Title 17 . Transportation and Public Facilities

Chapter 45 . Miscellaneous Provisions

Section 410. General terms of a lease, permit, or concession

17 AAC 45.410. General terms of a lease, permit, or concession

(a) The department will include provisions in a lease, permit, or concession that

(1) identify the obligations and privileges of the parties;

(2) produce fair and reasonable revenue for the state;

(3) foster the safe, effective, and efficient operation of the airport;

(4) require compliance with applicable law; and

(5) are in the best interest of the state.

(b) In addition to the other applicable requirements of this chapter, the department will include, as applicable, in a lease, in a permit, except for a first amendment activity permit issued under 17 AAC 45.800 - 17 AAC 45.810, or in a concession, provisions that

(1) require the lessee to assume full control and sole responsibility as between the lessee and the lessor for the activities of the lessee, the lessee's personnel, employees, and persons acting on behalf of or under the authority of the lessee, anywhere on the airport and for the activities of the lessee's sublessees, contractors, and guests, including customers and vendors, on the premises;

(2) require the lessee to coordinate the lessee's activities on the airport with the department and to abide by the department's decisions and directives regarding snow removal, maintenance, and general use of the airport by the lessee, the lessee's personnel, employees, and any person acting on behalf of or under the authority of the lessee, and by the lessee's sublessees, contractors, and guests, including customers and vendors;

(3) require the lessee to perform all operations authorized by the lease in a manner that ensures the safety of people and the airport, the protection of public health and the environment, and the safety and integrity of the premises;

(4) require the lessee to immediately notify the department of any condition, problem, malfunction, or other occurrence that threatens the safety of the airport, the safety of persons using the airport, harm to public health or the environment, or the safety or integrity of the premises;

(5) reserve to the lessor the right of ingress to and egress from the premises, including buildings, and the right to enter any part of the premises for the purpose of inspection at any reasonable time, subject only to the lessor's best efforts, except in the case of an emergency, to coordinate its inspection with the lessee to minimize interference with the lessee's activities on the premises;

(6) reserve to the lessor the right to grant to others any right or privilege on the airport that the lessor has not specifically and exclusively granted to the lessee;

(7) reserve to the lessor the right to grant to third parties or reserve to the lessor easements or rights of way through, on, above, or under the premises, so long as the easement or right-of-way does not unreasonably interfere with the lessee's use of the premises;

(8) prohibit, unless the department determines otherwise in the best interest of the state, the following activities:

(A) establishment or maintenance of any kind of living quarters on the premises, except for, as approved by the lessor, accommodations for the customers and employees of a hotel or motel authorized under the lease and temporary overnight accommodations for a member of an air carrier crew or an on-call member of an air ambulance or air rescue crew;

(B) if not visually screened from adjacent properties, the outside storage on the premises of salvage aircraft or vehicle parts, nonoperational support equipment, or unused or damaged equipment or material;

(C) the outside storage on the premises of junk, trash, solid waste, or debris;

(D) stripping, wasting, or removing from the premises any soil, gravel, trees, or other state-owned material, unless the lessor approves in writing;

(9) prohibit the construction or placement of a building or other permanent structure within 20 feet of a boundary line of a premises, unless the department otherwise approves a lesser distance;

(10) require the lessee to keep the premises and all improvements on the premises neat and presentable at the lessee's sole expense;

(11) require the lessee to provide for all utilities, maintenance, and services on the premises necessary for the lessee's use of the premises;

(12) require the lessee to keep the premises free of all liens other than by assignment for security purposes as approved in writing by lessor and to pay any cost for labor and materials arising out of any construction or improvements by the lessee on the premises;

(13) require the lessee to provide vehicle, equipment, and aircraft parking space, snow storage, and drainage on the premises adequate for the lessee's activities on the premises;

(14) require that the lessee

(A) continue to satisfy relevant qualifications initially set under 17 AAC 45.303(d) (3), 17 AAC 45.333(d) (3), or 17 AAC 45.354 (d)(2), as applicable, for the lease, permit, or concession; and

(B) provide to the lessor such documentation as the lessor may reasonably require to establish that lessee is in compliance with this paragraph;

(15) require the lessee, at the lessee's own expense, to obtain, maintain, and keep in force throughout the term of the lease, adequate and appropriate liability and other insurance coverage protecting both the lessor and lessee on an occurrence policy form covering any and all commercial operations by or on behalf of the lessee with combined single limits not less than $500,000 each occurrence or such higher limits as determined appropriate under AS 02.15.090 (g); the lessee shall deposit with the lessor a copy of each such insurance policy or a certificate of such insurance coverage, together with appropriate evidence that the premiums have been paid; all such insurance required of the lessee must name the lessor as an additional assured and, if applicable, contain a waiver of subrogation endorsement in favor of the lessor and must provide that the insurer must notify the lessor at least 30 days before any termination, cancellation, or material change in such insurance coverage; the requirement for insurance coverage does not limit or relieve the lessee of the lessee's other obligations under the agreement, including the lessee's obligation to indemnify the lessor; the coverage dollar amounts stated in the lease are minimums; if higher specific limits and coverages are shown, the lessor shall be entitled to the full benefit and protection of those limits and coverages;

