Broward County Commission Regular Meeting
Director's Name: Mark Gale
Department: Aviation Division: North Perry Airport
Information
Requested Action
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MOTION TO APPROVE termination of the Agreement of Lease between Broward County and Bobby’s Landing, LLC for property located at North Perry Airport; authorize the Director of Aviation to send notice(s) of termination pursuant to the Agreement and to take all necessary actions to effectuate termination of the Agreement; and authorize the Office of the County Attorney to take all legal steps on behalf of Broward County that are necessary to recover any amounts owed under the Agreement, together with costs, interest, and attorneys’ fees.
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Why Action is Necessary
Approval is required by the Broward County Board of County Commissioners (“Board”) to terminate the Agreement of Lease between Broward County (“County”) and Bobby’s Landing, LLC (“Lessee”) for property located at North Perry Airport (“Agreement”).
What Action Accomplishes
This action will approve the termination of the Agreement, authorize the Director of Aviation to provide Lessee with notice(s) of termination pursuant to the Agreement and take all necessary actions to effectuate the termination, and authorize the Office of the County Attorney to take all legal steps on behalf of the County that are necessary to recover any amounts owed under the Agreement, together with costs, interest, and attorneys’ fees.
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Previous Action Taken
None
Summary Explanation/Background
THE AVIATION DEPARTMENT RECOMMENDS APPROVAL OF THE ABOVE MOTION.
On September 25, 2018 (Item No. 2), the Board approved an Agreement of Lease between the County and Lessee (“Previous Lease”) for ten acres which consists of two 10,000 SF hangars, offices, aircraft tie-down ramp, and a fuel farm (“Existing Parcel”) at North Perry Airport.
On May 7, 2024 (Item No. 2), the Board approved the Agreement, pursuant to which Lessee leases, from the County, the Existing Parcel and ten additional acres of undeveloped land on the northeast side of North Perry Airport. The Agreement resulted in the termination of the Previous Lease on June 1, 2024. Pursuant to Section 3.2 of the Agreement, the termination of the Previous Lease does not have any effect on any obligations of Lessee that accrued thereunder and were not fully performed by Lessee as of the date of termination.
Pursuant to Article 7 and Article 31 of the Agreement, Lessee was required to provide County with a letter of credit (or a security deposit in cash in lieu of the letter of credit) in the amount of $1,247,746 as security for the activities by Lessee during the due diligence period and for construction requirements (“Article 7 Letter of Credit/Security Deposit”) and a letter of credit (or a security deposit in cash in lieu of the letter of credit) in the amount of $90,743 as security for Lessee’s obligations under the Agreement (“Article 31 Letter of Credit/Security Deposit”), respectively.
On May 9, 2024, and May 14, 2024, the Broward County Aviation Department (“BCAD”) instructed Lessee via email to provide the County with the Article 7 Letter of Credit/Security Deposit. Further, BCAD notified Lessee of its breach of Article 7 of the Agreement (for not providing the County with the required Article 7 Letter of Credit/Security Deposit) via a notice to cure that was hand delivered to Lessee on June 6, 2024. The County has not received the Article 7 Letter of Credit/Security Deposit. With respect to the Article 31 Letter of Credit/Security Deposit, the County had a security deposit in cash from Lessee in the amount of $57,360.
Pursuant to Section 13.5 of the Agreement, Lessee was required, on or before the effective date of the Agreement, to provide the County with a copy of all certificates of insurance or other documentation sufficient to demonstrate the insurance coverage required in Article 13 of the Agreement. BCAD requested, via emails sent on June 3, 2024, and June 17, 2024, the required certificate(s) of insurance. Lessee failed to comply with this obligation.
Lessee was past due on rents for the months of April, May, June, and July 2024; however, the County drew down on the Article 31 Letter of Credit/Security Deposit, as stated below, and Lesse submitted a payment after the notice to cure that was sent on June 21, 2024, referenced below. Therefore, Lessee is no longer past due on rent, but must replenish the Article 31 Letter of Credit/Security Deposit in full for a total of $90,743 and pay the upcoming rent for August 2024.
On June 21, 2024, BCAD sent Lessee a notice to cure via US first-class mail and email for the breaches identified above.
On July 3, 2024, BCAD sent Lessee a notice to draw down on the Article 31 Letter of Credit/Security Deposit to recover part of Lessee’s past due rent.
On July 16, 2024, BCAD sent Lessee a notice of BCAD’s intent to pursue termination of the Agreement pursuant to Section 20.2 of the Agreement.
On July 17, 2024, and July 23, 2024, the County drew down on the Article 31 Letter of Credit/Security Deposit in the amount of $57,360 for past due rent and interest/late fees. Lessee has not replenished the Article 31 Letter of Credit/Security Deposit in the amount of $90,743.
If approved, this item will authorize the Director of Aviation to provide the required notice(s) of termination to Lessee pursuant to the Agreement, to take all necessary actions to effectuate the termination, and authorize the Office of the County Attorney to take all legal steps on behalf of County that are necessary to recover any amounts owed under the Agreement, together with costs, interest, and attorneys’ fees.
Source of Additional Information
Mark E. Gale, A. A. E., CEO/Director of Aviation, (954) 359-6199
Fiscal Impact
Fiscal Impact/Cost Summary
The loss of estimated annual rent is $236,135.