04-06-2004 CC RPT 24 - Laserfiche WebLink

Home

People Serving People CITY OF RIVERSIDE CITY COUNCIL MEMORANDUM Riverside 199g HONORABLE MAYOR AND CITY COUNCIL DATE: April 6, 2004 ITEM NO: 24 SUBJECT: LONG TERM LEASE AGREEMENT WITH JOYTECH INTERNATIONAL~ INC. BACKGROUND: The Airport had been leasing its largest commercial hangar to Golden West Aircraft Radio from 1994 through late 2003. This tirol, which provided avionics repair and replacement, was given a reduced lease in 1994 as an inducement to relocate to Riverside Airport from Chino Airport. During the term of that lease the company experienced several periods of financial hardship resulting in interrupted lease payments and the imposition of thousands of dollars in late fees impose by the City. Due to various management and organizational difficulties the firm was sold to a buyer who relocated the reorganized company back to Chino Airport. The Airport Department involved itself in the escrow process during the sale of the firm and in that manner recovered all funds due prior to the departure of the company. Throughout the life of the lease, the tenant only applied the minimum amount of upkeep which resulted in our discovery of a dilapidated facility upon his vacation. Before this facility could be leased the Airport Department was going to have to spend thousands of dollars in renovation and repair to make thi~ facility attractive and functional enough to be leased again. In late 2003, the Airport Department entered into negotiations with two separate aviation firms interested in commercial hangar space at our Airport. During these negotiations they were shown the commercial hangar noted above and both firms declined the offer of this unit because of the renovations required and the cost of the property at today's market rate. Shortly thereafter, the Airport Department entered into negotiations with Brian Low, the President of Joytech International, Inc. for the lease of this hangar. Mr. Low, the firm's president, and senior member of the Airport's Commemorative Air Force Wing, indicated that he would pay for all the interior renovations, upgrades and improvements, plus exterior fencing and fence slats. The Airport's only obligation would be to repair several leaking roof sections on the structure which we are in the process of bidding. In addition, Joytech would be paying the Airport an additional $1,265 monthly is lease funds over the previous tenant. Joytech International is a Riverside Company which through this relocation to a larger facility will be expanding its employee work base. Presently, the firm converts commercial service vehicles to specific utility designs based on numerous outstanding, lucrative contracts. During the firms planned expansion, they will be seeking FAA approval to also do aircraft equipment conversions as well. 24-1