Los Angeles World Airports

Transcription

1 World Airports TM RESOLUTION NO LAX Van Nuys City of Los Angolas Eric Garcetti Mayor Board of Airport Commissioners BE IT RESOLVED that the Board of Airport Commissioners approved Second Amendment to Lease LAA-8388 with Mercury Air Cargo, Inc. at International Airport to adjust and reduce demised premises to facilitate construction of Landside Access Modernization Program improvements, resulting in a reduction of revenue to World Airports over the remaining Lease term, as referenced in the Board-adopted staff report attached hereto and made part hereof; and BE IT FURTHER RESOLVED that the Board of Airport Commissioners authorized the Chief Executive Officer to execute said Second Amendment upon approval as to form by the City Attorney and upon approval by the City Council; and Sean 0. Burton President Valeria C. Velasco Vice President BE IT FURTHER RESOLVED that the issuance of permits, leases, agreements, gate and space assignments, and renewals, amendments or extensions thereof, or other entitlements granting use of existing airport facilities or its operations is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Article III Class 1 (18)(c) of the City CEQA Guidelines; and Jeffery J. Daar Gabriel L. Eshaghian Beatrice C. Hsu Thomas S. Sayles Dr. Cynthia A. Telles Deborah Flint Chief Executive Officer BE IT FURTHER RESOLVED that actions taken on this item by the Board of Airport Commissioners will become final pursuant to the provisions of City Charter Section O0 I hereby certify that this Resolution No is true and correct, as adopted by the Board of Airport Commissioners at its Special Meeting held on Thursday, December 14, Sandra J. Miller - Secretary BOARD OF AIRPORT COMMISSIONERS isy -^Ty - (ft ( \ VntV. 1 World Way California 90045*5803 Mail RO. Box California Telephone Internet

2 World Airports REPORT TO THE BOARD OF AIRPORT COMMISSIONERS Meeting Date: Approved Ramon Olivare#, Director, ro erty)services 12/14/2017 A JxJiJnju Reviewed by: Debbie Bowers, Chief Commercial Officer City AttbrneY^ & CAP Review: Completed Pending N/A Reviewed for Date Amoval Status By Finance 11/3/2017 IHIY N NA RW CEQA 10/26/2017 BY N JH Procurement 10/26/2017 BY ON Cond MT Deborah Flint -chief Executive Officer Guest Experience 11/2/2017 SYDN AW SUBJECT: Approval of Second Amendment to Lease LAA-8388 with Mercurv Air Cargo, Inc. y Approve Second Amendment to Lease LAA-8388 with Mercury Air Cargo, Inc. at International Airport to adjust and reduce demised premises to facilitate construction of Landside Access Modernization Program improvements, resulting in a reduction of approximately $2,728,500 in revenue to LAWA over the remaining Lease term. RECOMMENDA TIONS: Management RECOMMENDS that the Board of Airport Commissioners: 1. ADOPT the Staff Report DETERMINE that this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Article III, Class 1 (18)(c) of the City CEQA Guidelines. APPROVE Second Amendment to Lease LAA-8388 with Mercury Air Cargo, Inc. AUTHORIZE the Chief Executive Officer to execute the Second Amendment to Lease LAA upon approval as to form by the City Attorney and approval by the City Council. Page 1 Mercury 2nd Amendment to LAA RO. 0ct20

