To: MAYOR AND CITY COUNCIL
From: CAMERON HARDING, COMMUNITY SERVICES DIRECTOR
TITLE
title
APPROVAL OF A SEVENTH AMENDMENT TO THE LICENSE AGREEMENT WITH NORTHROP GRUMMAN SYSTEMS CORPORATION FOR USE OF THE AVIATION PARK GYMNASIUM FOR THE TERM APRIL 1, 2024 TO MARCH 31, 2027 AT A TOTAL FEE VALUE OF $391,873 AND AN OPTION TO EXTEND THE AGREEMENT THROUGH MARCH 31, 2033
end
EXECUTIVE SUMMARY
Since 1990, the City has held a license agreement with Northrop Grumman for its exclusive use of a portion of the Aviation Park Gymnasium for an employee fitness center as well as periodic use of the large and small gymnasiums and the dance room. This long-standing Agreement has generated income to help offset operating costs of the facility while minimally impacting other community and municipal uses of the building.
BACKGROUND
The Agreement requires Northrop Grumman to pay a monthly rental fee for its use of the facilities in addition to paying its share of the facility's electrical use. The most recent amendment was executed on October 6, 2020 and included a three-year term from April 1, 2021 to March 30, 2024. Northrop Grumman desires to extend the Agreement, by way of a seventh amendment.
The proposed seventh amendment includes the following key terms:
* A three-year term, commencing April 1, 2024 through March 31, 2027 with an option to extend for two additional three-year terms
* Escalating monthly rental fees, payable to the City, including:
o $10,156/month for Year 1
o $10,359/month for Year 2
o $10,566/month for Year 3
* Monthly electrical reimbursement of $300
* A one-time fee of $8,100 for past-due electrical reimbursement fees for the term April 1, 2019 to March 31, 2024
* Continued, exclusive use of the existing fitness center portion of the facility (Rooms G-7, G-8 and G-9)
* Non-exclusive use of the restroom/locker room areas
* Use of the large and small gymnasiums from 11:30 am to 1:30 pm, Monday through Friday
* Use of the dance room (Room G-...
Click here for full text