Construction, Financing And Operating Special Facility Lease Agreement

Exhibit 10.28


2/23/2000


CONSTRUCTION, FINANCING AND OPERATING SPECIAL FACILITY LEASE AGREEMENT


Dated as of , 2000


Between THE STATE OF CONNECTICUT DEPARTMENT OF TRANSPORTATION and APCOA BRADLEY PARKING COMPANY, LLC


Relating to the Construction, Financing, Operating and Leasing of a Parking Garage and Surface Parking at Bradley International Airport Windsor Locks, Connecticut


Table of Contents


Page

RECITALS


1

SECTION 1.

Definitions

2

SECTION 2.

Ownership of and Granting of Leasehold Interest in the Project Site, Garage and Surface Parking

13

SECTION 3.

Term

14

SECTION 4.

Construction of the Garage

14

(a)

Obligation to Construct

14

(b)

Change Orders

15

(c)

Insurance

15

(d)

Substantial Completion

15

(e)

State' s Certificate of Acceptance

16

(f)

Site Plans and Surveys

16

(g)

Punch List

16

(h)

Construction Representatives

16

(i)

Extension of Target Date

17

(j)

Inspection of Garage and Project Site

17

(k)

State' s Duty to Cooperate

17

(l)

Payment and Performance Bond

18

SECTION 5.

Issuance of Bonds

18

SECTION 6.

Flow of Funds and Payments

18

(a)

Deposit of Gross Receipts

18

(b)

Trustee Payments

19

SECTION 7.

Use and Operation of the Leased Premises

26

(a)

General

26

(b)

Credit Cards and Debit Cards

31

(c)

Revenue Control

31

(d)

Budget

35

(e)

Recordkeeping, Reporting and Audits

35

(f)

Airport Shuttle Bus Service

37

SECTION 8.

Unlawful Use

39

SECTION 9.

Payment of Taxes and Assessments

39

SECTION 10.

Utilities and Service Contracts

41

SECTION 11.

Insurance

41

SECTION 12.

Maintenance, Repairs and Capital Improvements

43

(a)

Garage

43

(b)

Surface Parking

44

SECTION 13.

Damage or Destruction

46

SECTION 14.

Eminent Domain

46

SECTION 15.

ABPC' s Option to Terminate

47

SECTION 16.

Assignment of Lease by the State

48

SECTION 17.

Right of the State to Perform ABPC' s Obligations

48


1


Page

SECTION 18.

Employment of Personnel

49

SECTION 19.

Environmental Provisions

49

SECTION 20.

Defaults, Remedies and Waivers by ABPC

52

SECTION 21.

Representations of ABPC

54

(a)

Corporate Organization and Power

54

(b)

Pending Litigation

54

(c)

Agreements Are Valid and Authorized

54

(d)

Governmental Consents

54

(e)

No Defaults

55

(f)

Compliance with Laws

55

SECTION 22.

Representations of the State

55

(a)

Pending Litigation

55

(b)

No Defaults

55

(c)

Title

55

(d)

Compliance with Laws

55

SECTION 23.

No Remedy Exclusive

55

SECTION 24.

Breach by the State

56

SECTION 25.

Indemnification

56

SECTION 26.

Severability

56

SECTION 27.

Waiver of Subrogation

56

SECTION 28.

Vacation of Garage and Surface Parking

57

SECTION 29.

Holding Over

57

SECTION 30.

Waiver

57

SECTION 31.

Concurrent Remedies

57

SECTION 32.

Mechanic' s or Other Liens

57

SECTION 33.

Assignment and Subletting

57

SECTION 34.

Broker' s Commission

58

SECTION 35.

Construction of " the State" and " ABPC"

58

SECTION 36.

Notice of Lease to be Recorded

58

SECTION 37.

Notices

58

SECTION 38.

Quiet Enjoyment

59

SECTION 39.

No Third Party Benefit

59

SECTION 40.