3 DISCUSSION: 1. Purpose To facilitate construction of Landside Access Modernization Program projects at Los Angeles International Airport (LAX). 2. Prior Related Actions January 22, Board Order No. AO-5048 (LAA-8388) The Board of Airport Commissioners (Board) approved a 5-year Lease with Mercury Air Cargo, Inc. (Mercury) for property located at 6040 Avion Drive at LAX. The Lease expired on February 29, January 23, Board Resolution No (LAA-8388A) The Board approved the First Amendment to Mercury s Lease to extend the term to September 30, Current Action Mercury occupies a cargo facility located at 6040 Avion Drive at LAX under Lease LAA Mercury warehouses and handles cargo for Aer Lingus Limited, Air New Zealand Limited, All Nippon Airways Co., Ltd., British Airways PLC (Publice Limited Company), Emirates Airlines, Fiji Airways (Air Pacific Limited), Iberia Airlines of Spain, LAN (Latam Airlines) and MAS (Aerotransportes Mas De Carga SA). Mercury is one of eight cargo handlers at LAX, and processed approximately 135,882 tons of cargo through the facility in Its facilities are currently operating at maximum capacity, based on current industry standards. Construction of LAX Landside Access Modernization Program (LAMP) projects requires the take-back of certain ramp and warehouse areas of Mercury s premises by December 1, The proposed Second Amendment provides for an adjustment and reduction of Mercury s premises to make way for such construction. The Lease does not require LAWA to provide replacement space. However, to minimize any disruption to Mercury s operations and airline clients, staff is working with Mercury to identify alternative space to replace the space lost as a result of the take-back. Page 2 Mercury 2nd Amendment to LAA-8388.RO. Oct20

4 The table below provides a summary of key elements of the proposed Second Amendment: LEASE SUMMARY Current Proposed DEMISED PREMISES: Warehouse/Office -175,008 SF 1) Effective December 1, 2018: Hangar-31,717 SF Land-283,017 SF Auto Paving - 103,103 SF Warehouse/Office - 171,787 SF Hangar - 0 SF Land-235,826 SF Auto Paving- 91,609 SF 2) Upon restoration of ramp area by LAWA: Warehouse/Office -171,787 SF Hangar-0 SF Land -247,320 SF Auto Paving -103,103 SF RENT: Monthly Rent $409,315 1) $348,775 (12/1/2018) 2) $352,396 (Upon restoration) Annual Rent $4,911,785 1) $4,185,300 (12/1/2018) 2) $4,228,747 (Upon restoration) Board-approved building, land and paving rates apply. Adjusted annually, per CPI, minimum 2% increase. Action Requested Staff requests the Board approve the Second Amendment and authorize the Chief Executive Officer to execute the Amendment after approval as to form by the City Attorney and approval by the City Council. Fiscal Impact Approval of the Second Amendment will result in a revenue reduction of approximately $2,728,500 over the remaining Lease term, netting approximately $11,858, Alternatives Considered Take No Action Taking no action is not recommended. The proposed Second Amendment will facilitate construction of LAMP projects on a timely basis. Page 3 Mercury 2nd Amendment to LAA RO. Oct20

5 STANDARD PROVISIONS: 1. The issuance of permits, leases, agreements, gate and space assignments, and renewals, amendments or extensions thereof, or other entitlements granting use of existing airport facilities or its operations is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Article III, Class 1 (18)(c) of the City CEQA Guidelines. 2. This item is subject to approval as to form by the City Attorney. 3. Actions taken on this item by the Board of Airport Commissioners will become final pursuant to the provisions of City Charter Section This action is not subject to the provisions of the Small Business Enterprise, Local Business Enterprise/Local Small Business Enterprise, and Disabled Veterans Business Enteprise Programs. 5. Mercury is required by contract to comply with the provisions of the Affirmative Action Program 6. Mercury has been assigned Business Tax Registration Certificate No Mercury is required by contract to comply with the provisions of the Child Support Obligations Ordinance. 8. Mercury must have approved insurance documents, in the terms and amounts required, on file with World Airports prior to execution of the amendment. 9. This action is not subject to the provisions of City Charter Section 1022 (Use of Independent Contractors). 10. Mercury has submitted the Contractor Responsibility Program Questionnaire and Pledge of Compliance and will comply with the provisions of the Contractor Responsibility Program. 11. Mercury has been determined by Public Works, Office of Contract Compliance, to be in full compliance with the provisions of the Equal Benefits Ordinance. 12. Mercury will be required to comply with the provisions of the First Source Hiring Program for all non-trade LAX Airport jobs. 13. This action is not subject to the provisions of Bidder Contributions CEC Form 55. Page 4 Mercury 2nd Amendment to LAA RO. Oct20