5) Review and Possible Action on Food, Beverage, and Retail Concession and Lease Agreement

Transcription

1 CENTRAL WISCONSIN JOINT AIRPORT BOARD MEETING CENTRAL WISCONSIN AIRPORT TERMINAL Conference Room B East Terminal Upper Level, Mosinee, Wisconsin June 15, 2018, 8:00 a.m. 1) Call to Order by Chairman John Durham at 8:00 a.m. a) Pledge of Allegiance 2) Approval of Minutes of the May 18, 2018 Board Meeting 3) Public Comment Period: 15-minute time limit 4) Presentation by Oakwells CR LLC The Blind Rooster a) Michael J. Reilly - President 5) Review and Possible Action on Food, Beverage, and Retail Concession and Lease Agreement 6) Review and Possible Action on Concessionaire Intoxicating Liquor License Resolution for State of Wisconsin R ) Discussion on Restaurant Parking Options 8) Review and Possible Action on Resolutions a) Cell Phone Reimbursement Resolution R b) Clothing Reimbursement Resolution R ) Discussion on Meeting Agenda Template 10) Staff Reports a) Director Report i) Statistics May 2018 ii) Flight Schedule iii) Legislative Update iv) Warbird Rendezvous at CWA Update v) Other Items of Interest b) Operations and Maintenance Report i) Elevator Update ii) Other Items of Interest c) Financial Reports i) Revenues and Expenses May 2018 ii) Other Items of Interest d) Project Reports i) Master Plan Update ii) Project Updates iii) Other Items of Interest 11) Tour of The Central Wisconsin Airport 12) Adjournment Any person planning to attend this meeting who needs some type of special accommodation to participate should call the County Clerk s Office at or infomarathon@co.marathon.wi.us one business day before the meeting. 01

2 CENTRAL WISCONSIN JOINT AIRPORT BOARD MEETING CENTRAL WISCONSIN AIRPORT TERMINAL Conference Room B East Terminal Upper Level, Mosinee, Wisconsin May 18, :00 a.m. Airport Board: John Durham, Chairman Jim Zdroik, Vice Chairman Excused Leonard Bayer Sara Guild Jeff Zriny Excused Lonnie Krogwold Dave Ladick Staff: Brian Grefe, Airport Director Mark Cihlar, Director of Planning & Dev. Jim Olson, Director of Ops & Maintenance Julie Ulrick, Badging Coordinator Dave Drozd, Airport Accountant Visitors: Andy Remstad, Jviation Joel Wiechmann, Jviation Randy Van Natta, Becher Hoppe Jim Warsaw, MCDEVCO Don Rowlett, ATCT Manager Call to Order by Chairman John Durham at 8:01 a.m. Motion by Guild, second by Krogwold to approve the minutes of the March 16, 2018 board meeting. Motion carried unanimously. The April 20, 2018 meeting was canceled due to lack of a quorum. Public Comment: None. Welcome Portage County Supervisor Dave Ladick to the Central Wisconsin Joint Airport Board: Supervisor Dave Ladick of Portage County was welcomed to the Central Wisconsin Joint Airport Board. Ladick has been a private pilot since 1979 and is familiar with airports and aircraft. He has been involved in some of the construction projects at CWA, such as the fly-ash project with WPS, and is the airport support representative for the Stevens Point Airport. Ladick also serves on the Portage County Highway and Finance Committees. Hold Elections of Officers of the Central Wisconsin Joint Airport Board: Motion by Ladick, second by Guild to nominate Jim Zdroik as Chairman. Motion by Bayer, second by Krogwold to close nominations and cast a unanimous ballot. Motion carried unanimously. Motion by Bayer, second by Krogwold to nominate Sara Guild as Vice Chairman. Motion by Ladick, second by Krogwold to close nominations and cast a unanimous ballot. Motion carried unanimously. Wisconsin Aviation Conference Update - John Durham: The 63 rd annual Wisconsin Aviation Conference was held in the Wisconsin Dells this year and attendees included Guild, Durham and airport management. The conference holds value in informational sessions that apply directly to Wisconsin and Wisconsin airports. Grefe was nominated Vice President of the Wisconsin Airport Management Association and the Board sees the leadership role as a benefit and believes it will create a positive reflection of the airport. Each session Guild attended pointed out the challenge of attracting young people into the field of aviation and it is something that needs to be actively pursued. Guild would like to grow the interest in our area. CWA management and Board representatives met with the Chicago FAA Airport s District Office (ADO) at the conference and the ADO office manager and program manager were in attendance. All CWA projects were touched on and the key focus was addressing timelines on receiving deliverables such as approvals and feedback from the FAA. The ADO manager set goals and assigned team members to each project and established a firm plan moving forward. 02

