable standby letter of credit shall be kept in force until Completion of the above-
referenced Capital Improvement. "Completion" means issuance of Certificates of Occupancy for
the Capital Improvement(s) have been issued or a determination by an engineering or
architectural firm that the Capital Improvement Plan is substantially complete and Lessee may
safely use and occupy the improvements.
A bond or irrevocable letter of credit, as described above, must be valid for six (6)
months or more and require, as sole documentation for payment, a statement in writing from the
Aviation Director setting forth (i) the circumstances giving rise to the call on the bond or giving
rise to the draft on a letter of credit or (ii) a statement of the failure to furnish proof of renewal or
replacement of the bond or letter of credit, as applicable, no less than thirty (30) days prior to the
expiration of the then current bond or letter of credit and, if a letter of credit was posted,
accompanied by a properly drawn draft in an amount not to exceed the face value of the letter of
credit.
Upon Lessor's request, Lessee shall provide documentation such as invoices, contracts,
proof of payment, and other records satisfactory to the Aviation Director as evidence of
expenditure towards Capital Improvement Plan.
Only in the event that this Lease is terminated by the City prior to the end of an exercised
Option without fault or default on the part of Lessee and (i) other than as a result of the lawful
assumption by the United States Government or any authorized agency thereof of the operation,
control or use of the Leased Premises that substantially restricts Lessee from operating thereon;
or(ii) other than as a result of the issuance by any court of competent jurisdiction of an injunction
that prevents or restrains the use of the Leased Premises that prevents Lessee from operating
thereon, the total Direct Construction Costs for the approved Capital Improvement Plan
associated with said Option shall be amortized on a straight line basis over the term of that Option
and a payment issued by the City to the Lessee for the unamortized amount of the Direct
Construction Costs for the approved Capital Improvement Plan for the remaining balance of that
Option term, with payment to be made within sixty (60) days of such termination. If the Lease is
terminated as a result of a Lessee default as stated in Section 24 of this Lease or for any reason
other than that stated in the immediately preceding sentence herein, no reimbursement of Direct
Construction Costs will be made and Lessee forfeits the full investment to the City.
The budget for the Capital Improvement Plan required to exercise an Option, as described
in this Section 5.02, shall be in addition to the deferred maintenance and other maintenance
required in Article 15 herein.
The performance bond or irrevocable standby letter of credit required to exercise an
Option, as described in this Section 5.02, shall be in addition to the performance guarantee
required in Article 8 herein.
Page 7 of 36
ARTICLE 6. INDEMNIFICATION
6.01 Lessee shall indemnify, hold harmless and defend the City, its officers,
officials, employees, and agents ("Indemnitees") from and against any and
all liability, loss, damages, claims, demands, causes of action, and
judgments of any nature on account of personal injuries, property loss, or
damage (including, without limitation to the foregoing, workers'
compensation and death claims) which arise out of or in connection with
this Lease Agreement or the performance of this Lease Agreement,
regardless of whether the injuries, death, loss, or damage are caused by or
are claimed to be caused by the concurrent or contributory negligence of
Indemnitees, but not by the sole negligence of Indemnitees unmixed with
the fault of any other person. Lessee must, at its own expense, investigate
all claims and demands, attend to their settlement or other disposition,
defend all actions based thereon with counsel satisfactory to Indemnitees,
and pay all charges of attorneys and all other costs and expenses of any
kind arising from any liability, loss, damages, claims, demands, or actions.
The indemnification obligations of Lessee under this section shall survive
the expiration or earlier termination of this Lease Agreement.
6.02 Intentionally left blank.
6.03 NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL,
INDIRECT, SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF THE PERFORMANCE OF
THIS AGREEMENT.
ARTICLE 7. INSURANCE
7.01 General Requirements. Lessee shall not commence use or occupancy of the Leased
Premises until Lessee has obtained the types and amounts of required insurance as indicated
below and until such insurance has been reviewed by the City and a Certificate of Insurance is
received indicating required coverage. If the coverage period ends prior to the end of the Term of
this Lease, including any extensions thereof, Lessee must, prior to the end of the coverage period,
forward a new Certificate of Insurance to City as verification of continuing coverage for the
duration of the Term of this Lease. Lessee must submit certificates of insurance for all sub
lessees, assignees and subcontractors to the City prior to commencing work.
Lessee and all sub lessees', assignees' and subcontractors' insurance coverage shall be written
by companies licensed to do business in the State of Texas at the time the policy is issued and
shall be written by companies with an A.M. Best rating of A-VII or better. Hazardous materials
insurance, if required, shall be written by companies with an A.M. Best rating of A-VII or better.
Lessee, sub lessees, assignees and subcontractors must obtain workers' compensation
coverage through a licensed insurance company in accordance with Texas law. The contract for
coverage must be written on a policy and with endorsements approved by the Texas Department
of Insurance. The coverage provided must be in amounts sufficient to assure that all workers'
compensation obligations incurred by the Operation will be promptly met.
Page 8 of 36
The following conditions apply:
(a) Approval of insurance by City and the required minimums shall not relieve or
decrease the liability or responsibility of the Lessee hereunder and shall not be construed to be a
limitation of liability on the part of the Lessee.
(b) The Lessee, sub lessees, assignees and subcontractors must obtain and maintain
in force insurance at all times during the Term of this Lease.
(c) All endorsements naming the City as additional insured, waivers of subrogation,
and notices of cancellation, endorsements, as well as Certificates of Insurance shall indicate:
City of Corpus Christi
Department of Aviation
1000 International Drive
Corpus Christi, Texas 78406
Attn: Director of Financial Services
A copy of the insurance certificate shall be provided to the City's Risk Management
Division.
(d) It is intended that Policies required in the Minimum Standards, which may be
amended from time to time, covering the City and Lessee shall be considered primary and non-
contributory coverage, as applicable.
(e) If insurance policies are not written for the amounts specified below, the Lessee,
sub lessees, assignees and subcontractors shall carry Umbrella or Excess Liability Insurance for
any differences in amounts specified. If Excess Liability Insurance is provided, it shall follow the
form of the Primary Coverage.
(f) The City shall be entitled, upon request and without expense, to receive certified
copies of policies and endorsements thereto.
(g) The City reserves the right to review insurance requirements set forth during the
term of a Lease and to make reasonable adjustments to required types of insurance coverage,
limits, and exclusions when deemed necessary and prudent by the City based upon changes in
statutory law, court decisions, the claims history of the industry or financial considerations of the
insurance company as well as the Lessee, sub lessees, assignees and subcontractors.
(h) The Lessee, sub lessees, assignees and subcontractors shall not cause any
insurance to be cancelled or permit any insurance to lapse during the Term of a Lease or as
required in the Lease.
(i) The Lessee, sub lessees, assignees and subcontractors shall provide all
deductibles and self-insured retentions, if any, stated in the policies. All deductibles and self-
insured retentions shall be disclosed on the Certificates of Insurance.
(j) Liability Insurance provided by the Lessee, sub lessees, assignees and
subcontractors pursuant to the Minimum Standards shall cover and protect the City, its officials,
officers, agents, Personnel, contractors, successors, and assigns, as their interests may appear.
Page 9 of 36
(k) The Lessee, sub lessees, assignees and subcontractors are responsible for
insuring their own interest.
7.02 Specific Insurance Requirements. The Lessee, sub lessees, assignees and
subcontractors shall obtain, and maintain throughout the Term of this Lease, the following
insurance coverages and furnish certificates of insurance and policy endorsements as evidence
thereof:
(a) Workers' Compensation and Employers Liability coverage with limits consistent
with statutory benefits outlined in the Texas Workers' Compensation Act (Section 401) and
minimum policy limits for employers liability of$1,000,000 bodily injury each accident, $1,000,000
bodily injury by disease policy limit and $1,000,000 bodily injury by disease each Personnel. The
following endorsements shall be added to the policy:
(i) A Waiver of Subrogation in favor of the City of Corpus Christi;
(ii) A thirty (30) day written notice of Cancellation/Material Change in favor of
the City.
(b) Property insurance coverage on an "All Risk of Physical Loss" form for 100% of
the replacement value of all improvements constructed by or for Lessee on the Leased Premises.
Coverage shall include, but not be limited to, fire, wind, hail, theft, vandalism, and malicious
mischief. The coverage shall be written on a replacement cost basis. The proceeds from such
insurance shall be used to restore the improvements to their original condition in the event of a
covered loss. Lessee is responsible for insuring their own interests. Lessee is responsible for
deductibles for any loss.
(c) Liability insurance in the specific types and amounts specified in section 7.03
below as applicable for the proposed Commercial Aeronautical Service Operator, as defined in
the Minimum Standards, as may be amended from time to time.
(i) All Commercial General Liability Insurance policies shall contain:
(1) Waiver of Subrogation in favor of the City of Corpus Christi.
(2) Thirty (30) day written notice of cancellation or material change in
favor of the City of Corpus Christi.
(3) City of Corpus Christi listed as additional insured,form CG 2010, or
its equivalent.
(4) Independent Contractors coverage.
(5) Blanket contractual liability coverage for liability assumed under the
Lease or Permit.
(6) Damage to Premises Rented to you in an amount not less than
$250,000.
(7) Medical Expense coverage with a limit of$5,000 any one person.
(d) Environmental impairment liability to include remediation and spill/leakage
clean-up with minimum limits of $2,000,000 each incident/ $2,000,000 policy aggregate limit
issued on a claims made policy with extended reporting coverage of 24 months post-lease
termination/expiration. By offer of Lessee and specific acceptance by City, Lessee shall
provide the 24 months post-lease termination/expiration coverage of environmental
impairment liability insurance by renewal of the policy in effect during the Term, with proof of
renewal provided to the City's Risk Manager and Aviation Director upon each successive
renewal for a period of 24 months following the expiration or earlier termination of the Lease.
Page 10 of 36
This provision, providing for the environmental coverage post-lease, survives the expiration
or earlier termination of this Lease.
7.03 Lessee Requirements.
Environmental Commercial Aircraft
Impairment General Liability
Liability (Broad Liability (Bodily Injury
Form Pollution (Bodily Injury Completed Hangar and Property Non Owned
Liability and Property Operations Keepers Damage/ Aircraft
Coverage/Third Damage/
party Clean up. Personal and including
AST/UST Advertising Passengers
coverage) Injury)
$2MM each
incident— limit
/$2MM policy
aggregate; if
claims made $10MM/ $10MM/
policy needs $10MM $10,000,000 $2,000,000 $10MM $10MM
twenty four(24)
month extension
period post
termination date
7.04 Motor Vehicle Requirements. For Lessee's vehicles operated on the Leased
Premises and in the AOA the following conditions apply:
(a) Business Automobile Liability Insurance for all owned, non-owned, and
hired vehicles with a minimum combined single limit of $5,000,000 for bodily injury and
property damage.
(b) City of Corpus Christi named as additional insured, Form TE 9901 B.
(c) Thirty (30) day written notice of cancellation or material change in favor of the
City of Corpus Christi, form TE 0202A.
ARTICLE 8. PERFORMANCE GUARANTEE & LANDLORDS LIEN
8.01 Lessee shall deliver to the City, on or before the Commencement Date of this Lease, but
at a minimum must show written evidence of performance guarantee commitment no later than
the date of execution of this Lease, and shall keep in force throughout the Term hereof, an
irrevocable standby letter of credit ("ISLC") in favor of Lessor, drawn upon a bank satisfactory to
Lessor and payable to City of Corpus Christi, Aviation Department. The foregoing shall be in a
form and content satisfactory to Lessor, shall be conditioned upon satisfactory performance of all
terms, conditions and covenants, including maintenance requirements, contained herein during
the Term hereof and shall stand as security for payment by Lessee of all amounts due by Lessee
as a result of valid declarations of uncured default, as set forth herein, asserted by Lessor. The
amount of the ISLC shall be adjusted, as necessary, so that it shall at all times equal at least one
(1) year of the total estimated annual rentals, fees and charges payable by Lessee to Lessor
hereunder. The ISLC shall not be subject to reduction in coverage or cancellation. If the available
Page 11 of 36
balance on the ISLC falls below the amount required herein, Lessor agrees to replenish it to the
full required amount within seven (7) days of it falling below the full required amount. Failure to
replenish the ISLC as stated herein constitutes default of the Lease. The surety on the ISLC must,
by appropriate notation thereon, stipulate and agree that no change, extension of time, alteration
or addition to the terms of this Lease in any way affects its obligations under the ISLC and
consents to waive notice of any such matters. An irrevocable letter of credit, as described above,
must be valid for six (6) months or more and require, as sole documentation for payment, a
statement in writing from the Aviation Director setting forth (i) the circumstances of a valid
declaration of default giving rise to the call on the letter of credit or (ii) a statement of the failure
to furnish proof of renewal or replacement of the letter of credit no less than thirty (30) days prior
to the expiration of the then current letter of credit, and accompanied by a properly drawn draft in
an amount not to exceed the face value of the letter of credit.
8.02 Lessee hereby gives to Lessor a lien upon all of its property now, or at any time hereafter,
in or upon the Leased Premises, to secure the prompt payment of charges herein stipulated to be
paid for the use of said Premises; all exemptions of such property, or any of it, being hereby
waived.
In the event that the amount of the performance guarantee provided by Lessee under the terms
of this Lease, at all times during the term hereof, shall equal the greater of the rents,
fees and charges payable by Lessee to Lessor for the current calendar
year or double the amount of the performance guarantee set forth in Section 8.01 above,
then the provisions set forth in Section 8.02 above, shall not apply hereto.
8.03 The performance guarantee required in Article 8 herein shall be in addition to the
performance bond or irrevocable standby letter of credit required to exercise the Option, as
described in Section 5.02 herein.
ARTICLE 9. MINIMUM STANDARDS
Lessor has adopted Minimum Standards ("Minimum Standards") and Rules and Regulations
("Rules and Regulations"), which shall govern Lessee in the use of the Leased Premises and all
common facilities, a copy of each of which has been furnished to Lessee and are incorporated
herein by reference. Lessee agrees to comply fully at all times with these governing documents.
Lessor, in its sole discretion, shall have the right to amend, modify and alter these Minimum
Standards and Rules and Regulations from time to time in a reasonable manner or may introduce
other regulations as deemed necessary for the purpose of assuring the safety, welfare,
convenience and protection of property of Lessor, Lessee and all other tenants and customers of
the Airport; provided, however, that Lessor shall give Lessee reasonable advance notice of any
such amendments, modifications or alteration of the Minimum Standards and/or Rules and
Regulations.
ARTICLE 10. FEES AND CHARGES
10.01 Fees and Charges.
(a) Fuel flowage fees shall be paid by Lessee to the Lessor for all fuel delivered to the
Leased Premises for dispensal by the Lessee to all categories of customers except any signatory
airline paying a landing fee at the Airport, in the amount per gallon, subject to atmospheric
adjustments, now or hereafter set by the Aviation Director, as may be adjusted periodically. The
fees and charges in effect as of the Commencement Date of this Lease are set forth in EXHIBIT
5 attached hereto. Lessee agrees to keep accurate books, records and accounts of its purchase
Page 12 of 36
and sale of aircraft fuel delivered to its customers on the Airport premises. Lessee agrees to remit
to the Aviation Director payment and related delivery tickets provided by the various suppliers as
to the amount of aircraft fuel delivered to the Leased Premises, by the 10th day of the month
following such delivery. If no such delivery is made during a particular month, Lessee shall provide
the Aviation Director with a written statement to that effect.
(b) Any City controlled ramp related uses by Lessee that are not included in the
Leased Premises shall be for public use and subject to a Ramp Fee, as set forth in EXHIBIT 5
attached hereto. The Ramp Fee shall be set annually by the City for use of City controlled ramp.
Lessee or sub lessee shall remit to the City seventy-five percent (75%) of all revenues received
for use of City controlled ramp or equivalent charges within ten (10) days following the end of the
month in which the ramp was utilized, accompanied by an accounting of all City controlled ramp
rental activity. Lessee shall retain the remaining twenty-five percent (25%) of such revenues as
consideration for Lessee's management of said City controlled ramp rental and collection of
resulting revenues. The City retains the right to enter upon City controlled ramp at any time and
to take an inventory of any aircraft parked on the City controlled ramp, as well as a right to audit
Lessee's or sub lessee's accounting of City controlled ramp rental activity. Lessee or sub lessee
cannot charge any fees for use of the City controlled ramp other than the Ramp Fee set by the
City for use of City controlled ramp and cannot waive any fees set by the City and due to the City
for use of City controlled ramp without City's written approval.
(c) Fees and charges for miscellaneous items and services provided by the City,
including, but not limited to, employee badges, shall be assessed by the City in connection with
the ordinary usage of Airport facilities (hereafter "City Fees," set forth in EXHIBIT 5 attached
hereto).
(d) All rentals, fees and charges payable by Lessee to Lessor under the terms hereof,
whether or not expressly denominated as rent, shall constitute rent for all purposes, including, but.
not limited to, purposes of the United States Bankruptcy Code.
(e) For those services or functions listed in EXHIBIT 5 attached hereto, Lessee cannot
charge fees to their customers that are in excess of the applicable fees and charges that are
approved by the City, as amended from time to time, set forth in EXHIBIT 5 attached hereto.
10.02 Proceeds Rent.
(a) Lessee covenants and agrees to pay as additional Rent hereunder an amount
equal to three percent (3%) of any Gross Proceeds (as hereinafter defined) from a Sale (as
hereinafter defined) of the Lessee's Leasehold Interest in the Leased Premises, or any portion
thereof, as the case may be, at the times and in the manner hereinafter set forth (the "Proceeds
Rent"). This section 10.02 applies only to the sale of Lessee's Leasehold Interest in the Leased
Premises, or any portion thereof, at Corpus Christi International Airport and no other location.
(b) Payments of the Proceeds Rent shall be paid immediately upon a Sale as follows:
upon the Closing and payment of the total purchase price in a Sale, accompanied by a certificate
of the chief financial officer of the Lessee as to the amount of Gross Proceeds of the Sale. At the
election of the City, the City and the Lessee shall coordinate payment of the Proceeds Rent
through an escrow.
(c) Lessee shall, at the time of any such Sale, deliver to the City a statement certifying
the amount of the Gross Proceeds for such Sale and the amount of the Proceeds Rent due and
payable to the City. Such statement shall set forth in detail reasonably satisfactory to the City the
Page 13 of 36
computation of Gross Proceeds, and Proceeds Rent therefor, together with such other information
as the City may deem reasonably necessary for the determination of the Proceeds Rent, such as
the purchase agreement and/or sale closing statement. Except for such changes as are
necessary to calculate the Gross Proceeds from the Sale, the statements required above shall be
prepared in accordance with generally accepted accounting principles on the accrual basis
consistently applied and otherwise in such manner as the City shall have approved in writing.
(d) For purposes of this Section, capitalized terms set forth below shall have the
meanings ascribed to them below:
"Beneficial Interest" shall mean the interest of the Beneficiary in any trust of which
it is beneficiary, if the Lessee is ever a land trust.
"Beneficiary" shall mean the Beneficiary under a trust which at any time the Lessee
is a trustee under a land trust.
"Gross Proceeds" shall mean the purchase price in a Sale (including, without
limitation, (1) the principal and interest of any financing to which the Sale is subject or which is
assumed by the Lessee and (2) the fair market value of any consideration consisting of property
other than cash).
"Leasehold Interest" shall mean the Lease between the City and Lessee and all
resulting income streams and contracts resulting from Lessee's use of the Leased Premises, as
defined herein.
"Sale" shall mean (i) a sale, assignment, transfer or other conveyance of any
portion of Lessee's interest under this Lease (including an assumption and assignment of the
Lease by Lessee as debtor or debtor in possession or by a trustee in bankruptcy acting on behalf
of Lessee) and/or in the Leased Premises or any portion of the Leased Premises; (ii) execution
and delivery of a contract to convey any portion of Lessee's interest under this Lease upon
payment of part or all of the purchase price which is accompanied by a transfer of possession
and the risks and benefits of ownership to the purchaser; or (iii) a transaction or series of related
transactions involving Lessee which has the economic equivalence to the owners of interests in
Lessee as a transaction described as a Sale, regardless of the form of such transaction, whether
by sales of direct or indirect interests in Lessee(including,without limitation, sales or other transfer
of any membership interests in Lessee or in any constituent members of Lessee or in any
corporate stock, partnership interests or Beneficial Interests in any future tenant organized as a
corporation, partnership or trust, respectively, or in any constituent shareholders, partners or
Beneficiaries thereof) or sales of assets by an entity which owns Lessee's interest under this
Lease and other property.
(e) The City shall not, as a result of the rights granted herein to receive Proceeds Rent,
be considered as a co-owner, co-partner or co-adventurer with Lessee in the Leased Premises.
(f) The Lessee shall not be required to pay Proceeds Rent on its receipt of proceeds
from business interruption or loss of rents insurance payments.
ARTICLE 11. PRIVILEGES AND CONDITIONS
11.01 Lessor hereby grants to Lessee and any assignees and/or sub lessees pursuant to Article
26 herein, the following general, non-exclusive privileges, uses and rights, subject to the terms,
Page 14 of 36
conditions and covenants herein set forth:
(a) The general use by Lessee, for commercial aviation activities, of all common
aircraft facilities and improvements, which are now, or may hereafter be, connected with or
appurtenant to said Airport, except as hereinafter provided. "Common airport facilities" shall
include all necessary landing area appurtenances, including, but not limited to, approach areas,
runways, taxiways, unleased aprons provided for in 10.01(b) of this Lease, public roadways,
sidewalks, navigational and aviation aids, the airfield lighting facilities, terminal facilities or other
common or public facilities appurtenant to said Airport.
(b) The right of ingress to and egress from the Leased Premises, over and across
common or public roadways serving the Airport for Lessee and sub lessees, its agents,
contractors, employees, patrons, invitees, suppliers of service and furnishers of material. Said
right shall be subject to such ordinances, rules and regulations as now, or may hereafter, apply
at the Airport.
(c) Lessee must remain in compliance at all times with all FAA, Department of
Homeland Security and all other governmental organizations with jurisdiction over the Airport as
well as all rules, laws and regulations as may be amended from time to time.
11.02 The granting and acceptance of this Lease is conditioned upon compliance with the
covenant that the right to use said common Airport facilities, in common with others so authorized,
shall be exercised subject to and in accordance with the laws of the United States, State of Texas
and City of Corpus Christi, the rules and regulations promulgated by their authority with reference
to aviation and navigation, and all reasonable and applicable rules, regulations and ordinances of
Lessor, now in force or hereafter prescribed or promulgated by charter authority or by law, as may
be amended from time to time.
11.03 Lessor reserves the right to enter the Leased Premises at any reasonable time for the
purpose of inspecting same or verifying that fire, safety, sanitation regulations and other
provisions contained in this Lease are being adhered to by Lessee.
ARTICLE 12. AS IS ACCEPTANCE AND CONDITION OF PREMISES
12.01 The parties agree that this Lease is granted by Lessor, at Lessee's request, and that the
Leased Premises were formerly and presently are leased to and occupied by Lessee .
12.02 Lessee has had full opportunity to examine the Leased Premises and to review the
structural report prepared by engineering firm PGAL, dated November, 2010, attached hereto as
EXHIBIT 3 and incorporated into this Lease. Except for environmental matters not caused by or
reasonably discoverable by Lessee prior to the commencement of this Lease, Lessee's taking
possession of the Leased Premises shall be conclusive evidence of Lessee's acceptance thereof
in an "AS IS" condition, and Lessee hereby accepts same in its present condition as suitable for
the purpose for which leased.
12.03 Lessee agrees that no representations respecting the condition of the Leased Premises
and no promises to improve same, either before or after the execution hereof, have been made
by Lessor or its agents to Lessee, unless contained herein or made a part hereof by specific
reference.
Page 15 of 36
ARTICLE 13. CONSTRUCTION/CAPITAL IMPROVEMENT BY LESSEE
13.01 Lessee shall have the right to erect, alter, remodel and renovate buildings and make other
improvements as Capital Improvements on the Leased Premises, provided that it shall submit to
the Aviation Director plans and specifications prepared by registered architects and engineers
setting forth the renovations, construction, alterations or improvements that Lessee desires to
perform, in such detail as may be reasonably required by the Aviation Director, and provided that
approval of such plans and specifications by said Director is obtained as set forth below. In
addition to the requirements herein, approval of any Capital Improvement Plan shall be pursuant
to section 5.02 herein.
13.02 Lessor agrees to examine and approve or disapprove plans and specifications submitted
in accordance with the provisions above, within thirty (30) calendar days after receipt thereof, and
to give Lessee written notification of same. The approval by Lessor of such plans and
specifications refers only to the conformity of same to the general architectural plan for the Leased
Premises, as opposed to their architectural or engineering design. Lessor, by giving its approval,
assumes no liability or responsibility therefor or for any defect in any work performed according
to such plans and specifications. Lessee agrees not to commence any renovations, construction,
alterations or improvements until Lessor, through the Aviation Director, has given written approval
regarding Lessee's plans and specifications.
13.03 Further, prior to the commencement of any construction, Lessee shall procure any and all
additional approvals of the plans and specifications for its buildings and improvements required
by any federal, state or municipal authorities, agencies, officers and departments having
jurisdiction thereof and shall obtain any and all requisite building or construction licenses, permits
or approvals. Construction shall comply with applicable building code requirements and with
applicable regulations promulgated by any federal, state or municipal agency or department
having jurisdiction thereof. Lessee specifically agrees that it shall hold Lessor completely
harmless from and against any and all claims, causes of action or liabilities, whether actual or
potential, associated with any construction undertaken by Lessee hereunder.
13.04 The cost of any renovations, construction, alterations or improvements upon the Leased
Premises shall be borne and paid for solely by Lessee. Except as may be otherwise set forth
herein, Lessor has no financial or other obligation of any kind under this Lease, other than the
renting to Lessee of the Leased Premises which are the subject hereof for the term and
consideration hereinbefore set forth.
13.05 Upon completion of all renovations, construction, alterations or improvements, a
conformed set of"as built" plans and a Certificate of Occupancy shall be provided by Lessee to
the Aviation Director.
13.06 In undertaking any such renovations, construction, alterations or improvements, it is
expressly understood that, where applicable, unless otherwise agreed to in writing by the parties,
Lessee shall be responsible, at its sole expense, for any and all construction and maintenance of
taxiways and connections to the Airport's runway and taxiway system, along an alignment and in
accordance with designs and plans approved in advance, in writing, by the Aviation Director. It is
further expressly understood and agreed that any improvements and access thereto constructed
by Lessee on the Leased Premises shall be performed in such a manner that shall not cause
flowage of surface drainage onto adjacent tracts or interrupt flow to the storm drainage system.
Page 16 of 36
13.07 Any construction of a Capital Improvement pursuant to this Article 13 may, at the option
of the Lessee be considered part of a Capital Improvement Plan and subject to the review and
approval procedures in Article 5 hereof.
ARTICLE 14. LIENS PROHIBITED
14.01 Lessee shall not suffer or permit any mechanics' or other liens to be filed against the fee
of the Leased Premises, or against Lessee's leasehold interest in the land, buildings or
improvements thereon, by reason of any work, labor, services or materials supplied, or claimed
to have been supplied, to Lessee or to anyone holding the Leased Premises, or any part thereof,
through or under Lessee.
ARTICLE 15. MAINTENANCE AND REPAIR
15.01 Lessee shall pay or cause to be paid any and all charges for water, heat, gas, electricity,
sewer and any and all other utilities used on the Leased Premises, throughout the term of this
Lease, including, but not limited to, any connection fees and any and all additional costs related
to utility connection, metering, maintenance, repair and usage.
15.02 Deferred Maintenance. Lessee shall complete all deferred Maintenance items identified
on EXHIBIT 4, attached hereto and incorporated into this Lease ("Deferred Maintenance"), no
later than eighteen (18) months from the Commencement Date of this Lease. In this respect, as
a point of reference, Lessee shall refer to the structural report prepared by PGAL, dated
November, 2010, attached hereto as EXHIBIT 3 and incorporated into this Lease, which shall be
considered the base condition of the Leased Premises from which Deferred Maintenance
requirements shall be measured.
The Aviation Director shall have thirty (30) calendar days after Lessee's completion of all
Deferred Maintenance items to object to any deficiencies thereof. If the Aviation Director does not
object in writing within such 30-day period, Lessor shall be deemed to have approved such
Deferred Maintenance. If, however, the Aviation Director objects within such 30-day period in
writing as to any deficiencies of the Deferred Maintenance completed, the Aviation Director and
Lessee agree to work together in good faith to resolve any such objections to the reasonable
satisfaction of both parties.
Deferred Maintenance completed pursuant to this Section 15.02 is in addition to the repair
and maintenance required in Sections 15.01, 15.03 and 15.04 herein.
15.03 In addition to the Deferred Maintenance required in Section 15.02 above, except as may
be otherwise provided herein, Lessee shall, throughout the term of this Lease, assume the entire
responsibility, cost and expense for all repair and Maintenance of the Leased Premises and all
buildings and improvements thereon, whether such repair or Maintenance be ordinary,
extraordinary, structural or otherwise, normal wear and tear excepted. In this respect, as a point
of reference, Lessee shall refer to the structural report prepared by PGAL, dated November, 2010,
attached hereto as EXHIBIT 3 and incorporated into this Lease, which shall be considered the
base condition of the Leased Premises from which any needed repairs shall be measured.
Additionally, without limiting the foregoing, Lessee shall:
(a) at all times maintain the buildings and improvements in a good state of repair and
preservation, excepting ordinary wear and tear and obsolescence in spite of repair; and
Page 17 of 36
(b) replace or substitute any fixtures and equipment which have become inadequate,
obsolete, worn out, or unsuitable, with replacement or substitute fixtures and equipment, free of
all liens and encumbrances, which shall automatically become a part of the buildings and
improvements and revert to City ownership at termination of this Lease, as provided for herein;
and
(c) at all times keep the Leased Premises, its buildings, improvements, fixtures,
equipment and personal property, in a clean and orderly condition and appearance; and
(d) provide, and maintain in good working order, all obstruction lights and similar
devices, fire protection and safety equipment, and all other equipment of every kind and nature
required by applicable laws, rules, orders, ordinances, resolutions or regulations of any competent
authority, including Lessor and Aviation Director; and
(e) observe all insurance regulations and requirements as required in Article 7 herein
concerning the use and condition of the Leased Premises,for the purpose of reducing fire hazards
and insurance rates on the Airport; and
(f) repair any damage caused by Lessee to paving or other surfaces of the Leased
Premises or the Airport, in connection with the scope of the Lease, caused by any oil, gasoline,
grease, lubricants, flammable liquids and/or substances having a corrosive or detrimental effect
thereon, or by any other reason whatsoever; and
(g) take measures to prevent erosion, including, but not limited to, the planting and
replanting of grass on all unpaved or undeveloped portions of the Leased Premises; the planting,
maintaining and replanting of any landscaped areas; the designing and constructing of
improvements on the Leased Premises; and the preservation of as many trees as possible,
consistent with Lessee's construction and operations; and
(h) be responsible for the maintenance and repair of all utility services lines serving
the Leased Premises, including, but not limited to, water and gas lines, electrical power and
telephone conduits and lines, sanitary sewers and storm sewers; and
(i) keep and maintain all vehicles and equipment operated by Lessee on the Airport
in safe condition, good repair, properly licensed and insured, as required by this Lease; and
(j) replace broken or cracked plate glass, repair roofing material as needed,
paint/repaint structures upon the Leased Premises and, where applicable, mow the grass; and
(k) provide and use suitable covered metal receptacles for all garbage, trash and other
refuse; assure that boxes, cartons, barrels or similar items are not piled in an unsightly, unsafe
manner, on or about the Leased Premises; promptly collect and remove all trash and foreign
materials from parking lots and Leased Premises; provide a complete and proper arrangement,
satisfactory to the Aviation Director, for the adequate sanitary handling and disposal (away from
the Airport), of all trash, garbage and refuse generated as a result of the operation of Lessee's
business;
(I) at the expiration or termination of this Lease, deliver the Leased Premises to
Lessor clean and free of trash and in good repair and condition, with all fixtures and equipment
situated in the Leased Premises in good working order, reasonable wear and tear excepted; and
Page 18 of 36
(m) within five (5) calendar days of receipt of Lessor's written request, Lessee shall
provide documentation such as invoices, contracts, proof of payment and other records
satisfactory to the Aviation Director as evidence of performance of major Maintenance.
15.04 Following consultation with Lessee, the adequacy of the performance of the foregoing
Maintenance and repair by Lessee shall be determined by the Aviation Director, whose
reasonably exercised judgment shall be conclusive. No more than thirty (30) days after
determining the inadequacy of such Maintenance or repair, the Aviation Director shall provide
Lessee a written request that Lessee remedy such inadequate Maintenance or repair. Should
Lessee fail to undertake any such Maintenance or repair within ten (10) days of receiving written
notice from the Aviation Director, or if Lessor performs any Maintenance or repair on behalf of
and for Lessee necessitated by Lessee's failure to start or complete Maintenance or repairs, then
the costs of such Maintenance or repair, plus any associated overhead reasonably determined
by Lessor, plus a 15% administrative fee, shall be reimbursed by Lessee to Lessor no later than
ten (10) days following receipt by Lessee of written demand from Lessor for same. In cases not
involving Maintenance or repair requiring exigent action, Lessor shall provide Lessee a written
request that Lessee perform such Maintenance or repair, at least thirty (30) days before Lessor
affects such Maintenance or repair on behalf of Lessee.
15.05 Any Maintenance or repair performed pursuant to this Article 15 will not be part of a Capital
Improvement plan.
15.06 The Capital Investment required to exercise an Option, as described in Section 5.02, shall
be in addition to the Deferred Maintenance and other Maintenance required in Article 15 herein.
ARTICLE 16. TITLE
16.01 It is expressly understood and agreed that any and all fixtures, furniture, equipment, and
improvements that may be reasonably removed, placed or maintained by Lessee in the Leased
Premises during the Term hereof shall be and remain Lessee's property, and the Leased
Premises returned to its original condition at the sole expense of Lessee, normal wear and tear
excepted. Provided that Lessee is not in default under this Lease, it may remove or cause to be
removed all such items from the Leased Premises, with any damage caused by such removal
repaired at the Lessee's sole expense. At Lessor's sole election, any such items remaining on
the Leased Premises more than ten (10) days after the expiration or termination of the term
hereof, shall then belong to Lessor without payment of consideration therefor.
16.02 Unless otherwise provided, all foundations, buildings, alterations, additions or
improvements ("Improvements") made upon the Leased Premises by Lessee are and shall be the
property of Lessee during the Term hereof. During said Term, absent the Aviation Director's
written approval, such Improvements shall be conveyed, transferred or assigned, only to a person
or entity to whom this Lease is being transferred or assigned, whereupon such Improvements
shall become the property of the holder of the leasehold interest hereunder. Absent such written
approval of the Director any attempted conveyance, transfer or assignment of Improvements, to
any person or entity, whether voluntary, by operation of law or otherwise, shall be void and of no
effect.