Estoppel Certificates

59

SECTION 41.

Governing Law

60

SECTION 42.

Disadvantaged Business Enterprise (DBE) Requirement

60

SECTION 43.

Counterparts

61

SECTION 44.

Captious

61

SECTION 45.

Complete Agreement

61

SECTION 46.

Civil Rights and Executive Orders

62

SECTION 47.

Agent for Service of Process

66

SECTION 48.

Required Federal Aviation Administration (FAA) Contract Provisions

66

SECTION 49.

Suspension or Debarment

67

SECTION 50.

Covenant as to Tax Exemption

68

SECTION 51.

Property Rights on Termination

69

SECTION 52.

Covenants with Respect To the United States of America

70

SECTION 53.

Leasehold Mortgage

70


2


Page

EXHIBIT A.

Description of Project Site

A-1

EXHIBIT B.

Intentionally Omitted

B-1

EXHIBIT C.

Certificate of Acceptance of the Garage

C-1

EXHIBIT D.

RESERVED


EXHIBIT E.

State Minimum Guarantee Payment Schedule

E-1

EXHIBIT F.

Parking Fee Schedule

F-1

EXHIBIT G.

Surface Parking Lots

G-1

EXHIBIT H.

Major Maintenance Fund Requirement and Capital Improvement Fund Requirements

H-1

EXHIBIT I.

Copy of License Agreement

I-1

EXHIBIT J.

Copy of Assignment Agreement

J-1

EXHIBIT K.

Development Costs

K-1

EXHIBIT L.

Construction Management Agreement

L-1

EXHIBIT M.

Guaranty Agreement

M-1


3


CONSTRUCTION, FINANCING AND OPERATING SPECIAL FACILITY LEASE AGREEMENT


THIS CONSTRUCTION, FINANCING AND OPERATING SPECIAL FACILITY LEASE AGREEMENT (the " Lease" ) is made and entered into as of the - day of March, 2000, by and between THE STATE OF CONNECTICUT, DEPARTMENT OF TRANSPORTATION, James F. Sullivan, Commissioner, acting herein by Robert F. Juliano, Bureau Chief, Bureau of Aviation and Ports, duly authorized (the " State" ), and APCOA BRADLEY PARKING COMPANY, LLC, a Connecticut limited liability company (" ABPC" ).


WITNESSETH :


A. WHEREAS, the State of Connecticut, acting through the Department of Transportation, is the owner of certain land, buildings and improvements thereon known as Bradley International Airport (the " Airport" ), which is located in part in the Town of Windsor Locks, County of Hartford, State of Connecticut;


B. WHEREAS, the State has determined that the need exists for an approximately 3,500 space parking garage and other improvements (the " Garage" ) on a site immediately adjacent to the terminal complex at the Airport, as more particularly described in Exhibit A hereto (the " Project Site" );


C. WHEREAS, APCOA/Standard Parking, Inc. (" APCOA" ) and Tomasso Brothers, Inc. (" TBI" ) acting through ABPC, a wholly owned affiliate of APCOA, and the State desire to enter into this Construction, Financing and Operating Special Facility Lease Agreement under which ABPC agrees to construct and operate the Garage and to provide for the payment of certain amounts hereunder, and the State, pursuant to authority granted in C.G.S. Chapter 266a, Section 2.8 of the Bradley Airport Parity Bond Indenture, and a Trust Indenture, dated as of , 2000, as supplemented by a First Supplemental Trust Indenture (as so supplemented, the " Trust Indenture" ), each between the State and the trustee named therein (the " Trustee" ), agrees to issue and sell one or more series of its Bradley International Airport special obligation parking revenue bonds (the " Bonds" ) in a principal amount sufficient to finance the cost of developing and constructing the Garage and related costs;