3 Project Presentations Jviation Architect, Andy Remstad: Andy presented progress to date on the concourse remodel and passenger boarding bridge replacement projects. Bridge project: 30% concept design review is complete, June 8 th will be 60% design complete, with 100% completion by August 3 rd. Opportunities for stimulus or discretionary funding to fast track the project are being looked at. Direction from the Board was requested on their preference of smooth metal panel or corrugated bridges. The Board and staff preferred leaving it open to bids for comparison rather than specifying smooth or corrugated. The second choice for the Board was either solid interior walls with bright lighting or glazing, which has windows that would bring higher maintenance costs. The Board and staff preferred specifying solid panel interior in the bids. Flooring and interior colors of the bridge will be designed to match the terminal and future concourse design. A pre-scope meeting for the concourse remodel project was held Apr 24 th, which began with as-built drawings, inventorying existing conditions, and compiling CAD files. The scope of work will be finalized in May and the contract is to be negotiated in June. There is no obligation at this point and Board feedback will be needed to keep in line with budget and expectations. The scope of work will include flooring, interior finishes, restroom remodel, and items such as the roof, windows, sprinklers and an inspection of the exterior. The concession space would see the largest visible change of the concourse project, contingent upon securing a future concessionaire. Review and Possible Action on 2018 and 2019 Airport Capital Improvement Plan: Congress recently approved $1 billion in appropriations to the FAA to be used for smaller airports and CWA is on the list. CWA is positioned well in acquiring some of those funds with the boarding bridge and concourse projects already in motion. The FAA is working on how to administer and prioritize projects with the additional funding. By aiming to move the boarding bridge and concourse remodel projects up to this year or next, utilizing the supplemental funding rather than PFC funds would be a possibility. The BOA has reviewed the plan and it would fit in with their program, it was also forwarded to the FAA with no response to date. Motion by Ladick, second by Bayer to approve the CIP plan and to move forward with applying for the additional appropriation funds for the boarding bridge and concourse remodel projects. Motion carried unanimously. Review and Possible Action on National/Alamo Auto Rental Concession Agreement Dated March 1, 2012 as Amended Pursuant to 2017 Addendum to Lease Document Dated March 1, 2017 from Midwest Car Corporation to Enterprise Rent-A-Car Company of Wisconsin, LLC: Enterprise Rent-A-Car will assume the lease of the National/Alamo brand from Midwest Car Corporation for operations at CWA. The assignment has no financial impact and onsite employees will remain the same. Motion by Krogwold, second by Guild to approve the lease assignment to Enterprise Rent-A-Car. Motion carried unanimously. Discussion on Marathon County Meeting Agenda Template: Item deferred until the June meeting. Staff Reports: Director Report Brian Grefe: Statistics April 2018 enplanements are up 12.5% on the month with increased frequency and improvements to the schedule. Load factors ranged from 65-73% and cancelations were higher due to the winter storm. Flight Schedule Grefe continues working with United on getting their late flight adjusted to the 4:00-4:30pm time frame and charters are strong with the second Honor Flight departing on Monday. Food, Beverage, and Retail Concession The request for proposals for a food, beverage and retail concessionaire is out and proposals are due by Wednesday, May 23 rd. A selection committee will be formed to review the proposals and should include a board member(s), an Advisory Committee member and staff, if possible. Durham will serve on the committee and Grefe will send out a meeting date invitation. A tour of the restaurant space will take place at the end of the agenda. Air Service Update and Quarterly Report The air service quarterly report was included in the packet for review. 03

