02271978 Regular Meeting - Laserfiche WebLink

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I 731 Page 2 copy has been provided to the City of an agr'eement dated June 3, 1977 purporting to show that John J. Stokes purchased the stock of Chandelle from Richard W. Looney and Samuel Frank Adams. However, rather than continuing to operate as a separate corporate entity, it appears that Chandelle has in fact been absorbed into the other business interests of Mr. Stokes. In addition, the City Council was never requested to approve this change in the ownership or transfer of rights under the contract and, in fact, has never done so as required by Paragraph XII. Discussion (2): While the present FOO would argue the legal point of continuation of the corporate entity of Chandelle with whom the City has previously contracted., we can not avoid the evidence of apparant disregard of the contractual obligations identified by the Airport Cormnission. That indicates that whether Chandelle continues to exist or not, the intent of the contract has been breached in so far as City Councils do not normally pass contractual rights to persons who ignore contractual obligations. In addition to the deficiencies identified by the Airport Commission in the relationship beu,Teen the City and the presently acting FBO, I would point out that this particular business interest now owes the City in excess of $34,000.00 in delinquent taxes. I Discussion (3): Paragraph XIII of the original contract in part provides that: "If at the expiration of the initial five (5) year term of this contract the FOO has satisfactorily complied with all of the provisions hereof, this contract llI3.y, at the option of the FOO, be extended for an additional five (5) year period corrrnencing on the date provided for the termination of the initial period of this contract..." The Council will need to review the evidence as to whether the actions of the presently acting FEO have themselves voided this aspect of the contra:::t. Discussion (4): Paragraph XXI.of the original contract states: "In the event that FBO fails to operate the FEO operation during the terms of this lease in accordance with its terms, and shall continue to so fail to do after (30) days notice from Lessor, then this lease shall terminate in its entirety." This provision does not apply to Paragr'aph XIII regarding the FBO option to extend, which can be cancelled at any time Council determines that the FBO I