16.03 Title to Improvements made upon the Leased Premises by Lessee, and fixtures annexed
thereto, shall vest in and become the property of Lessor, at no cost to Lessor and without any
instrument of conveyance, upon the expiration of the Term of this Lease or upon earlier
termination thereof. Notwithstanding the foregoing, Lessee covenants and agrees, upon Lessor's
demand, on or after termination of the Lease, to execute any instruments requested by Lessor in
Page 19 of 36
connection with the conveyance of such Improvements. Lessor shall notify Lessee whether or not
Lessor intends take title to Improvements, or any portion thereof, as herein provided, at least sixty
(60) days prior to the expiration of the Term of this Lease or earlier termination thereof. Lessor's
failure to provide such notice, however, shall not act as a waiver of its rights hereunder; provided
that Lessor, within a reasonable time after receipt of Lessee's written request, advises Lessee of
its election hereunder. No obligations under this section herein are waived by the termination of
this Lease.
16.04 Should Lessor elect not to take title to Improvements, or any portion thereof, as provided
in Section 16.03 above, same shall be removed by Lessee, at its sole cost and risk, no later than
midnight of the expiration or termination date of the Lease, in compliance with all applicable laws
and regulations and, to the degree reasonably possible, the Leased Premises shall be restored
to the condition that existed prior to the construction of same, provided however, that Lessee shall
not be required to demolish or remove any building, structure or improvement that was the subject
of a Capital Improvement Plan. Should Lessee fail to undertake such removal within ninety (90)
days following the expiration or termination of this Lease, Lessor may undertake such removal at
Lessee's expense. The performance guarantee, required under this Lease, may not be applied
towards any costs incurred by Lessor for such removal.
ARTICLE 17. ENVIRONMENTAL COMPLIANCE
17.01 Lessee agrees that it shall, at its sole expense, comply with all applicable federal, state
and local statutes, laws, ordinances, rules and regulations concerning the use and operation of
all fuel storage facilities presently existing upon the Leased Premises, including, but not limited
to, regulations promulgated by the Environmental Protection Agency ("EPA") as well as all
inspection, financial liability and inventory control recording requirements of the EPA, and that it
shall provide Lessor with copies of certificates of registration from the Texas Commission on
Environmental Quality("TCEQ")for any existing fuel storage facilities, together with copies of any
required proof of financial responsibility and other documentation, such as an "Accord Form"
certificate of insurance applicable to above ground fuel storage tanks, income statements or
balance sheets, reasonably required by the Aviation Director or applicable regulatory agency. For
purposes of this provision, "facilities" are defined as any mobile or fixed, onshore building,
structure, installation, equipment, pipe, or pipeline used in fuel storage, fuel gathering, fuel
transfer, or fuel distribution.
17.02 During the Term of this Lease and any extensions thereof, should changes in applicable
statutes, laws, rules or regulations regarding fuel storage facilities and/or dispensing equipment
necessitate the removal, modification or replacement of any component, piping, valves, or
connections comprising part of the fuel storage facilities and/or dispensing equipment, potentially
including the entire fuel storage facilities, in, on, upon or under the Leased Premises, then such
removal, modification or replacement shall be timely undertaken and performed by Lessee, at its
sole cost and expense. Furthermore, if requested by Lessor, Lessee shall, no later than Midnight
of the termination or expiration of this Lease, at its sole cost, remove said fuel storage facilities,
dispensing equipment and/or component(s) thereof from the Leased Premises, perform any
required soil or other investigations, perform regulatory remediation and restore the Leased
Premises in a condition that complies with all applicable statutes, laws, rules, or regulations
governing fuel storage facilities. Provided, however, that if Lessee has made significant
improvements to such fuel storage facilities and/or dispensing equipment, as part of a Capital
Improvement Plan or as otherwise determined and approved by the Aviation Director, whose
approval shall not unreasonably be withheld, such removal by Lessee upon termination or
expiration shall not be required. Any such removal of Lessee's property shall be coordinated by
Lessee so that there is no unreasonable interference with Airport customers' use of the Airport or
Page 20 of 36
of other aeronautical service providers' use and occupancy of other areas at the Airport. In the
event Lessee plans to conduct any environmental remediation work on the Leased Premises,
Lessee shall give the Aviation Director and the aeronautical service providers adjacent to Lessee
written notice of the same, with a general description of the work to be conducted, including if
Lessee anticipates that such work will impact the use and occupancy of adjacent areas at the
Airport and, if so, how Lessee intends to minimize such impact. Following the termination or
expiration of this Lease, City will conduct a comprehensive environmental assessment to
determine compliance with TCEQ and/or EPA standards, at Lessee's sole expense, to reasonably
determine if any environmental pollution or contamination exists and, if so, an accepted
contamination removal program shall be implemented at Lessee's sole expense. Lessee or any
City approved sub lessee shall remain liable for any discharge if contamination is found at a future
date if such discharge is the responsibility of Lessee or sub lessee.
17.03 Lessee shall, in conducting any activity or business on the Leased Premises, including
environmental response or remedial activities, comply with all environmental laws, including, but
not limited to, those regarding the generation, storage, use, transportation and disposal of solid
wastes, hazardous materials, toxic chemicals, special wastes or other contaminants, and all laws,
regulations and notice requirements pertaining to releases or threatened releases of hazardous
materials, toxic chemicals, special wastes or other contaminants into the environment. Lessee
shall not cause the release, or permit its employees, agents, permittees, contractors,
subcontractors, sublessees, or others in Lessee's control, supervision, or employment, to release
(whether by way of uncapping, pouring, spilling, spraying, spreading, attaching or otherwise), into
or onto the Leased Premises or any other location upon or above the Airport (including the air,
ground and ground water thereunder and the sewer and storm water drainage systems thereon),
any quantity of hazardous substances (as defined or established from time to time by applicable
local, state, or federal law and including, among other things, hazardous waste and any other
substances that have been or may in the future be determined to be toxic, hazardous or unsafe).
To the extent any such release may exceed quantities or volumes permitted by applicable federal,
Texas or local law, Lessee shall immediately notify the Aviation Director, TCEQ, and Local
Emergency Planning Committee, as may be required under the federal Emergency Planning and
Community Right To Know Act. The Lessee, or any occupant of Leased Premises, shall be
responsible for compliance with said Act, in the event of any such release.
17.04 Lessee shall remedy any release or threatened release caused by Lessee's operations at
the Airport, as described above and, whether resulting from such release or otherwise, remove
any hazardous materials, special wastes and any other environmental contamination caused by
Lessee on, under or upon the Leased Premises, as may be required by a governmental or
regulatory agency responsible for enforcing environmental laws and regulations. Such work shall
be performed, at Lessee's sole expense, after Lessee submits to Lessor a plan, approved in
writing by the appropriate governmental or regulatory agency(ies) responsible for enforcing such
environmental laws and regulations, for completing such work. Lessor shall have the right to
review and inspect all such work at any time, using consultants and representatives of its choice,
at Lessor's sole cost and expense. Specific cleanup levels for any environmental remedial work
shall be designed to meet all of the applicable environmental laws and regulations, to the
satisfaction of the appropriate government or regulatory agency responsible for enforcing
environmental laws and regulations.
17.05 Lessee agrees to defend, indemnify and hold harmless Lessor, its
elected and appointed officials, officers, agents and employees, from and
against any and all reasonable losses, claims, liability, damages, injunctive
relief, injuries to person, property or natural resources, costs, expenses,
Page 21 of 36
enforcement actions, actions or causes of action, fines and penalties,
arising as a result of action or inaction of Lessee, its officers, employees,
sublessees, guests, invitees, agents or contractors, in connection with the
release, threatened release or presence of any hazardous material,
contaminants, or toxic chemicals at, on, under, over or upon the Leased
Premises or Airport, whether or not foreseeable. The foregoing indemnity
includes, without limitation, all reasonable costs at law or in equity for
removal, clean-up, remediation and disposal required to bring the Leased
Premises or Airport to be in compliance with, all applicable environmental
laws and regulations and all reasonable costs associated with claims for
damages to persons, property or natural resources arising out of Lessee's
use and occupancy of the Leased Premises or its operations at the Airport.
In the event that Lessor is named in any enforcement action or lawsuit by
any party in connection with the environmental condition of the Leased
Premises caused by the action or inaction of the Lessee, its officers,
employees, sublessees, guests, invitees, agents or contractors, Lessee
shall defend Lessor and indemnify and hold harmless Lessor from any
reasonable costs, damages, fines and penalties resulting therefrom.
Nothing in this Lease shall prohibit Lessee from pursuing contribution or indemnity for such
cleanup costs or remediation by other responsible parties and the Aviation Director shall provide
reasonable cooperation and coordination in such endeavors.
17.06 In addition to any other rights of access herein regarding the Leased Premises, Lessor
shall, upon reasonable notice, have access thereto in order to inspect and confirm that the Lessee
is using same in accordance with all applicable environmental laws and regulations. Lessee shall,
upon the Aviation Director's reasonable demand and at Lessee's sole expense, demonstrate to
said Director (through such tests, professional inspections, samplings, or other methods as may
be reasonably required by said Director) that Lessee has not caused or permitted any release of
hazardous substances or contaminants in excess of quantities or volumes permitted by applicable
federal, Texas or local law. Qualified independent experts, chosen by Lessee, subject to Lessor's
approval, which approval shall not be unreasonably withheld, shall conduct any such tests and
assessments. Lessee shall provide copies of reports from any such testing or assessments to
Lessor upon receipt. Should Lessee not provide same to Lessor after Lessor's written request
therefor, Lessor may conduct, or cause to be conducted, such tests, inspections, samplings and
assessments, and Lessee shall reimburse Lessor for all costs of such actions, no later than thirty
(30) days following receipt by Lessee of invoices therefor. Lessor reserves the right to conduct
any of the above actions, at the Aviation Director's discretion, when in the opinion of same,
additional or supplemental assessments are in Lessor's best interest.
17.07 Lessee, at Lessor's request, shall make available for inspection and copying, upon
reasonable notice and at reasonable times, any or all of the non-privileged documents and
materials Lessee has prepared pursuant to any environmental law or regulation, which may be
retained by Lessor or submitted to any governmental regulatory agency; provided, such
documents and materials relate to environmental regulatory compliance and pertain to the Airport
or the Leased Premises. If any environmental law or regulation requires Lessee to file any notice
or report of a release or threatened release of regulated materials on, under or about the Leased
Premises or the Airport, Lessee shall promptly submit such notice or report to the appropriate
Page 22 of 36
governmental agency and simultaneously provide a copy of such report or notice to Lessor. In
the event that any written allegation, claim, demand, action or notice is made against Lessee
regarding Lessee's failure or alleged failure to comply with any environmental law or regulation,
Lessee, as soon as practicable, shall notify Lessor in writing and provide same with copies of any
such written allegations, claims, demands, notices or actions so made.
17.08 The parties to this Lease, including the tenants or sublessees who may enjoy a future right
of occupation through Lessee, acknowledge a right and a duty in Lessor, exercised by the Aviation
Director, to review safety and potential environmental impacts of any proposed operation,
business, maintenance or other activity of the Lessee and its sublessees. To this end, said
Director shall have authority to disapprove an activity of the Lessee and/or any sublessee not
otherwise expressly permitted under this Lease, on the basis of a risk assessment. The parties
understand that Leased Premises are not intended for use involving refining, processing,
manufacturing, maintenance (other than aircraft maintenance and repair permitted hereunder or
as may be required by the Minimum Standards), overhaul, or similar heavy industrial activities
entailing use, storage, manufacture, or transport of critical volumes of regulated or hazardous
materials or toxic chemicals. For purposes of this Lease, "critical volumes" are those which pose
or may pose an unreasonable risk to Airport property, its occupants, employees or the traveling
public.
ARTICLE 18. SIGNS
Any signs installed on the Leased Premises shall be submitted to the Aviation Director for
approval prior to installation. Lessee shall neither erect signs nor distribute advertising matter
upon Airport Premises, without the prior written consent of the Aviation Director. All signage must
be in compliance with applicable City code standards and restrictions.
ARTICLE 19. REGULATIONS
Lessee's officers, agents, employees, contractors, subcontractors, tenants and subtenants shall
obey all rules and regulations promulgated by Lessor, its authorized agents in charge of the
Airport, or other lawful authority, to insure the safe and orderly conduct of operations and traffic
thereon.
ARTICLE 20. QUALITY OF SERVICES
Lessee shall, at all times, furnish good, prompt and efficient commercial aviation services, in
compliance with the applicable Minimum Standards, adequate to meet demand for same at the
Airport, furnish said services on a non-discriminatory basis to all users thereof, and charge non-
discriminatory prices for each unit of sale or service; provided, however, that Lessee will be
allowed to make reasonable and non-discriminatory discounts, rebates or other similar types of
price reductions to volume purchasers.
ARTICLE 21. TIME OF EMERGENCY
During time of war or national emergency, Lessor shall have the right to lease the landing area or
any part thereof to the United States for government use, and, if such lease is executed, the
provisions of this Lease, insofar as they are inconsistent with those of the Government lease,
shall be suspended.
Page 23 of 36
ARTICLE 22. SUBORDINATION OF LEASE & RIGHT OF RECAPTURE
22.01 This Lease shall be subordinate to the provisions of any existing or future agreement
between Lessor and the United States of America and/or the State of Texas regarding operation
or maintenance of the Airport, the execution of which has been or may be required as a condition
precedent to the expenditure of Federal or state funds for the development of the Airport. Should
the effect of such agreement with the United States be to take any of the property under lease, or
substantially alter or destroy the commercial value of the leasehold interest granted herein, Lessor
shall not be held liable therefore, but, in such event, Lessee may cancel this Lease upon ten (10)
days' written notice to Lessor. Notwithstanding the foregoing, Lessor agrees that, in the event it
becomes aware of any such proposed or pending agreement or taking, Lessor shall utilize its best
efforts to give the maximum possible notice thereof to Lessee.Any portion of the Leased Premises
recaptured from Lessee under this provision shall result in a proportionate abatement of rent as
of the date the recapture is effectuated.
22.02 Lessor shall have the right to recapture any or all of the Leased Premises to the extent
that such are necessary for the City's development, improvement, and or maintenance of the
Airport's runways and taxiways; for protection or enhancement of flight operations; or for other
development in compliance with any current or future Airport Master Plan and Airport layout plan.
In the event of any such recapture, Lessee and Lessor shall execute an amendment reflecting
a corresponding adjustment to the Leased Premises and rent, according to the then
applicable rental rates. In the event Lessee has made an investment in accordance with an
approved Capital Improvement Plan during the Initial Term of this Agreement or any extension
thereof and a portion or all of the Leased Premises are recaptured, the total Direct Construction
Costs for the approved Capital Improvement Plan associated with said Option shall be
amortized on a straight line basis over the term of that Option and a payment issued by the City
to the Lessee for the unamortized amount of the Direct Construction Costs for the approved
Capital Improvement Plan for the remaining balance of that Option term, with payment to be
made within sixty (60) days of such amendment.
ARTICLE 23. SECURITY
23.01 Lessee shall comply with all rules, regulations, statutes, orders, directives or other
mandates of the United States or State of Texas, regarding Airport security requirements or
measures. Additionally, Lessee shall comply with the Airport Security Program, as may be
amended from time to time, a copy of which will be provided by Lessor to Lessee upon
request. Lessor reserves the right to require Lessee to install access control system(s) and/or
surveillance cameras at all points of access from public areas to security-restricted areas. Airport
security officials must be able to access, inspect and monitor such access control system(s)
and/or surveillance cameras required by Lessor.
23.02 Lessee shall comply with all current and future mandates of the Transportation Security
Administration, or successor agency, for background investigations of its personnel.
23.03 Lessee shall indemnify and hold harmless Lessor, its officers,
officials, employees, and agents from any charges, fines or penalties that
may be assessed or levied by any department or agency of the United
States or State of Texas, by reason of Lessee's failure to comply with any
applicable security provision and/or requirement for compliance set
Page 24 of 36
forth herein. Lessee is responsible for payment of all such fines and
penalties.
ARTICLE 24. DEFAULT AND REMEDIES
24.01 Each of the following shall constitute an event of default by Lessee or its parent company,
successor company or related company(ies):
(a) Lessee shall fail to pay any rent as provided for in this Lease and such failure shall
continue for a period of ten (10) days after receipt by Lessee of written notice thereof.
(b) Lessee shall neglect or fail to perform or observe any of the terms, provisions,
conditions or covenants herein contained, and if such neglect or failure should continue for a
period of thirty (30) days after receipt by Lessee of written notice of same, or if more than thirty
(30) days shall be required because Of the nature of the default, if Lessee shall fail within said
thirty(30) day period to commence and thereafter diligently proceed to cure such default.
(c) Lessee shall become insolvent; take the benefit of any present or future insolvency
statute; make a general assignment for the benefit of creditors; file a voluntary petition in
bankruptcy or a petition or answer seeking a reorganization or the readjustment of its
indebtedness under the federal bankruptcy laws, or under any other law or statute of the United
States or of any state thereof; or consent to the appointment of a receiver, trustee or liquidator of
all or substantially all of its property.
(d) An Order of Relief shall be entered, at the request of Lessee or any of its creditors,
under federal bankruptcy, reorganization laws or any law or statute of the United States or any
state thereof.
(e) A petition under any part of the federal bankruptcy laws, or an action under any
present or future insolvency law or statute, shall be filed against Lessee and shall not be
dismissed within thirty (30) days after the filing thereof.
(f) Pursuant to, or under the authority of, any legislative act, resolution, rule, or any
court, governmental, agency or board order or decree or officer, a receiver, trustee, or liquidator
shall take possession or control of all or substantially all of the property of Lessee and such
possession or control shall continue in effect for a period of fifteen (15) days.
(g) Lessee shall become a corporation in dissolution or voluntarily or involuntarily
forfeit its corporate charter.
(h) The rights of Lessee hereunder shall be transferred to, pass to or devolve upon,
by operations of law or otherwise, any other person,firm, corporation or other entity, in connection
with or as a result of any bankruptcy, insolvency, trusteeship, liquidation or other proceeding or
occurrence described in Paragraphs c through g of this Section 24.01.
(i) Lessee shall voluntarily discontinue its operations at the Airport for a period of
ninety (90) consecutive days.
(j) If Lessee sells, transfers or assigns this Lease to or is sold, transferred or assigned
a lease from any entity or organization that has an interest in any other FBO operating at the
Airport.
Page 25 of 36
24.02 In the event any default shall occur, Lessor then, or at any time thereafter, but prior to the
removal of such condition of default, shall have the right, at its election, either to terminate this
Lease and/or any sublease agreements that Lessee may have, by giving at least five (5) days
written notice to Lessee, at which time Lessee will then quit and surrender the Leased Premises
to Lessor, but Lessee shall remain liable as herein provided, or enter upon and take possession
of the Leased Premises (or any part thereof in the name of the whole), without demand or notice,
and repossess the same as of the Lessor's former estate, expelling Lessee and those claiming
under Lessee, forcibly if necessary, without prejudice to any remedy for arrears of rent or
preceding breach of Lease.
24.03 Lessor's repossession of the Leased Premises shall neither be construed as an election
to terminate this Lease and/or any sublease agreements that Lessee may have nor shall it cause
a forfeiture of rents or other charges remaining to be paid during the balance of the term hereof,
unless a written notice of such intention be given to Lessee, or unless such termination is decreed
by a court of competent jurisdiction.
24.04 Upon repossession, Lessor shall have the right, at its election, whether or not this Lease
and/or any sublease agreements that Lessee may have shall be terminated, to relet the Leased
Premises or any part thereof for such period(s), which may extend beyond the term hereof, at
such rent and upon such other terms and conditions as Lessor may, in good faith, deem advisable.
Notwithstanding any law or anything contained herein to the contrary, to the full extent permitted
under applicable law, Lessee and Lessor agree that Lessor's duty to relet the Leased Premises
or otherwise to mitigate damages hereunder shall be limited to those requirements set forth in the
Texas Property Code, as amended. Lessor shall in no event be liable, and Lessee's and sub
lessees' liability shall not be affected or diminished whatsoever, for failure to relet the Leased
Premises, or in the event the Leased Premises are relet, for failure to collect any rental under
such reletting, so long as the Lessor uses objectively reasonable efforts to comply with said
Property Code. Lessor and Lessee agree that any such duty shall be satisfied and Lessor shall
be deemed to have used objective reasonable efforts to relet the Leased Premises and mitigate
Lessor's damages by: (a) posting a "For Lease" sign on the Leased Premises; (b) advising
Lessor's lease agent, if any, of the availability of the Leased Premises; and (c) advising at least
one (1) outside commercial brokerage entity of the availability of the Premises.
24.05 In the event that Lessor elects to relet, rentals received by same from such reletting shall
be applied: first, to the payment of any indebtedness, other than rent due hereunder from Lessee
under this Lease; second, to the payment of any cost of such reletting; third, to the payment of
rent due and unpaid hereunder; and finally, the residue, if any, shall be held by Lessor and applied
hereunder. Should that portion of such rentals received from such reletting during any month,
which is applied to the payment of rent hereunder, be less than the rent payable during that month
by Lessee hereunder, then Lessee shall pay such deficiency to Lessor. Such deficiency shall be
calculated and paid monthly. Lessee shall also pay to Lessor, as soon as ascertained, any costs
and expenses incurred by Lessor in such reletting not covered by the rentals received from such
reletting of the Leased Premises.
24.06 If Lessor shall terminate this Lease or take possession of the Leased Premises by reason
of a condition of default, Lessee and those holding under Lessee, shall forthwith remove their
goods and effects from the Leased Premises. If Lessee or any such claimant shall fail to effect
such removal forthwith, Lessor may, without liability to Lessee or those claiming under Lessee,
remove such goods and effects and store same for the account of Lessee or of the owner thereof
at any place selected by Lessor, or, at Lessor's election, and upon giving fifteen (15) days' written
notice to Lessee of date, time and location of sale, Lessor may sell the same at public auction or
private sale on such terms and conditions as to price, payment and otherwise, as Lessor in its
Page 26 of 36
sole discretion may deem advisable. If, in Lessor's judgment, the cost of removing and storing, or
of removing and selling any such goods and effects, exceeds the value thereof or the probable
sale price thereof, as the case may be, Lessor shall have the right to dispose of such goods in
any manner Lessor may deem advisable.
24.07 Lessee shall be responsible for all costs of removal, storage and sale, and Lessor shall
have the right to reimburse the Airport from the proceeds of any sale for all such costs paid or
incurred by Lessor. If any surplus sale proceeds remain after such reimbursement, Lessor may
deduct from such surplus any other sum due to Lessor hereunder and shall pay over to Lessee
any remaining balance of such surplus sale proceeds.
24.08 If Lessor shall enter into and repossess the Leased Premises as a result of Lessee's
default in the performance of any of the terms, covenants or conditions herein contained, then
Lessee hereby covenants and agrees that it will not claim the right to redeem or re-enter the said
Premises to restore the operation of this Lease , and Lessee hereby waives the right, and the
right of any party claiming through or under Lessee, to such redemption and re-entrance under
any present or future law, and does hereby further, for any party claiming through or under
Lessee, expressly waive its right, if any, to make payment of any sum or sums of rent, or
otherwise, of which Lessee shall have made default under any of the covenants of the Lease and
to claim any subrogation of the rights of Lessee under these presents, or any of the covenants
thereof, by reason of such payment.
24.09 All rights and remedies of Lessor herein created or otherwise existing at law are
cumulative, and the exercise of one or more rights or remedies shall not be taken to exclude or
waive the right to the exercise of any other. All such rights and remedies may be exercised and
enforced concurrently, whenever and as often as deemed desirable.
24.10 If proceedings shall, at any time, be commenced for recovery of possession, as aforesaid,
and compromise or settlement shall be effected either before or after judgment whereby Lessee
shall be permitted to retain possession of the Leased Premises, then such proceeding shall not
constitute a waiver of any condition or agreement contained herein or of any subsequent breach
thereof or to this Lease.
24.11 Any amount paid or expense or liability incurred by Lessor for the account of Lessee may
be deemed to be additional rental and the same may, at the option of Lessor, be added to any
rent then due or thereafter falling due hereunder.
ARTICLE 25. HOLDING OVER
It is agreed and understood that any holding over by Lessee or sub lessee, with Lessor's written
consent, at sole discretion of Lessor, after the termination of this Lease, shall not renew and
extend same, but shall operate and be construed as a tenancy from month-to-month, not to
exceed six (6) months, upon all the terms and conditions set forth herein, except that rental shall
be paid to Lessor by Lessee for all buildings on the Leased Premises at one hundred twenty-five
percent (125%) the then current rents, fees and charges in effect as of the end of the primary
term of this Lease or the ground rental rate established through appraisal, whichever is greater.
Lessee shall be liable to Lessor for all loss or damage resulting from such holding over against
Lessor's will after the termination of this Lease, whether such loss or damage may be
contemplated at this time or not. It is expressly agreed that acceptance of the foregoing rental by
Lessor, in the event that Lessee fails or refuses to surrender possession, shall not operate to
give Lessee any right to remain in possession beyond the period for which such amount has been
paid nor shall it constitute a waiver by Lessor of its right to immediate possession thereafter.
Page 27 of 36
ARTICLE 26. ASSIGNMENT AND SUBLET
26.01 Lessee shall not transfer or assign this Lease or Lessee's interest in or to the Leased
Premises, or any part thereof, without having first obtained Lessor's prior written consent, which
may be given only by or pursuant to an ordinance enacted by the City Council of the City of Corpus
Christi, Texas. Lessee may not assign or sublet this Lease to any other FBO operating at the
Airport or to any entity or organization that has any financial, equity or ownership interest in any
other FBO operating at the Airport. Notwithstanding the foregoing and for so long as any pledge
or collateral assignment of Lessee's interest in the Lease shall be by instrument substantially in
such form as shall have previously been approved by the City Council, the consent of Lessor to
such pledge or collateral assignment may be given by Lessor acting by and through the Aviation
Director.
26.02 Lessor acknowledges and agrees that the subletting of hangar, office, shop and ramp
space comprises a routine and material part of Lessee's business operations. In the event Lessee
subleases any such space, Lessee shall submit to the Director a copy of the applicable sublease
agreement(s) and of all agreement(s) collateral thereto. The identity of the sublessee, the area or
space to be subleased, the rental to be charged and the type of business to be conducted shall
be specified in any such sublease. In the alternative, at the election of the Director, Lessee shall
instead periodically submit to the Director a schedule of all subtenants occupying space upon the
Leased Premises, with such other detail as may be reasonably requested.
26.03 Should the subletting of the Leased Premises be approved by Lessor, however, Lessee
agrees and acknowledges that it shall remain fully and primarily liable under this Lease,
notwithstanding any such sublease and that any such sublessee shall be required to attorn to
Lessor hereunder.
26.04 The receipt by the Lessor of rent from an assignee, subtenant or occupant of the Leased
Premises shall not be deemed a waiver of the covenant in this Lease against assignment and
subletting or an acceptance of the assignee, subtenant or occupant as a tenant or a release of
the Lessee from further observance or performance by Lessee of the covenants contained in this
Lease. No provision of this Lease shall be deemed to have been waived by the Lessor, unless
such waiver is in writing, signed by the Aviation Director.
ARTICLE 27. FIRE AND OTHER DAMAGE
27.01 In the event the Premises shall be partially damaged by fire or other casualty through no
fault of Lessee, Lessee shall give immediate notice thereof to Lessor and the same shall be
repaired, at Lessor's expense, without unreasonable delay, unless Lessor determines that the
damage is so extensive that repair or rebuilding is not feasible. From the date of such casualty
until repair, monthly rents, fees and charges hereunder shall abate based on the proportion of the
Premises destroyed, or rendered untenantable, bears to the total Premises; provided, however,
that if said Premises shall be so slightly damaged in any such way so as to be rendered usable,
the rent hereunder shall not cease or be abated during any repair period. In the event that the
damage to the Premises, by fire or other casualty, is so extensive that the Premises is rendered
wholly unusable, and such damage to the Premises, in the exclusive judgment of Lessor, makes
occupancy and use to be impractical, then at the option of the Lessor, and upon notice to Lessee,
this Lease, as it applies to said Premises, shall cease, and the rent hereunder shall be apportioned
and paid up to date of such damage. If Lessor elects to restore the Premises, Lessor shall notify
Page 28 of 36
Lessee of such intention within thirty (30) days of the date of the damage, otherwise the Lease,
as applicable to said Premises, shall be deemed canceled and of no further force or effect.
27.02 Lessor's obligations to rebuild or repair under this Article shall, in any event, be limited to
restoring said Premises to substantially the condition that existed prior to the commencement of
improvements, if any, performed by Lessee and shall further be limited to the extent of the
insurance proceeds available to Lessor for such restoration. Lessee agrees that if Lessor elects
to repair or rebuild as set forth in this Article, then Lessee will proceed with reasonable diligence,
at its sole cost and expense, to rebuild, repair and restore its improvements, signs, fixtures,
furnishings, equipment and other items provided or installed by Lessee in or about the Leased
Premises in a manner and to a condition at least equal to that which existed prior to the damage
or destruction.
ARTICLE 28. LAWS AND ORDINANCES
Lessee agrees to comply promptly with all laws, ordinances, orders and regulations affecting the
Leased Premises, including, but not limited to, those related to its cleanliness, safety, operation,
security, environmental, use and business operations. Lessee shall comply with all Federal, State
and local regulations concerning its operation on the Airport and shall indemnify and hold
harmless Lessor, its officers and employees, from any charges, fines or
penalties that may be assessed or levied by any department or agency of
the United States, the State of Texas, or any other governmental agencies,
or their successor agencies, with jurisdiction over the Airport by reason of
Lessee's failure to comply with the terms of this Article or with any other
terms set forth in this Lease.
ARTICLE 29. TAXES AND LICENSES
Lessee shall, at its sole cost and expense, pay on or before their respective due dates, to the
appropriate collecting authority, all Federal, State and local taxes and fees, which are now or may
hereafter be levied upon the Lessee, Leased Premises, the business conducted thereon or upon
any of Lessee's property used in connection therewith including, but not limited to, any possessory
interest taxes. Lessee shall also maintain and provide to the City upon request, in current status,
all Federal, State and local licenses and permits required for the operation of its business.
ARTICLE 30. NONDISCRIMINATION &AFFIRMATIVE ACTION REGULATIONS
30.01 Any discrimination by Lessee, its sublessees, agents or employees, based on race, color,
creed, sex, age, religion, national origin or handicap, in employment practices, use of or admission
to the Leased Premises, is prohibited.
30.02 Lessee for itself, its successors and assigns, as a part of the consideration hereof, does
hereby covenant and agree, as a covenant running with the Lease, that in the event facilities are
constructed, maintained or otherwise operated on the Leased Premises, for a purpose for which
a DOT program or activity is extended or for another purpose involving the provision of similar
services or benefits, Lessee shall maintain and operate such facilities and services in compliance
with all other requirements imposed pursuant to 49 CFR pt 21, Nondiscrimination in Federally
Assisted Programs of the Department of Transportation, and as said Regulations may be
amended.
Page 29 of 36
30.03 Lessee for itself, its successors and assigns, as a part of the consideration
hereof, does hereby covenant and agree, as a covenant running with the Lease, that: (a) no
person, on the grounds of race, color, creed, sex, age, religion, national origin or handicap, shall
be excluded from participation in, denied the benefits of, or be otherwise subjected to
discrimination, in the use of said facilities; (b) that in the construction of any improvements on,
over or under such land and the furnishing of services thereon, no person on the grounds of race,
color, creed, sex, age, religion, national origin or handicap shall be excluded from participation,
denied the benefits of, or otherwise be subjected to discrimination; and (c) that Lessee shall use
the Leased Premises in compliance with all other requirements imposed by or pursuant to 49 CFR
pt 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, and
as said Regulations may be amended.
30.04 Lessee agrees that it will comply with applicable statutes, Executive Orders and such rules
as are promulgated by applicable state, federal or municipal agencies to assure that no person
shall be excluded from participating in any activity conducted with or benefiting from Federal
assistance on the basis of race, creed, color, national origin, sex age, or handicap. Lessee, is
successors and assigns, shall be obligated to comply with the provisions of this Section 30.04 for
the period during which Federal assistance is extended to the Airport during the Term of this
Lease, except where Federal assistance is to provide, or is in the form of personal property or
real property or interest therein or structures of improvements thereon. In these cases, this
Section 30.04 shall apply to Lessee, its successors and assigns, through the later of: (a) the
period during which such property is used by Lessor, its successors and assigns for a purpose
for which Federal assistance is extended, or for another purpose involving the provision of similar
services or benefits; or (b) the period during which Lessor, its successors or assigns, retains
ownership or possession of the Leased Premises.
ARTICLE 31. WAGES and EMPLOYMENT
Lessee shall comply with all federal, state and local wage and employment laws, ordinances,
rules and regulations. All employees must be legally employable in the United States.
ARTICLE 32. FORCE MAJEURE
If either party shall be delayed or prevented from the performance of any act required hereunder
by reason of acts of God, strikes, lockouts, labor troubles, war, terrorism, inability to procure
materials, restrictive governmental laws or regulations or other cause, without fault and beyond
the control of the party obligated (the financial inability of the party excepted), performance of
such act shall be extended by a period equal to the period of such delay; provided, however, that
nothing in this paragraph shall excuse Lessee from the prompt payment of any rental except as
may be expressly provided otherwise in this Lease; and further provided that the party relying on
this paragraph shall provide written notice to the other party notifying such other party of the force
majeure event promptly after such force majeure event, and shall proceed with all diligence to
complete the performance of the act upon the cessation of the force majeure event.
ARTICLE 33. ATTORNEYS' FEES
Excluding an action to enforce the indemnification provisions of this Lease Agreement, in the
event that Lessor or Lessee brings an action under this Lease to enforce this Lease, each party
shall be responsible for their own attorneys' fees incurred in the defense or prosecution thereof.
Page 30 of 36
ARTICLE 34.SEVERABILITY
If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future
laws, it is the parties' intention that the remainder hereof not be affected. In lieu of each clause or
provision that is illegal, invalid or unenforceable, the parties intend that there be added, as a part
of this Lease, a clause or provision, as similar in terms to such illegal, invalid or unenforceable
clause or provision, as may be possible, yet be legal, valid and enforceable.
ARTICLE 35. AMENDMENT
This Lease, together with its authorizing ordinance, constitutes the entire agreement between the
parties. No amendment, modification or alteration of the terms of this Lease shall be binding,
unless the same is in writing, dated subsequent to the date hereof and duly executed by the
parties hereto.
ARTICLE 36. NOTICES
Notices to City provided for in this Agreement shall be sufficient if sent by registered
or certified mail, postage prepaid, addressed to the Aviation Director, Corpus Christi
International Airport, 1000 International Drive, Corpus Christi, Texas 78406; and notices to
Lessee shall be sufficient if sent by registered or certified mail, postage prepaid, addressed to:
Signature Flight Support Corporation
Attn: General Manager
574 Hangar Lane
Corpus Christi, Texas 78406
with a copy to:
Signature Flight Support Corporation
Attn: General Counsel
201 South Orange Avenue, Suite 1100
Orlando, Florida 32801
or to such other respective addresses as the parties may designate to each other in writing
from time to time.
ARTICLE 37. RELATIONSHIP OF PARTIES
Nothing contained herein shall be deemed or construed by the parties hereto, or by any third
party, as creating the relationship of principal and agent, partners, joint venturers or any other
similar such relationship, between the parties hereto. It is understood and agreed that neither the
method of computation of rent, nor any other provision contained herein, nor any acts of the
parties hereto, creates a relationship other than one of Lessor and Lessee.