4 Legislative Update The House Appropriations Committee released a 2019 funding bill, which includes air traffic control personnel, but little on the AIP program. Airline fee collection hit a new record of nearly $7.5 billion in fees. The significance of that number is the funds do not go into the aviation trust fund. One solution to subsidize the fund would be to increase PFCs to make up for the lost revenue. Grefe has contacted local Representatives emphasizing this point. Marketing Update CWA participated in the 2018 Wausau Business Expo and held a raffle drawing for six months of free advertising at the airport. Marth Wood Products, Great Dane, Coldwell Banker and El Tequila Salsa were the prize winners and the raffle was well received. Warbird Rendezvous at CWA Update Planning for the second annual Warbird Rendezvous is going very well with many sponsors to date. New for this year is cash sponsorships, which would be tax deductible for the sponsor. Other Items of Interest A tour of airport grounds and facilities will be held at the June meeting. Operations and Maintenance Report Jim Olson: Elevator Update The elevator repairs are complete and a final inspection will be scheduled with the State. Other Items of Interest Crews have worked diligently making repairs and cosmetic improvements to the restaurant space for a possible new concessionaire. Maintenance has been preparing summer equipment and winterizing plow units, as well as painting and crack sealing in parking and ramp areas. Financial Reports Dave Drozd: Revenues April revenues are on track at 30.1% of budget. Several corporate hangar invoices have not been entered, but the account will be caught up for May. Parking is doing well at 31% and sale of fixed assets reflects one truck sold on the Wisconsin Surplus website. Disbursements April disbursements are at 28.9% of budget and doing well. The April snow storm ended with a total expense of approximately $37,000 in fuel, labor and equipment costs, which may impact year end numbers. Project Reports Mark Cihlar: Master Plan Update Discussions have taken place with the FAA on the forecast and fleet mix, and approval may be coming soon. The fleet mix and runway length justifications are pending and will keep talks open for the alternatives analysis. Projects Update Final touches to the general aviation apron and taxiway Charlie will begin Monday. The fuel system project is complete and the roadway for the fuel farm will begin next week. AIP-49 for the commercial apron rehabilitation/reconstruction design project is going out for bids next week. Fleet Update The loader mount snow blower was delivered last week and the self-propelled snow blower is scheduled for delivery by MB Companies late July. The scissor lift is expected to be delivered in the next few weeks. 10:38 a.m. Motion by Bayer, second by Guild to adjourn. Motion carried unanimously. The next regular session of the board will be held on June 15, 2018 at 8:00 a.m. Julie Ulrick, Recording Secretary 04

5 Food, Beverage, and Retail Concession and Lease Agreement THIS CONCESSION AGREEMENT (Agreement) made and entered into this First Day of July, 2018 by and between the County of Marathon and the County of Portage, municipal corporations of the State of Wisconsin, by their Joint Airport Board, hereinafter referred to as "Airport," and Oakwells Commuter Rail LLC a privately held, limited liability corporation, hereinafter referred to as Concessionaire. WITNESSETH: WHEREAS, Airport is a public body charged with the operation of the Central Wisconsin Airport in the City of Mosinee, Marathon County, Wisconsin, and now owns or holds under lease, with power to grant rights with respect thereto certain property, known as the Central Wisconsin Airport. WHEREAS, the Concessionaire desires to lease certain premises and facilities on the Airport, and to obtain certain rights in connection with, and on, said Airport, more fully described hereinafter, and WHEREAS, Airport deems it advantageous to itself and its operation of said Airport to grant and lease unto Concessionaire these premises and facilities, and to grant certain rights upon the terms and condition hereinafter set forth. NOW, THEREFORE, THE PARTIES AGREE: SECTION 1. DEFINITIONS: The following terms and phrases shall have the following meanings for purposes of this Agreement: 1. Airport" shall mean the Joint Airport Board existing under the laws of the State of Wisconsin that controls, operates, and maintains the Central Wisconsin Airport. 2. "Airport Director" shall mean the Airport Director of the Airport, or his or her designee. 3. "Leasehold Improvements" shall mean all improvements and equipment which are affixed to the Leased Premises and which cannot be removed without material damage to the Premises. 4. "Trade Fixtures" shall mean all non-affixed items, except expendables and Personal Property, which can be removed without damage to the Leased Premises, including cash registers, safes, patron tables and chairs, display fixtures, and the like. 5. Leased Premises shall mean, collectively, the portions of the commercial service passenger terminal building leased to the Concessionaire for food beverage and retail operations hereunder, as further described in Section 6 of this Agreement and attached Exhibit A. 05

