Subject: AMENDMENT TO CARGO OPERATING AGREEMENT & OFFICE AND RAMP SPACE LEASE AGREEMENT WITH BAX GLOBAL, INC.
COUNCIL DISTRICT: City -Wide
Approval of:
1. A first amendment to the Commercial Cargo Operating Agreement with BAX Global, Inc., to extend the term of the agreement through February 28, 2007, and change the tenant name to Air Transport International, L.L.C., with estimated annual revenue to the City of $170,000; and
2. A first amendment to the lease agreement with BAX Global, Inc. for office and asphalt ramp space at 1311 Airport Boulevard, to extend the term of the lease through February 28, 2007, and change the tenant name to Air Transport International, L.L.C., with annual rental revenue to the City in the amount of $3,892.44.
BACKGROUND
BAX Global, Inc. (“BAX”) has conducted air freight/cargo activities at the San Jose International Airport starting February 24, 1996, as extended by Council through March 1, 2002. In addition, BAX has leased office and asphalt ramp space at 1311 Airport Boulevard for operations support and storage. The air cargo agreement expires on February 28, 2002, and the office and ramp space lease expires on December 31, 2001. BAX has requested an extension of both agreements.
In May 1998, BAX Global, Inc. acquired Air Transport International, L.L.C. (ATI), a certificated air cargo carrier. Although ATI is a wholly-owned subsidiary of BX Global, BAX has been realigning its operations and assigning all airport agreements from BAX to ATI for administrative purposes. Therefore, BAX has requested that the Amendments to extend the terms also affect an assignment to ATI.
ANALYSIS
Under the current air cargo operating agreement, BAX utilizes the air cargo area and ramp on a non-exclusive basis for aircraft parking, loading and unloading, refueling, and aircraft
maintenance. BAX also leases office and asphalt ramp space for operations support and storage. The proposed amendments will extend the term of the cargo operating agreement for an additional five-year period, and extend the term of the office and ramp space lease five years and two months, so both agreements will expire on February 28, 2007.
Not applicable.
Both amendments have been coordinated with the City Attorney’s Office.
Resolution No. 67380.
RALPH G. TONSETH
Director of Aviation
Airport Department