D. WHEREAS, under this Lease, ABPC will obligate itself to deposit all Garage Gross Receipts and Surface Parking Gross Receipts, as hereinafter provided with the Trustee, as assignee of the State under the Trust Indenture or in its capacity as Custodian which deposit obligations and other non-construction obligations of ABPC under this Lease shall, prior to Substantial Completion of the Garage, be performed by APCOA, pursuant to a License Agreement (the " License Agreement" ) dated as of the date hereof, between ABPC and APCOA, a copy of which is attached hereto as Exhibit I ;


1


E. WHEREAS, APCOA pursuant to a Guaranty Agreement, a copy of which is attached hereto as Exhibit M (the " Guaranty" ), has guaranteed certain Guaranteed Payments as set forth in Sections 6(b)(1) and (2), as hereinafter set forth;


F. WHEREAS, pursuant to a Construction Management Agreement (the " Construction Management Agreement" ) dated as of the date hereof, between ABPC and TBI-BDL Company, a wholly owned subsidiary of TBI (the " Construction Manager" ), a copy of which is attached hereto as Exhibit L , ABPC has engaged the Construction Manager to perform each of ABPC' s obligations under the Lease in connection with the construction of the Garage, and the Construction Manager, having experience in the design, development, construction and management of similar projects, has accepted such engagement, all in accordance with the terms and conditions set forth in the Construction Management Agreement;


G. WHEREAS, pursuant to an Assignment Agreement, a copy of which is attached hereto as Exhibit J (the " Assignment" ), dated as of the date hereof, between ABPC, and Bradley Airport Parking Limited Partnership, a Delaware limited partnership (" BAP" ), of which APCOA will be the general partner and TBI-BDL Garage, LLC, an affiliate of TBI, will be the sole limited partner, ABPC has assigned, effective as of the earlier of the date the Garage is Substantially Completed or the expiration or termination of the License Agreement, all of ABPC' s non-construction rights and obligations under the Lease, including, without limitation, the deposit of all Garage Gross Receipts and Surface Parking Gross Receipts, as hereinafter provided to BAP, and BAP has agreed to exercise all of such non-construction rights and perform all of such non-construction obligations under this Lease, including, without limitation, the requisite deposits thereunder; and


H. WHEREAS, pursuant to C.G.S. Section 13b-42(b), the State has authority to enter into this Lease with the approval of the Secretary of the Office of Policy and Management, the State Properties Review Board, and the Attorney General;


NOW, THEREFORE, for and in consideration of the premises and other good and valuable consideration and of the mutual covenants, benefits, and agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, the State and ABPC hereby agree as follows:


SECTION 1. Definitions . Unless the context otherwise requires, the terms defined in this Section 1 shall, for all purposes of this Lease and of any amendment hereof or supplement hereto, have the meanings herein specified, with the following definitions to be equally applicable to both the singular and plural forms of any of the terms herein defined:


" ABPC" is defined in the preamble of this Lease. In addition, as used hereinbelow, " ABPC" shall include the successors, licensees and assignees of ABPC, including, without imitation, the licensee and assignee of ABPC under the License Agreement and the Assignment. In the event that ABPC should cease to exist at any time after Substantial " Completion, any reference herein to ABPC shall be construed as a reference to BAP.


2


" ABPC' s Gross Award" means the amount awarded to or received by ABPC as damages, compensation or otherwise by reason of the taking of all or any part of ABPC' s leasehold interest under this Lease, including, without limitation, its leasehold interest in either or both of the Garage and the Surface Parking or ABPC' s own property which is not affixed to the Garage, as a result of or in anticipation of the exercise of the right of expropriation, condemnation or eminent domain.


" Additional Payments" is defined in Section 6(c) of this Lease.


" Airport" is defined in paragraph A of the recitals of this Lease.


" Airport Administrator" means the administrator of the Airport appointed by the State.