6 SECTION 2. EXHIBITS: The following Exhibits are attached to this Agreement and are incorporated herein: Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Leased Premise CWA Concession Equipment Inventory Menu, Products, and Pricing Copy of Proposal Staple Items SECTION 3. CONCESSION: The Airport does hereby grant to the Concessionaire and Concessionaire hereby accepts from the Airport the nonexclusive right to operate food, beverage and gift shop concessions within the Terminal at the Airport for the purpose of offering products and services to the traveling public under the covenants, conditions and provisions and in the places set forth in this Agreement. SECTION 4. TERM: 1. Initial Term: The initial term of this Agreement shall commence on July 1, 2018 and shall remain in effect for five (5) years from that date, unless terminated earlier as provided for herein. 2. Holding Over: It is further agreed that in the event that the Base Term expires and the Optional Term is not exercised, or a new agreement has not been executed, at the sole discretion and upon written consent of the Airport Director, this Agreement shall continue in effect on a month-tomonth basis under the terms and conditions set forth in this Agreement subject to the adjustment of rates and charges to be negotiated between the parties. The consent of the Airport Director to continue operating on a month-to-month basis may be withdrawn upon thirty (30) days' written notice to Concessionaire. 3. Additional Term: It is further agreed that the Airport and the Concessionaire may enter in to a new five (5) year Agreement with two (2), 5-year extensions, terms and conditions to be negotiated, upon acceptable Leasehold Improvements made by Concessionaire (total potential extension is 15 years beyond the initial term) The determination of what is and what is not acceptable will be made by the Airport Director, but shall include, at a minimum, furnishing and equipping a new concourse concession area as part of the Airport s concourse rehabilitation project. SECTION 5. NONEXCLUSIVITY: 1. Definition: In this section, Catering means the preparation, delivery, service and cleanup of food and beverages outside of the Leased Premises. It does not include carry-in food such as doughnuts, pre-made sandwiches, pizza, etc., or coffee, canned or bottled beverages. 2. Nonexclusive Agreement: This concession shall not be construed to be an exclusive concession, and the Airport shall have the right to negotiate and execute substantially similar arrangements with any other individual, firm or corporation for engaging in similar activities within the terminal at the Airport, except under the following terms and conditions: 06

7 2.1 Concessionaire shall be the exclusive provider of alcohol served in the terminal for onpremise consumption. This exception shall not apply to gifts, raffles, or any other give-away items intended for consumption off-premises. 2.2 Concessionaire shall be the exclusive provider of catering services in the terminal. In consideration for this exception, Concessionaire agrees to provide catering services to any group and to charge no more than the regular catering price regardless of size of the group. 3. Terms and Conditions: The Airport shall not, during the term of this Agreement, grant to any other individual, firm or corporation, a similar concession upon terms or conditions materially more favorable than those herein granted Concessionaire, or use of Premises under Lease to Concessionaire. SECTION 6. LEASED PREMISES: Concessionaire is hereby granted use of the Leased Premises, for the purposes set forth in Section 3 herein. The Leased Premises to be used by Concessionaire are shown on attached Exhibit A. SECTION 7. RIGHTS OF INGRESS AND EGRESS: Subject to any applicable rules, regulations, or Airport policies governing the use of the Airport, the Airport grants to Concessionaire the non-exclusive right to use, in common with others, the areas designated by Airport to be public or to be used in common, including, but not limited to, the walkways, streets, roadways, waiting rooms, hallways, restrooms and other passenger conveniences, herein after referred to as "Public Areas", for Concessionaire's employees, patrons, guests and invitees for the use for which the Public Areas were designed. Concessionaire's right under this section includes the right of ingress to and egress from the Leased Premises for Concessionaire and its employees, patrons, guests, invitees, suppliers of materials and services, along with equipment, and others property related to Concessionaire's business at the Airport under this Agreement. The rights of ingress and egress granted by this section may be exercised without charge, provided that Airport may charge Concessionaire for employee, patron, guest, and supplier parking privileges. SECTION 8. CONCESSION PAYMENT AND STATEMENTS: 1. Concession Fee: In consideration of the rights and privileges conferred by this Agreement, Concessionaire agrees to pay the Airport the following commissions on Gross Revenues resulting from the concession: 1.1. Liquor, beer, and wine fifteen percent (15%) 1.2. Food and non-alcoholic beverages - eight percent (8%) 1.3. Retail- twelve percent (12%) 2. Gross Revenues: The term Gross Revenues as used herein shall mean the revenues or sales price of all food, beverages and other merchandise and items sold or dispensed by the successful Proposer on the Airport and the charges made for all services performed by the successful Proposer without exception, including revenues for service or goods delivered outside the terminal and 07