(16) require the lessee to peaceably and quietly vacate the premises and return possession to the lessor at the expiration, cancellation, or termination of the lease;

(17) require the lessee to discontinue the use of any machine or device that interferes with any government operated transmitter, receiver, or navigation aid until the cause of the interference is eliminated;

(18) provide that the lessor will not unreasonably withhold any approval required by the lease or by this chapter;

(19) provide that the lessor will, after notice and an opportunity for the lessee to cure, cancel the lease and recover possession of the premises or take such other action as the lessor considers appropriate to enforce the lease if the lessee does not perform or comply with a material lease requirement;

(20) provide that, if the lessee holds over and remains in possession of the premises after the expiration of the lease,

(A) the holding over will not operate as an extension of the term of the lease, but, with the consent of the lessor, creates only a month-to-month tenancy, regardless of any rent payments that the lessor accepts;

(B) the lessee's obligations for performance under the lease will continue during the month-to-month tenancy; and

(C) either party may terminate the month-to-month tenancy at any time by giving the other party at least 30 days' prior written notice;

(21) require the lessee, after the expiration, cancellation, or termination of the lease and subject to any duty the lessor may have to mitigate damages, to continue to pay rent to the lessor and to abide by all other lease obligations, including maintenance of the premises and provision of evidence of insurance coverage for the premises, through the date on which the lessee relinquishes possession of and completely vacates the premises, having, at the lessee's expense and without cost to the lessor, in accordance with 17 AAC 45.245 and 17 AAC 45.250, as applicable,

(A) remediated, consistent with applicable law, any environmental contamination for which the lessee is responsible under this chapter;

(B) removed or otherwise disposed of any lessee-owned permanent or removable improvements and personal property; and

(C) restored the premises to a neat and clean physical condition acceptable to the lessor;

(22) provide that title to property abandoned by the lessee on the premises automatically vests in the state unless the property is contaminated with any hazardous substance or rejected by the department by a written notice to the lessee or the property's automatic vesting would violate a statute or regulation;

(23) provide that the lease is subject to all applicable requirements of the state statutes and regulations in effect during the term of the lease, including those relating to the leasing of lands and facilities and the granting of privileges, at state airports;

(24) require the lessee to comply with applicable requirements imposed on the airport by federal law to ensure that eligibility for federal money or for participation in a federal aviation program by the airport is not jeopardized and with all applicable orders issued by the department;

(25) require the lessee to pay, within 30 days of the billing date, any cost or damage that the department incurs to enforce or protect its rights under the lease or due to any failure of the lessee to comply with a provision of the lease, including a cost to correct a violation under 17 AAC 45.430(d) ; in this paragraph "cost" includes legal fees and administrative costs;

(26) assure the lessee quiet enjoyment of the lessee's leased premises;

(27) prohibit installation of a drinking water well on the premises where local water utility service is available; and

(28) require the lessee to indemnify the lessor and its agents and employees against a loss or obligation arising directly or indirectly from the lessee's use or occupancy of the premises, exercise of the privileges granted in the lease, or operations and activity on the airport and that was not legally caused solely by one or more acts or omissions of the lessor, in the following manner:

(A) the lessee shall indemnify, hold harmless, and defend the lessor and its agents and employees to the full extent of the loss or obligation;

(B) notwithstanding (A) of this paragraph, as to any amount paid by the lessor or the lessee to others for personal injury or property damage with respect to which an act or omission of the lessor is a legal cause, the lessee and the lessor shall reimburse each other, as applicable, according to the principles of comparative fault; in addition, the lease provision will state that this provision for reimbursement according to comparative fault is not intended to be construed to affect the rights of any person who is not a party to the lease.

(c) All leases, permits, and concessions are granted without specific warranties, express or implied, concerning the title or condition of the property, including survey, soils, wetlands, access, or suitability for any use, including those uses authorized by the lease, permit, or concession.

(d) In this section, unless the context otherwise requires

(1) "lease" includes "permit" and "concession";

(2) "lessee" includes "permittee" and "concessionaire" and each sublessee of the lessee, permittee, or concessionaire with respect to that sublessee's operations;

(3) "lessor" means the department as the grantor in permits and concessions, as well as leases;

(4) "loss or obligation" includes any loss, fine, penalty, claim, liability, or damages sustained by, asserted against, or imposed on the lessor, including any claim, demand, action, judgment, or liability asserted against or imposed upon the lessor for injury or damages sustained by a person or property.

History: Eff. 3/28/2002, Register 161; am 11/23/2003, Register 168

Authority: AS 02.15.020

AS 02.15.060

AS 02.15.070

AS 02.15.090

AS 02.15.200