" Airport Facilities" means " airports" and " functionally related and subordinate facilities" within the meaning of and qualifying under Section 142 of the Code that consist solely of (A) items of property that are directly related and essential to servicing aircraft, enabling aircraft to take off and land, or transferring passengers or cargo to or from aircraft, or (B) property located at the Airport that is functionally related and subordinate to such facilities and that is of a character and size commensurate with the character and size of the Airport, and all of which property is of a character subject to the allowance for depreciation under Sections 167 and 168 of the Code. All Airport Facilities constitute part of the Airport and are, or will be upon completion of acquisition or construction, available to and will serve the general public on a regular basis, including serving private companies operating as common carriers that serve the general public on a regular basis. The term " Airport Facilities" excludes (i) working capital expenditures; (ii) hotels or other lodging facilities; (iii) retail facilities (including food and beverage facilities) in excess of the size necessary to serve passengers (and persons who meet or accompany them) and employees at the Airport; (iv) any retail facility (other than parking) for passengers or the general public located outside the Airport terminals; (v) office buildings for individuals who are not employees of a governmental unit or the State; (vi) industrial parks or manufacturing facilities; (vii) any office space that is not located on the premises of the Airport or in which more than a de minimis amount of the functions to be performed will not be directly related to the day-to-day operations at the Airport; or (viii) any office building or office space within a building or a computer facility, either of which serves a system-wide or regional function of an airline or other private person. All Airport Facilities are, or upon completion of acquisition or construction will be, owned by the State or another governmental unit, within the meaning of Section 142 (b)(1) of the Code.


" APCOA" is defined in paragraph C of the recitals of this Lease.


" Assignment" is defined in paragraph G of the recitals of this Lease.


" BAP" is defined in paragraph G of the recitals of this Lease.


" Bond Issuance Date" means the date on which the original Bonds are issued and delivered and payment therefor is received from the purchasers thereof.


3


" Bonds" is defined in paragraph C of the recitals of this Lease. The term " Bonds" shall include any Special Obligation Refunding Bonds. The Bonds are issued pursuant to authority contained in C.G.S. Chapter 266a et seq. and Section 2.8 of the Bradley Airport Parity Bond Indenture and are not secured by the Gross Operating Revenues of the Airport.


" Bradley Airport Parity Bond Indenture" means that certain Indenture of Trust dated as of October 1, 1982, as amended, between the State and the trustee named therein, which provides for the issuance of the State' s Bradley Airport Parity Bonds which are secured by the Gross Operating Revenues of the Airport. In the event that the State shall subsequently issue bonds to refund or replace the Bradley Airport Parity Bonds, the indenture or other similar document securing those bonds shall be deemed to be the " Bradley Airport Parity Bond Indenture," to the extent applicable, for purposes of this Lease.


" Bradley Airport Parity Bonds" means the bonds (not including the Bonds issued to finance the Garage or any Special Obligation Refunding Bonds) which are issued and secured on a parity basis by the Gross Operating Revenues of the Airport under the general provisions of the Bradley Airport Parity Bond Indenture. In the event that the State shall subsequently issue bonds to refund or replace the Bradley Airport Parity Bonds, those bonds shall be deemed to be the " Bradley Airport Parity Bonds," to the extent applicable, for purposes of this Lease.


" Budgets" means the Garage Budget and the Surface Parking Budget as defined in Section 7(c) of this Lease.


" Business Day" means any day of the year, other than a Saturday or Sunday, or a day on which banks located in the cities in which the principal offices of the Trustee and any Paying Agent are located and in Hartford, Connecticut are legally authorized to be closed, and on which the Trustee and the Paying Agent are open.


" Capitalized Interest Account" means the fund or account into which is deposited an amount of Bond proceeds which is adequate, with earnings thereon, to provide funds to pay debt service (equal to capitalized interest) on the Bonds from the Bond Issuance Date to the date or dates that the Garage is expected to be placed in service.


" Certificate of Acceptance" is defined in Section 4(e) of this Lease.