8 airport property, (i.e. on and off-site catering) but excluding State and local sales taxes collected by operator from its customers. 4. Monthly Statements: The Concession Fee shall be due and payable to the Airport on a monthly basis. Concessionaire shall furnish a statement of Gross Revenues in a form acceptable to the Airport Director on or before the tenth (10th) day of each month following the month to which such Gross Revenues relate. Payment shall be due and payable within five calendar (5) days thereafter. 5. Reconciliation: Revenues, fees, or payments shall be subject to review as set forth in Section 10 below. Any reconciliation by either party shall be paid within ninety (90) days. 6. Late Payment or Statement: If Concessionaire is delinquent for thirty (30) days or longer in paying any amounts owed to the Airport under this Agreement, Concessionaire shall pay to the Airport a late payment fee assessed on the delinquent amount at the Airport s Prevailing Rate on the delinquent accounts (The rate at the date of execution of the Agreement is one and one-half percent (1.5%) per month. The late payment charge shall accrue from the date the delinquent amount was due until paid. 7. Remedies: The remedies provided by this Section are in addition to all other remedies the Airport may have for a breach of this Agreement by Concessionaire, and nothing in this Section shall be deemed to be a waiver by the Airport or prevent the Airport from asserting any other remedy. 8. Any and all payments due to the Airport by Concessionaire shall be remitted to the following address: Marathon County Treasurer % Central Wisconsin Airport 500 Forest St. Wausau, WI SECTION 9. OTHER PAYMENTS AND FEES: 1. Fee for Utility Consumption: Concessionaire agrees to pay for its monthly electrical, gas, phone, and internet charges. Consumptions as indicated by separate meter or calculation should meter not indicate separate use. 2. Fee for Restaurant and Liquor License: Concessionaire agrees to pay for all fees associated with obtaining and maintaining a restaurant license and airport liquor license in its name from the City of Mosinee and the State of Wisconsin. Concessionaire shall be responsible for complying with all insurance requirements associated with the liquor license and shall assume all liability for any actions resulting from the serving of alcohol covered by the license and shall further hold the Airport harmless from any and all liability or other actions associated with the license and the serving of beer or alcohol. 3. Fee for Employee Background Checks and Security Badges: Concessionaire agrees to pay for all costs of required fingerprint based criminal history record checks and other Airport badging related expenses conducted on Concessionaire's agents and employees. 08

9 4. Fee for Failure to Maintain: In the event that Concessionaire fails to keep the Leased Premises in neat, clean, orderly and sanitary condition as is required by this Agreement and the Airport Director has issued a written notice of such deficiency and provided a reasonable cure period as determined solely by the Airport Director, Airport may itself clean or cause to be cleaned those portions of the Leased Premises not so kept, and Concessionaire agrees to reimburse Airport for the direct and indirect costs incurred by Airport for the performance of said work plus a fifteen percent (15%) administrative fee, due and payable upon the receipt of the invoice. 5. Fee for Repair and Replacement: Concessionaire shall promptly repair or replace any property of the Airport lost, destroyed or damaged by its operations hereunder. If Concessionaire fails to promptly repair or replace such property following written notice by the Airport Director of such deficiency and a reasonable cure period as determined solely by the Airport Director, Airport may repair or replace it and Concessionaire agrees to reimburse for the direct and indirect costs incurred by Airport for such repair or replacement plus a fifteen (15%) percent administrative fee, due and payable upon the receipt of the invoice. 6. Fee for Unpaid Licenses, Fees, Taxes, and Assessments: Concessionaire hereby agrees to pay all licenses, fees, taxes and assessments of any kind whatsoever which arise because of, or in the course of any operations covered by this Agreement during the term hereof. Should Concessionaire fail to pay such amounts following written notice of such deficiency and a reasonable cure period as determined solely by the Airport Director, the Airport may pay the same on behalf of Concessionaire, and Concessionaire agrees to reimburse Airport for said amounts paid plus a fifteen percent (15%) administrative fee due and payable upon the receipt of the invoice. SECTION 10. AUDIT: The rights and obligations of the parties with respect to Concessionaires reports and books of account are as follows: 1. As stated in Section 8, at the same time that the Concessionaire is obligated to pay its percentage of gross receipts herein, Concessionaire shall provide the Airport Director with an itemized statement showing the gross amount of revenues or receipts Concessionaire charged during the preceding calendar month, showing: Gross Receipts for all food and beverage sales except alcoholic beverages Gross Receipts for alcoholic beverage sales Gross Receipts for all retail sales 2. The itemized statement shall be signed and certified as complete and correct by an official of Concessionaire authorized to so certify, and shall be in a form acceptable to Airport. The itemized statement will include the calculated amount due the Airport. 3. Within ninety (90) days after the end of every contract year, and at the expiration of the Agreement term and prior to the assignment of Concessionaire s rights hereunder, Concessionaire, at its expense, shall have prepared and filed with the Airport, financial statements from and relating to this location, which certain statements shall be compiled by Concessionaire s director of finance and shall include statements of revenues and gross receipts reportable, includable and excludable under this Agreement. Financial Statements, audits and audit reports shall be completed and certified by 09