ARTICLE 38. CUMULATIVE REMEDIES
NO WAIVER - NO ORAL CHANGE
The specific remedies of the parties under this Lease are cumulative and do not exclude any other
remedies to which they may be lawfully entitled, in the event of a breach or threatened breach
hereof. The failure of either party ever to insist upon the strict performance of any covenant of this
Page 31 of 36
Lease, or to exercise any option herein contained, shall not be construed as its future waiver or
relinquishment thereof. Lessor's receipt of a rent payment, with knowledge of the breach of any
covenant hereof, shall not be deemed a waiver of such breach. Further, no waiver, change,
modification or discharge by either party of any provision of this Lease shall be deemed to have
been made or be effective, unless in writing and signed by the party to be charged. In addition to
other remedies herein, the parties shall be entitled to an injunction restraining the violation, or
attempted violation, of any of the covenants, conditions or provisions hereof, or to a decree
compelling performance of same; subject, however, to other provisions herein.
ARTICLE 39. CONFLICT OF INTEREST
Lessee warrants and certifies, and this contract is made in reliance thereon, that it, its officers,
employees and agents are neither officers nor employees of the City. Lessee further warrants
and certifies that is has tendered to the City a true and correct Disclosure Statement in
compliance with Section 2-349 of the City's Ethics Code.
ARTICLE 40. GENERAL PROVISIONS
40.01 Incorporation of Exhibits. All exhibits referred to in this Lease are intended to be and
hereby are specifically made a part of this Lease.
EXHIBIT 1: Leased Premises
EXHIBIT 2: November 18, 2011 Appraisal
EXHIBIT 3: PGAL Structural Report
EXHIBIT 4: Deferred Maintenance Items and Budget
EXHIBIT 5: Fees and Charges
40.02 Incorporation of Required Provisions. Lessor and Lessee incorporate herein by this
reference all provisions lawfully required to be contained herein by any governmental body or
agency.
40.03 Nonexclusive Rights. It is understood and agreed that nothing herein contained shall be
construed to grant to Lessee any exclusive right or privilege within the meaning of Section 308 of
the Federal Aviation Act, as amended, for the conduct of any activity on the Airport, except that,
subject to the terms and provisions hereof, Lessee shall have the right to exclusive possession of
the Leased Premises.
40.04 Removal of Disabled Aircraft. Lessee shall promptly remove any disabled aircraft that is
in the care, custody, or control of Lessee from any part of the Airport (other than the Leased
Premises) (including, without limitation, runways, taxiways, aprons, and gate positions) and place
any such disabled aircraft in such storage areas as may be designated by the Aviation Director.
Except as to aircraft subject to bailment and/or for which Lessee is owed money from a customer,
Lessee may store such disabled aircraft only for such length of time and on such terms and
conditions as may be established by Lessor. If Lessee fails to remove any of disabled aircraft
promptly, the Aviation Director may, but shall not be obligated to, cause the removal of such
disabled aircraft after written notice to Lessee (except in the event of emergency), provided,
however, the obligation to remove or store such disabled aircraft shall not be inconsistent with
federal laws and regulations and Lessee agrees to reimburse Lessor for all costs of such removal,
and Lessee further hereby releases Lessor from any and all claims for damage to the disabled
aircraft or otherwise arising from or in any way connected with such removal by Lessor unless
caused by the negligence or recklessness of Lessor.
Page 32 of 36
40.05 Airport Access License/Permit. Lessor reserves the right to establish a licensing or permit
procedure for vehicles requiring access to the Airport operational areas and to levy directly against
Lessee or its suppliers a reasonable regulatory or administrative charge (to recover the cost of
any such program) for issuance of such Airport access license or permit.
40.06 Compliance with 14 CFR pt 77. Lessee agrees to comply with the notification and review
requirements covered in Part 77, Title 14, Code of Federal Regulations, FAA Regulations, in the
event future construction of a building is planned for the Leased Premises, or in the event of any
planned modification or alteration of any present or future building or structure situated on the
Leased Premises.
40.07 Reservations re: Airspace and Noise. There is hereby reserved to Lessor, its successors,
and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the
airspace above the surface of the Leased Premises.
40.08 Inspection of Books and Records. Each party hereto, at its expense and on reasonable
notice, shall have the right from time to time to inspect and copy the books, records, and other
data of the other party relating to the provisions and requirements hereof, provided such
inspection is made during regular business hours and such is not prohibited by the U.S.
Government.
40.09 Independent Contractor. Lessee is not an employee or agent of City by reason of this
Lease, or otherwise. Lessee shall be solely responsible for its acts and omissions arising from or
relating to its operations or activities at Airport, or lease of property herein.
40.10 Authority of Agreement. Lessee warrants and represents that it has the right, power, and
legal capacity to enter into, and perform its obligations under this Lease, and no approvals or
consents of any persons are necessary in connection with it. The execution, delivery, and
performance of this Lease by the undersigned Lessee representatives have been duly authorized
by all necessary corporate action of Lessee, and this Lease will constitute a legal, valid, and
binding obligation of Lessee, enforceable in accordance with its terms.
40.11 Authority of the Aviation Director. The Aviation Director shall administer this Lease on
behalf of Lessor. Whenever this Lease calls for approval by Lessor, such approval shall be
evidenced, in writing, by either the Aviation Director or the City Manager of the City of Corpus
Christi or his designee, in accordance with the requirements of the City Charter. In no event shall
this language be considered a waiver by Lessee to object to decisions by the Aviation Director
which it considers to be arbitrary, capricious or inconsistent with any express obligations to act
reasonably set forth herein.
40.12 Consent. Unless stipulated otherwise herein, whenever the consent or approval of either
party hereto is required or authorized hereunder, such consent or approval shall not be
unreasonably withheld, unreasonably conditioned, or unreasonably delayed.
40.13 Net Agreement. It is the intent and purpose of the City and Lessee that all rental payable
by Lessee herein shall be absolutely net to the City so that this Lease shall yield to City the entire
rent specified, in each year of this Lease, free of any charges, assessments, impositions or
deductions of any kind or character which may be charged, assessed, or imposed on or against
Lessee or the Leased Premises, without abatement, deduction or set-off by Lessee.
Page 33 of 36
40.14 Noise Control. Lessee, for itself and each of its officers, representatives, agents,
employees, guests, patrons, contractors, subcontractors, licensees, subtenants, invitees, or
suppliers shall not conduct any operation or activity on the Leased Premises, or elsewhere at the
Airport, in which the sound emitting therefrom is of such volume, frequency or intensity at such
time as to constitute a nuisance. The Aviation Director shall have the sole and exclusive authority
to determine what constitutes a nuisance under the provisions of this Lease Agreement
recognizing the permitted uses granted hereunder, except that operations and activities having
noise levels not in violation of federal, State, or local governmental standards shall not be deemed
a nuisance.
40.15 Time is of the Essence. Time shall be of the essence in complying with the terms,
conditions and provisions of this Lease.
40.16 Vehicular Parking. Vehicular parking in the areas included in the Leased Premises shall
be restricted to parking directly related to Lessee's operations on the Leased Premises by Lessee,
its officers, representatives, agents, employees, guests, patrons, volunteers, contractors,
subcontractors, licensees, and suppliers. Access to vehicular parking areas within the Leased
Premises shall be coordinated through the Airport's overall parking management program.
ARTICLE 41. AUDIT
Lessee shall keep complete and accurate accounts, records and books pertaining to the
lease of the Leased Premises and FBO services rendered in connection with the permitted uses
under this Lease, including all expenses, costs and expenditures for the Leased Premises and
other information reasonably necessary or pertinent to determine the amounts due and payable
under this Lease. Such records may be kept by Lessee at its local office or at the management
office for the Leased Premises for seven (7) years after each annual financial statement has been
delivered to Lessor. Such books and records shall be made available to the City and its agents
(or copies shall be furnished at the City's request) at all times, on not less than five (5) Business
Days' notice, during regular business hours for examination and audit. If such books and records
are located outside the City of Corpus Christi, Lessee shall make them available to the City within
the City of Corpus Christi.
If the results of such examination by the City establish a deficiency in Proceeds Rent payable to
the City, Lessee shall within ten (10) days' pay to the City the deficiency. In the event that a
deficiency in such Proceeds Rent of five percent (5%) or more is established for any calendar
year, Lessee shall pay the full cost of any examination requested by the City if Lessee is
responsible for such deficiency, and Lessee shall also pay interest at the Default Rate on said
deficiency in Proceeds Rent from the time it should have been paid until the date paid. The
inspection on behalf of the City may be made by an officer, employee or other designee of the
City.
Lessor shall have the right during each calendar or fiscal year to authorize an audit of Lessee's
records pertaining to its operation on the airport. Such audits shall be undertaken by the Lessor's
staff or a firm of certified public accountants, satisfactory to Lessor. Except with respect to an
audit of Proceeds Rent as set forth above, the cost of such audit shall be paid by Lessor, unless
the results of such audit reveal a discrepancy of more than three percent (3%) between the
amounts that should have been paid under this Lease and the amounts actually paid during any
calendar or fiscal year. In case of such discrepancy, the full cost of the audit shall be paid by
Lessee. Any additional auditing expense resulting from Lessee's inability or refusal to provide
records as required by the auditor shall be paid by Lessee. The Lessee shall forthwith pay to the
Page 34 of 36
Lessor the full amount of fees due based upon the results of the audit if a discrepancy exists. This
amount shall be paid within thirty(30) days of written notice by Lessor.
ARTICLE 42. MOST FAVORED NATION
CITY covenants and agrees not to enter into any agreement with any FBO which (i) makes
substantially similar use of the Airport as set forth in Article 4 herein, and (ii) utilizes substantially
similar facilities to that of Lessee, which contains more favorable terms than this Lease, or to grant
to any such FBO rights or privileges with respect to the Airport which are not afforded to Lessee
hereunder unless substantially the same terms, rights, privileges and facilities are concurrently
made available to Lessee.
ARTICLE 43. PARTIES BOUND
This Lease shall be binding upon and inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, legal representatives, successors and assigns, as permitted
hereby.
ARTICLE 44. TEXAS LAW TO APPLY
All obligations under this Lease are performable in Nueces County, Texas, and shall be construed
pursuant to the laws of the State of Texas, except where state law shall be preempted by any
rules, laws or regulations of the United States.
ARTICLE 45. GENDER
Words of either gender used in this Lease shall be held and construed to include the other gender,
and words in the singular number shall be held to include the plural, unless the context otherwise
requires.
ARTICLE 46. CAPTIONS
The captions of the provisions contained herein are for convenience in reference and are not
intended to define, extend or limit the scope of any provision of this Lease.
ARTICLE 47. ENTIRE AGREEMENT
This Lease comprises the final and entire agreement, including all terms and conditions thereof,
between the parties hereto, and supersedes all other agreements, oral or otherwise, regarding
the subject matter hereof, none of which shall hereafter be deemed to exist or to bind the parties
hereto. The parties intend that neither shall be bound by any term, condition or representation not
herein written.
Page 35 of 36
IN WITNESS WHEREOF, the undersigned have duly executed this Lease as of the dates set
forth below.
CITY/LESSOR: LESSEE:
CITY OF CORPUS CHRISTI SIGNATURE FLIGHT SUPPORT
CORPORATION
Y.
e By:
dakc--
Ronald L. Olso , City Manager Maria Sastre, Presi ent and Chief
Operating Officer
Date: Date: II/3//`q
//4 -
APPROVED AS TO FORMApproved as to legal form: izPi Ae..4 ii_2- 2O'
LEGAL DEPT,
Iza•e�" "un• ey
Assist.' V ity Attorney
on beh. of the City Attorney
ccj .00qct
ATTEST: 1I---.6"/C- 4 �`"`"'l `^ AU I riUK ILA..
COUNCIL..—.,�,,.i 134
REBECCA HUERTA IT
CITY SECRETARY
SECRET
Page 36 of 36
rilr [ ,
y - a
Htfitti f------g-- _
•
I I 1,_ . +PAiZKINO►SLOTS* ::.
_ 'O RG SLO1S,.
r• •, -. .. 1 (1 O
1 1 1 1 1 1 I,, -. 1>r
EGA Iwe Q
31 EXCLUDED FROM LEASE EGA "of 5
of 3 EGA H-2 c,1; _ =4+ EGA I11-3 m K
(FOR AIRPORT USE) w nos/ 15,00051' starsi < `sr 30,80b J O
GA d i 'I U .,.,
4 4D1 SF
APRON
62,000 SF
EAST GA .: _-. .
Description Area SF Acreage Rett PSF/YR Told East GA Apron
EGA H-2 15,000 0.34 $1,500 22,500.00
EGA H-3 30,800 0.71 1.650 ,820.00 '�' �
EGA of 1 (TERM) 4,900 0.11 .000 29,400.00 —
EGA or 3 5,770 oa3 650 32,60b 50 EGA Fuel Farm -
EGA of 4 ,5,032 0.11 9$5450 28,430.80 ny
EGA of 5 7,464 0.17 5�55,650 171.60 Description (Gallons Pe^f/YR Total
PARKING LOT 51,602 1.18 50.300 15,480.60 JET A 36,000 .750 427,000.00_
APRON 62,000 1.42
�8d0 325 20 150.00 AVGA$ 12 000 .750 49,000.00
UNDEVELOPED 22,944 0.53 40.300883.20 UNLEADED .••._.,06,883.20 .750 $1,500.00
FUEL FARM PAD _ 4,776 0.11 40.300 41,432.80 DIESEL 2,000 .750 41,500.00
Total 210.288 4.81 427.325 $249,869.50 1 Total , 52.000 439,000.00
7
CORPUS CHRISTI INTERNATIONAL AIRPORT
14, 4
;1r►a,0`,tcroI A EAST FBO LEASED PREMISES Prepared
ccvi
:oft AND AREA CALCULATIONS Approved by
EXHIBIT 1
FRED SEGUNDO
1, r , % Date:
Sheet No. 1 of 5 07-03-2014
57'.0 CQI 1��� O ..i ri._ i 8t! fF' ,j��
AIR-LOCK
LuliPilil: ]
DICLUOED FROM 1 EA6f ^ L---.�..:-
(FORAIRPORT IJIEI
witti..---F‘ . ( --
FEMALE. )- NS&E Fq 8 ,. t I S
Q ; SUPERVISOR • I- I
. 1
.. . , Q.C. + .
a g
. o
BLFCT.
1 04
Q ADMIN OFC. RM. _.
_ ,..._ ....,
4,24
PILOT LOUNGE 1 ....14
"" J �.,
1 ` vs 1
+0 1._,._F EGA I W I
1 OFFICEL2 PANTRY , • r�. ,,-, ; 4,900 q.FL
IlkI
Afir,
Iss"'_ __ _ __
JAN. . I EXCLUDED FROM LEASE
.gmpolo,..0 .r , (FOR AIRPORT USE)
CLOW .
,Rg a._ ON / MAIL
• BY•
,..�,,.. lit 3
, , OFFICE-I p
MAIL
_ 1
,.........____
-LOCK
: : 14,1 EGA of 1 FLOOR Area = 4,900 Sq.Ft. SITE PLAN
1 CORPUS CHRISTI INTERNATIONAL AIRPORT
V�1► . Prepared
j �� EAST GA of 1 AS-BUILT FLOOR PLAN CCSJ
M z
`7',Aaw�' EXHIBIT 1 Approved by FRED SEGUNDD
O
Date;
Sheet No.: 2 of 07-01-2014
•
41'..4" iigll'u a 5ii,,�I},.. I'�i1�-t,a 1 +A t
, do 1"
' BTORAOE 'f
41'•4' r'r V EXCLUDED FROIA LEASE
{ ,{ r• (FOR AIRPORT USE) A
roil up door: Ill + 'V'
r .,
STO.1 ' J
WARE(OUSE MEZZ./F PLAN ' •
. ,„ ill)if\i„,-ti.._.i.. (----
�0.z •
' 790 Sq'Ft.
• '
* S
8 i
WAREHOUB8ri f,. i
A : f•1 1 , 1 .•
a
14 1
OFC. r Q
• LOBBY \r/ ,N,
T. ^ " , ,.,. EGA OF 0 0
o HALLWAY 'rj_ - �� 5,7708cI.Ft N
,,,,,A rior , i 1 c0
t INFO. i. ,L W
1�.,� I
LOBBY ' % 7AIKRZ. ' 8170. I
IEXCLUDED FROM LEASE
. ` WHOUSE WAREHOUSE -J
(FOR AIRPORT USE)
I. �_
WORKING OFC. II
WORKING z r--
AREA G/F PLAN
4,980 Sq.Ft.
ItI
i Lam SITE PLAN
EGA of3
Floor Area = 5,770 SgFt.
. . CORPUS CHRISTI INTERNATIONAL AIRPORT
� r Prepared by:
d, i ,� _, 1 _� EAST GA of 3 AS-BUILT FLOOR PLAN CCM
1 ~ lit x
. 4110, i l / Approved by.
EXHIBIT 1 FRED SEGUNDO
.' T 1 ^.- Date:
Sheet No.: 3 oF5 07-01-2014
J � � 1\ -. �'ja4 � t. I' r r
41•-b" A r r ', � l 4-, i.-
ro
0Iutter �___,_�
EXCLUDED FROM LEX ! 1
i OR AIRPORT Pi
fir' t (
WAREHOUSE •.
I
•
1 s
FAli \ i .4 Cw
•• • EGA ai_ ' O
` 5,082 FL Qr
• . .
Q
•}•
rI ( j' N
' 1" ,1 W
L___ _
,.:_L., \
�
co
I �
WAREHOUSE I EXCLUDED FROM LEASE
(FOR AIRPORT USE)
� t
r„- ...f
mi
It /r
$hU floor
EGA of 4 SITE PLAN
Floor Area = 5,032 SgFt.
CORPUS CHRISTI INTERNATIONAL AIRPORT
+'�4440 Prepared by
� �� ril A EAST GA of 4 AS-BUILT FLOOR PLAN Approved by: CCOI
,ddb' 1/ � EXHIBIT I
FRED SEGUNDO
Date:
- Sheet No,: 4()FS 07-01-20I4
30.-9" WY-IT CDREVUltilianISIRM ERN'1!.:I.
1 --<-71--.',.
OFO$
EXCLUDED FROM LEASE __....
- OfC-4 FOR AIRPORT USE) A
OFC$ 3 •
�_
• I1 - P.
•
i)-I
OFC-T OFf 9 WM EHOUBPt • }
\\\
_ exN s .464 Ft
J
J
$
OFO0
i ,C
OFCA ss ORM 44 .'•4, . C7
y
•• r y
e } Cr. I 44
tC
I OFO.10 i _ � i
MANAGER OFO 2
mil
�,�1/410
a EXCLUDED FROM LEASE
NNW. ,.. Y „ (FOR AIRPORT USE) l
PANTRY
II
vil
L
,'
OPd•1 do
LOBBYji MANAO�R' -'r`
r _
G/F PLAN 2/F PLAN
3,732 Sq.Ft. 3,732 Sq.Ft. SITE PLAN
EGA of5
Floor Area = 7,464 SqFt.
CORPUS CHRISTI INTERNATIONAL AIRPORT
�p Piepared by:EAST GA of 5 AS-BUILT FLOOR PLAN CCW
•IrApproved by:
�" g5p`., �/ I EXHIBIT 1 FRED SEGUNDO
Date.
5 o'5 07-03-2014
I
Aviation
Management
Consulting
Group
Summary Appraisal R
City of Corpus Christi
Corpus Christi International Airport
WEST GENERAL AVIATION FACILITY
EAST GENERAL AVIATION FACILITY
IMPROVED AND UNIMPROVED LAND
EXHIBIT 2
November 18, 2011
SUMMARY APPRAISAL REPORT
of:
West General Aviation Facility
East General Aviation Facility
Improved and Unimproved Land
1000 International Drive
Department of Aviation
Corpus Christi, Texas 77406
Prepared For:
Mr. Enrique H. Castillo
Assistant Director of Aviation
Corpus Christi International Airport
1000 International Drive
Department of Aviation
Corpus Christi, Texas 77406
Prepared By:
David C. Benner
Associate Consultant
Aviation Management Consulting Group, Inc.
9085 East Mineral Circle, Suite 315
Centennial, Colorado, 80112-3499
Consultant
Robert D. Decker, MAI
Decker Associates, Inc.
1950 W. Littleton Boulevard, Suite 115
Littleton, Colorado, 80120-2000
Appraiser
Date of Report:
November 18, 2011
Date of Value:
August 11, 2011
IN
TM
Aviation Management Consulting Group
November 18, 2011
Mr. Enrique H. Castillo
Assistant Director of Aviation
Corpus Christi International Airport
1000 International Drive
Department of Aviation
Corpus Christi, Texas 77406
RE: Summary Appraisal Report
West General Aviation Facility
East General Aviation Facility
Improved and Unimproved Land
Corpus Christi International Airport
Dear Mr. Castillo:
In accordance with your request and authorization, this writing transmits our summary
appraisal report for the above referenced properties (hereinafter referred to as the "Subject
Properties").
The purpose of this assignment is to determine the market value and the market rent for
the West General Aviation Facility (WGA) and the East General Aviation Facility (EGA) and
to determine the market rent for certain parcels of improved and unimproved land located
at Corpus Christi International Airport (Airport). The Subject Properties consists of the land
and improvements (Hangar, General Aviation Terminal Building, Office — associated with
Hangar, Storage — associated with Hangar, Apron, Vehicle Parking, and Fuel Storage
Facilities) currently being leased by Atlantic Aviation and Signature Flight Support from the
City of Corpus Christi (City) and certain parcels of land (identified as B1, Cl, and C2 areas)
which are currently available for lease at the Airport.
This summary appraisal report was prepared in compliance with the Uniform Standards of
Professional Appraisal Practice (USPAP) as set forth by the Appraisal Foundation in
accordance with the Code of Professional Ethics and Standards of Professional Practice of
the Appraisal Institute. In addition, this summary appraisal report has been prepared in
conformance with Federal Aviation Administration (FAA) requirements.
As a result of the analysis conducted and based upon our experience in the field of real
property valuation, an opinion of market value of the Subject Properties, as the date of
valuation and contingent to the attached Limiting Conditions and Certifications, has been
derived, as follows:
9085 East Mineral Circle, Suite 315 ■ Centennial, Colorado 80112 • Phone 303 792 2700 • Fax 303 792 2751
www.aviationmanagement.corn
Mr. Enrique H. Castillo
November 18, 2011
Page 2
"As Is" Value (August 11, 2011)
West General Aviation Facility $3,750,000
East General Aviation Facility $3,500,000
The market rental rates (by component) for the Subject Properties are conveyed in the
Executive Summary.
The following summary appraisal report contains the descriptive data and analyses upon
which our opinion was predicated. Should you have any questions concerning the contents
of this report, please feel free to call us. Thank you for the opportunity to serve you.
Respectively submitted,
aj
David C. Benner Robert D. Decker, MAI
Associate Consultant Decker Associates, Inc.
Aviation Management Consulting Group, Inc. Texas Temporary Permit No. TX-2528
Consultant Appraiser
9085 East Mineral Circle, Suite 315 ■ Centennial, Colorado 80112 • Phone 303 792 2700 ■ Fax 303 792 2751
www.aviationmanagement.corn
Aviation
Management
Consulting
Group TABLE OF CONTENTS
I. CERTIFICATIONS iii
II. LIMITING AND CONTINGENT CONDITIONS iv
III. EXECUTIVE SUMMARY 1
A. Market Value — West General Aviation Facility (WGA) 1
B. Market Value — East General Aviation Facility (EGA) 1
C. Market Rent— Subject Properties 2
D. Definitions 4
E. Subject Properties — Identification Map 5
IV. INTRODUCTION 6
A. Intended Use and Intended User of the Appraisal 6
B. Definition of Market Value 6
C. Definition of Market Rent 6
D. Property Rights Appraised 7
E. Scope of the Appraisal 7
F. Date of Report and Value 8
G. Area of Influence 8
1. Community Overview 8
2. Population 9
3. Residential Real Estate 9
4. Resale Housing 10
5. Commercial Real Estate 11
6. Employment 12
7. Port of Corpus Christi 13
8. Tourism 14
9. Climate 14
10. Utilities 14
V. AIRPORT OVERVIEW 15
A. Airport Description 15
B. Aircraft Operations 15
C. Based Aircraft 16
D. Fuel Volumes 17
E. Commercial Operators 18
F. Non-Commercial Aeronautical Tenants 19
G. Non-Aeronautical Tenants 19
H. Zoning 19
1. Zoning Map 20
I. Assessor's Data 20
VI. SUBJECT PROPERTIES 21
A. History of Property/Owner of Record 21
B. Legal Description 21
C. Property Description 21
D. Description of the Subject Properties 24
Summary Appraisal Report i
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
Group TABLE OF CONTENTS
1. Non-Aeronautical Improved Land 24
2. Non-Aeronautical Unimproved Land 24
3. Aeronautical Improved Land 25
4. Aeronautical Unimproved Land 25
5. Hangar 26
6. General Aviation Terminal Building 27
7. Office (associated with Hangar) 28
8. Storage (associated with Hangar) 29
9. Apron (Asphalt and Concrete) 30
10. Vehicle Parking (Asphalt and Concrete) 31
11. Fuel Storage Facilities 31
VII. HIGHEST AND BEST USE 33
A. Physically Possible Uses 33
B. Legally Permissible 33
C. Financially Feasible and Most Profitable Uses 34
D. Highest and Best Use -As Vacant 34
E. Highest and Best Use - As Improved 34
VIII. VALUATION 35
A. Introduction 35
1. Ground Leasehold Analysis 36
B. Cost Approach 36
1. Replacement Cost of Improvements 36
2. Estimate of Accrued Depreciation 37
3. Cost Approach Summary 40
C. Income Approach 42
1. Rental Discussion 42
2. Study Findings 43
3. Market Rent Summary 48
4. Vacancy and Collection Loss 62
5. Expense and Reserves 62
6. Overall Capitalization Rate 63
7. Income Approach Summary 64
D. Reconciliation and Final Market Value Estimate 66
E. Prospective Marketing and Exposure Time 67
IX. APPENDIX 68
A. Mathematical Definitions 68
B. Subject Properties — Identification Map 69
C. Subject Properties — Component Identification Map 70
D. Subject Properties — Photographic Survey 72
E. Subject Properties — Metes and Bounds Descriptions 96
F. Consultant/Appraiser Qualifications 99
Summary Appraisal Report ii
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
111 Aviation
Management
Consulting
Group CERTIFICATIONS
I. CERTIFICATIONS
We certify that, to the best of our knowledge and belief...
- the appraisal assignment was not based upon a requested minimum valuation, a specific
valuation, or approval of a loan.
- we did not base (either partially or completely) and/or estimate value predicated upon the race,
color, religion, sex, handicap, familial status, health or national origin of the present or
prospective owners, occupants or users of the Subject Properties, or of the present or
prospective owners, occupants or user of the properties in the vicinity of the Subject Properties.
- the statements of fact contained in this report are true and correct.
- the reported analyses, opinions, and conclusions are limited only by the reported assumptions
and limiting conditions, and represent our personal, impartial, unbiased professional analyses,
opinions, and conclusions.
- we have no present or prospective interest in the Subject Properties and we have no personal
interest with respect to the parties involved.
- we have no bias with respect to the Subject Properties or to the parties involved with this
assignment.
- our engagement in this assignment was not contingent upon developing or reporting
predetermined results.
- our compensation for completing this assignment is not contingent upon the development or
reporting of a predetermined value or direction in value that favors the cause of the client, the
amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
- our analyses, opinions, and conclusions were developed and this report has been prepared in
conformity with the Uniform Standards of Professional Appraisal Practice.
- Robert D. Decker(Appraiser) and David Benner(Consultant) have made personal inspections of
the Subject Properties.
- as of the date of this report Robert D. Decker, MAI has completed the voluntary requirements
under the continuing education program of the Appraisal Institute.
- we have not performed previous appraisal services related to these Subject Properties.
- the use of this report is subject to the requirements of the Appraisal Institute relating to review by
its duly authorized representatives.
- the following opinion of value has been derived for the Subject Properties as of August 11, 2011:
"As Is" Value (August 11, 2011)—West General Aviation Facility $3,750,000
"As Is" Value (August 11, 2011) — East General Aviation Facility $3,500,000
0,,J (. e.............„ _______ _,.....4
David C. Benner Robert D. Decker, MAI
Associate Consultant Decker Associates, Inc.
Aviation Management Consulting Group, Inc. Texas Temporary Permit No. TX-2528
Consultant Appraiser
Summary Appraisal Report iii
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
Group LIMITING AND CONTINGENT CONDITIONS
II. LIMITING AND CONTINGENT CONDITIONS
This report is made expressly subject to the following conditions and stipulations:
1. Our compensation is not contingent upon the reporting of a predetermined value that favors the
cause of the client, the amount of value estimate, the attainment of a stipulated result, or the
occurrence of a subsequent event, and the appraisal assignment was not based upon a
requested minimum valuation, a specific valuation, or approval of a loan.
2. This report is made for the client to whom it is addressed and is delivered to the client on the
condition that it is to be used by said client only for the purpose stated in the report. No
reliance is to be placed on this report for any other purposes nor shall it be published,
distributed or shown to other parties except to the party to whom the report is addressed.
3. No responsibility is assumed for matters legal in character. We render no opinion as to the title,
but assume that it is marketable. The Subject Properties are appraised as though free and
clear of all liens and encumbrances, except as otherwise indicated. Management and
ownership are presumed to be competent and responsible.
4. All drawings, diagrams, and photographs in this report are included to assist the reader in
visualizing the Subject Properties. These drawings do not represent the product of any
professional survey performed by us or any other individual or firm. We are not professional
engineers; therefore, we have not completed any engineering survey of the Subject Properties
nor are we reporting on structural adequacy.
5. No right to expert testimony, attendance in court, or publication is indicated with possession of
this report. We will be available for expert testimony in court at the request of the client at a
rate of $200.00 per hour (for Robert Decker, Appraiser) and $180.00 per hour (for David
Benner, Consultant) plus incidental (out-of-pocket) expenses.
6. We have no present or contemplated future interest in the Subject Properties.
7. The property information included in this report was provided by the client and assumed to be
correct. Market data is based upon information reported by lessors and sellers, lessees and
buyers, and/or by other people knowledgeable about the individual transactions. Since not all
transactions are reported and some information may be incorrect, the available information
may not accurately reflect the status of the market.
8. Our opinion assumes that the existing improvements comply with building and zoning codes of
the municipality in which it is located, unless otherwise noted.
9. In the current market, real estate price levels for income-producing properties are dictated by
the present value of future expectations. Under the circumstances, appraisers must quantify
market estimates which are, by their character, imprecise. Property earnings and financial
estimates contained in this report represent our informed judgment as to present and
anticipated market trends as of the date of value. Any aberrations and/or dramatic changes in
segments of the local and national economy may impact the property's capacity to generate the
earnings set forth herein with a concomitant impact on value.
10. This analysis assumes the Subject Properties are free of hazardous materials and toxic
wastes. The presence of hazardous materials or toxic wastes on the Subject Properties can
substantially impact value. A variety of materials, including chemicals, metals and minerals,
has been determined to be hazardous or toxic under local, state and/or federal laws and
regulations and can be required to be specially handled and removed from the Subject
Properties at the expense of the property owner. Certain materials which may have been used
in the construction of the premises or in building components may be hazardous. Asbestos, for
example, can be hazardous and has been included in a number of building components such
as fire proofing, insulation, linoleum, floor tiles, ceiling panels and acoustical ceiling coatings.
Summary Appraisal Report iv
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
11 Aviation
Management
Consulting
Group LIMITING AND CONTINGENT CONDITIONS
Appraisers are not experienced in identifying potential toxic waste and hazardous material
problems nor estimating the cost of resolving such problems. In order to identify the nature and
extent, if any, of toxic waste and hazardous material problems of the Subject Properties, the
appropriate experts should be selected and retained.
11. Except as noted, this analysis assumes the land to be free of adverse soil conditions which
would prohibit development of the Subject Properties to highest and best use. We assume no
liability as to the soils condition of the Subject Properties. This analysis is of surface rights only,
and no analysis has been made of the value of subsurface rights, if any.
12. The United States Congress has enacted the Americans with Disabilities Act. Among other
things, this act is intended to make many business establishments equally accessible to
persons with a variety of disabilities; modifications to real property may be required. State and
local laws also may mandate changes. We are not qualified to advise you as to what, if any,
changes may be required now, or in the future. As such, you should consult your attorneys and
qualified design professionals for information regarding these matters. We cannot determine
which attorneys or design professionals have the appropriate expertise in this area for your
needs. Therefore, unless otherwise stated herein, this report and any estimate of value or
other evaluation contained herein does not include any allowance for any cost which may be
necessary now, or in the future, to bring the Subject Properties into compliance with the
requirements, if any, of the Americans with Disabilities Act.
13. We assume that all the building systems, including electrical, mechanical, and plumbing, are in
good operating condition. We have not inspected these systems nor are we qualified to
comment on the condition of the systems. An expert in these fields should be retained for an
inspection. Except as otherwise noted in this report, the Subject Properties are appraised as
though there are no structural, mechanical or other defects or problems associated with it.
14. Neither all nor any part of this report (nor any findings, opinions, and/or conclusions contained
in this report) shall be disseminated to the news media or to the general public without prior
written consent and approval of the authors of this report.
15. Only the subject real estate was appraised. No personal property was included or appraised.
The going-concern value of the business was not included or appraised.
Summary Appraisal Report v
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
111 Aviation
Management
Consulting
Group EXECUTIVE SUMMARY
III. EXECUTIVE SUMMARY
Subject Properties: West General Aviation Facility (WGA)
East General Aviation Facility (EGA)
Improved and Unimproved Land
Corpus Christi International Airport
1000 International Drive
Corpus Christ, Texas 77406
Date of Report: November 18, 2011
Date of Value: August 11, 2011
Zoning: IH, Heavy Industrial, City of Corpus Christi
A. Market Value—West General Aviation Facility (WGA)
Improvement Description: Consists of Aeronautical Improved Land (Commercial),
Hangar, General Aviation Terminal Building, Office
(associated with Hangar), Storage (associated with
Hangar), Concrete Apron, Asphalt and Concrete Vehicle
Parking, and a Fuel Storage Facility
Highest and Best Use: As Vacant: Aeronautical Use
As Existing: Commercial Aeronautical Use (aviation
business)
Market Value Indication: "As Is"
Cost Approach (rounded): $4,250,000
Income Approach (rounded): $3,500,000
Final Conclusion (rounded) $3,750,000
B. Market Value — East General Aviation Facility (EGA)
Improvement Description: Consists of Aeronautical Improved Land (Commercial),
Hangar, General Aviation Terminal Building, Office
(associated with Hangar), Storage (associated with
Hangar), Asphalt Apron, Asphalt and Concrete Vehicle
Parking, and a Fuel Storage Facility
Highest and Best Use: As Vacant: Aeronautical Use
As Existing: Commercial Aeronautical Use (aviation
business)
Market Value Indication: "As Is"
Cost Approach (rounded): $2,500,000
Income Approach (rounded): $4,250,000
Final Conclusion (rounded) $3,500,000
This Executive Summary represents only a portion of this summary appraisal report and is invalid outside
the context of the entire document.