" Change Orders" is defined in Section 4(b) of this Lease.


" Charge" and " Charges" are defined in Section 9(a) of this Lease.


" Code" means the Internal Revenue Code of 1986, as amended, and the applicable Treasury Regulations (as defined in the Tax Compliance Certificate) thereunder.


" Completion Date" means the date that the Garage has been Substantially Completed.


4


" Concession Agreement" means that certain Public Parking Facility and Shuttle Bus Service Operation Concession Agreement dated January 3, 1994, as amended to date, between the State and APCOA - R & G Parking, a joint venture organization.


" Construction Fund" means the Construction Fund established under the Trust Indenture which contains certain proceeds of the Bonds deposited therein plus interest earnings thereon, for the purpose of paying the Development Costs, the Fixed Construction Price, State Construction Oversight Costs and the Issuance Costs.


" Construction Documents" is defined in Section 4(a) of this Lease.


" Construction Management Agreement" is defined in paragraph F of the recitals of this Lease.


" Construction Manager" is defined in paragraph F of the recitals of this Lease.


" Construction Representative" is defined in Section 4(h) of this Lease.


" Custodian" means the Trustee acting in its capacity as Custodian under the Custody Agreement.


" Custody Agreement" means the Custody Agreement between the State and the Custodian relating to the deposit and application of Surface Parking Gross Receipts.


" Debt Service" is defined in Section 6(b)(1)(ii) of this Lease.


" Debt Service Fund" means the fund or account into which Debt Service payments are deposited pursuant to the Trust Indenture.


" Debt Service Reserve Fund" means the fund or account into which is deposited any Bond proceeds issued to fund a debt service reserve fund or other reserve deposits required under the Trust Indenture.


" Developer Payments" is defined in Section 6(c)(i) of this Lease.


" Development Costs" means the sum as defined and set forth in Exhibit K .


" Environmental Laws" is defined in Section 19A of this Lease.


" Fixed Construction Price" means the fixed price of $36,900,000 to be paid from the Construction Fund to the Construction Manager for the construction of the Garage, in accordance with the Construction Management Agreement.


5


" Garage" is defined in paragraph B of the recitals of this Lease and includes other facilities and improvements as set forth in the Construction Documents as defined in Section 4(a) of this Lease.


" Garage Budget" is defined in Section 7(c) of this Lease.


" Garage Coverage Ratio" is defined in the Trust Indenture.


" Garage Gross Receipts" means, for any period with respect to the operation of the Garage, all sums collected by ABPC (including, but not limited to, gross cash, gross debit card and gross credit card transactions) from the parking of motor vehicles, whether on an hourly, daily, weekly or monthly basis, plus all rents, revenues, interest, license fees and any other income fees or charges received with respect to ABPC' s lease, use, possession and operation of the Garage, including interest earnings on the Garage Operating Expenses Account required to be transferred to the Trustee pursuant to Section 6(a)(4) hereof, less all State approved refunds, promotional discounts and allowances made by ABPC to its customers, and less any sales tax, use tax, excise tax, occupancy tax, gross receipts tax, parking tax or any other tax or charge collected by ABPC on behalf of and payable to any governmental or quasi-governmental entity.


" Garage Gross Receipts Fund" is defined in Section 6(b)(1) of this Lease.


" Garage Guaranteed Payments" is defined in Section 6(b)(1) of this Lease.


" Garage Major Maintenance and Capital Improvement Fund" is defined in Section 6(b)(1) of this Lease.