10 the Concessionaire s director of finance to be in accordance with Concessionaire s Other Comprehensive Basis of Accounting (OCBA) as promulgated by the American Institute of Certified Public Accountants. 4. The Airport, or its designated representatives, shall have the right, upon reasonable notice to the Concessionaire, to examine all pertinent books and records of the Concessionaire for the purpose of verifying the actual amount of gross sales as herein defined. In addition, Airport shall have the right during any one fiscal year of the Agreement to authorize additional audits of Concessionaire s records pertaining to the concession. Such audits may be undertaken by a reputable firm of independent certified public accountants. The cost of such audits are borne by Airport, unless the results of such audits reveal an underpayment of greater than 2% between the gross receipts reported in accordance with Paragraph E and the gross receipts as determined by audit for any twelve month period. In case of such underpayment, the full cost of the audit shall be borne by Concessionaire. Additionally, the Concessionaire shall pay the amount of under payment plus interest at the rate of 12% per annum from the time the underpayment was due until paid. SECTION 11. UTILITIES BY AIPORT: The Airport agrees to provide such heat, internet infrastructure, telephone infrastructure, water infrastructure, and sewer service, as are reasonably necessary for Concessionaire's operations at no additional cost to Concessionaire. The Concessionaire agrees to pay cost and repair any damage to the utility infrastructure determined to be caused by the Concessionaire. SECTION 12. AIRPORT PROVIDED EQUIPMENT: The Airport shall lease to the Concessionaire the Leased Premises and the Airport provided equipment set forth in Exhibit B, CWA Concession Equipment Inventory. The Leased Premises and the Airport provided equipment are provided on an as is, where is condition without representation or warranties of any kind. Replacement responsibility is as described on Exhibit B. SECTION 13. CONCESSIONAIRE PROVIDED EQUIPMENT: Concessionaire shall, at its soles risk and expense, provide all equipment needed to operate its concession on the Leased Premises not expressly described in Exhibit B. Concessionaire provided equipment shall include, but not be limited to: 1. All dishes and utensils needed for its food, beverage and other related services. 2. Branded signage and menu boards in all approved locations. 3. Point of sale system for food/beverage and other related services. 4. Landside vending machines. SECTION 14. CONCESSIONAIRE BOND/LETTER OF CREDIT/ SECURITY DEPOSIT: 1. Requirements. To guarantee its performance of all of the conditions and obligations under this Agreement, Concessionaire agrees to secure a concessionaire bond or letter of credit or provide a 10