Summary Appraisal Report 1
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
11 Aviation
Management
Consulting
Group EXECUTIVE SUMMARY
C. Market Rent— Subject Properties
Improvement Description: Consists of Aeronautical Improved Land (Commercial
and Non-Commercial), Aeronautical Unimproved Land
(Commercial and Non-Commercial), Non-Aeronautical
Improved Land (Commercial and Non-Commercial), Non-
Aeronautical Unimproved Land (Commercial and Non-
Commercial), Hangar, General Aviation Terminal
Building, Office (associated with Hangar), Storage
(associated with Hangar), Asphalt and Concrete Apron,
Asphalt and Concrete Vehicle Parking, and Fuel Storage
Facilities
Market Rent Conclusion: The following table conveys the recommended market
rent for each component of the Subject Property.
Subject Property Name Total Square Feet Market
Rent
Component
B1-1 219,465 $0.080
B1-2 248,851 $0.080
B1-3 476,988 $0.100
B1-4 244,475 $0.120
B1-5 383,583 $0.110
Non-Aeronautical Improved Land B1-7 511,3 $0.120
61-7 46,3110 0 $0.120
B1-8 359,518 $0.100
B1-9 190,177 $0.100
B1-10 231,820 $0.120
B1-13 355,245 $0.110
B1-15 315,388 $0.110
C1-2 184,292 $0.060
C1-4 285,412 $0.050
C1-6 258,830 $0.050
C1-8 160,057 $0.050
01-10 351,656 $0.050
Non-Aeronautical Unimproved Land C1-12 259,889 $0.050
C1-14 360,505 $0.050
C2-2 262,725 $0.050
C2-4 258,655 $0.050
C2-6 256,669 $0.050
C2-8 242,385 $0.050
0—200,000 SF $0.275
200,000— 1,000,000 SF $0.250
Greater than 1,000,000 SF $0.225
B1-11 251,244 $0.250
Aeronautical Improved Land B1-12 546,039 $0.250
(Commercial) B1-14 78,358 $0.275
B1-16 1,149,553 $0.225
B1-17 74,565 $0.275
WGA Undeveloped Land 170,087 $0.300
EGA Undeveloped Land 140,048 $0.300
Summary Appraisal Report 2
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group EXECUTIVE SUMMARY
0—200,000 SF $0.300
200,000— 1,000,000 SF $0.275
Greater than 1,000,000 SF $0.250
Aeronautical Improved Land B1-11 251,244 $0.275
(Non-Commercial) B1-12 546,039 $0.275
B1-14 78,358 $0.300
B1-16 1,149,553 $0.250
B1-17 74,565 $0.300
0—200,000 SF $0.175
200,000— 1,000,000 SF $0.150
Greater than 1,000,000 SF $0.125
C1-1 231,392 $0.150
C1-3 388,058 $0.150
C1-5 399,154 $0.150
Aeronautical Unimproved Land C1-7 394,432 $0.150
(Commercial) C1-9 389,710 $0.150
C1-11 384,988 $0.150
C1-13 380,266 $0.150
C2-1 480,951 $0.150
C2-3 208,588 $0.150
C2-5 267,870 $0.150
C2-7 209,262 $0.150
0—200,000 SF $0.200
200,000— 1,000,000 SF $0.175
Greater than 1,000,000 SF $0.150
C1-1 231,392 $0.175
C1-3 388,058 $0.175
C1-5 399,154 $0.175
Aeronautical Unimproved Land C1-7 394,432 $0.175
(Non-Commercial) C1-9 389,710 $0.175
C1-11 384,988 $0.175
C1-13 380,266 $0.175
C2-1 480,951 $0.175
C2-3 208,588 $0.175
C2-5 267,870 $0.175
C2-7 209,262 $0.175
WGA H-1 14,000 SF $1.500
WGA H-2 14,000 SF $1.500
WGA H-3 11,500 SF $1.650
WGA H-4 13,325 SF $1.350
Hangar EGA H-1 25,600 SF $1.650
EGA H-2 15,000 SF $1.500
EGA H-3 30,800 SF $1.650
EGA H-4 5,000 SF $1.650
General Aviation Terminal Building WGA OF-1 3,105 SF $6.000
EGA OF-1 4,900 SF $6.000
WGA OF-2 4,680 SF $5.650
WGA OF-3 2,300 SF $6.250
WGA OF-3 2,300 SF $6.250
Office (associated with Hangar) EGA OF-2 2,500 SF $6.250
EGA OF-3 5,000 SF $5.650
EGA OF-4 5,000 SF $5.650
EGA OF-5 5,700 SF $5.650
EGA OF-6 2,000 SF $6.250
Summary Appraisal Report 3
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group EXECUTIVE SUMMARY
Storage (associated with Hangar) WGA OF-2 4,680 SF $1.250
EGA OF-5 1,900 SF
Asphalt Apron EGA Apron 354,765 SF $0.325
Concrete Apron WGA Apron 466,514 SF $0.350
WGA Apron—FSF 11,246 SF
Asphalt Vehicle Parking WGA Vehicle Parking 56,543 SF $0.300
EGA Vehicle Parking 39,500 SF
Concrete Vehicle Parking WGA Vehicle Parking 5,280 SF $0.300
EGA Vehicle Parking 47,266 SF
Fuel Storage Facility WGA FSF 24,000 gallon Jet Fuel $0.750
10,000 gallon Avgas
500 gallon Unleaded
EGA FSF 36,000 gallon Jet Fuel $0.750
12,000 gallon Avgas
2,000 gallon Unleaded
2,000 gallon Diesel
All rental rates (excluding the Fuel Storage Facility) are"per square foot per year" (psf/yr)
Rental rates for the Fuel Storage Facility are"per gallon of capacity per year" (pg/yr)
D. Definitions
Aeronautical Improved Land, Airport land having access (airside and landside) and utilities
to the property boundary.
Aeronautical Unimproved Land, Airport land without access (airside or landside) or without
utilities to the property boundary
Commercial, An activity undertaken with the intent to generate and/or secure earnings,
income, or compensation (including exchange or barter of goods or services), and/or profit,
whether or not such objectives are accomplished.
Itinerant, Aircraft operations terminated at the Airport which (1) arrive from outside the
Airport area or (2) depart the Airport and leave the Airport area.
Local, Aircraft operations which (1) remain in the local traffic pattern, (2) execute simulated
instrument approaches or low passes at the Airport, or (3) operate to or from the Airport
and a designated practice area within a 20 mile radius of the Air Traffic Control Tower.
Non-Aeronautical Improved Land, Airport land having landside access and utilities to the
property boundary, but no airside access.
Non-Aeronautical Unimproved Land, Airport land without landside access or utilities to the
property boundary and no airside access.
Non-Commercial, An activity undertaken for a purpose other than securing earnings,
income, compensation (including exchange or barter of goods or services), and/or profit.
Undeveloped Land, Airport land which is currently under lease without improvements
constructed upon the land.
Summary Appraisal Report 4
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
EliAviation
Management
Consulting
Group EXECUTIVE SUMMARY
E. Subject Properties — Identification Map
CORPUS CHRISTI INTERNATIONAL AIRPORT—
A B„,,,,,; ,--:,,,--- - ,,,
•
:,....ee:is 'At-. =AI......
�
,"). ,
::-.., .' ,f:1 )-,'I ,. ,1 ,0,00 �
,,41,..101,',(,,,/
� ♦,� . ' 711(ll , .;,,,,,,... /
i� iION. i � iiiiieo
, „..:.,,_,
4 :ft:
it
t r
-r/r//)
/101
I,
e ii , ' 1 ' -'- . -
� --J •
lAr.'; I •
/C
r
k'''.. ,_ ' I'4,' I s' ' ri:
"Ir'* ,I
r. j
,.. : ' „.• .,_ 4,
/
,,,,,, . , ,,:.: .,
.: ... 4, ,.. r' P.' ':,
%,”,//rAZZr . ,,
jail'L , '.44,...
WiPIJS CHRISTI IKTERWTION.AL AIIWORT '^4' „xA,
uum.: osynsptes
j�7/,t F. AIRPORT PROPERTY OVERVIEW
tt• ` ATrACHMENT`D-2" waw na:wne rccnsm�n
v '1 CIT]'OE CORP.[S CHRISTI
DEPARTMENT OF AVIATION 201 I ,.
Summary Appraisal Report 5
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
IIAviation
Management
Consulting
Group INTRODUCTION
IV. INTRODUCTION
A. Intended Use and Intended User of the Appraisal
The purpose of this summary appraisal report is to set forth the investigations and analyses
leading to our opinion of the market value and the market rent for the Fixed Base Operation
(FBO) improvements and the market rent for certain land, both improved and unimproved,
located at the Corpus Christi International Airport, Corpus Christi, Texas. The intended
user of this report is the Aviation Department and the intended purpose of this report is for
establishing market rents for the FBO improvements and for certain parcels of improved
and unimproved land.
B. Definition of Market Value
Market value means "the most probable price which a specified interest in real property is
likely to bring under all conditions requisite to a fair sale, the buyer and seller each acting
prudently and knowledgeably, assuming the price is not affected by undue stimulus".
Implicit in this definition are the consummation of a sale as of a specified date and the
passing of title from seller to buyer under conditions whereby:
a) buyer and seller are typically motivated;
b) both parties are well informed or well advised and both acting in what they consider
their best interest;
c) marketing efforts were adequate and a reasonable time was allowed for exposure in
the open market;
d) payment is made in terms of cash in United States dollars or in terms of financial
arrangements comparable thereto;
e) an open and competitive market exists for the property interest appraised; and,
f) the price represents the normal consideration for the property sold, unaffected by
special or creative financing or sales concessions granted by anyone associated
with the sale.2
C. Definition of Market Rent
Market rent is defined as "the rental income a property would probably command in the
open market; indicated by the current rents that are either paid or asked for comparable
2 Dictionary of Real Estate Appraisal,Appraisal Institute, Fourth Edition, Page 177.
Summary Appraisal Report 6
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
Group INTRODUCTION
space as of the date of appraisal."3 The market rent conclusions are representative of the
rental rates recommended for the City to charge lessees (not the rental rates lessees
should charge customers or end users).
D. Property Rights Appraised
The leasehold interest of the property rights is being appraised. Leasehold interest is
defined as "the interest held by the lease (tenant or renter) through a lease transferring
rights of use and occupancy for a stated term under certain conditions."4
E. Scope of the Appraisal
The scope of this appraisal is to gather appropriate market data, utilize appropriate or
applicable appraisal techniques, and arrive at an indication of the market value for the
Subject Properties. To complete this assignment, an investigation of highest and best use
of the Subject Properties as though vacant and as improved was completed and
neighborhood trends were analyzed. Information regarding Improved Land
(Aeronautical/Non-Aeronautical and Commercial/Non-Commercial), Unimproved Land
(Aeronautical/Non-Aeronautical and Commercial/Non-Commercial), General Aviation
Terminal Building (GATB), Office (associated with Hangar), Storage (associated with
Hangar), Hangar, Apron (Asphalt and Concrete), and Vehicle Parking (Asphalt and
Concrete) rental rates were gathered through survey efforts and confirmed with airport
owners/operators. Based upon an analysis of the research findings, conclusions were
drawn and two approaches to value (Cost and Income Approaches) were completed. The
Sales Comparison Approach was not performed since this approach is not considered
appropriate or applicable in this case. The Sales Comparison Approach is not a good
indicator of value in this case since sales of FBOs include business enterprise which is very
difficult to separate from the real estate. A final market value estimate was derived and the
results are conveyed in this summary appraisal report.
3 Ibid, Page 83.
4 !bid, Page 162.
Summary Appraisal Report 7
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
Group INTRODUCTION
F. Date of Report and Value
This report is dated November 18, 2011 which generally corresponds to the completion
date of the report. The effective date of value is August 11, 2011 which generally
corresponds to the date the Subject Properties were inspected.
G. Area of Influence
1. Community Overview
The Subject Properties are located in the City of Corpus Christi (City), Texas. The City is
located in the extreme southern portion of the State of Texas, in the area known as the
Coastal Bend, approximately 207 miles southwest of Houston, 143 miles south of San
Antonio, 150 miles east of Laredo, and 159 miles north of Brownsville (and the United
States/Mexico Border).
The Spanish explorer, Alonso Alvarez De Pineda, named the City's bay Corpus Christi which
translates to "Body of Christ" in Latin. Founded in 1838 as a small trading post, the City later
became a major center for the petrochemical industry. The Port of Corpus Christi is the
seventh busiest port in the United States in terms of tonnage.
The City is the county seat of Nueces County and serves as the governmental, economic, and
cultural center of the region. While Nueces County dominates the statistical and demographic
information of the region, the Corpus Christi Metropolitan Statistical Area (MSA) also includes
the counties of San Patricio and Aransas. Occasionally, statistical information is provided for
the Seven County Region which includes Bee, Jim Wells, Kleberg, and Refugio counties.
Summary Appraisal Report 8
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
SiAviation
Management
Consulting
Group INTRODUCTION
The location of the City is depicted in the following map.
Three IQers ,, `...:_..V., C A L H 0 U N
N
Gallivan
B, n1„i j Tm°a seerd,rt
\}l f AWwd
B E E
ei
D -:' - REFUGIO
L I V E 0'A K
Q smm ee Aransas 0. MaleAransasRef
B
/ ARANSAS ..s�
77, -o
pamlar.A7ettes ..,.: C gay
__ nSaien Roclooit
Sen SAN PATR1 IO Si Joseph
PaMdo ,:- TSR Island
- _ fOtlem °Qa9orY
-
.Aransas Pass
. ",. Portlata
`__,hglesde
tat
Rabstown —..( ... Port Aransas
Lyell p0D7 - .fie PAca ° -_Vr nSil 50.0 Ni
J -M a Corers Ghost Bay Abuawg
___ 359 Island
AA
Driscal Galt o f
NUECES
Andes >vr. M e x c o
i
i, ,Bishop! ........
7 -.r..
Kigs:Me° '?
H L E B E R G
°
,--' :.. Sena p:
Falfurnas6 ,:.:a
.. _ ,iw. m
0 R 0 0 K
.X E ' D V
❑ z ❑
2. Population
The City experienced a gradual increase in population between the 2000 and 2010 United
States Census. The annual compounded rate of increase was 1.0% per year and the
overall percentage increase was 10.1% over the period studied. While the overall
percentage increase for the City exceeded the increase for the overall MSA (6.2%), it was
approximately one-half of the increase for the State of Texas (20.0%) and slightly higher
than the United States (9.4%).
3. Residential Real Estate
Residential construction and price appreciation in the Corpus Christi area generally increased
between 2000 and 2006 before decreasing significantly in 2007. The reason for the active
housing growth was due primarily to historically low interest rates, which also provided an
Summary Appraisal Report 9
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
Group INTRODUCTION
impetus for commercial real estate transactions throughout the country. The slightly larger
increase in the population growth rate (between 2004 and 2006), when coupled with the
area's desirability as a second home location, resulted in strong demand for housing.
However, as the Federal Reserve increased interest rates during 2006 and homebuilder profit
margins declined, the housing market flattened. In 2007, the national housing market was
rocked by the "sub-prime crisis" and in Corpus Christi, single family residential construction
activity continued to decrease. From 2009 to 2010, however, total residential permit volume
in the City increased 13.3%.
The 2010 dollar-value of residential construction was up 5.8% (compared to 2009); although,
volume was down 19.1% (compared to 2008) and 33.6% (compared to 2007). While 2010
single-family dollar-value decreased from 2009, the average price per single-family unit
increased 10.8% to $131,664. This may be a misleading indicator in the market as
construction of mansion-style residences distorts the average. Most permits in the market fall
within the $75,000 to $125,000 range.
4. Resale Housing
The Multiple Listing Service (MLS) statistics for the City were strong between 2003 and 2006
with both sale prices and the number of houses sold increasing. While the average and
median prices continued to increase, sales activity dropped 13.1% in 2007 and 16.3% in
2008. Average and median prices remained about the same until early 2009 when prices
began to decline. The data suggests a bottoming in the market as 2010's activity was largely
unchanged from 2009. The 2010 data indicated 10.3 months worth of inventory compared to
an average of 7.2 months (since 2000) and approximately 5.0 months (between 2002 and
2006).
Summary Appraisal Report 10
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
gi Aviation
Management
Consulting
Group INTRODUCTION
Corpus Christi Single-Family Residential SalesActivity
YearNkrnber of Percent Median Percent A',erage Percent
Properties Change Sales Price Change Sales Price Change
2000 3,441 N/A $ 85,900 N/A $ 103,100 N/A
2001 3,517 2.2% $ 89,100 3.7% $ 107,600 4.4%
2002 3,770 7.2% $ 93,100 4.5% $ 110,800 3.0%
2003 4,198 11.4% $ 101,4(X) 8.9% $ 120,700 8.9%
2004 4,745 13.0% $ 113,800 12.2% $ 132,100 9.4%
2005 4,894 3.1% $ 125,2(X) 10.0% $147,300 11.5%
2006 5,192 6.1% $ 130,400 4.2% $ 153,300 4.1%
2037 4,510 -13.1% $ 136,500 4.7% $ 162,030 5.7%
2038 3,773 -16.3% $ 138,900 1.8% $ 162,900 0.6%
2009 3/M4 -8.7% $ 134,803 -3.0% $ 155,500 -4.5%
2010 3,/145 0.0% $ 136,500 1.3°/0- $ 152,300 -2.1%
Source: U.S. Census Bureau and Burbach &Associates, Inc.
The overall apartment vacancy rate for the Corpus Christi Region has typically ranged
between 4.0% and 5.0%. The lowest vacancy rate was 3.7% in 2001. The vacancy rate was
2.9% in 2008, 5.6% in 2009, and 6.8% in 2010.
5. Commercial Real Estate
The overall commercial property vacancy rate increased to 10.2% in the fourth quarter of
2010, up from 9.0% in 2009 and 8.0% in 2008. The average quoted full-service rental rate
was $13.80 per square foot (Q4, 2010). The industrial market fourth quarter vacancy rate was
4.8% in 2010. This rate is down from 6.2% in 2009 and 5.2% in 2008. The warehouse
market vacancy rate was 4.7% while the flex market vacancy rate was 7.4% (Q4, 2010). The
average quoted rental rate was $5.95 per square foot (Q4, 2010). The retail market had a
fourth quarter 2010 vacancy rate of 6.6%. This rate is down from 6.9% in 2009, but still above
the rate of 6.0% in 2008. The average net rental rate was $12.33 per square foot (Q4, 2010).
Commercial permit volume increased 35.7% in 2010 over 2009. The 2010 dollar-volume of
total project costs ($118.98 million) was 95.5% higher than the 2009 level ($60.85 million) and
the highest since 2006. The proposed construction details for the permits were not readily
available from the City. As such, a determination could not be made regarding the extent of
private versus public sector funding. Regardless, the significant increase in the number of
new permits suggests that private sector construction is increasing.
Summary Appraisal Report 11
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
11 Aviation
Management
Consulting
Group INTRODUCTION
Commercial Real Estate Market-Fourth Quarter 2010
Component SF (000) Vacancy Rate/SF
Office Market
Total Market 9,280 10.2% $13.80
Class A 1,189 10.3% $17.34
Class B 6,063 8.7% $13.85
Class C 2,028 14.7% $10.45
CBD Market 4,427 7.7% $15.04
South Side Market 2,205 8.7% $13.27
Mid-City Market 1,357 20.4% $12.55
West Side Market 557 10.9% $10.17
Industrial Market
Total Market 18,405 4.8% $5.95
Warehouse Space 17,456 4.7% $5.55
Flex Space 949 7.4% $8.82
CBD Market 1,257 4.9% $4.75
West Side Market 7,998 3.8% $5.32
Northwest Market 3,334 3.8% $6.08
South Side Market 1,543 6.6% $7.55
Southwest Market 1,723 3.7% $5.91
Retail Market
Total Market 22,248 6.6% $12.33
General Retail 11,922 6.7% $10.17
Mall Market 3,177 3.4% $13.54
Power Center 346 0.0% $8.00
Shopping Center 6,770 8.3% $14.48
CBD Market 1,938 5.5% $10.29
Mid-City Market 6,281 6.9% $11.21
South Side Market 5,885 6.3% $15.63
West Side Market 1,692 5.4% $6.98
Northwest Market 1,560 11.6% $10.93
Flour Bluff/Padre Is. 1,581 4.2% $16.75
Portland/Ingleside 1,748 7.1% $11.01
Source: U.S. Census and Burbach &Associates, Inc.
6. Employment
The economy of the MSA is rooted in a number of industries including convention and
tourism, energy, government, military, manufacturing, construction, consumer goods and
services, ranching, fishing, and agriculture.
Summary Appraisal Report 12
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group INTRODUCTION
Several multimillion dollar retail projects have been completed in recent years including new
national restaurants, retail strip centers, two new H.E.B. Plus Supermarkets, and three new
Walmart stores.
South Padre Island Drive is the City's high-volume retail corridor. There are three large
shopping centers located along the corridor including:
a) Sunrise Mall — 800,000 square foot regional mall constructed in 1981, anchored by
Sears, Burlington Coat Factory, Wilcox Furniture, and Discount Cinema;
b) Moore Plaza — 560,000 square foot power center constructed in 1989, anchored by a
H.E.B. Supermarket, Target, Hobby Lobby, Marshalls, and Office Depot; and
c) La Palmera Mall — 1.2 million square foot regional center, opened in 1970, expanded
in 1985, and anchored by Bealls, Dillards, Macys, and JC Penny.
As of December 2010, the total non-agricultural employment in the MSA was 179,800 which
represented an increase of 3,000 jobs (or 1.7%) compared to December 2009. In addition, at
that time, the unemployment rate in the MSA was 8.3% which was up from 2009 (7.7%) and
2008 (5.5%) compared to 8.0% in the State of Texas and 9.1% in the United States (12/2010).
In 2010, the highest rates of employment growth occurred in the following sectors: Natural
Resources, Mining & Construction (5.4%), Manufacturing (3.2%), Other Services (2.9%),
Education & Health Services (2.8%), and Professional & Business Services (2.7%). All other
sectors were unchanged or had growth rates of less than 1.0%. None of the sectors declined
from the prior year.
Since 2005, the largest increases in employment occurred in the following sectors: Other
Services (12.7%), Education & Health Services (12.3%), and Natural Resources, Mining, &
Construction (8.9%). The Leisure & Hospitality (6.3%) and Government (8.2%) sectors
increased as well. The sectors experiencing significant declines included Information (-
12.0%), Manufacturing (-10.9%), and Professional & Business Services (-5.5%).
7. Port of Corpus Christi
The Port of Corpus Christi, which was the seventh busiest port in the United States in 2010, is
the heart of international trade activity in South Texas. In 2008, 85.9 million tons of cargo
moved through the Port, down 3.8% from 2007. In 2009, volume continued to decrease with
76.5 million tons of cargo moving through the Port, down 10.9% from 2008. In 2010,
Summary Appraisal Report 13
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
in Aviation
Management
Consulting
Group INTRODUCTION
however, volume increased 7.4% to 82.2 million tons indicating improvement in economic
conditions. Petroleum products represented 84% of the tonnage handled in 2010.
8. Tourism
The growth in the region's tourism industry can be attributed to a number of area attractions
including the Padre Island National Seashore, Convention Center, USS Lexington Museum,
Texas State Aquarium, and Corpus Christi Hooks—a minor league baseball team.
In 2009, the Texas State Aquarium was the top tourist destination (attracting 523,432 visitors)
followed by the USS Lexington (attracting 264,927 visitors). It is estimated that the tourism
industry generates approximately 12,000 jobs and accounts for approximately 20% of the total
wages and salaries in the community.
9. Climate
The City, which is located on the Texas coastline near the Gulf of Mexico, enjoys warmer
than average temperatures for the United States, higher than average humidity, rainfall,
and sunshine. While the area's tornado activity is below the Texas state average, the area
is subject to other natural disasters such as storms, hurricanes, and floods.
10. Utilities
Electrical service in Texas is deregulated. As a result, seven companies provide electrical
service in the City. At least five companies offer telephone/television/cable services. The
City provides natural gas, trash removal, water, and sewer service.
Summary Appraisal Report 14
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
II Aviation
Management
Consulting
Group AIRPORT OVERVIEW
V. AIRPORT OVERVIEW
A. Airport Description
The Airport, which consists of approximately 2,457 acres, has two runways (Runway 13/31
which is 7,508 feet long and 150 feet wide grooved asphalt in good condition and Runway
17/35 which is 6,080 feet long and 150 feet wide grooved asphalt in good condition). The
Airport has an Air Traffic Control Tower (which operates from 4:00 a.m. to 12:30 a.m. local)
and is served by an Instrument Landing System (ILS) for Runways 13 and 35. The Airport
is designated a Primary Small Hub Airport in the Federal Aviation Administration (FAA)
National Plan of Integrated Airport Systems.
Runway 13/31 and Runway 17/35 will be extended over the next two years (2012 and
2013). Upon completion, Runway 13/31 will have a declared distance of 9,100 feet and
Runway 17/35 will have a new length of 6,680 feet. Upgrades to all navigational aids are
part of the multi-million dollar investment which will be complete by 2014.
Recently, the Department and FAA have invested approximately $3.2 million to rehabilitate
the Federal Inspection Services (FIS) area to process up to 250 passengers per hour. The
users are pleased with the outcome and have labeled it as a "Hassle-Free" facility.
B. Aircraft Operations
The following graphic depicts the general aviation aircraft operations (by category — local,
itinerant, and total) at the Airport from 2006 to 2010, as reported by the Air Traffic Activity
System (ATADS).
Summary Appraisal Report 15
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
11 A
Management
Consulting
Group AIRPORT OVERVIEW
I
General Aviation Aircraft Operations
30,000
N
0 25,000
Y
f0
L
Oa 20,000 in
iillril
u 15,000 at . •
■ ■ Local
a
6 10,000millik Itinerant
c
Ili ■ ■ .Total
5,000
z
0 I,; I
2006 2007 2008 2009 2010
Year
Total general aviation aircraft operations at the Airport have fluctuated from a high of
24,923 (2006) to a low of 18,920 (2007) to 22,704 (2010). This represents an overall
decrease of 8.90% which represents an average annual decrease of 3.06% over the five-
year period studied.
General Aviation Operations
(2006 -2010)
Year Local Itinerant Total % Change
2006 3,170 21,753 24,923 N/A
2007 2,160 16,760 18,920 -24.1%
2008 794 20,200 20,994 11.0%
2009 1,560 19,354 20,914 -0.4%
2010 4,067 18,637 22,704 8.6%
C. Based Aircraft
The majority of aircraft based at the Airport are single-engine aircraft. However, there is a
significant number of multi-engine aircraft and jets based at the Airport as well. The
following graphic depicts the number of based aircraft at the Airport from 2006 to 2010, as
reported by Airport management.
I
Summary Appraisal Report 16
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
laAviation
Management
Consulting
Group AIRPORT OVERVIEW
General Aviation Based Aircraft
90
80
c<a 70
u
a 60 •Single-engine
-a
m 50 Multi-engine
m
6 40 t Jet
30 , III , ■ Helicopter
20 , III 1 ■Other
10 Total
0 -_111.
2006 2007 2008 2009 2010
Year
A total of 68 aircraft are currently based at the Airport of which, 32 (or approximately
47.0%) are single-engine aircraft. From 2006 to 2010, the number of based aircraft at the
Airport decreased a total of 10.53% which represents an average annual decrease of
3.64%.
General Aviation Based Aircraft
(2006 - 2010)
Single- Multi- o
Year engine engine Jet Helicopter Other Total /o Change
2006 40 26 5 5 N/A 76 N/A
2007 37 34 6 1 N/A 78 2.6%
2008 35 32 4 3 N/A 74 -5.1%
2009 36 37 5 1 N/A 79 6.8%
2010 32 22 13 1 N/A 68 -13.9%
D. Fuel Volumes
The following graphic depicts the total general aviation fuel volumes at the Airport from
2006 to 2010, as reported by Airport management.
Summary Appraisal Report 17
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group AIRPORT OVERVIEW
1
General Aviation Fuel Volumes
2,500,000
2,000,000
o0
c7 1,500,000
46
d
E 1,000,000 ■Total
o
z
500,000
0
2006 2007 2008 2009 2010
Year
Total general aviation fuel volumes decreased from 2,018,503 gallons (2006) to 1,404,963
gallons (2010). Over the five-year period studied, total general aviation fuel volumes
decreased 30.40% which represents an average annual decrease of 11.38%.
General Aviation Fuel Volunnes
(2006-2010)
Year Total °10 a rd ye
2006 2,018,503 N(A
2007 1,433,421 -40.8%
2008 1,497,428 4.3%
2009 1,478,136 -1.3%
2010 1,404,963 -5.2%
E. Commercial Operators
There are seven general aviation commercial aeronautical operators at the Airport. There are
two FBOs (Atlantic Aviation and Signature Flight Support) providing aircraft fueling (Jet Fuel
and Avgas), line services, and aircraft parking (hangar and tiedown). There are five SASOs,
operating as sublessees of the FBOs, providing aircraft maintenance and repair, avionics and
instrument repair, aircraft management and charter, flight training and aircraft rental, and
aircraft sales.
Summary Appraisal Report 18
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
Group AIRPORT OVERVIEW
F. Non-Commercial Aeronautical Tenants
There are four non-commercial aeronautical tenants (individual or corporate flight
departments) based at the Airport (Berry Aviation, L.J. Aviation, Law Office of Allan Potter,
and Tubing Rentals). In addition, there are two governmental agencies (National Weather
Service and Civil Air Patrol) operating at the Airport. Additionally, the Airport is utilized by all
branches of the United States military.
G. Non-Aeronautical Tenants
FedEx Ground is currently located in the Airport's International Business Center.
H. Zoning
The Corpus Christ Airport is zoned IH, Heavy Industrial (see zoning map below). The
permitted uses under the IH Zone are extensive and include caretaker's quarters, childcare,
parks and open areas, passenger terminals, utilities, crematoriums, self-service storage, truck
stops, vehicle service, light industrial uses, warehouse and freight movement, waste related
uses, wholesale trade, and heavy industrial. The WGA and EGA represent legal conforming
uses under the current zoning.
The Airport has a Joint Airport Zoning Board that was authorized in 1980 and the Appraiser
assumes the improvements in existence, and under appraisal, meet the criteria set forth in the
Airport Zoning Ordinance. Since the Subject Properties are located at the Airport, as
stipulated in 14 CFR Part 77, a variety of setback and clear (obstacle-free) zone requirements
relating to the Airport's runways and taxiways (e.g., horizontal, transitional, and conical zones)
apply as well. It is assumed that the improvements conform to FAA standards. The City has
adopted Leasehold Development Criteria which governs leasehold development at the
Airport. It is beyond the scope of work to provide an opinion as to whether or not the existing
FBO improvements conform to the City's development criteria or any other standards
established by the City.
Summary Appraisal Report 19
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
IIAviation
Management
Consulting
Group AIRPORT OVERVIEW
1. Zoning Map
Sedwick'Rd ti�
• \
058044 057044 056044 055044 054044 053044 0520
`05804305 43 056043 065 43 0 054043'2 053043 052043"
In ernarional a
Airport
058042 J057042 056042 055042 054042 053042 052042
---Bear�L•n-
05804 057041 `056041 05504 054041 053041 052041
056040 055040 054040 053040 052040
6 0‘ J`
I. Assessor's Data
The improvements at the Airport are part of the Nueces County Appraisal District and
accessed accordingly. The improvements, which have various parcel numbers, are assessed
separately. A summary of the assessments of the West and East General Aviation Facilities
follows:
Improvement Parcel Number Status
Signature Aviation 75-46-0000-00-22 Exempt
Atlantic Aviation 75-46-0000-00-21 Exempt
The land at the Airport is exempt from property taxes; therefore, there are no assessor parcel
numbers for the land.
Summary Appraisal Report 20
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
II Aviation
Management
Consulting
Group SUBJECT PROPERTY
VI. SUBJECT PROPERTIES
A. History of Property/Owner of Record
The Airport is owned by the City of Corpus Christi. The original site, which consisted of 470
acres, was purchased by the City in 1957 and several parcels of land have been added over
the years. Currently, the Airport consists of 2,457 acres.
B. Legal Description
A legal description of the Airport was requested, but not provided. However, metes and
bounds descriptions are provided in the Appendix section of this report.
C. Property Description
West and East General Aviation Facilities
Street Address: Atlantic Aviation (West General Aviation Facility) and
Signature Flight Support (East General Aviation Facility)
have the following addresses:
Atlantic Aviation
355 Pinson Drive
Corpus Christi, Texas 78406
Signature Flight Support
506 International Drive
Corpus Christ, Texas 78406
Location: Atlantic Aviation is located on the west side of the Airport
and Signature Flight Support is located on the east side of
the Airport. Please refer to the Subject Properties
Identification Map provided in the Appendix.
Site Area: WGA: approximately 774,880 square feet (17.79 acres)
EGA: approximately 683,079 square feet (15.68 acres)
Topography: The sites are level at street grade with a slight slope in a
southeasterly direction.
Soil Conditions: The Appraiser was not furnished with a soils report for
review. It is assumed there are no soil conditions which
would adversely impact the Subject Properties.
Easements: The Appraiser was not provided with a title report for review.
It is assumed there are no easements or encumbrances
which would adversely impact the Subject Properties.
Summary Appraisal Report 21
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
11 Aviation
Management
Consulting
Group SUBJECT PROPERTY
Utility Availability: All usual and necessary public utilities are available to both
sites and are provided by the following agencies:
Water: City of Corpus Christi
Sewer: City of Corpus Christi
Natural Gas: City of Corpus Christi
Electrical Service: Multiple providers
Trash Removal: City of Corpus Christi
Telephone/television/cable Multiple providers
Access to Street
Improvements: Both sites are accessible from International Drive — the main
commercial arterial to the Airport. International Drive connects
with State Highway 84 to the north, which, in turn, connects
with Interstate 37.
On-Site Improvements: The West General Aviation Facility consists of Aeronautical
Improved Land (Commercial), Hangar, General Aviation
Terminal Building, Office (associated with Hangar), Storage
(associated with Hangar), Concrete Apron, Asphalt and
Concrete Vehicle Parking, and a Fuel Storage Facility.
The East General Aviation Facility consists of Aeronautical
Improved Land (Commercial), Hangar, General Aviation
Terminal Building, Office (associated with Hangar), Storage
(associated with Hangar), Asphalt Apron, Asphalt and
Concrete Vehicle Parking, and a Fuel Storage Facility.
Environmental Hazards: The Appraiser reviewed and considered the Phase I report.
However, the Appraiser has not quantified the impact of the
findings for the Subject Properties as this is beyond the
scope of work.
Wetlands: During inspection of the sites, no wetlands were observed.
Vegetation: With the exception of the runways, taxiways, apron, roads,
and other developed portions of the Airport, the undeveloped
portions of the Airport are natural grass, which is mowed
periodically, and farmland which is managed by contract
farmers.
Functional Utility: The sites are large, slightly irregular in shape, and improved
with various facilities. As a result of the size and shape of the
sites, a wide variety of uses including, but not limited to, FBOs
can be accommodated.
Summary Appraisal Report 22
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
11 Aviation
Management
Consulting
Group SUBJECT PROPERTY
Aeronautical and Non-Aeronautical Land
Street Address: Street addresses have not been assigned to any of the land
parcels due to lack of development.
Location: The land parcels are located to the north of the Airport
passenger terminal building, both east and west of
International Drive.