" Garage Operating Expenses" means, for any period, all expenses paid in the ordinary course of business in connection with the operation of the Garage which are reasonable and directly attributable thereto, including, without limitation:


(i) Payment or deposit of Charges with respect to the Garage as provided under Section 9(a) of this Lease;


(ii) Payroll expenses and applicable payroll taxes for employees directly performing services for the Garage, and including provision for vacation pay, pension, health and welfare programs and other benefit obligations;


(iii) The costs of insurance with respect to the Garage as herein provided;


(iv) The costs of supplies for the Garage;


(v) Laundry and uniforms for the Garage;


(vi) Postage for the Garage;


6


(vii) The costs of printing parking tickets and related forms for use exclusively at the Garage;


(viii) The payment uninsured damage claims with respect to the Garage;


(ix) The costs of routine repairs and maintenance with respect to the Garage;


(x) Legal fees for processing and defending claims relating to the Garage;


(xi) The costs of bookkeeping, accounting, internal audit of parking tickets and preparation of monthly reports with respect to the Garage;


(xii) License and permit fees with respect to the Garage;


(xiii) Telephone, gas, electric, water and any other utility charges with respect to the Garage;


(xiv) Data processing costs incurred to outside third parties for accounts receivable invoicing and for the preparation of payroll and payroll-related reports with respect to the Garage;


(xv) Debit/credit card discounts and service charges with respect to the Garage;


(xvi) Security costs pursuant to Section 7(a)(16) with respect to the Garage; and


(xvii) Reasonable and appropriate cost recovery allocation of APCOA home office overhead and direct costs related to the operation of the Garage by ABPC, which is consistent with APCOA' s general practices and in accordance with accepted allocation standards. The above charges should be made based on actual costs as calculated and allocated among all of APCOA' s locations and shall not include profit to APCOA, nor profit sharing to its officers, directors or employees.


" Garage Operating Expenses Account" is defined in Section 6(a)(2) of this Lease.


" Garage Operating Expenses Budget" is defined in Section 6(a)(2) of this Lease.


" Garage Trustee Expenses" is defined in Section 6(b)(1)(v) of this Lease.


" Government Obligations" means (a) direct and general obligations of, or obligations unconditionally guaranteed by, the United States of America, (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America for the timely payment thereof, (c) municipal obligations the payment of principal (either to the maturity thereof or an earlier stated redemption date), redemption price, if any and interest on which is irrevocably secured by obligations described in clauses (a) or (b) above which have been deposited in an escrow arrangement which is irrevocably pledged to the credit of such municipal obligations and which municipal obligations are rated at the time of


7


acquisition or purchase in the highest rating category by Moody' s and Standard and Poor' s, or (d) securities or receipts evidencing ownership interests in obligations or specified portions (such as principal or interest) of obligations described in clauses (a), (b) or (c) above the full and timely payment of which securities receipts or portions of obligations is unconditionally guaranteed as a full faith and credit obligation of the United States."


" Gross Operating Revenues" shall have the meaning given to such term in the Bradley Airport Parity Bond Indenture.


" Guaranteed Payments" means, collectively, the Garage Guaranteed Payments and the Surface Parking Guaranteed Payments as provided in Section 6(b) of this Lease.


" Guarantor Payments" is defined in Section 6(d) of this Lease.


" Guaranty" is defined in Paragraph E of the recitals of this Lease.


" Hazardous Materials" means (i) any " hazardous waste" as now or hereafter defined by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. section 6901 et seq.), as amended from time to time, or in regulations now or hereafter promulgated thereunder; (ii) any " hazardous substance" as now or hereafter defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. section 9601 et seq.), as amended from time to time, or in regulations now or hereafter promulgated thereunder; (iii) any " toxic substance" as now or hereafter defined by the Toxic Substance Control Act 15 U.S.C. section 2601 et seq., as amended from time to time, or in regulations now or hereafter promulgated hereunder; (iv) any " toxic pollutant" as now or hereafter defined by the Federal Water Pollution Prevention and Control Act, 33 U.S.C. section 1251 et seq., as amended from time to time, or in regulations now or hereafter promulgated hereunder; (v) any " air pollutant" as now or hereafter defined by the Clean Air Act 42 U.S.C. section 7401 et seq., as amended from time to time, or in regulati ...