11 security deposit issued to the Airport in the amount of five thousand dollars ($5,000.00). If a bond or letter of credit, it must be secured from a surety which is acceptable to the Airport Director and guaranteeing performance by the Concessionaire of all of the terms and conditions of this Agreement and further guaranteeing all payments to be made hereunder. Said bond or letter of credit shall further include a requirement that the surety notify the Airport in writing at least thirty (30) days prior to the cancellation or termination of said performance bond or letter of credit. It is agreed that the amount of such bond or letter of credit may not be diminished below the required amount as set forth herein during the term of this Agreement. As an alternative and in lieu of a performance bond or letter of credit, Concessionaire may deposit with the Airport the required amount. 2. Waiver. The Airport Director may waive the Performance Bond/Letter of Credit/Security Deposit requirement provided Concessionaire has remained in compliance with the terms and conditions of this Agreement and has remained current on all payments due under this Agreement for a period of one (1) year. If Concessionaire has met this requirement over the past twelve (12) months prior to the renewal of this Agreement, it will qualify for such waiver. If Concessionaire has the requirement waived and subsequently is determined to be in default as called for in this Agreement or has delinquent payments due the Airport, Airport reserves the right to reinstitute the Performance Bond/Letter of Credit/Security Deposit requirement subject to the terms of this section. SECTION 15. CONSTRUCTION AND IMPROVEMENTS TO LEASED PREMISES: In the event that Concessionaire wishes to make any improvements within the Leased Premises, Concessionaire shall submit a written request to the Airport Director together with design development or construction drawings showing all details of Improvement. No Improvement shall be made in the Leased premises without the prior written approval of the Airport Director, and then only in conformance with the approved plans that conform to then current regulations, building standards, and minimum insurance and bonding requirements. All improvements to the Leased Premises done by or on behalf of Concessionaire shall be of first-class quality in both materials and workmanship, and shall be equal to or better than the original in materials and workmanship. Concessionaire expressly waives any and all claims for damages of any kind, including but not limited to loss of revenue or profits as a result of the interruption of Concessionaire's business, resulting from the improvements to the Leased Premises, the mechanical systems or Airport-owned equipment or fixtures, whether such repairs are undertaken by the Airport or Concessionaire. Concessionaire assumes the risk and any liability of personal injury, loss, damage, or any cost or wage claims resulting from the improvements to the Leased Premises. SECTION 16. SIGNAGE: 1. Definitions of Signs: For purposes of this Section, signs shall include, but not necessarily be limited to, identification signs, Concessionaire logos, advertising or promotions, photographs, art displays, and the like. 2. Right to Install: Concessionaire shall have the right to install and operate upon or in the Leased Premises at Concessionaire's sole cost and expense, signs containing its name and representing its business. Concessionaire acknowledges Airport's desire to maintain a high level of aesthetic quality. Therefore, Concessionaire covenants and agrees that, in the exercise of its privilege to install and 11

12 maintain appropriate signs on the Leased Premises, it will submit to Airport the size, design, content, and intended location of each and every sign it proposes to install on or within the Leased Premises and that no signs of any type shall be installed on or within the Leased Premises without the specific prior written approval of the Airport Director as to the size, design, content, and location. Paper, Cardboard, Handwritten, or hand lettered signs are prohibited. Notwithstanding any prior written approval, upon written notice from the Airport Director at any time during the term of this Lease, Concessionaire shall install, remove, or modify any signs which the Airport Director deems necessary or unnecessary for identification or information to the public, passengers, or other Airport users. Failure to require removal of any sign placed on or about the Leased Premises without written permission shall not limit the Airport Director's authority to require removal of any unapproved sign. 3. Signs and Fixtures Outside Premises: Concessionaire shall not place or install any racks, stands, trade fixtures, pedestal signs, or other displays of products outside the boundaries of the Leased Premises without the express prior written approval of the Airport Director. 4. Removals of Signs: Upon the expiration or sooner termination of this Lease, Concessionaire shall, if requested by the Airport Director, remove any and all identification signs and similar devices placed by Concessionaire on or in the Leased Premises. In the event of the failure on the part of Concessionaire to so remove each and every sign as requested by the Airport Director, the Airport Director may perform such work and, upon demand, Concessionaire shall pay the cost thereof to Airport. 5. Requirement to Install: Concessionaire shall install or allow the Airport to install any signs in and on the Leased premises that provide for security related information and or procedures. SECTION 17. CONCESSIONAIRE'S OPERATING STANDARDS: 1. Service Standards: 1.1. Required Services: Concessionaire shall be required to sell food, beverages, and souvenirs as indicated in Exhibit E: Staple Items Greeting: Concessionaire shall greet all of its customers with warm, friendly, smiling, prompt, and courteous service. Telephones shall be answered promptly. Walk-in customers shall be given priority Food Service Menu: Concessionaire shall develop and maintain a food and beverage menu to meet the needs the traveling public. Prices for items on the food service menu shall be comparable to those charged by other restaurants in central Wisconsin. Concessionaire shall vary the food and beverage menu from time to time to meet changes in demand Food Quality and Display: Concessionaire shall provide good quality, fresh and well prepared and presented food. Prices will be displayed in such a manner as to be easily visible and understood by potential customers Merchandising: Concessionaire shall develop and implement creative and effective merchandising means within the Leased Premises; those means may include, without 12