Site Area: The total land area under appraisal is 277.71 acres identified
as B-1, C-1, and C-2.
Topography: The sites are level at street grade with a slight slope in a
southeasterly direction.
Soil Conditions: The Appraiser was not furnished with a soils report for
review. It is assumed there are no soil conditions which
would adversely impact the Subject Properties.
Easements: The Appraiser was not provided with a title report for review.
It is assumed there are no easements or encumbrances
which would adversely impact the Subject Properties.
Utility Availability: B-1 parcels are ready for development and have all usual and
necessary public utilities available. C-1 and C-2 parcels do
not have all the usual and necessary public utilities installed as
of the date of appraisal.
Access to Street
Improvements: The subject land available for development is located on both
the east and west sides of International Drive.
On-Site Improvements: All of the land parcels are current vacant and available for
development.
Environmental Hazards: The Appraiser reviewed and considered the Phase I report.
However, the Appraiser has not quantified the impact of the
findings for the Subject Properties as this is beyond the
scope of work.
Wetlands: During inspection of the sites, no wetlands were observed.
Vegetation: With the exception of the runways, taxiways, apron, roads,
and other developed portions of the Airport, the undeveloped
portion of the Airport are natural grass, which is mowed
periodically, and farmland which is managed by contract
farmers.
Functional Utility: The sites are large, generally rectangular in shape, and the
size of the sites can be adjusted as the demand dictates.
Such potential uses include C-store, hotel, office, hangar (and
associated office and shop areas), and warehouse.
Summary Appraisal Report 23
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
El Aviation
Management
Consulting
Group SUBJECT PROPERTY
D. Description of the Subject Properties
1. Non-Aeronautical Improved Land
There are approximately 3,583,298 square feet (82.26 acres) of Non-Aeronautical
Improved Land available for lease at the Airport. The following table, which utilizes the
parcel names provided by Airport management, identifies the Non-Aeronautical Improved
Land areas and associated use(s):
Non-Aeronautical Improved Land
Area Use Lessee Square Feet
B1-1 Commercial/Non-Commercial N/A 219,465
B1-2 Commercial/Non-Commercial N/A 248,851
B1-3 Commercial/Non-Commercial N/A 476,988
61-4 Commercial/Non-Commercial N/A 244,475
61-5 Commercial/Non-Commercial N/A 383,583
B1-6 Commercial/Non-Commercial N/A 511,479
B1-7 Commercial/Non-Commercial N/A 46,310
B1-8 Commercial/Non-Commercial N/A 359,518
B1-9 Commercial/Non-Commercial N/A 190,177
B1-10 Commercial/Non-Commercial N/A 231,820
B1-13 Commercial/Non-Commercial N/A 355,245
B1-15 Commercial/Non-Commercial N/A 315,388
Total 3,583.298
2. Non-Aeronautical Unimproved Land
There are approximately 2,754,075 square feet (63.22 acres) of Non-Aeronautical
Unimproved Land available for lease at the Airport. The following table, which utilizes the
parcel names provided by Airport management, identified the Non-Aeronautical
Unimproved Land areas and associated use(s):
Non Aeronautical Unimproved Land
Area Use Lessee Square Feet
C1-2 Commercial/Non-Commercial N/A 184,292
C1-4 Commercial/Non-Commercial N/A 258,412
C1-6 Commercial/Non-Commercial N/A 258,830
C1-8 Commercial/Non-Commercial N/A 160,057
C1-10 Commercial/Non-Commercial N/A 351,656
C1-12 Commercial/Non-Commercial N/A 259,889
C1-14 Commercial/Non-Commercial N/A 260,505
C2-2 Commercial/Non-Commercial N/A 262,725
C2-4 Commercial/Non-Commercial N/A 258,655
C2-6 Commercial/Non-Commercial N/A 256,669
C2-8 Commercial/Non-Commercial N/A 242,385
Total 2,754,075
Summary Appraisal Report 24
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group SUBJECT PROPERTY
3. Aeronautical Improved Land
There is approximately 2,409,895 square feet (55.32 acres) of Aeronautical Improved Land
leased from the City or available for lease at the Airport. Approximately 170,087 square
feet of the Aeronautical Improved Land associated with WGA is utilized for commercial
purposes by Atlantic Aviation and approximately 140,048 square feet of Aeronautical
Improved Land associated with the EGA is utilized for commercial purposes by Signature.
The remaining 2,099,760 square feet of Aeronautical Improved Land is available for lease
for Commercial or Non-Commercial purposes. The following table, which utilizes the parcel
names provided by Airport management, identifies the Aeronautical Improved Land and
associated use(s):
Aeronautical Improved Land
Area Use Lessee Square Fed
B1-11 Corrmerdal/dial NVA 251,244
B1-12 Comrmrercial/Non-Corn ial NYA 546,039
B1-14 Commercid/Nn-Commercial NYA 78,358
B1-16 Carrnercial/NxrCorrmercial NVA 1,149,553
B1-17 Com ercial/N -01mmercial NVA 74,565
\AGA,Undeveloped Lad Commercial Atlantic Auation 170,087
EGA,Ur cped Land Commercial Sigiature 140,048
Total 2,409,895
4. Aeronautical Unimproved Land
There is approximately 3,734,668 square feet (85.74 acres) of Aeronautical Unimproved
Land available for lease at the Airport for Commercial or Non-Commercial purposes. The
following table, which utilizes the parcel names provided by Airport management, identifies
the Aeronautical Unimproved Land and associated use(s):
Aeronautical Unimproved Land
Area Use Lessee Square Feet
C1-1 Commercial/Non-Commercial N/A 231,392
C1-3 Commercial/Non-Commercial N/A 388,058
C1-5 Commercial/Non-Commercial N/A 399,154
C1-7 Commercial/Non-Commercial N/A 394,432
C1-9 Commercial/Non-Commercial N/A 389,710
C1-11 Commercial/Non-Commercial N/A 384,988
C1-13 Commercial/Non-Commercial N/A 380,266
C2-1 Commercial/Non-Commercial N/A 480,951
C2-3 Commercial/Non-Commercial N/A 208,588
C2-5 Commercial/Non-Commercial N/A 267,870
C2-7 Commercial/Non-Commercial N/A 209,262
Total 3,734,668
Summary Appraisal Report 25
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
le Aviation
Management
Consulting
Group SUBJECT PROPERTY
The Aeronautical Unimproved Land classification is based upon the assumption that the
City will provide airside access (to the Airport) from the properties by constructing a parallel
taxiway east of Runway 17/35.
5. Hangar
There is approximately 129,225 square feet of Hangar space being leased from the City by
Atlantic Aviation (approximately 52,825 square feet) and Signature (approximately 76,400
square feet) at the Airport. The following table identifies the Hangar space being leased by
both FBOs utilizing Airport management's naming structure:
Hangar
Area Use Lessee Square Feet Door Coristn#ion
Width Haight Date
WGA H-1 Commercial Atlantic A'ation 14,000 120 20 1962
WGA H-2 Commercial Atlantic Aaiation 14,000 120 20 1962
WGA H-3 Commercial Atlantic Aviation 11,500 110 20 1990
WGA H-4 Commercial Atlantic Auation 13,'05 60 14 1962
EGA H-1 Commercial Signature 25,600 100 32 1962
EGA H-2 Commercial Signature 15,000 90 22 1975
EGA H-3 Commercial Signature 30,900 110(2) 20(2) 1992
EGA H-4 Commercial Signature 5,000 60 20 —1990
Total 129,295
WGA H-1 (leased by Atlantic Aviation) is clear span, steel frame, metal hangar (roof, siding,
and door) with a concrete floor with drains. The hangar tail door is out of service. WGA-H1
has fluorescent lighting, electrical service, and is considered to be average condition.
WGA H-2 (leased by Atlantic Aviation) is clear span, steel frame, metal hangar (roof, siding,
and door) with a concrete floor with drains. The hangar tail door is out of service. WGA-H2
has a mix of halide and fluorescent lighting, electrical service, and is considered to be
average condition.
WGA H-3 (leased by Atlantic Aviation) is clear span, steel frame, metal hangar (roof, siding,
and door) with a concrete floor with drains. The hangar tail door is out of service. WGA-H3
has halide lighting, electrical service, and is considered to be average condition.
WGA H-4 (leased by Atlantic Aviation) is clear span, steel frame, metal hangar (roof, siding,
and door) with a concrete floor with drains. WGA-H4 has fluorescent lighting, electrical
service, and is considered to be fair condition. WGA-H4 is considered to be in fair
condition due to the quality of doors, concrete floor, as well as interior and exterior finish.
Summary Appraisal Report 26
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
Group SUBJECT PROPERTY
EGA H-1 (leased by Signature) is a clear span, concrete shell structure with a metal door
and concrete floor without drains. EGA-H1 has halide lighting, electrical service, and is
considered to be average condition.
EGA H-2 (leased by Signature) is clear span, steel frame, metal hangar (roof, siding, and
door) with a concrete floor with drains. EGA-H2 has halide lighting, electrical service, and
is considered to be average condition.
EGA H-3 (leased by Signature) is a steel frame metal hangar (roof, siding, and door) with a
concrete floor with drains. EGA-H3 has two doors which are 110 feet wide and 20 feet tall,
halide lighting, electrical service, and is considered to be average condition.
EGA H-4 (leased by Signature) is clear span, steel frame, metal hangar (roof, siding, and
door) with a concrete floor with drains, and concrete block fire-wall. EGA-H4 has halide
lighting, electrical service, and is considered to be average condition.
6. General Aviation Terminal Building
There is approximately 8,005 square feet of General Aviation Terminal Building (GATB)
space being leased from the City by Atlantic Aviation (approximately 3,105 square feet) and
Signature (approximately 4,900 square feet) at the Airport. The following table identifies
the GATB space being leased by both FBOs utilizing Airport management's naming
structure:
General Aviation Terminal Buliding
Area Use Lessee Square Feet
WGA OF-1 Commercial Atlantic Aviation 3,105
EGA OF-1 Commercial Signature 4,900
Total 8,005
WGA OF-1 (leased by Atlantic Aviation) is a steel structure with brick veneer and a metal
roof. The interior is a combination of ceramic and vinyl tile and carpeted floors with painted
drywall and carpeted walls, drywall ceiling, with fluorescent lighting. The building, which
has central air conditioning, was constructed in 1962 and renovated in 2003. There is a
common lobby/waiting area, restroom facilities, kitchen area, office spaces, conference
room, pilot's lounge, and service counter/work area. The GATB is considered to be in good
condition.
Summary Appraisal Report 27
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
li Aviation
Management
Consulting
Group SUBJECT PROPERTY
EGA OF-1 (leased by Signature) is a steel structure with metal exterior (roof and siding).
The interior is a combination of ceramic tile and carpeted floors with painted and
wallpapered drywall walls, acoustic ceiling, and integrated fluorescent lighting. The
building, which has central air conditioning, was constructed in the 1990s and remodeled in
2000. There is a common lobby/waiting area, restroom facilities, kitchen area, office
spaces, conference room, pilot's lounge, and service counter/work area. The GATB is
considered to be in good condition.
7. Office (associated with Hangar)
There is approximately 29,480 square feet of Office space being leased from the City by
Atlantic Aviation (approximately 9,280 square feet) and Signature (approximately 20,200
square feet) at the Airport. With the exception of EGA OF-4, all the Office space has
central air conditioning. The following table identifies the Office space utilizing Airport
management's naming structure:
Office
Area Use Lessee Square Feet
WGA OF-2 Commercial Atlantic Aviation 4,680
WGA OF-3 Commercial Atlantic Aviation 2,300
WGA OF-4 Commercial Atlantic Aviation 2,300
EGA OF-2 Commercial Signature 2,500
EGA OF-3 Commercial Signature 5,000
EGA OF-4 Commercial Signature 5,000
EGA OF-5 Commercial Signature 5,700
EGA OF-6 Commercial Signature 2,000
Total 29,480
WGA OF-2 (leased by Atlantic Aviation) is a steel structure with metal exterior (roof and
siding). The interior is a combination of vinyl tile, carpet, and concrete floors with painted
drywall walls, acoustic and painted plywood ceiling, and fluorescent lighting. The office,
which was constructed in 1962, is considered to be in average condition.
WGA OF-3 (leased by Atlantic Aviation) is a steel structure with metal roof and brick veneer
exterior. The interior is a combination of ceramic tile, carpet, and concrete floors with
painted drywall walls, acoustic ceiling, and fluorescent lighting. The office, which was
constructed in 1962, is considered to be in average condition.
WGA OF-4 (leased by Atlantic Aviation) is a steel structure with metal exterior (roof and
siding). The interior is a combination of ceramic tile, carpet, and concrete floors with
Summary Appraisal Report 28
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
leAviation
Management
Consulting
Group SUBJECT PROPERTY
painted drywall walls, acoustic ceiling, and fluorescent lighting. The office, which was
constructed in 1962, is considered to be in average condition.
EGA OF-2 (leased by Signature) is a concrete shell structure. The interior is a combination
of vinyl tile, with painted drywall walls, acoustic ceiling, and fluorescent lighting. The office,
which was constructed in 1962, is considered to be in average condition.
EGA OF-3 (leased by Signature) is a steel structure with metal exterior (roof and siding).
The interior is a combination of painted concrete floors with painted drywall walls and
ceiling and fluorescent lighting. The office, which was constructed in the 1975, is
considered to be in average condition.
EGA OF-4 (leased by Signature) is a steel structure with metal exterior (roof and siding).
The interior is a combination of concrete floors, unfinished walls, and fluorescent lighting.
The office, which has no central air conditioning or heat, was constructed in 1975. The
office is considered to be in average condition.
EGA OF-5 (leased by Signature) is a steel structure with metal exterior (roof and siding).
The interior is a combination of vinyl tile and carpet with painted drywall walls, acoustic
ceiling, and integrated fluorescent lighting. The office, which was constructed in 1982, is
considered to be in average condition.
EGA OF-6 (leased by Signature) is a steel structure with metal exterior (roof and siding).
The interior is a combination of ceramic tile, vinyl flooring, and concrete floors with painted
drywall walls, acoustic ceiling, and integrated fluorescent lighting. The office, which was
constructed in 1982, is considered to be in average condition.
8. Storage (associated with Hangar)
There is approximately 6,580 square feet of Storage space (associated with a Hangar)
being leased from the City by Atlantic Aviation (approximately 4,680 square feet) and
Signature (approximately 1,900 square feet) at the Airport. The following table identifies
the Storage space (associated with a Hangar) utilizing Airport management's naming
structure:
Summary Appraisal Report 29
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
leAviation
Management
Consulting
Group SUBJECT PROPERTY
Storage
Area Use Lessee Square Feet
WGA OF-2 Commercial Atlantic Aviation 4,680
EGA OF-5 Commercial Signature 1,900
Total 6,580
WGA OF-2 (leased by Atlantic Aviation) is a steel structure with metal exterior (roof and
siding). The interior of the Storage space is unfinished with plywood floors and skylights.
The Storage space, which is located on the second floor, was constructed in 1962 and is
considered to be in average condition.
EGA OF-5 (leased by Signature) is a steel and concrete block structure with metal exterior
(roof and siding). The interior of the Storage space is unfinished with concrete floors. The
Storage space, which is located on the second floor, was constructed in the 1982 and is
considered to be in average condition.
9. Apron (Asphalt and Concrete)
There is approximately 832,525 square feet of Apron space (concrete and asphalt) being
leased from the City by Atlantic Aviation (approximately 354,765 square feet) and Signature
(approximately 477,760 square feet) at the Airport. The following table identifies the Apron
space (concrete and asphalt) utilizing Airport management's naming structure:
Apron
Area Use Lessee Square Feet Type
WGA Apron Commercial Atlantic Aviation 466,514 Concrete
WGA Apron-FSF Commercial Atlantic Aviation 11,246 Concrete
EGA Apron Commercial Signature 354,765 Asphalt
Total 832,525
WGA Apron and the WGA Apron associated with the Fuel Storage Facility (FSF) are
concrete, constructed in 2008, and considered to be in excellent condition.
EGA Apron is asphalt and is considered to be in average condition.
Summary Appraisal Report 30
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
/I Aviation
Management
Consulting
Group SUBJECT PROPERTY
10. Vehicle Parking (Asphalt and Concrete)
There is approximately 148,589 square feet of Vehicle Parking space (concrete and
asphalt) being leased from the City by Atlantic Aviation (approximately 61,823 square feet)
and Signature (approximately 86,766 square feet) at the Airport. The following table
identifies the Vehicle Parking space (concrete and asphalt) utilizing Airport management's
naming structure:
Vehicle Parking
Area Use Lessee Square Feet Type
WGA Vehicle Parking Commercial Atlantic Aviation 5,280 Concrete
Commercial Atlantic Aviation 56,543 Asphalt
EGA Vehicle Parking Commercial Signature 47,266 Concrete
Commercial Signature 39,500 Asphalt
Total 148,589
WGA Vehicle Parking consists of approximately 5,280 square feet of concrete and 56,543
square feet of asphalt. The WGA Vehicle Parking, which was constructed in 1962, is
considered to be in average condition.
EGA Vehicle parking consists of approximately 47,266 square feet of concrete and 39,500
square feet of asphalt. The EGA Vehicle Parking is considered to be in average condition.
The construction date of the EGA Vehicle Parking area is unknown.
11. Fuel Storage Facilities
There is approximately 86,500 gallons of fuel storage capacity (jet fuel, avgas, unleaded,
and diesel) being leased from the City by Atlantic Aviation (approximately 34,500 gallons)
and Signature (approximately 52,000 gallons) at the Airport. The following table identifies
the Fuel Storage Facilities (jet fuel, avgas, unleaded, and diesel) utilizing Airport
management's naming structure:
Fuel Storage Facilities(FSF)
Area Use Lessee Gallons Type
Commercial Atlantic Aviation 24,000 Jet Fuel
WGA FSF Commercial Atlantic Aviation 10,000 Avgas
Commercial Atlantic Aviation 500 Unleaded
Commercial Signature 36,000 Jet Fuel
EGA FSF Commercial Signature 12,000 A.gas
Commercial Signature 2,000 Unleaded
Commercial Signature 2,000 Diesel
Total 86,500
Summary Appraisal Report 31
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
NConsulting
't Group SUBJECT PROPERTY
The WGA Fuel Storage Facility is above ground and considered to be in average condition.
Two 12,000 gallon Jet Fuel tanks were installed in 1998 and one 10,000 gallon Avgas tank
and one 500 gallon Unleaded tank were installed in 2007.
The EGA Fuel Storage Facility is below ground and all of the tanks (three 12,000 gallon Jet
Fuel tanks, one 12,000 gallon Avgas tank, one 2,000 gallon Unleaded tank, and one 2,000
gallon Diesel tank) were installed in 1962. Due to the below ground construction of the
EGA Fuel Storage Facility, an opinion of condition was not derived.
Summary Appraisal Report 32
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group HIGHEST AND BEST USE
VII. HIGHEST AND BEST USE
Highest and best use is defined as "the reasonable, probable, and legal use of vacant land or
an improved property, which is physically possible, appropriately supported, financially
feasible, and that results in the highest value."5
The highest and best use of land if vacant and available for use may be different from the
highest and best use of improved property. This will be true when the improvement is not an
appropriate use and yet makes a contribution to total property value in excess of the value of
the site.
In estimating highest and best use of the site as if vacant and as improved, the uses are
submitted to four different analyses. The analyses are:
a) Physically Possible Uses — Which proposed uses are physically possible to put on
the subject site;
b) Legally Permissible Uses — Which of the possible uses are legally permissible by
current or probable zoning and deed restrictions on the subject site;
c) Financially Feasible Uses — Of the selected uses based upon the prior criteria, which
uses will produce a net return to the owner of the site;
d) Most Profitable Uses — Which of the economically feasible uses provides the highest
net return or the highest present worth.
These tests are applied first to the land as if vacant and ready for development.
A. Physically Possible Uses
The first constraint imposed on the highest and best use of the Subject Properties is that
dictated by the physical aspects of the site. In general, the larger the site, the greater the
potential for achieving economies of scale and flexibility in development.
For the Subject Properties, the principle of conformity suggests the most logical uses would
be aeronautical and aeronautical-related.
B. Legally Permissible
Generally, there are two types of legal restrictions applicable to property: private restrictions
(deed restriction easements) and public restrictions (primarily zoning). The Appraiser was
not provided with a title report for review. The Appraiser assumes there are no legal public
5 The Appraisal of Real Estate, Ninth Edition,American Institute of Real Estate Appraisers, Chicago, II., 1987.
Summary Appraisal Report 33
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
11 Aviation
Management
Consulting
Group HIGHEST AND BEST USE
or private deed restrictions which would impact the current or future improvements on the
site with the following exceptions: the Subject Properties are zoned IH, Heavy Industrial
and are also regulated under the Airport Zoning Ordinance of 1980 and therefore, the use
must be in compliance with these requirements.
C. Financially Feasible and Most Profitable Uses
The Appraiser understands the Subject Properties will continue to be utilized as part of the
Airport. Although land values indicate a use other than an airport use could be supported
as the highest and best use, for the purposes of this analysis, the Appraiser has analyzed
the Subject Properties as a part of the Airport without addressing the potential to redevelop
the Subject Properties for a use other than an aeronautical or aeronautical-related. The
Appraiser anticipates the Subject Properties will continue to operate as a part of the Airport
over the long-term and therefore the most profitable uses would be aeronautical or
aeronautical-related uses.
D. Highest and Best Use - As Vacant
Based upon the preceding analysis, the highest and best use of the Subject Properties, as
vacant, would be for an aeronautical or aeronautical-related use. Allowed uses may be
restricted under the legal constraints imposed by the IH Zone, the Airport Zoning
Ordinance, and the FAA. The Appraiser has not addressed the redevelopment of the land
for uses other than aeronautical or aeronautical-related.
E. Highest and Best Use - As Improved
Given the sizes of the various aeronautical improvements, the Appraiser anticipates the
facilities would best be utilized for the servicing, maintenance, and/or storage of general
aviation aircraft. As such, the existing building improvements provide a reasonable return
to the land.
Summary Appraisal Report 34
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group VALUATION
VIII. VALUATION
A. Introduction
In theory, there are three approaches to value: the Cost, Sales Comparison, and Income
Approach. Central to each approach is the principle of substitution: an astute real estate
investor will pay no more than the value of an equally desirable alternative property or
investment.
The Cost Approach considers the current cost of replacing the building and site
improvements on a property less depreciation plus the market value of the land assumed
vacant. Depreciation affecting the property can occur from three sources: physical
deterioration, functional obsolescence, and economic obsolescence. This approach is
most effective in valuing relatively new (or even proposed) developments or special
purpose properties such as the Subject Properties. This approach is included in the
analysis due to the special purpose nature of the Subject Properties.
The Sales Comparison Approach involves direct comparisons of similar properties which
have sold in the same or similar markets. The data from these comparables is then
analyzed and adjustments are made for differences that are considered significant. These
adjusted sales are then weighted to provide an indication of value. The Sales Comparison
Approach is not a good indicator of value since sales of FBOs include business enterprise
which is very difficult to separate from the real estate. As such, the Sales Comparison
Approach was not considered appropriate or applicable to derive a value conclusion in this
case.
The Income Approach is based upon an estimate of the Subject Property's possible net
income and measures the present worth of anticipated future benefits derived from property
ownership. In order to derive the anticipated future benefits, the net income is capitalized
to arrive at an indication of value from the standpoint of an investment. By the use of the
capitalization process, the net income is converted to its present value. Provision for the
investor's recapture of invested capital, as well as return on capital, is built into this
capitalization procedure. Typically, there are two methodologies for determining value by
the Income Approach; the Direct Capitalization technique and Discounted Cash Flow. The
Summary Appraisal Report 35
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
SI Aviation
Management
Consulting
Group VALUATION
Discounted Cash Flow method is best suited for larger, multi-tenant properties with
divergent leases since the income streams being generated can vary significantly from year
to year.
After completing the various approaches to value, the methods utilized are then compared
for appropriateness and applicability to the Subject Property. The quantity and quality of
the data available for examination under each approach and the inherent dangers and
advantages in each approach is considered and weighed to derive a final estimate of value.
The process of evaluating the alternative conclusions is outlined in the Reconciliation
Section of this report.
1. Ground Leasehold Analysis
Atlantic Aviation is on a month-to-month lease. Signature Aviation's lease is scheduled to
terminate in 2012. Due to the short-tern nature of these leases, there is no measurable
leasehold interest in either property.
Also, the B1 , Cl, and C2 land areas have not been leased; therefore, no leasehold interest
exists.
B. Cost Approach
It is the Appraiser's opinion that the Cost Approach is appropriate and applicable in this
case. A land valuation/sales analysis was not deemed necessary, however, as leasehold
interest (as opposed to fee simple interest) is being appraised.
1. Replacement Cost of Improvements
In order to estimate a replacement cost for the subject improvements, the Marshall & Swift,
Marshall Valuation Service (MVS) Publication, a national cost publication, was utilized.
Additional indirect costs (permanent loan fees, property taxes during construction, etc.)
which are not included in the MVS base cost were calculated separately. After adjusting for
current and local multipliers, replacement costs range from $4.00 per square foot (psf) for
Asphalt Apron and Vehicle Parking to $83.50 psf for General Aviation Terminal Building.
Indirect costs have been estimated based upon a survey of the marketplace. There are no
interim real estate taxes since the property is exempt from property taxes.
Summary Appraisal Report 36
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
IM Group VALUATION
Advertising/lease-up costs for WGA and EGA are estimated at $50,000. Permanent loan
fees are estimated for WGA and EGA at $100,000. Legal, title insurance, and
miscellaneous fees have been estimated at $150,000 for WGA and $140,000 for EGA.
Entrepreneurial profit has not been estimated given the airport-related nature of the subject
improvements.
2. Estimate of Accrued Depreciation
Accrued depreciation is the difference between the cost of new improvements and the
present value of those improvements measured as of the date of the appraisal.
Depreciation includes loss in value from three basic categories: physical deterioration,
functional obsolescence, and external obsolescence.
Physical deterioration is the loss in value caused by deterioration or impairment of condition
as a result of normal wear and tear and the actual aging of the physical components. It
may be curable or incurable. While it is the opinion of the Appraiser that there appears to
be some limited curable physical depreciation in the Subject Properties, for the purposes of
this analysis, no curable physical depreciation has been calculated.
Regarding the economic life, given the design and quality of the Subject Properties and
based upon the age-life histories indicated in the MVS, it is the Appraiser's opinion that the
Subject Properties have the following economic lives:
Subject Property Economic Life
Hangar 35 years
General Aviation Terminal Building 45 years
Office (associated with Hangar) 40 years
Storage (associated with Hangar) 40 years
Concrete Apron 20 years
Asphalt Apron 15 years
Concrete Vehicle Parking 20 years
Asphalt Vehicle Parking 15 years
Fuel Storage Facility 20 years
Physical depreciation ranges from 25% to 88% depending upon the component of the
Subject Properties. Please refer to the Depreciation Schedules that follow.
Summary Appraisal Report 37
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
11 Aviation
Management
Consulting
Group VALUATION
West General Aviation Area
Depredation Schedule
Effecti'e Economic Estimate Replacement Estimated
Bolting Age Life Physical Cost(New) Depreciation
Depreciation
WGA H-1 30 35 86% $ 516,320 $ 4144,035
W3A H-2 30 35 86% $ 516,320 $ 444,035
WGA H-3 25 35 71% $ 427,275 $ 303,330
WGA H-4 30 35 86% $ 483,431 $ 415,751
WGA OF-1 15 45 33% $ 259,268 $ 85,558
WGA OF-2 35 40 88% $ 258,991 $ 227,912
WGA OF-3 35 40 88% $ 131,905 $ 116,076
WGA OF-4 35 40 88% $ 130,755 $ 115,064
WGA OF-2 Storage 35 40 88% $ 95,893 $ 84,386
WGA Apron-Concrete 3 20 15% $ 3,732,112 $ 559,817
WGA Apron-FSF 3 20 15% $ 89,968 $ 13,495
WGA Parking-Concrete 10 20 50% $ 26,400 $ 13,200
WGA Parking-Asphalt 10 15 67% $ 226,172 $ 151,535
10 20 50% $ 180,000 $ 90,000
WGA FSF 5 20 25% $ 75,000 $ 18,750
5 20 25% $ 3,750 $ 938
Total $ 7,153,510 $ 3,083,883
East General Aviation Area
Depredation Schedule
Estimate
Effective Econcnic Replacement Estimated
Building Age Life Physical Cost(Nei✓) Depreciation
Depreciation
EGA H-1 30 35 86% $ 1,003,520 $ 863,027
EGA H-2 30 35 86% $ 600,450 $ 516,387
EGA H-3 20 35 57% $ 1,069,684 $ 609,720
EGA H-4 20 35 57% $ 188,750 $ 107,588
EGA OF-1 10 35 29% $ 396,557 $ 115,002
EGA CF-2 35 45 78% $ 206,775 $ 161,285
EGA OF-3 30 40 75% $ 251,550 $ 188,663
EGA CF-4 30 40 75% $ 251,550 $ 188,663
EGA OF-5 25 40 63% $ 286,767 $ 180,663
EGA OF-6 25 40 63% $ 110,680 $ 69,728
EGA OF-5 Storage 25 40 63% $ 38,931 $ 24,527
EGA Apron-Asphalt 10 15 67% $ 1,419,C60 $ 950,770
EGA Parking-Concrete 10 20 50% $ 2'6,330 $ 118,165
EGA Parking-Asphalt 10 15 67% $ 158,000 $ 105,860
10 20 50% $ 270,000 $ 135,000
EGA FSF 10 20 50% $ 90,000 $ 45,000
10 20 50% $ 15,000 $ 7,500
10 20 50% $ 15,000 $ 7.500
Total $ 6,608,604 $ 4,395,046
Summary Appraisal Report 38
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group VALUATION
Functional obsolescence is the adverse effect on value resulting from defects in design
which may impair utility. It can be caused by changes occurring over the years making
some aspect of the structure, material, or design obsolete by current standards.
External obsolescence is the adverse effect on value resulting from influences outside (or
beyond) the property itself. This includes changing property or land use patterns, shifting
zoning districts, or adverse economic climate. Economic impact (or obsolescence) is
measured by the difference between a return on cost and estimated net operating income.
While it is the opinion of the Appraiser that there appears to be some limited functional and
external obsolescence in the Subject Properties, for the purposes of this analysis, no
obsolescence has been calculated.
Summary Appraisal Report 39
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
11 Aviation
Management
Consulting
Group VALUATION
3. Cost Approach Summary
West General Aviation Area
COST APPROACH SUNVIARY
DIRECT COSTS
Component Square Fed Gallons Cost per Wit Total Cost
WGA F-1' 14,000 - $ 36.88 $ 516,320
WGA H-2' 14,000 - $ 36.88 $ 516,320
WGA 1+3' 11,500 - $ 37.15 $ 427,225
WGA I-1-4* 13,'75 - $ 36.28 $ 483,431
WGA OF-1" 3,105 - $ 83.50 $ 259,268
WGA OF-2"` 4,680 - $ 55.34 $ 258,991
WGA OF-3" 2,303 - $ 57.35. $ 131,905
WGA OF-4 2,300 - $ 56.85 $ 130,755
WGA OF-2 Storage' 4,680 - $ 20.49 $ 95,893
WGA Apron-Concrete"` 46B,514 - $ 8.00 $ 3,732,112
WGA Apron-FSF"' 11,246 - $ 8.00 $ 89,968
WGA Parking-Concrete"' 5,280 - $ 5.00 $ 26,400
WGA Parking-Asphalt"' 56,543 - $ 4.00 $ 226,172
24,000 $ 7.50 $ 180,000
WGA FSP**** - 10,000 $ 7.50 $ 75,000
503 $ 7.50 $ 3,750
Total Direct BuiIcing and Site Improvement Costs $ 7,153,510
INDIRECT COSTS
Component Cost
Interim Real Estate Taxes $ -
AcKertising/Lease up Costs $ 50,000
Permanent Loan Fees $ 100,000
Legal,Title Insurance, and Misc. Fees $ 150,000
Tota I Indirect Cons $ 300,000
Total Direct and Indirect Costs $ 7,453,510
LESS:DQAT1ON
Component Cost
Physical (see Depreciation Schedule) $ 3,083,883
Functional $ -
External $ -
Total Depreciation $ 3,083,883
Depreciated Replacement Cost $ 4,369,627
ADD: LEASEHOLD VALUE FOR LAND $ -
INDICATED VALUE BY THE COST APPROACH $ 4,369,627
ROMDEIk $ 4,250,000
' Marshall Valuation Service, Section 14, Page 29.
" Marshall Valuation Service, Section 15, Page 17.
Marshall Valuation Service, Section 66, Page 3.
"" Marshall Valuation Service, Section 61, Page 4.
Summary Appraisal Report 40
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
11 Aviation
Management
Consulting
Group VALUATION
East General Aviation Area
COST APPROACH SUMMARY
DIRECT 00675
Comp a,erl Square Feet Gallons Cost per Unit Total Cost
EGA H-1* 25,600 - $ 39.20 $ 1,003,520
EGA H-2" 15,000 - $ 40.03 $ 600,450
EGA F1-3" 30,800 - $ 34.73 $ 1,039,684
EGA H-4* 5,000 - $ 37.75 $ 188,750
EGA OF-1** 4,900 - $ 80.93 $ 396,557
EGA OF-2** 2,500 - $ 82.71 $ 206,775
EGA OF-3** 5,000 - $ 50.31 $ 251,550
EGA OF 4*" 5,000 - $ 50.31 $ 251,550
EGA OF-5*" 5,700 - $ 50.31 $ 286,767
EGA OF-6** 2,000 - $ 55.34 $ 110,680
EGA OF-5 Storage* 1,900 - $ 20.49 $ 38,931
EGA Apron-Asphalt*** 354,765 - $ 4.00 $ 1,419,060
EGA Parking-Concrete*"" 47,265 - $ 5.00 $ 236,330
EGA Parking-Asphalt"** 39,500 - $ 4.00 $ 158,000
36,000 $ 7.50 $ 270,000
EGA FSP*** - 12,000 $ 7.50 $ 90,000
- 2,000 $ 7.50 $ 15,000
2,000 $ 7.50 $ 15,000
Total Direct F3uiIding and Site Improvement Costs $ 6,608,604
INDIRECT COSTS
Component Cost
Interim Reel Estate Taxes $ -
AdkertisingI se up Costs $ 50,000
Permanerrt Loan Fees $ 100,000
Lam,Title Insurance, and Misc. Fees $ 140,000
Total Indirect Costs $ 290,000
Total Direct and Indirect Costs $ 6,898,604
LEGS:DEPREPA71CN
Component Cast
Physical (see Deprecation Schedule) $ 4,395,046
Functional $ -
Exterr $ -
Total Depreciation $ 4,395,046
Depredated Replacement Cost $ 2503,558
ADD:LEASEHOLD VALUE FOR LAND $ -
I NDI CAT®VALUE BY TF E COST APPROACH $ 2,503,558
ROUNDED. $ 2,500,000
* Marshall Valuation Service, Section 14, Page 29.
** Marshall Valuation Service, Section 15, Page 17.
*** Marshall Valuation Service, Section 66, Page 3.
**** Marshall Valuation Service, Section 61, Page 4.
Summary Appraisal Report 41
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group VALUATION
C. Income Approach
The Income Approach to real property value considers a relationship between the
estimated net income the property could generate and the sale price or value. This net
income is translated into a value estimate using a market driven capitalization rate
appropriate to meet the market demands for investment returns. The two commonly used
capitalization methods are the Direct Capitalization and Discounted Cash Flow analysis.
These methods are summarized, as follows.
Direct Capitalization is "used to convert an estimate of a single year's income
expectancy into an indication of value in one direct step, either by dividing the
income estimate by an appropriate rate or by multiplying the income estimate by an
appropriate factor.i6
Discounted Cash Flow analysis is "the procedure in which a discount rate is applied
to a set of projected income streams and a reversion. The analyst specifies the
quantity, variability, timing, and duration of the income streams as well as the
quantity and timing of the reversion and discounts each to its present value at a
specified yield rate."'
Under the Income Approach, leasehold interest is dictated by market rent which is the
rental income the Subject Properties would likely command in the open market.
As such, the Direct Capitalization approach finds application in this case and the
Discounted Cash Flow analysis does not.
1. Rental Discussion
In order to estimate market income potential, AMCG conducted a survey of: (a) comparable
airports located throughout the United States, (b) comparable Small Hub airports located in
Texas and surrounding states, and (c) competitive airports located within 50 nautical miles
of the Airport. AMCG also considered information contained in its proprietary database for
regional and national airports as a supplement to the results of the survey and as a
validation of the conclusions reached.
6 The Dictionary of Real Estate Appraisal, Third Edition, Appraisal Institute, 1993, Page 100.
Ibid. Page 102.
Summary Appraisal Report 42
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
gzAviation
Management
.. Consulting
Group VALUATION
2. Study Findings
In order to derive the market rent for the Subject Properties, information/data from similar
properties at national, regional, comparable, Small Hub, and competitive airports was
analyzed. The results of the analysis are summarized in this section. Definitions of the
Minimum, Maximum, Mean, Standard Deviation, Median, and Range (utilized in the
following tables) are provided in the Appendix section of this report.
a. National Data
As a supplement to the comparable airport data, rents obtained from over 350 airports
located throughout the United States were analyzed. A summary and statistical analysis of
the findings for national airports is provided in the following table.
National Airport oata
Type Component fvirirrim Maxirnm Mean Medan Range
Dekiation
Aeronautical Improved Lad(Commercial) 0.009 1.190 0.240 0.187 0.198 1.181
Aeronautical Irrpro ed taxi(Non-CormTial) 0.050 0.790 0.262 0.147 0.225 0.740
Aeronautical Lk irrproved Land(Cormx rrcial) 0.010 0.503 0.165 0.109 0.140 0.493
Aeronauticel Unirrpn,,ed Land(Wn-Oca r ercial) 0.020 0.740 0.220 0.156 0.140 0.720
Nautical Improved Land(Commercial) 0.210 0.450 0.315 0.091 0.320 0.240
Nb-i,Aectnajticel Inproked Lard(f onCa'nr rcial) 0.098 0.720 0.315 0.2(/ 0.777 0.677
Non-Aeronautical Unimproved Land(Commercial) 0.040 1.000 0.520 0.6/9 0.520 0.960
Win-Aeronautical Lhr proed Lad(Nay-Commercial) 0.040 0.040 0.040 NA 0.040 0.000
Aeronautical Hangar 0.008 6.050 1.768 1.679 1.208 6.042
Aeronautical General Auation Terminal Building 0.070 10210 4.()7 3.064 3.900 10.140
Aeronautical Office(associated with Hangar) 0.100 27./60 6.756 6.004 4.500 27.660
Aeronautical Storage(associates with Hangar) 0.246 11.070 2500 3.221 1.055 10.830
Aeronautical Concrete Apron 0.030 0.850 0.259 0.205 0.260 0.820
Aeronautical Asphalt Apron 0.050 1.070 0.345 0.285 0.240 1.020
Aeronautical Concrete Vehicle Parking 1.330 2650 1.990 0.933 1.990 1.320
Aeronautical Asphalt Vehicle Parking 0.115 0.650 0.202 0.183 0.180 0.67-"(
All rental rates are "per square foot per year" (psf/yr)
b. Regional Data
As an additional supplement to the comparable airport data, rents obtained from 33 airports
in the FAA Southwestern Region (consisting of Arkansas, Louisiana, Texas, New Mexico,
Oklahoma) were analyzed. A summary and statistical analysis of the findings for regional
airports is provided in the following table.
Summary Appraisal Report 43
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
SiAviation
Management
Consulting
Group VALUATION
Regional Airport Data
Type Component Nirirrun Macirrtm Min Madan Range
Deviation
Aeronautical Irrproei Lail(Commercial) 0.010 0.580 a 189 0.124 0.150 0.570
Aeronautical Irrproed Lad(Non-Carmarcial) 0.050 0.480 0.240 0.149 0.220 0.430
Aeronautical Unimproved Lard(Commercial) 0.045 0.400 0.176 0.114 0140 0355
Aeronautical Unimproved ed Lad(Nan-Commercial) 0.030 0.385 0.153 0.136 0.116 0.355
Nan-Aeronautical Improved Lad(Co m ercial) 0.210 0.210 0.210 NA 0.210 0.020
Nan-Aeronautical Irrpro‘e1 Lard(N n-( rneroial) N/A f YA f YA NA NA NA
Nan-Aeronautic N Uninprovad Lad(Camercial) NA NA N'A NA NA NA
Nan-Aeronautical UNrrpro i Lad(Nan-Camercia) NA NA NA NA NA
Aeronautical Hangar 0.100 3.860 1.395 1.100 1.137 3.760
Aeronautical Ct feral Auation TerrrinA Building 0.227 10.210 6.354 3.785 7.315 9.983
Aeronautical Office(associated with Hangar) 0.100 8.000 3.6S6 2.635 3.500 7.900
Aeronautical Storage(associated with liengar) 0.066 10.000 3.118 3585 2100 9.934
Aeronautical Concrete Apron 0.030 0.300 0.103 0.100 0.060 0.270
Aeronautical Asphalt Apron 0.089 0.650 0.256 0207 0193 0.551
Aeraax.tical Concrete Vehicle Palcing NA NA N'A NA NA N'A
Aeronautical Asphalt Vehcle Perking 0.140 0.140 0 140 NA 0.140 0.000
All rental rates are "per square foot per year" (psf/yr)
c. Comparable Airport Data
Rental rates and related information from 12 airports considered comparable to the Subject
Airport (identified in this section) were obtained and analyzed.
➢ Bradley International Airport (BDL) - Windsor Locks, CT
➢ Charleston International Airport (CHS) - Charleston, SC
➢ Gerald R. Ford International Airport (GRR) - Grand Rapids, MI
➢ Key Field Airport (MEI) - Meridian, MS
➢ Lubbock Preston Smith International Airport (LBB) - Lubbock, TX
➢ Midland International Airport (MAF) - Midland, TX
➢ Mobile Regional Airport (MOB) - Mobile, AL
➢ Newport News/Williamsburg International Airport (PHF) - Newport News, VA
➢ Piedmont Triad International Airport (GSO) - Greensboro, NC
➢ Port Columbus International Airport (CMH) - Columbus, OH
➢ Syracuse Hancock International Airport (SYR) - Syracuse, NY
➢ Tallahassee Regional Airport (TLH) - Tallahassee, FL
The following table provides a summary and statistical analysis of the findings for the
comparable airports.
Summary Appraisal Report 44
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
:Egl Aviation
Management
Consulting
Group VALUATION
Comparable Airport Data
Standard
Type Corrport Virir rn Maxirnm Meal Medan targe
Dation
Aeronautical Inpc ed Lard(Corrrr ercial) 0.011 0.900 0.359 0.245 0.305 0.889
Aeronautical Irrpro Laid(Nbn-Om ercial) 0.160 0.900 0.542 0.269 0.800 0.740
Aeronautical UnirrFxved Laid(Caniercial) N/A PYA PYA N/A PYA n/A
Faonautical Unirrpro\ed Laid(Nbn-Cormnercial) PYA PYA N/A PYA NA N'A
Non-Aeronautical Improved land(Commercial) PYA PYA wA PYA PYA NA
Non-Aeronautical Improved Laid(PbrrCarrnerrial) PYA PYA PYA PYA PYA PYA
PbrrAernnautical Unimxved Laid(Corrrercial) PYA PYA PYA PYA PYA PYA
Non-Aeronauticr utical Unimproved Land(Nor-Umr rcial) PYA PYA PYA PYA PYA NA
Aeronautical Hangar 0.250 2710 0.996 0.775 0.920 2.460
Aeronautical General Auatim Terminal Building 7.475 10.210 8.843 1.934 8.843 2.735
Aeronautical Office(associated with Hamar) 0.250 5.250 2750 3.536 2750 5.000
Aeronautical Storage(associated with Hangar) 0.480 222u 1.350 1.230 1.350 1.740
Aeronautical Concrete Apron 0.310 0.840 0.625 0232 0.675 0.530
Aeronautical Asphalt Apron 0.310 2650 1.075 0.972 0.750 2.340
Aeronautical Concrete Vehicle Parking 1.330 2650 1.990 0.933 1.990 1.320
Aeronautical Asphalt Vehicle Parking 0.140 0.140 0.140 PYA 0.140 0.000
All rental rates are"per square foot per year" (psf/yr)
d. Competitive Airport Data
Typically, an airport is considered competitive if it: (a) is located in relatively close proximity,
(b) has similar infrastructure, (c) offers similar products, services, and facilities, and (d) has
similar activity levels (i.e., aircraft operations, based aircraft, and fuel volumes).
For the purposes of this study, airports within 50 nautical miles of the Subject Airport were
identified as being potentially competitive airports. Although none were Small Hub Primary
Commercial Service Airports, a total of seven airports were considered, as follows:
D Alfred C. "Bubba" Thomas Airport (T69) - Sinton, TX
D Alice International Airport (ALI) -Alice, TX
D Aransas County Airport (RKP) - Rockport, TX
D Beeville Municipal Airport (BEA) - Beeville, TX
D. Brooks County Airport (BKS) - Falfurrias, TX
D Kleberg County Airport (IKG) - Kingsville, TX
D T.P. McCampbell Airport (TFP) - Ingleside, TX
The following table identifies the key criteria utilized to make this assessment.
Summary Appraisal Report 45
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group VALUATION
CRP
City CORPUS ROCKPORT KINGSVILLE SINTON INGLESIDE ALICE BEEVILLE FALFURRIAS
CHRISTI
Tower Yes No No No No No No No
Acreage 2,457 600 295 186 231 556 391 169
Longest 7,508 5,608 6,000 4,323 5,000 5,997 4,551 6,002
Runway
Local GA 1,324 16,500 4,000 6,400 7,400 4,400 3,000 600
Operations
Itinerant GA 21,996 33,000 2,000 3,200 3,700 2,200 1,500 4,500
Operations
Total Based 78 66 14 39 23 7 13 1
Aircraft
Last
Inspection 07/16/09 03/04/11 03/20/11 03/05/11 03/04/11 03/05/11 03/04/11 03/20/11
Date(5010)
For these airports, the data is depicted for the most recently reported 12 month cycle (as
indicated in the table) — not per calendar year. As previously indicated (in the Aircraft
Operations and Based Aircraft sections of this report), total aircraft operations and based
aircraft for the Subject Airport are depicted as of December 31, 2010 (as reported by
Airport management and/or the FAA TAF).
No relevant and/or useable information pertaining to the Subject Properties from the
competitive airports was obtained.
e. Small Hub Primary Commercial Service Airports
In addition to the competitive airport analysis, the following Small Hub Primary Commercial
Service airports located in Texas and surrounding states (Arkansas, Louisiana, New
Mexico, and Oklahoma) were considered comparable:
> Adams Field Airport (LIT) — Little Rock, AR
➢ Baton Rouge Metropolitan Airport (BTR) — Baton Rouge, LA
➢ El Paso International Airport (ELP) — El Paso, TX
> McAllen-Miller International Airport (MFE) — McAllen, TX
➢ Midland International Airport (MAF) — Midland, TX
Summary Appraisal Report 46
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
/1 Aviation
Management
Consulting
Group VALUATION
➢ Northwest Arkansas Regional Airport (XNA) - Fayetteville/Springdale, AR
➢ Rick Husband Amarillo International Airport (AMA) - Amarillo, TX
➢ Tulsa International Airport (TUL) - Tulsa, OK
➢ Valley International Airport (HRL) - Harlingen, TX
➢ Will Rogers World Airport (OKC) - Oklahoma City, OK
Rental rates and related information from nine Small Hub airports considered comparable
to the Subject Airport was obtained and analyzed. The following table provides a summary
and statistical analysis of the findings for the Small Hub airports.
Small Hub Airport data
Type Component Minimum Maximum Mean Standard Median Range
Cetiiation
Aeronautical Improved Lard(Commercial) 0.050 0.340 0.169 0.098 0.149 0.290
Aeronautical Inpra',ed Lard(Non-Commercial) 0.130 0.240 0.193 0.057 0.210 0.110
Aeronautical uninprc ed Lard(Commercial) N/A N/A N/A N/A N/A N/A
Aeronautical Unirnprrwd Lard(NonCommerciaI) N/A N/A N/A N/AN/A N/A
Non-Aeronautical Imprc ed Lard(Commercial) N/A N/A N/A N/A N/A N/A
Non-Aeronautical Improved Lard(Non-Commercial) N/A N/A N/A N/A N/A N/A
Non-Aeronautical UnirrproN.ed Lard(Commercial) N/A N/A NIA N/A N/A N/A
No-Aeronautical unirnpraed Lard(Non-Commercial) N/A N/A N/A N/A N/A N/A
Aeronautical Hangar 0.300 2.400 1.049 0.836 0.940 2.100
Aeronautical General A\.iation Terrnina Building N/A N/A NIA N/A N/A N/A
Aeronautical Office(associated with Hangar) N/A N/A N/A' N/A N/A N/A
Aeronautical Storage(associated with Hangar) 0.658 0.658 0.658 N/A 0.658 0.000
Aeronautical Concrete Apron 0.020 0.130 0.075 0.078 0.075 0.110
Aeronautical Asphalt Apron 0.020 0.725 0.253 0.319 0.133 0.705
Aeronautical Concrete Vehicle Parking N/A NIA NIA N/A WA N/A
Aeronautical Asphalt Vehicle Parking N/A N/A N/A N/A N/A N/A
All rental rates are"per square foot per year" (psf/yr)
Summary Appraisal Report 47
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
11 Aviation
Management
Consulting
Group VALUATION
f. Non-Aeronautical Land
To derive conclusions for Non-Aeronautical use Land (including Improved and Unimproved
land), a survey of land sales and listings in the Corpus Christi area was conducted. A
summary of the sales and listing data is provided in this section. It is significant to note
there is a substantial amount of land currently available in the market which has an adverse
impact the supply/demand ratio. While demand appears to be increasing slightly, land sale
values have remained fairly low over the past three years.
Land Sales and Listings Summary
Sale
Location Date Sale Price Zoning Size perce SF
SWC Bear Lane and Navigation 07/2008 $405,625 12 324,522 SF $1.25
Boulevard (7.45 acres)
•
E/S Cliff Maws Drive 600 feet S/O Bear 01/2010 $221,500 12 161,360 SF $1.37
Lane (3.70 acres)
W/S Navigation Boulevard 90 feet NW Listing $162,000 12 108,464 SF $1.49
Old Brownsville Road (2.49 acres)
SEC NPID and Bates Road Listing $1,989,780 I-2/B-4 A-2 1,333,372 SF $1.49
(30.61 acres)
4822 Bear Lane 03/2009 $174,999 1-2 534,481 SF $0.33
(12.27 acres)
Highway 44 and Clarkwood Road Listing $261,360 Commercial 144,184 SF $1.81
(3.31 acres)
Highway 44 and Agnes Street Listing $290,000 Commercial 144,184 SF $2.01
(3.31 acres)
3. Market Rent Summary
a. Market Rent Conclusions (By Component)
The following table identifies the base market rental rate conclusions for the Subject
Properties (by component). The following market rental rate conclusions are based upon
the analysis of the Subject Properties and the rents being charged for similar properties at
national, regional, comparable, Small Hub, and competitive airports.
Summary Appraisal Report 48
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group VALUATION
Subject Properties Base Rental
Rates
Component Conclusion
Non-Aeronautical Improved Land $0.080 -$0.120
Non-Aeronautical Unimproved Land $0.050-$0.060
Aeronautical Improved Land (Commercial) $0.275
Aeronautical Improved Land (Non-Commercial) $0.300
Aeronautical Unimproved Land (Commercial) $0.175
Aeronautical Unimproved Land (Non-Commercial) $0.200
Hangar $1.500
General Aviation Terminal Building $6.000
Office(associated with Hangar) $6.250
Storage(associated with Hangar) $1.250
Asphalt Apron $0.325
Concrete Apron $0.350
Asphalt Vehicle Parking $0.300
Concrete Vehicle Parking $0.300
Fuel Storage Facility $0.750
All rental rates (excluding the Fuel Storage Facility) are"per square foot per year" (psf/yr)
Rental rates for the Fuel Storage Facility are"per gallon of capacity per year" (pg/yr)
Non-Aeronautical Land
The results of the study indicate land sales/listings in the area range from $0.330 psf to
$2.010 psf. It is significant to note that the parcels studied do not have immediate access
to the Airport; however, the land is located within reasonable proximity to the Airport.
To derive rental rate conclusions for Non-Aeronautical use Land, the following areas were
analyzed:
1. Zoning — five of the land sales/listings are zoned IH (Heavy Industrial); two are
zoned for commercial uses. The sales/listings located closest to the Airport are
zoned commercial.
2. Size — it is significant to note as size increases, the unit rate generally decreases,
although, this not always the case. It is the Appraiser's opinion that land
sales/listings located closest to the main entrance to the Airport (e.g., B1-10, B1-13,
etc.) are more valuable than those parcels located to the east of the Airport's main
entrance (e.g., C1-2, C1-4, etc.)
3. Utilities — (B1 land has utilities in place and is classified as Improved Non-
Aeronautical Land. Cl and C2 land do not have utilities in place and are classified
as Unimproved Non-Aeronautical Land).
Summary Appraisal Report 49
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
11 Aviation
Management
Consulting
Group VALUATION
Airport land, utilized for aeronautical or non-aeronautical purposes, demonstrate only partial
rights of ownership as the lessee does not have fee simple rights. The lessor has the right
to receive income during a certain period of time, but gives up the right of the use of the
land during the time of the lease. On a fee simple basis (i.e., for off-airport land), all
property rights are included with the land. Airport land is restricted to certain types of uses,
by 14 CFR Part 77 requirements and subject to additional restrictions of the Airport
sponsor. Based upon the Appraiser's experience analyzing land sales/listings for non-
aeronautical use of airport land, it is the Appraiser's opinion that a discount of 40% to 60%
of value is appropriate for Airport versus off-airport land. As such, for purposes of this
analysis, a discount of 50% was applied to off-airport land sales/listings.
Finally, a rate of return is necessary to establish a rental rate based upon off-airport land
sales/listings. The rate of return is applied to the discount value (psf) to determine a rental
rate (psf). A survey of airports revealed the following rate of return expectations.
Rates of Return
Rate of
Airport Return
Hartsfield-Jackson Atlanta International Airport(ATL) 9.0%
Chicago O'Hare International Airport(ORD) 10.0%
Dallas/Fort Worth International Airport(DFW) 9.0% - 10.0%
McCarran International Airport(LAS) 10.0%
Los Angeles International Airport(LAX) 8.0% -9.0%
Houston/George Bush Intercontinental Airport(IAH) 10.0%
Minneapolis-St. Paul International Airport(MSP) 10.0%
Orlando International Airport(MCO) 10.0%
Seattle-Tacoma International Airport (SEA) 9.5%- 10.0%
Philadelphia International Airport(PHL) 8.5%
Long Beach/Daugherty Field (LGB) 8.5%
Norman Y. Mineta San Jose International Airport(SJC) 10.0%
Metropolitan Oakland International Airport (OAK) 8.0%
Sacramento International Airport(SMF) 10.0%
San Francisco International Airport(SFO) 6.0%
Honolulu International Airport (HNL) 7.0%
John Wayne Airport-Orange County(SNA) 10.0%
San Diego International Airport(SAN) 8.5%
Summary Appraisal Report 50
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
11 Aviation
Management
Consulting
Group VALUATION
As indicated, rate of return expectations range from 6% to 10% with most in the range of
8% to 10%. It is significant to note that at Dallas/Fort Worth International Airport, a rate of
return of 9% to 10% is utilized and at Houston/George Bush Intercontinental Airport, a rate
of return of 10% is utilized. It is the Appraiser's opinion that a rate of return toward the
lower end of the range is reasonable and appropriate for the Subject Airport.
Predicated upon the preceding criteria the following conclusions were derived.
Non-Aeronautical Land Rental Rate
Off- Adjustments
Parcel Type airport Discount Rate of Conclusion
Base Return
Value
B1-1 Improved $2.00 50% 8% $0.080
B1-2 Improved $2.00 50% 8% $0.080
B1-3 Improved $2.50 50% 8% $0.100
B1-4 Improved $3.00 50% 8% $0.120
B1-5 Improved $2.75 50% 8% $0.110
B1-6 Improved $2.50 50% 8% $0.100
B1-7 Improved $3.00 50% 8% $0.120
B1-8 Improved $2.50 50% 8% $0.100
B1-9 Improved $2.50 50% 8% $0.100
B1-10 Improved $3.00 50% 8% $0.120
B1-13 Improved $2.75 50% 8% $0.110
B1-15 Improved $2.75 50% 8% $0.110
C1-2 Unimproved $1.50 50% 8% $0.060
C1-4 Unimproved $1.25 50% 8% $0.050
C1-6 Unimproved $1.25 50% 8% $0.050
C1-8 Unimproved $1.25 50% 8% $0.050
C1-10 Unimproved $1.25 50% 8% $0.050
C1-12 Unimproved $1.25 50% 8% $0.050
C1-14 Unimproved $1.25 50% 8% $0.050
C2-2 Unimproved $1.25 50% 8% $0.050
C2-4 Unimproved $1.25 50% 8% $0.050
C2-6 Unimproved $1.25 50% 8% $0.050
C2-8 Unimproved $1.25 50% 8% $0.050
The leasehold size for these properties may change. However, the parcels were analyzed
based upon a maximum of 1 million square feet. Parcels with square footage greater than
1 million square feet exhibit a differential (approximately 10% discount) based upon size.
Summary Appraisal Report 51
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
IIAviation
Management
Consulting
Group VALUATION
Aeronautical Improved Land (Commercial)
The results of the study indicate that average rental rates for Aeronautical Improved Land
(Commercial) range from $0.170 psf/yr at Small Hub airports to $0.360 psf/yr at
comparable airports. The average rental rate at regional airports was $0.190 psf/yr and
$0.240 psf/yr at national airports.
The calculated midpoint and weighted average between comparable, Small Hub, regional,
and national airports was $0.240 psf/yr. Giving consideration to the comparable average
rental rate ($0.360 psf/yr), a base rental rate of$0.275 psf/yr was derived.
The average size of Aeronautical Improved Land (Commercial) in the national database is
approximately 200,000 square feet. Parcels with less square footage than the national
average do not exhibit a differential based upon size. Parcels with square footage greater
than 1 million square feet exhibit a significant rent differential (approximately 20% discount)
based upon size.
Utilizing the base rental rate and discount for size, the following conclusions were derived:
Aeronautical Improved Land (Commercial) Rental Rate
Square Feet Conclusions Conclusion
0—200,000 square feet $0.275
200,000— 1,000,000 square feet $0.250
Greater than 1,000,000 square feet $0.225
The leasehold size and use of certain B1 parcels (including B1-11, B1-12, B1-14, B1-16,
and B1-17) may change. As such, the rent per square foot for each parcel may change as
well. However, the rent per square foot conclusions derived for the B1 properties is
presented in the preceding Aeronautical Improved Land (Commercial) Conclusions table.
Predicated upon the leasehold size of the WGA Undeveloped Land and EGA Undeveloped
Land, a rent per parcel for each of these properties can be determined. An adjustment for
size was not deemed necessary. The base rental rate of $0.275 psf/yr was utilized
(consistent with the Aeronautical Improved Land — Commercial Square Feet Conclusions
table) and a premium of 10% was applied to the base rental rate for superior location to
derive a conclusion of$0.300 psf/yr.
Summary Appraisal Report 52
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group VALUATION
Aeronautical Improved Land (Non-Commercial)
The results of the study indicate that average rental rates for Aeronautical Improved Land
(Non-Commercial) range from $0.190 psf/yr at Small Hub airports to $0.540 psf/yr at
comparable airports. The average rental rate at regional airports was $0.240 psf/yr and
$0.260 psf/yr at national airports.
The calculated midpoint between comparable, Small Hub, regional, and national airports
was $0.340 psf/yr and the weighted average was $0.270 psf/yr. Due to the limited data
available from comparable and Small Hub airports, a base rental rate of $0.300 psf/yr was
derived.
The leasehold size and use of certain B1 parcels (including B1-11, B1-12, B1-14, B1-16,
and B1-17) may change. As such, the rent per square foot for each parcel may change as
well. However, a discount for size was applied to the base rental rate to derive the
following conclusions:
Aeronautical Improved Land(Non-Commercial) Rental Rate
Square Feet Conclusions Conclusion
0—200,000 square feet $0.300
200,000— 1,000,000 square feet $0.275
Greater than 1,000,000 square feet $0.250
Aeronautical Unimproved Land (Commercial)
The results of the study indicate that average rental rates for Aeronautical Unimproved
Land (Commercial) range from $0.170 psf/yr at national airport to $0.180 psf/yr at regional
airports. It is significant to note that useable rental rates for Aeronautical Unimproved Land
(Commercial) were not available from comparable and Small Hub airports.
The average between the regional and national airports was $0.175 psf/yr. Due to the
limited data available from comparable and Small Hub airports, a base rental rate of $0.175
psf/yr was derived.
Utilizing the base rental rate and discount for size (identified for Aeronautical Improved
Land — Commercial), the following conclusions were derived:
Summary Appraisal Report 53
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group VALUATION
Aeronautical Unimproved Land (Commercial) Rental Rate
Square Feet Conclusions Conclusion
0—200,000 square feet $0.175
200,000—1,000,000 square feet $0.150
Greater than 1,000,000 square feet $0.125
The leasehold size and use of certain Cl and C2 parcels (including C1-1, C1-3, C1-5, C1-
7, C1-9, C1-11, C1-13, C2-1, C2-3, C2-5, and C2-7) may change. As such, the rent per
square foot for each parcel may change as well. However, rent per square foot
conclusions are presented in the preceding Aeronautical Unimproved Land (Commercial)
Conclusions table.
Aeronautical Unimproved Land (Non-Commercial)
The results of the study indicate that average rental rates for Aeronautical Unimproved
Land (Non-Commercial) range from $0.150 psf/yr at regional airports to $0.220 psf/yr at
national airports. It is significant to note that useable rental rates for Aeronautical
Unimproved Land (Non-Commercial) were not available from comparable and Small Hub
airports.
The average between the regional and national airports was $0.185 psf/yr. Due to the
limited data available from comparable and Small Hub airports with consideration given to
the national average as significantly more data was available, a base rental rate of $0.200
psf/yr was derived which is consistent with the 10% premium for Non-Commercial use
($0.300 psf/yr) compared to Commercial use ($0.275 psf/yr).
The leasehold size and use of certain C1 and C2 parcels (including C1-1, C1-3, C1-5, C1-
7, C1-9, C1-11, C1-13, C2-1, C2-3, C2-5, and C2-7) may change. As such, the rent per
square foot for each parcel may change as well. However, a discount for size was applied
to the base rental rate to derive the following conclusions:
Aeronautical Unimproved Land (Non-Commercial) Rental Rate
Square Feet Conclusions Conclusion
0—200,000 square feet $0.200
200,000— 1,000,000 square feet $0.175
Greater than 1,000,000 square feet $0.150
Summary Appraisal Report 54
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
liAviation
Management
Consulting
Group VALUATION
Hangar
The results of the study indicate that average rental rates for Hangar range from $1.000
psf/yr at comparable airports to $1.770 psf/yr at national airports. The average rental rate
at Small Hub airports was $1.050 psf/yr and $1.390 psf/yr at regional airports.
The calculated midpoint between the comparable, Small Hub, regional, and national airport
rental rates was $1.280 psf/yr and the weighted average was $1.610 psf/yr. Giving
consideration to the national average rental rate ($1.770 psf/yr), a base rental rate of
$1.500 psf/yr was derived.
The average size of Community Hangars in the national database is approximately 15,000
square feet. Similarly sized Community Hangars (ranging from 12,500 square feet to
17,500 square feet) exhibit no differential based upon size. The average rental rate for
Community Hangars less than 12,500 square feet in the national database exhibit a
premium of approximately 10% based upon size. The average rental rate for Community
Hangars greater than 17,500 square feet in the national database also exhibit a premium of
10% based upon size.
Utilizing the base rental rate, a premium for size (as appropriate), and adjusting for
condition (Hangars WGA H-1, H-2, H-3 and EGA H-1, H-2, H-3, H-4 are considered
average and Hangar WGA H-4 is considered fair), the following conclusions were derived
for Hangar space.
Hangar Rental Rate
Hangar Adjustments
Name Size Condition Size Condition Conclusion
WGA H-1 14,000 Average - - $1.500
WGA H-2 14,000 Average - - $1.500
WGA H-3 11,500 Average + 10% - $1.650
WGA H-4 13,325 Fair - - 10% $1.350
EGA H-1 25,600 Average + 10% - $1.650
EGA H-2 15,000 Average - - $1.500
EGA H-3 30,800 Average + 10% - $1.650
EGA H-4 5,000 Average + 10% - $1.650
Summary Appraisal Report 55
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
Group VALUATION
General Aviation Terminal Building
The results of the study indicate that average rental rates for General Aviation Terminal
Building range from $4.530 psf/yr at national airports to $8.840 psf/yr at comparable
airports. The average rental rate at regional airports was $6.350 psf/yr. It is significant to
note useable rental rates for General Aviation Terminal Building were not available from
Small Hub airports.
The average rental rate (at national airports) for similarly sized General Aviation Terminal
Buildings (ranging from 2,000 square feet to 6,000 square feet) was $5.230 psf/yr. The
calculated midpoint between the comparable, regional, and national airports was $7.580
psf/yr and the weighted average was $5.010 psf/yr. Based upon this analysis, similarly
sized General Aviation Terminal Buildings (at national airports) and the condition of the
General Aviation Terminal Buildings (both are considered to be in good condition), a
conclusion of$6.000 psf/yr for each General Aviation Terminal Building was derived.
Office (Associated with Hangar)
The results of the study indicate that average rental rates for Office (associated with
Hangar) range from $2.750 psf/yr at comparable airports to $6.760 psf/yr at national
airports. The average rental rate at regional airports was $3.700 psf/yr. It is significant to
note useable rental rates for Office (associated with Hangar) were not available from Small
Hub airports.
The average of the regional and national airports was $5.230 psf/yr and the weighted
average was $6.420 psf/yr. Giving consideration to the national average rental rate
($6.760 psf/yr), a base rental rate of$6.250 psf/yr was derived.
The average size of Office (associated with Hangar) in the national database is
approximately 2,250 square feet. As such, similarly sized Office — associated with Hangar
(less than 3,500 square feet) exhibit no adjustment based upon size. The average rental
rate for Office (associated with Hangar) ranging from 3,500 square feet to 10,000 square
feet exhibit a discount of approximately 10% based upon size.
Summary Appraisal Report 56
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
11 Aviation
Management
Consulting
Group VALUATION
All Offices (associated with Hangars) are considered to be in average condition. As such,
an adjustment based upon condition is not necessary. Utilizing the base rental rate and
discount for size, the following conclusions were derived:
Office(Associated with Hangar) Rental Rate
Office Adjustment
Office Conclusion
Size For Size
WGA OF-2 4,680 - 10% $5.650
WGA OF-3 2,300 - $6.250
WGA OF-4 2,300 - $6.250
EGA OF-2 2,500 - $6.250
EGA OF-3 5,000 - 10% $5.650
EGA OF-4 5,000 - 10% $5.650
EGA OF-5 5,700 - 10% $5.650
EGA OF-6 2,000 - $6.250
Storage (Associated with Hangar)
The results of the study indicate that average rental rates for Storage (associated with
Hangar) range from $0.660 psf/yr at Small Hub airports to $3.120 psf/yr at regional airports.
The average rental rate at comparable airports was $1.350 psf/yr and $2.500 psf/yr at
national airports.
Due to the limited data available from comparable, Small Hub, and regional airports, a
comparative analysis of statistically significant data in the national database of airports was
conducted. This analysis included airports where Hangar and Storage (associated with
Hangar) are being leased. Through this analysis, it was determined that a discount of
approximately 25% for Storage (associated with Hangar) exists at such airports. Applying
this discount to the Hangar base rental rate conclusion ($1.500 psf/yr) yields a Storage
(associated with Hangar) rental rate of$1 .150 psf/yr. Based upon the comparative analysis
with consideration given to the national average rental rate, a conclusion of $1 .250 psf/yr
was derived. All storage (associated with Hangar) is considered to be in average condition.
Summary Appraisal Report 57
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
alAviation
Management
Consulting
Group VALUATION
Asphalt Apron
The results of the study indicate that average rental rates for Asphalt Apron range from
$0.250 psf/yr at Small Hub airports to $1.080 psf/yr at comparable airports. The average
rental rate at regional airports was $0.260 psf/yr and $0.350 psf/yr at national airports.
Due to the limited data available from comparable, Small Hub, and regional airports, a
comparative analysis of statistically significant data in the national database of airports was
conducted. This analysis included airports where Aeronautical Improved Land
(Commercial) and Asphalt Apron are being leased. Through this analysis, it was
determined a premium of approximately 32% for Asphalt Apron exists at such airports.
Applying this premium to the Aeronautical Improved Land (Commercial) rental rate
conclusion ($0.275 psf/yr) yields an Asphalt Apron rental rate of $0.360 psf/yr. Based upon
the average rental rate for national airports (and the availability of data in the national
database) and the results of the comparative analysis, and the current condition (average)
of the Asphalt Apron, a conclusion of $0.325 psf/yr was derived.
It is significant to note that this relational analysis was based upon an evaluation of triple
net lease rental rates (wherein the lessee pays all maintenance, utilities, insurance, and
taxes associated with the leasehold). As such, the rental rate for Asphalt Apron may need
to be adjusted if the City is responsible for maintaining and repairing such areas at the
Airport. Additionally, if Airport Improvement Program (AIP) funds were utilized to construct
the Asphalt Apron, the rental rate for this improvement may need to be adjusted as well.
Concrete Apron
The results of the study indicate that average rental rates for Concrete Apron range from
$0.080 psf/yr at Small Hub airports to $0.630 psf/yr at comparable airports. The average
rental rate at regional airports was $0.100 psf/yr and $0.260 psf/yr at national airports.
Due to limited data available from comparable, competitive, and regional airports, a
comparative analysis of statistically significant data in the national database of airports was
conducted. This analysis included airports where Aeronautical Improved Land
(Commercial) and Concrete Apron are being leased. Through this analysis, it was
determined that a premium of approximately 38% for Concrete Apron exists at such
Summary Appraisal Report 58
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group VALUATION
airports. Applying this premium to the Aeronautical Improved Land (Commercial) rental
rate conclusion ($0.275 psf/yr) yields a Concrete Apron rental rate of $0.380 psf/yr. Based
upon the average rental rate for national airports (and the availability of data in the national
database) and the results of the comparative analysis, and the current condition (excellent)
of the Concrete Apron, a conclusion of$0.350 psf/yr was derived.
It is significant to note that this relational analysis was based upon an evaluation of triple
net lease rental rates (wherein the lessee pays all maintenance, utilities, insurance, and
taxes associated with the leasehold). As such, the rental rate for Concrete Apron may
need to be adjusted if the City is responsible for maintaining and repairing such areas at
the Airport. Additionally, if AIP funds were utilized to construct the Concrete Apron, the
rental rate for this improvement may need to be adjusted as well.
Asphalt Vehicle Parking
The results of the study indicate that average rental rates for Asphalt Vehicle Parking range
from $0.140 psf/yr at comparable and regional airports to $0.260 psf/yr at national airports.
It is significant to note useable rental rates were not available from Small Hub airports.
Due to limited data available from comparable, Small Hub, and regional airports, a
comparative analysis of statistically significant data in the national database of airports was
conducted. This analysis included airports where Aeronautical Improved Land
(Commercial) and Asphalt Vehicle Parking are being leased. Through this analysis, it was
determined that a premium of approximately 10% for Asphalt Vehicle Parking exists at such
airports. Applying this premium to the Aeronautical Improved Land (Commercial) rental
rate conclusion for the Airport ($0.275 psf/yr) yields an Asphalt Vehicle Parking rental rate
of $0.300 psf/yr. Based the average rental rate for national airports (and the availability of
data in the national database), the results of the comparative analysis, and the current
condition (average) of the Asphalt Vehicle Parking, a conclusion of $0.300 psf/yr was
derived.
It is significant to note that this relational analysis was based upon an evaluation of triple
net lease rental rates (wherein the lessee pays all maintenance, utilities, insurance, and
taxes associated with the leasehold). As such, the rental rate conclusion for Asphalt
Summary Appraisal Report 59
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
le Aviation
Management
Consulting
Group VALUATION
Vehicle Parking may need to be adjusted if the City is responsible for maintaining and
repairing such areas at the Airport.
Concrete Vehicle Parking
The results of the study indicate that the average rental rate for Concrete Vehicle Parking
at comparable and national airports was $1.990 psf/yr. Useable rental rates were not
available at regional and Small Hub airports.
Due to the mix of surface types, similar functional utility of Asphalt and Concrete Vehicle
Parking, and limited data available from comparable, Small Hub, regional, and national
airports, a conclusion of $0.300 psf/yr was derived (which is consistent with the conclusion
for Asphalt Vehicle Parking). While a differential was derived between Asphalt and
Concrete Apron due to functional utility and condition, no differential was determined for the
Asphalt and Concrete Vehicle Parking. Additionally, all Asphalt and Concrete Vehicle
Parking in the WGA and EGA areas are considered to be in average condition.
It is significant to note that this relational analysis was based upon an evaluation of triple
net lease rental rates (wherein the lessee pays all maintenance, utilities, insurance, and
taxes associated with the leasehold). As such, the rental rate conclusion for Concrete
Vehicle Parking may need to be adjusted if the City is responsible for maintaining and
repairing such areas at the Airport.
Fuel Storage Facilities
The Fuel Storage Facilities consist of the following:
1. WGA Fuel Storage Facility consists of four above ground tanks (Tank 1 — 12,000
gallon Jet Fuel, Tank 2 — 12,000 gallon Jet Fuel, Tank 3 — 10,000 gallon Avgas, and
Tank 4 — 500 gallon Unleaded) which totals 34,500 gallons.
2. EGA Fuel Storage Facility consists of six below ground tanks (Tank 1 — 12,000
gallon Jet Fuel, Tank 2 — 12,000 gallon Jet Fuel, Tank 3 — 12,000 gallon Jet Fuel,
Tank 4 — 10,000 gallon Avgas, Tank 5 — 2,000 gallon Unleaded, and Tank 6 — 2,000
gallon Diesel) which totals 52,000 gallons.
To derive a rental rate, AMCG analyzed the Fuel Storage Facility on a return on investment
(or cost) basis. Based upon industry knowledge and survey results, the cost to develop a
fuel storage facility typically ranges from $7.500 to $12.500 per gallon. For example, the
cost to develop a 12,000 gallon fuel storage tank (similar to Tank 1) would typically range
Summary Appraisal Report 60
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
iiAviation
Management
Consulting
Group VALUATION
from $90,000 to $150,000. For the purposes of this report, AMCG estimated the cost to
develop a Fuel Storage Facility (at the Airport) at $7.500 per gallon or $258,750 for WGA
(based upon 34,500 gallons and $390,000 for EGA (based upon 52,000 gallons). A 10%
return on investment (or cost) has been applied to the estimated cost to develop the Fuel
Storage Facilities to derive the rental rate. A 10% return on investment (or cost) has been
utilized given the risk and level of returns on alternative investments. Based upon the
estimated cost of $258,750 (WGA) and $390,000 (EGA) with a 10% return on investment
(or cost), a rental rate of $25,875 per year (or $0.750 per gallon) was derived for WGA and
a rental rate of$39,000 per year (or $0.750 per gallon) was derived for EGA.
Key Underlying Assumptions
It is significant to note the current rental rates being charged at the Subject Airport were not
included in the national, regional, comparable, and Small Hub average market rents and as
such, were not utilized to calculate the averages. It is also significant to note the market
rental rate conclusions are based upon the tenant having full (unrestricted) and continued
access (from the Subject Properties) to the Subject Airport infrastructure.
Market rents are driven by the amount a willing buyer (lessee) pays to a willing seller
(lessor). To the extent that local economic factors affect rental rates at the national,
regional, comparable, Small Hub, and competitive airports, these economic factors will be
reflected in the market rental conclusions. To derive the market rent conclusions for the
Subject Properties, AMCG has identified and analyzed (on a comparative basis) the rents
being charged (and paid) for similar properties (by component) at a cross-section of
airports (and markets) that are considered most comparable (similarly situated) to the
Subject Airport (and market).
AMCG recognizes there are differences between the Subject Airport and the comparable
airports. Some of the comparable airports exhibit superior characteristics and some exhibit
inferior characteristics. In an effort to identify airports that were considered most
comparable to the Subject Airport and to draw conclusions which reflect the conditions at
the Subject Airport, the comparable airports were compared with the Subject Airport using
a number of aeronautical activity and infrastructure indicators.
Summary Appraisal Report 61
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
Group VALUATION
In AMCG's experience, aeronautical activity and infrastructure indicators at airports
typically run parallel to local market (economic) indicators. Therefore, it is reasonable to
assume the airports identified as being comparable to the Subject Airport (based upon the
selection criteria) will be located in communities (markets) having economic and
demographic characteristics similar to the subject community (market). As such, a
separate analysis of local market activity indicators was not deemed necessary (or
undertaken) in this case.
4. Vacancy and Collection Loss
In standard real estate appraisal practice, an allocation for vacancy and collection losses
would be deducted to reflect the potential loss of income resulting from tenant turnover, late
or unpaid rent, or other factors. For the purposes of this report, vacancy and collection loss
was estimated at 5.00%
5. Expense and Reserves
As indicated previously, "net" rents are typically paid to the lessor, which in most cases is
the airport owner (or sponsor) or other governmental entity. All expenses are typically the
responsibility of the lessee. The only expenditures incurred by the lessor would be related
to administrative and/or legal expense associated with organizing and maintaining the
various lease contracts as well as operating expenses (collectively referred to as
"management expenses") and reserves for replacement of short lived physical components
such as concrete or asphalt paving and various building components (e.g., roof). In this
case, the Appraiser has utilized 2.00% of effective gross income for management
expenses, $0.050 psf for reserves for replacement of asphalt and concrete paving, and
$0.100 psf for reserves for replacement of building components.
Summary Appraisal Report 62
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
li Aviation
Management
Consulting
Group VALUATION
6. Overall Capitalization Rate
The Income Capitalization Approach involves the direct capitalization of the projected net
operating income by an overall capitalization rate. This rate is usually selected based upon
an analysis of sales of similar facilities. However, as previously discussed, airport-based
properties are typically leased from airport owners (or sponsors) or other governmental
entities and are rarely sold on the open market. Therefore, the Appraiser has derived an
overall capitalization rate through an analysis of alternative source of rates published by
Burbach & Associates and Price Waterhouse Coopers (PWC) Real Estate Investor Survey.
Burbach & Associates published the results of a regional survey that includes southern
Texas. Rates in this survey ranged from 8.0% to 10.0% with most rates between 9.0% and
9.5%. PWC rates range between 6.0 to 12.0% for the National Warehouse Market and
average of 7.4%. In addition to the survey of rental rates, the Appraiser has obtained and
considered rates of return for airport based properties. Those airport owner/operators
surveyed indicated that a rate of return in the range of 8% to 12% is typically desired for
commercial use properties located on-airport with rates of return in the 9% to 10% being
most common. With consideration to the physical characteristics of the Subject Properties
and economic conditions in the area, an overall rate of 9% was selected as being most
appropriate for the Subject Properties. This rate is also consistent with regional and
national trends in the aviation industry.
Summary Appraisal Report 63
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
MI Aviation
Management
Consulting
Group VALUATION
7. Income Approach Summary
West General Aviation Area
INCOME APPROACH SUVMARY
IMOOIVE
Component* Square Feet Gallons Market Rent Total Cost
WGA H-1* 14,000 - $ 1.500 $ 21,000
WGA H-2* 14,000 - $ 1.500 $ 21,003
WGA H-3* 11,500 - $ 1.650 $ 18,975
WGA H-4* 13,325 - $ 1.350 $ 17,989
WGA OF-1** 3,105 - $ 6.000 $ 18,630
WGA OF-2' 4,680 - $ 5.650 $ 26,442
WGA OF-3** 2,300 - $ 6.250 $ 14,375
WGA OF-4** 2,303 - $ 6.250 $ 14,375.
WGA OF-2 Storage* 4,630 - $ 1.250 $ 5,850
WGA Apron-Concrete*** 466,514 - $ 0.350 $ 163,280
WGA Apron-FSF*** 11,246 - $ 0.350 $ 3,926
WGA Parking-Concrete*** 5,280 - $ 0.300 $ 1,584
WGA Parking-Asphalt*** 56,543 - $ 0.300 $ 16,963
24,000 $ 0.750 $ 18,000
WGA FSP"'** - 10,000 $ 0.750 $ 7,5C10
500 $ 0.750 $ 375
Total Gro Income $ 370,274
LESS:Vacancy and Collection Loss $ 18,514
Effective G oss Income $ 351,760
LESS:
Component Assumption Square Feet Total
Management(%of Effective Gross Income) 2.000% N'VA $ 7,035
Reserves for Replacement(Asphat/Concrete) $ 0.050 539,583 $ 26,979
Resales for Replacement(Buildings) $ 0.100 69,890 $ 6,989
Total Expenses and Reserves $ 41,003
Net Operating Income $ 310,757
Capitalization(9.0 ) $ 3,452,856
TOTAL VALUE BY THE I NCONE APPROACH $ 3,452,856
ROUNDED: $ 3,500,000
* No leasehold value exists for the Improved Land (Commercial) due to the
month-to-month nature of the lease.
Summary Appraisal Report 64
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group VALUATION
East General Aviation Area
I NCOIVE APPROACH SUVMAR(
INX NE
Component* Square Feet Gallons Market Rent Total Cost
EGA H-1* 25,600 - $ 1.650 $ 42,240
EGA H-2* 15,000 - $ 1.500 $ 22,500
EGA H-3* 30,800 - $ 1.650 $ 53,820
EGA H-4" 5,000 - $ 1.650 $ 8,250
EGA OF-1** 4,900 - $ 6.000 $ 29,400
EGA OF-2** 2,500 - $ 6.250 $ 15,625
EGA OF-3** 5,000 - $ 5.650 $ 28,250
EGA OF 4*` 5,000 - $ 5.650 $ 28,250
EGA OF-5** 5,700 - $ 5.650 $ 32,205
EGA OF-6 2,000 - $ 6.250 $ 12,500
EGA OF-5 Storage* 1,900 - $ 1.250 $ 2,375
EGA Apron-Asphalt*** 354,765 - $ 0. 75 $ 115,299
EGA Parking-Concrete*** 47,266 - $ 0.300 $ 14,180
EGA Parking-Asphalt**` 39,500 - $ 0.300 $ 11,850
36,000 $ 0.750 $ 27,000
EGA FSF""** 12,000 $ 0.750 $ 9,000
2,000 $ 0.750 $ 1,500
2,000 $ 0.750 $ 1,500
Total Gross Income $ 452,744
LESS:Vacancy and Collection Loss $ 22,637
Effect ve Cross Income $ 430,107
LESS:
Component Assumption Square Feet Total
Management(%of Effecti',e Gross Inane) 2.00% NYA $ 8,602
Resenes b-Replacement(Asphalt/Concrete) $ 0.050 441,531 $ 22,077
Resenes b-Replacement(Buildings) $ 0.100 103,400 $ 10,340
Total Expenses and Reserves $ 41,019
Net Operating Income $ 389,088
Capitalization(9.0°/4 $ 4,323,200
TOTAL VALUE BY THE I NCONE APPROACH $ 4,323,200
ROUNDED: $ 4,2.50,000
* No leasehold value exists for the Improved Land (Commercial) due to the
short-term nature of the lease.
Summary Appraisal Report 65
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
Group VALUATION
D. Reconciliation and Final Market Value Estimate
This analysis has resulted in the following value conclusions as of August 11 , 2011:
WGA EGA
Cost Approach $4,250,000 $2,500,000
Income Capitalization Approach $3,500,000 $4,250,000
The Cost Approach was supported by the MVS. There was some judgment involved in
estimating accrued depreciation due to the age of the improvements (the exact dates of
construction or age of each improvement is not known and/or could not be ascertained in
all cases). The Sales Comparison Approach was not performed since it was not
considered appropriate or applicable in this case. There was no leasehold value in the
FBO Improved Land (Commercial) due to the month-to-month and short-term nature of the
leases. Additionally, when FBO sales occur, it is difficult to ascertain separate business
enterprise and real estate values. The Cost Approach supported the Income Approach and
vice versa.
While there was subjectivity involved in estimating market rents for each component of the
Subject Properties, a survey of comparable and competitive airports was conducted and
regional and national data provided additional credibility in establishing rental rates for each
component of the Subject Properties.
Since the Subject Properties would be leased on a "net" basis, the expenses incurred
would be limited. The capitalization rate was supported by a national and regional investor
survey as well as conversations with airport owners/operators. In summary, while the value
derived using the Income Approach was different than the value derived using the Cost
Approach for both WGA and EGA, in this case, the values derived using both approaches
were given (generally) similar weight overall. As such, the Appraiser concluded between
the two approaches.
The final value conclusion as of August 11 , 2011 is as follows:
"As Is" Value (August 11, 2011)
West General Aviation Facility $3,750,000
East General Aviation Facility $3,500,000
Summary Appraisal Report 66
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
111 Aviation
Management
Consulting
Group VALUATION
E. Prospective Marketing and Exposure Time
Part of an appraisal assignment is to report a typical marketing period for the Subject
Properties based upon the value conclusion. Generally, the marketing period is tied to the
definition of Market Value which, in this case, states that "A reasonable time is allowed for
exposure in the open market."
Therefore, the research must focus on what would be a reasonable marketing and
exposure time in the market for this type of property being appraised. As such, the
marketing time estimate is based upon the known and expected characteristics of the
property, its environs, and the conditions of the current real estate market to the point of
reaching a negotiated sales contract.
There is a difference between exposure time and marketing period and this is an important
distinction that needs to be made. Within this context, an analysis of market transactions is
integral to the appraisal process. For example, comparable properties which are under
contract on the effective date of value are not usually adjusted for time (date of sale),
whereas options that call for a future closing date are generally adjusted back to the date of
appraisal. In other words, it is the "meeting of the minds" as to price and terms that
influences the appraisal. Therefore, in this report, "reasonable exposure time" is viewed as
an historical event ending on the valuation date. Conversely, the "marketing period" is the
Appraiser's estimate of the length of time necessary to secure a binding sales contract on
the property in the future (i.e., prospective marketing time).
The responses to the PWC Real Estate Investor Survey have also been reviewed and
considered by the Appraiser. This survey is published at quarterly intervals and
summarizes the responses of developers and investors. In the most recent survey, the
average marketing time for industrial properties nationally was 7.69 months and regionally
was up to 12 months for 82% of the responders. Given the current market conditions in the
area and the uniqueness of the Subject Properties, the Appraiser believes a reasonable
marketing time for the Subject Properties would be 12 months at the estimated market
value assuming a compatible aviation use. Essential to this conclusion is the marketing of
the property by competent professionals. The exposure period is also estimated at 12
months.
Summary Appraisal Report 67
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
IX. APPENDIX
A. Mathematical Definitions
The "Minimum" and "Maximum" columns represent the minimum and maximum values
present in the data range. The "Mean" column represents the arithmetic average of all data
in the data range. The "Standard Deviation" column represents the standard deviation of
all data points in the range. Standard deviation is a statistical method designed to
mathematically measure the variability in a set of data points. The calculated figure for
standard deviation is indicative of the relative distance between the mean and every data
point. For a normally distributed population, approximately 68% of the data points would
fall within 1 standard deviation of the mean, as illustrated by a normal bell curve. Similarly,
approximately 95% of the data points would fall within two standard deviations while
approximately 99.7% of the data points would fall within three standard deviations of the
mean. Assuming the collected sample data from the comparable airports is representative
of the population and the population follows a normal bell curve, the calculated standard
deviation values would illustrate the relative variability in data points (i.e., how close these
data points are to the mean). The figure in the "Median" column is the median of the data
range. Essentially, half of the data points in the number series are below the median value
while half of the data points in the number series are above the median value. The figure in
the "Range" column is the difference between the maximum and minimum values of the
data range. The "Midpoint" is an analysis which utilizes the Mean and Median values of the
data set to determine a representative "average." Utilization of the Mean and Median
values are incorporated in an effort to identify and eliminate the influence of outliers on the
representative "average."
Summary Appraisal Report 68
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
1:
Management
Consulting
GroupAviation APPENDIX
B. Subject Properties - Identification Map
CORPUS CHRISTI INTERNATIONAL AIRPORT—
A a
iii
t _-
a:•
�r 1
0 o
r---
__.
.. . .
..... .
,.: ....... , ,,, 11,
. .4):,,, ...,„..:
.,. ,
,..,,
, . „..„
. .„
\ .,
, s
: cm r.= , - i 1 1-1 1 ,= aq
-,,,,'
-"
,„„ �. I it
/000”
.,. ,,;r0
\,..,.444.'4\ 1 4;,'.,,1.7 11 ' I! I 4'4 ,,"Air .. .
a
' 'f$
su 31:n/ge ''
1I 1 1
0"111° ,
I
E.ME ..:',/,'HIT:1-,.'
.:',7*.':'' 1... /111,
.t\
tier.:;,,rr y ,... \\\\, :.-....„,- . \ .,1
sir (3" .
''' ' I..,''''''Illi
/// -gig 4 =I z4;:',/ '''''. i'''
. ' lit \.-, '
�i _ ,.per.__
wto
Orr I"rri r/r./r.ffAiZr.4/r, AZ A/A/ ' c . !_., $;..
I #10,,ii:
fA
71/
Wisp s r,4 sTI mrvJ 'no? LAWORT *.."
AIRPORT PROPERTY OVERVIEW ��,£ ertiVASMEZ
�t• i'^+F' �-- AITACI DI ENT"D-2" nm: /MUM w.CAM I,
s i•f�P,... CITY OF CORPUS CHRISTI
DEPARTMENT OF AVIATTON 20I I '•,R ,s,
Summary Appraisal Report, City of Corpus Christi, Corpus Christi International Airport (11/18/2011) 69
Aviation
Management
Consulting
GroupAviation APPENDIX
C. Subject Properties — Component Identification Map
1. West General Aviation Facility
CORPUS CHRIST[INTERNATIONAL AIRPORT
? ..c
n x.. . ... ...
.. .
f29'� • • 1. 118' _--12U'. •• 39' —120' -4• 10}•
,• 01 x - ••`..
'•
v\\-\\\ _ ` ! 2�
.: •.
Iv ' `6 r •:• N.'. WGA H-2 t. \W \I .1b .
WGA H\Q11 - y. Il{�i 1• ....:." WGA H•S 14,000 SP p 14,000 SF\'1'� s
_ ' 11,500 SF -\\\..\\
'� \\\ .1
°0 13,325 Si' s3 C wGBIB
\\\\\\\\\ \ \ 1" ... '
cu to r•�. \♦ �? v, ou•�xc w vx.,„,eao t'grw + ,p
WGA OF A11, WGA OF \ WGA OF-2 WGA OF-1
2,300 SF 2,300 SP \ 4,b80 SF 3,105 SF
K
`T �t: t .r• ,
a
T r—
�- 1 L _ L •
T \
\
NOT T T T T T T T ` T T -
BUILDING TOTAL 64,521
PARKING LOT:61,523 SF t
APRON:466,514 SF
THICKNESS.10"PCC `
FUEL FARM APRON:11,246 SFFUEL TANK.S: DEPARTMENT OP AVIATION
÷154, 416:IC
• 2-12,000 GALLON JET-A
• 1•10,000 GALLON AV•GAS WESTVITACK IE AVIATION ....: 04,01,11 WTII,
• 1.500 GALLON UNLEADED ,.:RPu S I:iRrsT I ATI A(2L\IB1VT"B" .is
TIC DOWN SPACES:57f..• f CORPUS CHRISTI
GRASS:170,057 SF tie b INTERNATIONAL AIRPORT Z)1 I ^^'" ..wi
Summary Appraisal Report, City of Corpus Christi, Corpus Christi International Airport (11/18/2011) 70
liAviation
Management
Consulting
GroupAviation APPENDIX
2. East General Aviation Facility
•
\ CORPUS CHRISTI INTERNATIONAL AIRPORT
IIIIIIIIIIT19
:II illlllllll • :
• • ...i„..••• ' .•s.':.�y S.219.6' i : .. -. . • ..- • 1 :
},uCa • • SYP
• ••IOW
41'.3" 119'-0, drs",. .gm.. u . :;::.:
•' 4d .‘P'-
\a•..::yil�r' EGA H-3 \;r:a"`wa,
', ( W. EGA H-1 o.-s. EGA H-2 'tw-• \'t:'"e•`':
_ .$ 25 600 SF "°' 15,000 SF '`� - 30,800 SF\ v t•
\�. \m �' s •..r. ... fir,•:•:.;.
iii_ li, ,..,:,,,,, ...a ,iiii:'.Z.::?....4:::::'11: 1111h, •:!!!.L,,r ::-.L " '11116. ..:.:.:.::::::.:::::::::::::
K iiii I-1_ 111‘4. \ rl , ..:7P:g:::::::::::::..1:4:....:::::::::::.:..:::.:::::.:::::,:::::::::::.:
ast A'Apr•
-r - \hill&
T\ .............. . ' .
‘"s\ -- NOTES: J
BUILDING TOTAL:99,600 SF
PARKING 1.0'C:b6,766 SF
UNIMPROVED:140,048 `
APRON:354,765
THICKNESS•UNKNOWN4:::C +u
�i FUEL.TANKS: UCPAR'IMFNfUI AVIATION xra
"`�G 3-I2 000 GALLON JEC•A PAST GENERAL.AVIATION ..4 „a,A r
011110
I•12,000 GALLON AV-GAS A'rrACHMFN r"C.'
TIE DOWNS:30 FIXED WING cosPt's c.,:). u+.,,
m 2 HFJ,IPAD CORPUS cwusr[ "
INTERNATIONAL AIRPORT 20I1 for
Summary Appraisal Report, City of Corpus Christi, Corpus Christi International Airport (11/18/2011) 71
Aviation
Management
Consulting
GroupAviation APPENDIX
D. Subject Properties — Photographic Survey
1. West General Aviation Facility
r,.t '
F
l
P.
WGA OF-1 — Exterior
(�
i
ir._
i , e x .,
.......................
-firi ........._.......... _
, ., _, . , b.A - .
_ ' ,j r........-7=.....1!
1.
s- .I .. er
WGA OF-1 — Interior
Summary Appraisal Report 72
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
,
WGA OF2 — Exterior
4
i - if ii .
1
ii ` nit, y .S
IM filMi II 1111011
`�1
1 A, " i
11111 �U�IIIIIiI�k �� -
' ' 11111 �: _
- --- 0% _ Aro i ___ . ___
a
IAli. i*
WGA OF2 — Interior
Summary Appraisal Report 73
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
_,1,,
1 -
Hiigitli'itil
__
libilliaL,1 ,,_ I 4 , , I
. _
_ .,
. . A . ,
_ .
__ .
- --.__
, ,
,.... ,
rit* ..
. . _
. _ .
WGA OF3 - Exterior
4
. t
4fr
- .. . . ,,
., . , ,__. . „. ,, - /,
a
WGA OF3 — Interior
Summary Appraisal Report 74
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
inAviation
Management
Consulting
GroupAviation APPENDIX
ii
volor
WGA OF4 — Exterior
.4.4, 1 kj ,...,
, .
0 1
„........
,....., _........
,x,,,..
. „,
,,, x ,
., h �ry
WGA OF4 — Interior
Summary Appraisal Report 75
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
111 Aviation
Management
Consulting
GroupAviation APPENDIX
•
i
4 ....._
.
•
•
/ = .
WGA Apron
Mfr
a
_.
ti
• . ... .
WGA Vehicle Parking
Summary Appraisal Report 76
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
liAviation
Management
Consulting
GroupAviationn APPENDI.4;1,,,
t,..ii.„
..,
,;,.:-..-,_
,..,,,,.
__
_ ...
4
, _
. _
• , fi ,.*. a
rill
WGA H-1 Exterior
i
r i
l
tahOligtui;
'll
lii
k � IS
®..r Mair x. \ i 7. , J `��Y(� t . :
:i
- 0 1 .,,, 4 , %
sp 1- mot_.
i- r
_
' ,
at- - $
t
WGA H-1 Interior
Summary Appraisal Report 77
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
siAviation
Management
Consulting
GroupAviation APPENDIX
10
ya. ,
N.
WGA H-2 Exterior
'W\\\\%\\\*tV„ ANNI111111 ,III I ', i /
tAkIBU111MMMMM M r '/'vtfto '
\ A\ 'N\ 1%111
�, `\1�\\1\A, \\\\\ ,,,,i 1111
\ \\ \\\\AM vv t' ♦_
\.a�a\
r
Nr. stainallih. @ , •,,, al
t . fir=110) i ' iiiiitlIMPIV i
,,
r.,
WGA H-2 Interior
Summary Appraisal Report 78
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
11 Aviation
Management
Consulting
GroupAviation APPENDIX
ilk
i
Pr
t
a
WGA H-3 Exterior
11
1
11"'x►
RI
r
--.....;__----. - — 16""""1", '
r .L
Et ___ *pa t
WGA H-3 Interior
Summary Appraisal Report 79
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
WGA H-4 Exterior
, iiiii‘b __ s
,iirt,*
11111111 le
�..rr!
�' _ .-- _ % ,...
11111.ji
v
p. r....... „ _.
r
r_
� rk
WGA H-4 Interior
Summary Appraisal Report 80
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
o -
1
Iltl) 1
emi
---jr-
•
i ,
1
,fir y .=
w�'"_
-,
fir„ _ >
WGA Storage
•
L'I R E jt
•
iminir
WGA Fuel Storage Facility
Summary Appraisal Report 81
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
111 Aviation
Management
Consulting
GroupAviation APPENDIX
2. East General Aviation Facility
1
s:AI: , ,
1111 .....it ,i,,,,,... _
:moI.
i# ,
t
EGA OF1 — Exterior
_ ,, :,/
.,. {
So,r-roe,
11•I1 IW PPPI S'
,e,1 1111
Y
•'
t A
t
; r ,....
,... .... .... ... .s
__
..------____ ..-,
, _ _
EGA OF1 — Interior
Summary Appraisal Report 82
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
11 Aviation
Management
Consulting
GroupAviation APPENDIX
lluivir
_ i
EGA OF2— Exterior
111 hill
I I
40464)"14r, 164firritliNgt
Segfest ND Farms to
SSegrest NV Farms
.,,,.meq NAM-SERVICE• DEPENDARNTY
em 9 14.Z.0 V3I7
8/1 hi
46
I` ~`
*WO.FairnS
EGA OF2 — Interior
Summary Appraisal Report 83
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
1, ; t
Sa
-3
. <
L, .
. .. .
. � 1.: i row
I , ,,,, ,
. ..
.. ,...;
EGA OF3 - _=xter or
2.
4
RP
r3
,, - .
,_,,a Fill
__ _ . .,.___:, ....,____
..
\-- '411111riji
Y‘fw
EGA OF3 — Interior
Summary Appraisal Report 84
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
likitia...........__________,..........001116800
AIRCit/{F7 M,JN EM+1NCE i {.
2 �f f
G r }
4
I t :f t _ Matta!! t_..
a wwr lit .
,...eek.,. _- -.....z. -- _ ,a; _ , .-..,..#
1
ee*tee----Y T'*.'lF.:--,-:^ ✓,^r: ,e rr 4-
EGA OF4 — Exterior
iiiii
'1 S 11
- ,1
._ ''.‘'It. '''"'it's'
1 \\
\ 1
Irk ,,, „.. , JILL 1 . lh
�`4 —
EGA OF4 - Interior
Summary Appraisal Report 85
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
milli Aviation
Management
11111Consulting
111111 GroupAviation APPENDIX
•
•
I �
AMA
vo
ay
EGA OF5 - Exterior
Tr
EGA OF5 - Interior
Summary Appraisal Report 86
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
I
x
"� - IF ■ � tQ
r� - ' z . c
EGA OF6 — Exterior
,
rt r
•
,sr,:-
01
moi ..+
I
EGA OF6 — Interior
Summary Appraisal Report 87
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
.- `>
,, � .e
tm
=
l . ` . +'
at ?&
''*,.,':. *-'-::-'-'—'''''''''414**14'srlk:°;):6"....''' ...411°: °'...6.;;'°."I*'''''''''-'- -'1' '''''''''''''''''''t'
EGA Apron
i
.moi . -,
.,
EGA Vehicle Parking
Summary Appraisal Report 88
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
p
4 ., _
._
_ t
___
,_
f, .....:,,
, _ _.... , r
...
EGA H-1 Exterior
Yom
,.
A
x
r
EGA H-1 Interior
Summary Appraisal Report 89
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
SiAviation
Management
Consulting
GroupAviation APPENDIX
2
EGA H-2 Exterior
•
�.
F:7
n
m
EGA H-2 Interior
Summary Appraisal Report 90
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
IIAviation
Management
Consulting
GroupAviation APPENDIX
4
E
s ofi,„
, i
EGA H-3 Exterior
.e,
,,.��• . ^��: -;%.....-
Ott ..
ift
1111,1ri "MI
IIII
��j` i i�ip, . i�� 1111111111
lam' !
r
ii
5
` � -
EGA H-3 Interior
Summary Appraisal Report 91
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
11 Aviation
Management
Consulting
GroupAviation APPENDIX
,
f f f IIIIiki _
! .,
• '
1 ,
1
1 3
3 ;
' t
. 3
' - ',... ,-;,.. .„-:, .........„.
. ,
, .
:
....„-- ,
EGA H-4 Exterior
‘ . .,...
I '-
- • -.. - .... . -- •, ' - ':
... -
, LI
. - ...ti I •ii
-.° . .. • - ..,
, ...
5 -
EGA H-4 Interior
Summary Appraisal Report 92
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
siAviation
Management
Consulting
GroupAviation APPENDIX
iii
Milk,•15
1
t. I
, 1 \\ \
\ \, j
t
1
`�. ial
y;
4
P
• y- -
9Z EGA Storage
k
5
__-- lip
,.
,,� . -
a
EGA Fuel Storage Facility
Summary Appraisal Report 93
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Aviation
Management
1111Consulting
111 GroupAviation APPENDIX
3. Improved and Unimproved Land
B1 Land
B1 Land
Summary Appraisal Report 94
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
IIAviation
Management
Consulting
GroupAviation APPENDIX
;r4
_ 4‘
, ,,,- 4. -,
^
p
.. .^.�- . 'L(
Cl Land
f
•
C2 Land
Summary Appraisal Report 95
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
IIAviation
Management
Consulting
GroupAviation APPENDIX
E. Subject Properties — Metes and Bounds Descriptions
corner of the tract of land described in Article I,
Paragraph A, of the Contract and Lease Agreement
between the Greensboro-High Point Airport Authority
and Atlantic Aero, Inc., bearing date of 24 May
1971, and running thence from said beginning point
North 44 deg. 49 min. 30 sec. West 198.06 feet to a
point in the margin of Perimeter Road; thence ,
running with the southeastern margin of Perimeter
Road as it curves to the right a chord and chord
distance of North 40 deg. 38 min. 29 sec. East
47.22 feet; thence continuing with said margin of
Perimeter Road North 60 deg. 20 min. 58 sec. East
2C4.60 feet; thence continuing with said margin of
Perimeter Road as it curves to the right a chord
and chord distance of North 68 deg. 16 min. 15 sec.
East 140.76 feet; thence continuing with said
margin of Perimeter Road North 76 deg. 10 min. 25
sec. East 180.53 feet; thence South 45 deg. 10 min.
30 sec. East 528.73 feet to the ooint of Beginning,
containing 67,374 square feet and being colored
in purple on the plat of survey attached to this
Fourth Amendment and marked "Exhibit B."
The above-described tract of land shall be added to
and become a part of the demised premises effective
1 Sc61.-cn6f4 1989.
C
BEGINNING at the northernmost corner of the tract
of land described in Article I, Paragraph A, of
the Contract and Lease Agreement between the •
Greensboro-High Point Airport Authority and Atlan •
-
tic Aero, Inc. , bearing date of 24 May 1971, and
running from said beginning point North 44 deg. 49
min. 30 sec. West 154.93 feet to a point in the
margin of Perimeter Road; thence with said margin •
of Perimeter Road North 76 deg. 10 min. 25 sec.
East 51.42 feet; thence with said margin of
Perimeter Road as it curves to the right a chord
and chord distance of South 74 deg. 18 min. 59 sec.
East 68 feet; thence continuing with the margin of
Perimeter Road South 44 deg. 49 min. 30 sec. East
68.44 feet; thence South 45 deg. 10 min. 30 sec.
West 78.00 feet to the point of Beginning, contain-
ing 10,006 square feet and being colored in brown
on the plat of survey attached to this Fourth
Amendment and marked "Exhibit 8."
The above-described tract of land shall be added to
and become a part of the Demised Premises effective
1 SEATEei 6•Si'1989.
D
BEGINNING at a point located North 45 deg. 10 min.
30 sec. East 8 feet from the northernmost corner of
the tract of land described in Article I, Paragraph
A, of the Contract and Lease Agreement between the
Greensboro-High Point Airport Authority and Atlan-
tic Aero, Inc. , bearing date of 24 May 1971, and
running thence from said beginning point North 45
deg 10 min. 30 sec. East 70 feet to a point in the
margin of Perimeter Road; thence with Perimeter
Road South 44 deg. 49 min. 30 sec. East 411.68
feet; thence continuing with said margin of
Summary Appraisal Report 96
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
li Aviation
Management
Consulting
GroupAviation APPENDIX
Perimeter Road as it curves to the left a chord
and chord distance of South 60 deg. 42 min. 10 sec_
East 71.12 feet; thence continuing with said margin •
of Perimeter Road as it curves to the right a chord
and chord distance of South 37 deg. 16 min. 01 sec.
East 25.34 feet to a point in General Aviation Loop
Road; thence with said road as it curves to the
left a chord and chord distance of South 08 deg.
42 min. 12 sec. East 85.79 feet; thence continuing '
with said access road as it curves to the left a
chord and chord distance of South 60 deg. 37 min.
55 sec. West 20.07 feet; thence continuing with
said road as it curves to the right a chord and
chord distance of South 19 deg. 30 min. 05 sec.
West 26.33 feet to a point in the margin of a spur
off said General Aviation Loop Road; thence with
the margin of said spur south 50 deg. 37 min. 55
sec. West 20.07 feet; thence with the margin of
said spur as it curves to the left a chord and
chord distance of South 52 deg. 54 min. 27 sec.
West 97.64 feet; thence North 44 deg. 49 min. 30
sec. West 19.48 feet; thence North 45 deg. 10 min.
30 sec. East 95.00 feet; thence North 44 deg. 49
min. 30 sec. West 550.00 feet to the point of
Beginning, containing 47,873 square feet and being
colored in red on the plat of survey attached to
this Fourth Amendment and marked "Exhibit B.
The above-described tract of land shall be added to
and become a part of the demised premises effective
1 Sce-remdtic 1989.
E
BEGINNING at a =oint lccared North 45 dcg. 10 min.
30 sec. East 500.00 feet from the southernmost
corner of the tract of land described in Article I, ,
Paragraph A, of the Contract and Lease Agreement
between the Greensboro-Sig,: Point Airport Authority
and Atlantic Aero, Inc., bearing date of 24 May
1971, and running from said beginning point North
00 deg. 10 min. 30 sec. West 247.49 feet; thence
North 44 deg. 49 min. 30 sec. West 190.52 feet to _
the margin of a spur off General Aviation Loop
Road; thence with said margin of said spur as it
curves to the right a chord and chord distance of
North 52 deg. 54 min. 30 sec. East 81.50 feet;
thence continuing with the margin of said spur
North 60 deg. 37 min. 55 sec. East 23.22 feet;
thence continuing with said margin of said spur as
it curves'to the right a chord and chord distance
of South 80 deg. 06 min. 34 sec. East 25.31 feet to
the margin of said General Aviation Loop Road;
thence with the margin of said General Aviation
Loop Road as it curves to the left a chord and
chord distance of South 54 deg. 10 min. 25 sec.
East 90.10 feet; thence continuing with said margin
of said General Aviation Loop Road as it curves to
the right a chord and chord distance of South 27
deg. 23 min. 02 sec. East 25.83 feet to a point in
the margin of another spur off said Loop Road;
thence South 12 deg. 48 rein. 28 sec. West 168.82
feet; thence continuing with the margin of said
spur as it curves to the left a chord and chord
distance of South 06 deg. 31 min. 29 sec. West
119.28 feet; thence South 44 deg. 49 min. 30 sec.
Summary Appraisal Report 97
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Ill Aviation
Management
Consulting
GroupAviation APPENDIX
East 14.49 feet to the point of Beginning, contain-
ing 26 ,109 square feet and being colored in blue on
the plat of survey attached to this Fourth Amend-
ment and marked "Exhibit B."
•
The above-described tract of land shall be added to
and become a part of the demised premises effective.
1 (i PT6- 5E/(' 1989.
F
BEGINNING at a point located North 45 deg. 10 min.
30 sec. East 500.00 feet from the southernmost
corner of the tract of land described in Article I,
Paragraph A, of the Contract and Lease Agreement
between the Greensboro-High Point Airport Authority
and Atlantic Aero, Inc. , bearing date of 24 May
1971 , and running thence from said beginning point
South 44 deg. 49 min. 30 sec. East 14.49 feet to
the margin of a spur off General Aviation Loop
Road; thence with said spur South 00 deg. 14 min.
30 sec. West 146 .52 feet; thence South 89 deg. 18 .
min. 30 sec. West 85.45 feet; thence North 44 deg.
49 min. 30 sec. West 58.44 feet to the point of
Beginning , containing 12,275 square feet and being
colored in yellow on the plat of survey .attached
to this Fourth Amendment and marked "Exhibit B."
The above-described tract of land was added to
became a part of the demised premises effective 1
April 1985.
G .
BEGINNING at a point located North 45 deg. 10 min.
•
30 sec. East 250 .00 feet from the southernmost
corner of the tract of land described in Article I,
Paragraph A, of the Contract and Lease Agreement
between the Greensboro-High Point Airport Authority
and Atlantic Aero, Inc. , bearing date of 24 May
1971, and running thence from said beginning point
North 45 deg. 10 min. 30 sec. East 85.00 feet to a
point; thence South 44 deg. 49 min. 30 sec. East
58.44 feet; thence North 89 deg. 18 min. 30 sec. .
East 85.45 feet; thence South 00 deg. 14 min. 30
sec. West 119. 23 feet; thence South 89 deg. 14 min.
00 sec. East 30 .16 feet; thence South 00 deg. 14
min. 30 sec. West 425.41 feet; thence North 89 deg.
23 min. 45 sec. West 45.39 feet; thence North 44
deg. 49 min. 30 sec. West 341.81 feet; thence North
45 deg. 10 min. 30 sec. East 250.00 feet; thence
North 44 deg . 49 min. 30 sec. West 150.00 feet to
the point of Beginning, containing 94,899 square
feet and being colored in gray on the plat of sur-
vey attached to this Fourth Amendment and marked
"Exhibit B."
The above-described tract of land shall be added to
and become a part of the demised premises effective
1 .vri-Em6l,c 1989 .
Summary Appraisal Report 98
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
F. Consultant/Appraiser Qualifications
1. David Benner(Consultant)
Associate Consultant (Aviation Management Consulting Group, Inc.)
Experience
David Benner has more than 10 years of aviation, management, and customer service
experience including airport operations, flight instruction, business operations, and aviation
(airports and aviation businesses) management consulting.
Education
David has a Bachelor of Science degree in Business Administration from Bethel College
and a Master of Business Administration degree in Aviation with a concentration in Airport
Management from Embry-Riddle Aeronautical University (ERAU). Additionally, David has a
commercial pilot license with instrument and multi-engine ratings, and he is a Certified
Flight Instructor.
Expertise
Airport Business
• Appraisals and Valuations • Appraisals and Valuations
• Leasing Policies • Due Diligence
• Rents and Fees Policies • Strategic/Business Planning
• Minimum Standards • Operational and Financial
• Rules and Regulations Assessments
• Development Guidelines • RFP Response Development
• Lease/Use/Operating Agreements (Proposal)
• Strategic/Business Planning • Market Assessments and
• Rent Studies Feasibility Studies
• Fee Studies
• RFP Development and Response
Evaluations
• Market Assessments and
Feasibility Studies
• Operational and Financial
Assessments
Summary Appraisal Report 99
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
11 Aviation
Management
Consulting
GroupAviation APPENDIX
Background
Prior to joining Aviation Management Consulting Group, David was a full-time student
pursuing his Master's degree at ERAU in Daytona Beach, Florida. While at ERAU, he
served as a graduate assistant and completed a number of high profile research projects
including an Aviation Forecast Study (San Diego International Airport), a Security Study
(San Francisco International Airport), and a Customer Satisfaction Survey (Daytona Beach
International Airport). In addition, while pursuing his Master's degree, David completed an
internship with Daytona Beach International Airport focused on airport administration,
operations, and management.
Summary Appraisal Report 100
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
Ill Aviation
Management
Consulting
GroupAviation APPENDIX
2. Robert Decker(Appraiser)
Principal (Decker Associates, Inc.)
Experience
Robert (Appraiser) has over 35 years of commercial appraisal and consulting experience
including a variety of aviation assignments encompassing the valuation of airport land and
building improvements (both leased fee estate and leasehold interest). In addition, Robert
has completed a number of rent studies involving airport (and aviation-related) properties.
Education
Robert has an undergraduate degree in Business Administration from Colorado State
University in Ft. Collins, Colorado. In addition, he has completed the following Appraisal
Institute Courses: Capitalization Theory and Techniques IA and IB, Case Studies in Real
Estate Valuation II, Investment Analysis VI, and Litigation Valuation, Standards of
Professional Practice and numerous appraisal seminars. Robert is a Certified General
Appraiser in the state of Colorado and has performed appraisal assignments in thirteen
other states.
Expertise
Airport/FBO/General Aviation Non-Aviation (Commercial)
• Appraisal • Sale/Purchase
• Valuation • Financing
• Rent Studies • Estate Tax
• Strategic/Business Planning
• Condemnation
• Market Assessment
• Feasibility Study
Summary Appraisal Report 101
City of Corpus Christi, Corpus Christi International Airport (11/18/2011)
Aviation
Management
Consulting
GroupAviation APPENDIX
3. James Burbach (Appraiser)
President (Burbach & Associates)
Experience
James (Jim) Burbach (MAI and President of Burbach & Associates) has approximately 35
years of appraisal and consulting experience including: appraisal and investment analysis
of residential PUDs; absorption studies for residential demand projections; pricing
recommendations for proposed office, industrial, and residential PUDs; and, the valuation
of office buildings, multi-family projects, regional malls, hotel/motels, industrial properties,
and major land assemblages.
Education
Jim has an undergraduate degree in Finance from the University of Wisconsin in
Whitewater, Wisconsin and a graduate degree in Real Estate Appraisal and Investment
Analysis from the University of Wisconsin in Madison, Wisconsin. Jim is a Certified
General Appraiser in the state of Texas.
Expertise
Non-Aviation (Commercial)
• Financing • Feasibility Studies
• Estate Tax • Litigation Support
• Strategic and Business Planning • Market Assessments
• Condemnation
Summary Appraisal Report 102
City of Corpus Christi, Corpus Christi International Airport(11/18/2011)
„____
CORPUS C
,., o`er
INTERNA.TI ONAL Al RP ORT
East General Aviation Hangars
Structural Condition Assessment
Prepared by: . .
-OF T•
r
PGAL ...
A,—
, .
o
e JEFFREY A.UL8O1T
�1� 88653 ; �e
-..lftv.4,0...0
JAN 28,2011
January 2011
EXHIBIT 3
East GA Hangars 1-3 Structural Condition Assessment January 2011
Structural Condition Assessment for CCIA East General Aviation Hangars
EXECUTIVE SUMMARY
The existing East General Aviation Hangars located at 506 International Drive at Corpus Christi
International Airport were inspected with regard to establishing structural condition and serviceability.
The original drawings for these structures were not available at the time of inspection. The East General
Aviation Hangars 1, 2 and 3 are currently in use for Fixed Base Operations (Signature Flight Support)
serving the general aviation community.Visual field inspections were performed to assess the structural
adequacy of these buildings. No destructive testing, invasive inspections or capacity analysis was
performed as it was beyond the scope of the investigation. Based on the observations made during the
visual inspections, Hangars I and 2 have adequate structural integrity to support the original intended
design loads although buildings have building envelope issues that will require certain repairs to remain
in serviceable condition. The Signature Flight Support office building is in generally good condition
needing only minor maintenance work. Hangar 3 is in need of immediate repairs and will not support its
full intended design load in its current condition. All of the East GA Hangar recommendations for such
repairs are provided and a conceptual cost estimate for those repairs is included in this report.
Page 1 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
INTRODUCTION
The East GA Hangar buildings are typically of commercial metal building type construction with the
exception of Hangar 1 which is a hyperbolic paraboloid concrete shell structure.On December 5th, 2010
a site visit was undertaken for the purpose of establishing the general structural condition of the existing
CCIA East General Aviation Hangars. The structural condition assessment performed is intended to
address the serviceability of the existing buildings for general aviation hanger type use and generally
conforms to the guidelines of ASCE Standard 11-99, "Guideline for the Structural Condition
Assessment of Existing Buildings." The assessment and report provided are NOT intended to be a
"Property Condition Assessment" per ASTM E2018-08 although similar items are discussed. The
inspection was limited to visual methods only and no destructive examinations were performed. The
assessment provided is based solely on those items that could be observed directly and may not include
all existing structural deficiencies, if any are present. While the primary focus of this report is the
structural adequacy of the hangar buildings there is also discussion of the building envelope integrity as
it relates to structural issues and certain recommendations are offered. Please note that the hangar
numbers and building names used in this report are based on input from Signature Flight Services and
may not correspond to the hangar numbers as commonly used by CCIA.
FIELD OBSERVATIONS
East GA Hangar 1
The first portion of the structural condition assessment consisted of inspection of the hyperbolic
paraboloid concrete shell structure designated as Hangar 1. Structures of this type are interesting in that
bending forces within the shell are very low and only a minimal amount of reinforcing is needed.
Structures such as this can support large loads for a given mass of concrete.
1i
. .a
rV
East GA Hangar 1 —Aircraft Bay East GA Hangar 1 —SWA Office Area
In general it was noted that concrete spalling has occurred in some of areas the structure and pop-outs
are evident. Cracking has occurred in limited areas. All of the fiberglass infill panels and wood support
framing are not weather tight and are in need of replacement. There is evidence of water infiltration
through the concrete shell. The water infiltration has caused numerous areas to receive water damage to
walls,ceilings and floor finishes. Secondary framing for metal wall panels is also corroded.
Page 2 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
� _ # YF . ` '.r ' tt * orf 't +
1' \ ; *.). , -fx, ' .`Y#y fi t +,,4',.
Sad �• ,. t "'. .r,
,,,. \ ,
eb
r
t
.a
Fiberglass Infill w/Rotted Framing Water Infiltration w/Spalling
5 -� ,, L. a
{
•
y
Cracking in Concrete Shell Water Infiltration w/Spalling
..
r t
1 ' t
.i u,' r
i
c
Water Damage to Walls and Wood Framing Water Damage to Ceilings
Page 3 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
No signs of significant foundation movement or distress were noted for Hangar 1. However there has
been movement of the floor slab causing water to run towards an office area. This situation can be
addressed with the installation of in floor drains if conditions warrant. Several locations on the exterior
of the shell have experienced corrosion of the reinforcing and are spalling. Water infiltration has also
damaged electrical conduits. In general there is poor drainage between Hangar I and the adjacent
Signature offices.This has allowed water to build up and damage a portion of the wall panels.
.� " ,.---
1
Floor Slab Cracking Exterior Spalls—Previously Patched
�,.
Fy
1411 : if
t' l' +
Iii
11P:4
�: 1
Water Damaged Electrical Conduit Steps added due to poor drainage
It is recommended that the roof of this building be treated by application of a white elastomeric coating
system to prevent further water infiltration. Any required concrete repairs should be performed in
conjunction with the roof repairs as well as replacement of the translucent infill panels and support
framing. Concrete repairs should include chipping out deteriorated concrete and blast cleaning the
substrate. The repair material should be a high strength mixture containing a corrosion inhibitor such as
"SikaTop 123 Plus" or equivalent. Once the shell is weather tight, repairs to the interior can be
undertaken. Interior repairs should include demolition and replacement of all water damaged framing
and finished surfaces. The storefront at the Southwest Airlines Cargo office has broken glazing panels
which need to be replaced. It should be noted that most of the observed damage is due to water
infiltration and lack of continuous maintenance of the roof coating is the primary cause.
Page 4 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
ipp -
iiiii '3000") ;',,....,1.1" --...-'4,....
-t ;
-� # ; r .. 4 t'
`
Damaged Glazing @ SWA Cargo Poor Drainage @ SWA Storefront
A complete structural analysis of the building to determine compliance with current building codes is
beyond the scope of this report. However,with the exception of those areas specifically noted, Hangar 1
appears to have adequate structural integrity to carry the original intended design loads. There are
building envelope and maintenance issues that need to be addressed and which affect the general
serviceability of the building.
East GA Signature Offices
The East General Aviation Signature Office Building is a commercial metal building type structure
approximately 55 feet wide by 85 feet deep with a metal panel roof.
t
Signature Office Building—Air Side Signature Office Building—Land Side
The exterior of the structure was inspected first. The overall condition of this building is good and no
damage was noted on wall cladding panels. The building envelope appears to be intact with no
deficiencies noted at the windows and doors. However, several maintenance items need to be addressed
for this building. The gutters are filled with debris and should be cleaned to prevent corrosion. In
Page 5 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
addition, the gutter downspouts place water directly adjacent to the building foundation. Gutter
extensions and splash blocks should be provided. If not corrected, this condition will cause damage to
the foundation due to heaving of the underlying soils. General improvements to grading adjacent to the
building should be performed to prevent the buildup of water adjacent to the foundation.
- ' . • i , /
ThPt� `'
i' 1, , t
a q
Plants Growing in Gutter @ Signature Offices Downspout @ Signature Offices
An inspection of the remainder of the interiorof the Signature Offices revealed the interior structure to
be in good condition.No heaving of the floor slab was noted and no evidence of roof leaks was found.
A complete structural analysis of the building to determine compliance with current building codes is
beyond the scope of this report. However, the Signature Offices Building appears to have adequate
structural integrity to carry the original intended design loads.
East GA Hangar 2—Ocean Air Center
The East General Aviation Hangar#2 is a commercial metal building type structure approximately 205
feet wide by 130 feet deep with lean-to structures attached to the both sides of the hangar.The south side
structure is an administrative office area and is separated from the hangar space by a CMU partition
wall. The building is framed in steel and has corrugated steel wall and roof panels.
t
*4'4%,, y1C ' � ' "� s
r..
xf _
:......':V''''ll*'''':::.-:...-i;;;"-'1'ill.'c-
„` Y r:'...111;*'7-ki*L.124:44" dux" - --'-+-i..�
East GA Hangar 2—Ocean Air Center—Air Side East GA Hangar 2—Ocean Air Center—Land Side
Page 6 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
An inspection of the exterior portions of the building revealed some damage to the corrugated steel wall
panels although this damage is not extensive.No other structural distress was noted from the outside of
the building in this area at the time of inspection although building envelope issues are apparent. The
eave trim and gutters are corroded and should be replaced. Downspouts were missing as well.
Cladding Damage @ Ocean Air Center Missing Downspout @ Ocean Air Center
4 41.40
• —1111111W
•4
Downspout Damage @ Ocean Air Center Cladding Damage @ Ocean Air Center
A few of the building cladding panels are perforated due to corrosion and the base angle is also
corroded. There is generally poor drainage in some areas around the building. An inspection of the
interior of Hangar 2 revealed the interior structure to be in fair condition. The primary structural
members appeared to be in fair condition. There are several locations where the main baseplates have
moderate to severe corrosion and which exhibit moderate section loss. These locations should be
cleaned and repaired as needed. Secondary framing members adjacent to the doors are severely corroded
with an estimated 50%section Loss and should be repaired as soon as possible.The protective coating on
these secondary members has reached it service life limit and painting should be considered. It is
anticipated that the rate of corrosion will increase since the existing protective coatings are no longer
fully functional. An inspection of the hangar doors revealed corrosion to the secondary door framing
members. The hangar door tracks, both upper and lower, are corroded. There is minor mechanical
damage to the hangar door frames and bumpers. All of the interior framing is in need of cleaning and
painting to prevent further damage and this work should be integrated into an ongoing maintenance
program.Failure to address these issues now will likely result in higher repair costs later.
Page 7 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
u
b
tt (�gw # t
It t
rk1i
. . .i: : k a J :i: ti.,.
.3 Zg
, I t'1%,',4; al
,. ., ,,- t ,, .. ,
.: 1.1-.; 1 1,Corroded Door Tracks @ OAC Panel and Base Angle Corrosion @ OAC
' t,is- ` 3
e'
x ,
r, ■i
4 ....Ns.. 4
, fl
3/41IiiitIOIW4
•
r
T
r rrC[
k_•a
Primary Member Corrosion @ OAC Baseplate Corrosion @ OAC
,e
}
9
Door Damage @ OAC Severe Corrosion Damage @ OAC Doors
Page 8 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
The floor stab of the Ocean Air Center Hangar appears to be in fair condition. There is minor to
moderate cracking but the floor is generally serviceable at this time. There is poor drainage between the
Ocean Air Center Hangar and the adjacent building although area drains are located here. These drains
should be kept clean to prevent accumulation of water adjacent to the building foundations.
N
— �7 f'
E ''
i
‘,..\ gra, . , i
k. —..--1....,-,41... '
Partially Blocked Drain @ OAC Drain in Good Condition @ OAC
A complete structural analysis of the building to determine compliance with current building codes is
beyond the scope of this report. However, with the exception of the items specifically listed above, the
Ocean Air Center Hangar appears to have adequate structural integrity to carry the original intended
design loads.
Page 9 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
East GA Hangar 3—Signature Flight Services,Dodd Aviation and Corpus Christi Flight School
The East General Aviation Hangar#3 is a commercial metal building type structure approximately 260
feet wide by 130 feet deep with a lean-to structure attached to the south side of the hangar. The south
side structure is an administrative office area and separated from the hangar space by a metal partition
wall.The building is framed in steel and has corrugated steel wall and roof panels.
j
I(/f({{riti j
4 % s �'`"� r,i!.ail 1
•,af .4 _ '. 1I,+�l'!' 1
1
r. -
7.
East GA Hangar 3—Air Side(East) East GA Hangar 3—Air Side(North)
The exterior inspection of Hangar 3 revealed mechanical damage to wall panels although this damage is
not extensive. There is moderate to severe damage to the gutters and downspouts and some downspouts
are missing. There is inadequate caulking around the windows. All of the fan louvers are in need of
replacement and it appears that the fans are inoperable as well. There is some evidence of water
infiltration in the area where Dodd Aviation is located as indicated by staining of the ceiling tiles in the
restroom areas. It could not be determined if this staining was caused by rainwater infiltration or other
moisture sources.
:' +
.i4
is
.«t` ^r` 'i t''''''"Ii #' ' *
II v
:r ,�, `V /
Stained Ceiling Tiles @ Dodd Aviation- I Stained Ceiling Tiles @ Dodd Aviation-2
Page 10 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
4 t t . ' * \ .„
111 ,}
i
i r 13 : r i, it.
Panel Damage @ EGA 3 Gutter Damage @ EGA 3
,,....i t
1.,..,, w g '�
.,r *
fix,
at fi
..,t. :
.:,
,„.- „
,,,
, _
, .,,
f ,y g }
44
c c
rr r
Fan Louver Damage @ EGA 3 Caulking Around Windows is Missing
The hangar door system is in moderate to poor condition. The doors cannot be operated normally and
require the use of an aircraft tug to open and close them. There is minor mechanical damage to the
hangar door frames and bumpers and corrosion damage to the doors and door pockets as well as
corrosion of the door tracks and running gear. The secondary door framing is corroded although with
minimal section loss observed. The protective coating on these secondary members has reached it
service life limit and painting should be considered. It is anticipated that the rate of corrosion will
increase since the existing protective coatings are no longer fully functional. The problems with the
hangar door system do not appear to affect the overall structural integrity of the building but do present a
serious serviceability issue.
Page 11 of 17
East GA Hargan 1-3 Structural Condition Assessment January 2011
Fr,..,. -::„.ii, -1,....:. '- .
. .
r
f
•
i�
L' io .,
i ..v
,
Door Track Corrosion e EGA 3 Door Pocket Corrosion , EGA 3
r -4
t ,sa
t .?'H
it 1
ti 3ari{ i
ii‘... r;...1):;'11444gr,::j.li
•
ti ,
1'
w
t;
T
Door Pocket Corrosion @ EGA 3 Upper Door Track Corrosion @ EGA 3
''''r.8'.. r Vir.--.aSy" , 7-'! Ir•
•
':G r -_
`
L-7.-- . . ,,r, . ,sj tr�?,ti$4gym.- !At,,_ ,..:.z•'^,:^;'.7' •!-.;....4 iiiA i
4111110tt
ik
fY, z .v- 57 y r "
��`-... , f k j • 4 r,
_ .tom YJ " +'t• ' ..;f,
Running Gear Corrosion @ EGA 3 Doors Lower Door Track Corrosion @ EGA 3
Page 12 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
An inspection of the interior portion of the building showed the structural steel framing to be in
generally good condition with the exception of the column baseplates. All of the primary and secondary
framing is experiencing corrosion and the original coating system has failed.Only minor section loss has
occurred so far.All of the interior framing is in need of cleaning and painting as well as replacement to
the corroded items to prevent further damage and this work should be integrated into an ongoing
maintenance program. Failure to address these issues now will likely result in higher repair costs later.
The floor slab for this hangar is in fair condition. There are cracks in the floor slab but heaving is
minimal and the floors are serviceable in their current condition.
The baseplate and column base corrosion is the most serious issue observed during the structural
condition assessment. There are three out of six baseplates on the south wall that have more than 50%
section loss and two of six baseplates along the west wall which have more than 50%section loss. A full
structural load and capacity analysis is beyond the scope of this report. However, based on the observed
condition of these baseplates and due to their location in proximity to one another, it is our opinion that
the building in its current condition will not be able to withstand its full original intended design
loads. These baseplates should be repaired as soon as possible. Failure of one of the column locations
would likely cause damage to propagate further into the structure potentially leading to costly repairs.
witig
1
r .
Severe Corrosion Damage @ EGA 3 South Wall Severe Corrosion Damage @ EGA 3 South Wall
�
'irZ: ar�,t a '1 ar xy t
it.
Severe Corrosion Damage @ EGA 3 South Wall Severe Corrosion Damage @ EGA 3 West Wall
Page 13 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
The interior inspection also revealed corrosion damage to the fire sprinkler riser pipe. The lower portion
of this 6 inch line is corroded and is currently leaking. The supports for the remaining riser piping are
also inadequate. This riser supplies all of the sprinkler piping and is under constant pressure. An
accidental bump from a tug or other equipment could cause this line to fail. Such a failure could lead to
damage to the structure or to the aircraft stored within the structure in addition to leaving the building
and its contents unprotected from fire. It is also possible that this corrosion damage extends below the
floor slab as well and failure there could undermine the floor slab leading to costly repairs. It is
recommended that this fire sprinkler riser be thoroughly inspected and then repaired as soon as possible
due to the potential consequences of a failure of this system.
. ."'
lo ' ' . ' i► .$ ,�
r
.: ' ' s.,
ll
.t j 1,
-s
t I
i { d E , yam( � ms.
\ i w .,.
e Support
Fire Sprinkler Riser Damage @ EGA 3 Fire Sprinkler Riser Damage @ EGA 3
Yl. a ,}q i
s i i
Fire Sprinkler Riser Damage @ EGA 3 Overflow Corrosion Damage @ EGA
As stated above,there repairs to the column bases and fire sprinkler riser should be completed as
soon as possible to prevent further and more costly damage. Failure of these components has the
potential to cause injury or property damage.
Page 14 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
RECOMMENDATIONS
East GA Hangar 1
For repairs and updates to the East GA Hangars 1, focus should be given to maintenance of the building
envelope. Leaks through the concrete shell as well as repairs to the shell should take priority. The
building shell needs to be water tight prior to any interior renovations. The existing interior partitions
and ceilings on the north side should be completely demolished. A decision on future build out in this
area can be made after this demolition work is completed. General re-grading of the area between
Hangar 1 and the Signature Office will help improve drainage. A conceptual cost estimate is included
below. A 20% contingency has been included. No additional costs such as design fees or permitting
have been included. It is possible that quantities or unit costs could vary as repairs plans are developed.
East GA Hangar 1 Renovation Estimate
Recommended items 1-7
# ITEM QUANTITY UNITS COST TOTAL
1 Elastomeric Roof Coating 32250 SF $2 $64,500
2 _Patch Concrete 400 SF $50 $20,000
3 Repair Girts/Purlins as needed 1 LS $5,500 $5,500
4 _Demo Exsiting Walls&Ceilings 1 LS $7,500 $7,500
5 Haul out load&haul off demo materials 1 100 CY $35 $3,500
6 Replace exterior windows 150 SF $85 $12,750
7 _Skylight panels and framing 1 LS $3,500 $3,500
Subtotal $117,250
20%Contingency $23,450
Optional Items 8-9
8 Reconstruct Interior walls&Ceilings 1 LS $12,000 $12,000
9 Electrical rough in 1 LS $7,500 $7,500
Subtotal $19,500
20%Contingency $3,900
TOTAL $164,100
Page 15 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
East GA Hangar 2 (Ocean Air Center)
For repairs and updates to the East GA Hangar 2, focus should be given to cleaning and painting the
building's steel framing, repair of gutters and downspouts and repair of the doors and door tracks.These
items will continue to deteriorate unless maintenance is performed and future repair costs will likely be
higher. A conceptual cost estimate is included below. A 20% contingency has been included. No
additional costs such as design fees or permitting have been included. It is possible that quantities or unit
costs could vary as repairs plans are developed.
East GA Hangar 2(OAC)Renovation Estimate
Recommended items 1-7
ITEM QUANTITY UNITS COST TOTAL
1 Replace all gutter and trim 830 LF $15 $12,450
2 Replace Base Angle 150 LF $8 $1,200
3 Repair/Replace Bottom Wall Panels 300 SF $12 $3,600
4 Replace Rolling Door Tracks 1 LS $8,000 $8,000
5 Repair Rolling Doors 1 LS $9,000 $9,000
6 Clean and Paint Structural Framing 1 LS $15,000 $15,000
7 Structural Framing Repairs 1 LS $4,000 $4,000
Subtotal $53,250
20%Contingency $10,650
TOTAL $63,900
East GA Hangar 3
For repairs and updates to the East GA Hangar 3, focus should be given to the immediate structural
deficiencies with the column bases and base plates and also the fire line riser. These are serious
deficiencies which, if not addressed, could result in further damage to the structure and subsequently
higher future repair costs. After the immediate structural issues are taken care of, attention can be given
to cleaning and painting the building's steel framing, repair of gutters and downspouts and repair of the
doors and door tracks. These items will continue to deteriorate unless maintenance is performed and
future repair costs will likely be higher. A conceptual cost estimate is included below. A 20%
contingency has been included. No additional costs such as design fees or permitting have been
included.It is possible that quantities or unit costs could vary as repairs plans are developed.
East GA Hangar 3(Signature) Renovation Estimate
Recommended items 1-8
ITEM QUANTITY UNITS , COST TOTAL
1 Replace all gutter and trim 1260 LF $15 $18,900
2 Replace Base Angle 200 LF $8 $1,600
3 Repair/Replace Bottom Wall Panels 200 SF $12 $2,400
4 Replace Rolling Door Tracks 1 LS $12,000 $12,000
5 Repair Rolling Doors 1 LS $12,000 $12,000
6 Clean and Paint Structural Framing 1 LS $19,000 $19,000
7 Structural Framing Repairs 1 LS $12,000 $12,000
8 Fire line riser repairs 1 LS $8,000 $8,000
Subtotal $85,900
20%Contingency $17,180
TOTAL $103,080
Page 16 of 17
East GA Hangars 1-3 Structural Condition Assessment January 2011
Limitations and Closing
The observations and recommendations provided herein are based on limited visual inspections and no
destructive testing or invasive inspections were performed. These observations and recommendations
are therefore limited to those features which could be directly observed through such techniques and all
deficiencies(if present)may not be noted.
PGAL appreciates the continued opportunity to serve the needs of Corpus Christi International Airport
and we look forward to working with you in the future.
Sincerely,
17‘ °Z44—.
Jeffrey A.Talbott
Director of Structural Design
Page 17 of 17
EXHIBIT 4
Deferred Maintenance Items and Budget
Terminal/Offices and Hangars 2, 3 and 4
Items Budgetary Cost
Terminal/Offices:
All rain gutters and damaged siding panels. TBD
Repair offices roof damage if any. (Not visible) TBD
Anchor A/C condensers to the slab. TBD
Hangar#2:
Structural Condition Assessment Report
-Replace all gutters and trim $12,000
-Replace Base Angle $1,200
-Repair/Replace Bottom Wall Panels $3,600
-Replace Rolling Doors $8,000
-Clean and Paint Structural Framing (floor to ceiling) $15,000
-Structural Framing Repairs $4,000
Walk Through Inspection
-Remove wild palm tree in parking lot and building siding panels. TBD
-Repair hangar roof including offices. TBD
-Corrosion control and paint hangar doors track railings. TBD
-Replace/paint all damaged side paneling floor support railings. TBD
-Replace all damaged panels between Dan GSE/Ocean Air
and hangar. (Damaged at floor) TBD
Hangar#3 & CCSA:
Structural Condition Assessment Report
-Replace all gutters and trim $18,900
-Replace Base Angle $1,600
-Repair/Replace Bottom Wall Panels $2,400
-Replace Rolling Door Tracks $12,000
-Repair Rolling Doors $12,000
-Clean and Paint Structural Framing (from floor to ceiling) $19,000
-Structural Framing Repairs $12,000
-Fire Line Riser Repairs $8,000
Walk Through Inspection
-Repair hangar roof including offices. TBD
-All doors and hinges need painting. TBD
-Anchor A/C condensers to the slab TBD
-Corrosion control and paint all side paneling support railings. TBD
-Replace and paint all damaged side paneling floor support railings. TBD
-Replace all stained ceiling tiles in office area 1st& 2nd floors. TBD
-Repair and paint all damaged drywall in office area 1st& 2nd floors,
stair well and restrooms. TBD
-Repair Janitorial door and trim. TBD
Page 1 of 2
EXHIBIT 4
Deferred Maintenance Items and Budget
Terminal/Offices and Hangars 2, 3 and 4
-Repair or replace ceiling insulation at Civil Air Patrol offices. TBD
-Replace lighting covers on light fixtures in offices and hallways. TBD
-Replace all broken exterior light covers. TBD
-Remove all wild growing plants that are not maintained. TBD
-Fire Sprinkler header needs corrosion control, backflow device
and bollards installed. TBD
-Comply with NFPA 409 for Group II Facility pertaining to sprinkler
System requirements TBD
NOTES:
(1) All Budgetary cost are estimates provided by PGAL Engineering at the time of Structural Condition
Assessment. The Director or his designee will approve repair workmanship for all items.
(2) Items corresponding to PGAL Structural Condition Assessment report are appended to this Lease as
Exhibit 3.
(3) Walk Through Inspection items were identified and agreed to by Lessee and Lessor as needing
repairs or replacement.
Page 2 of 2
EXHIBIT 5
Fees and Charges
(as of Commencement Date*)
Fuel Flowage Fee: $0.0625/gal
Ramp Fees:
Tie-Down (all aircraft): $25.00/day
Remain Overnight (per night. On Ramp after 9 p.m.):
Single Engine $20.00
Light Twin $25.00
Heavy Twin $30.00
Turbo Prop $40.00
Light Jets $50.00
Heavy Jets $100.00
Super Heavy Jets $125.00
Helicopter $30.00
Cabin Class Charter $250.00
"City Fees"
Security Identification Badge Deposit: $100.00
Security Identification Badge Fee: $20.00 - $100.00
Security Identification Badge Replacement Fee: $100.00 reissue fee plus $20 ($120.00)
Rental Car— not rented at Airport: ** $3.50/transaction day
*All Fees and Charges may be adjusted by the Aviation Director periodically.
** Not applicable if a CFC has been assessed.