13 limitation, merchandise displays, full retail display cases, promotional displays (for which Airport Director approval must be obtained), and attractive packaging Marketing: Concessionaire shall develop, implement and maintain a marketing and promotion program that will effectively informs citizens and visitors of Mosinee, private and commercial aviation service providers, and area businesses of the food and beverage services offered at the Airport by the Concessionaire Service: Concessionaire shall provide timely, attentive, and friendly service. Food and beverage orders and merchandise requests shall be taken promptly and in a friendly and courteous manner. Processing of payments for food service, beverages and retail products shall be prompt. Sales receipts shall be properly itemized, shall reflect a description of the goods and services purchased, the individual price for each item of goods and services purchased, totals and applicable taxes. All customers shall be thanked for their patronage Credit Cards: Concessionaire shall accept traveler's checks and at least three major credit cards for any purchase Hours of Service: Concessionaire shall provide services in the terminal concourse, as required under this Agreement, three hundred sixty five (365) days a year with operating hours and staffing levels adequate for both the hourly and seasonal peaks in passenger traffic. The concourse concession shall be open for service commencing one hour prior to the first scheduled departure until fifteen (15) minutes prior to the last scheduled departure. In the event of departure delays, the Concessionaire will use commercially reasonable best efforts to keep the concession open until the flight departs factoring in the value of customer service and the cost required to keep the concession open Concessionaire shall provide automated vending service, in approved locations, three hundred sixty five (365) days a year and twenty four (24) hours per day with stocked products available for purchase Concessionaire shall provide services in the second floor bar/restaurant area, as required under this agreement, a minimum of forty (40) hours per week. Specific hours of operation or schedule shall be approved in advance by the Airport Director and posted for the general public. Concessionaire further agrees to open the bar/restaurant area for special events, upon reasonable notice, when a large crowd is anticipated, such as Never Forgotten Honor Flight Testing and Inspection by the Airport. The Airport may monitor, test, or inspect Concessionaire's services at any time through the use of a responsible shopping service or by other commercially reasonable means that do not unduly interfere with Concessionaire's business Security Requirements. Concessionaire shall abide by, and require its agents, contractors, and employees to abide by, and be subject to all rules and regulations which are now, or may from time to time, be promulgated by the Airport concerning the management, 13

14 operation, or use of the Airport, and specifically to abide by all provisions of the Airport Security Plan. Concessionaire must comply with all security requirements of the Airport, Department of Homeland Security, the Federal Aviation Administration and any other governing agency. Concessionaire further agrees to provide Airport Identification badges as required by Airport at its sole cost for all of its agents, contractors and employees serving at the Airport, and shall require said agents, contractors and employees to have such badges in their possession at all times while on the Airport Badging. Concessionaire and its agents, contractors and employees shall display the correct security identification badges at all times while working at the Airport. 2. Employee Standards: Concessionaire shall recruit, train, supervise, direct, and deploy the optimum number of employees to match the Service Standards set forth above. Each employee shall: (1) be clean, neat, and attired in accordance with the approved Concessionaire dress code; (2) be free from offensive body odor; (3) be professional, and friendly to the public; (4) not wear excessive amounts of jewelry, perfume, or cologne; and (5) wear the employee's Airport identification at all times, showing the names of both the Concessionaire and the employee, within the guidelines of all local, state and federal laws. Concessionaire shall discipline and, if necessary, discharge any employee who fails to conform to the foregoing standards while working at the Airport. 3. Sanitation, Hygiene, and Cleanliness: 3.1. Concessionaire shall keep the Leased Premises and proximately located surrounding public areas reasonably free of debris, trash or soiled cleaning supplies (e.g., rags and buckets) originating from Concessionaire's operations or customers. Concessionaire shall ensure that all equipment, walls, floors, counters, tables and other surfaces are cleaned and sanitized frequently, and that employee areas are cleaned daily. Concessionaire shall keep the Leased Premises free of hazardous conditions, shall keep public areas around the Leased Premises free of hazardous conditions originating from Concessionaire's operations, and shall notify the Airport promptly of other hazardous conditions in the Public Areas outside the Leased Premises. Concessionaire shall monitor areas within and contiguous to the Leased Premises to ensure that they are kept clean and orderly, and that trash is not allowed to accumulate. Concessionaire shall ensure that all its employees conform to the Concessionaire's policies and by federal, state, or local laws, rules, regulations and/or ordinances Concessionaire shall provide a complete and proper arrangement for the adequate sanitary handling of all trash and other refuse caused as a result of Concessionaire's operations and shall provide for its timely removal to the central collection point designated by the Airport Director. Concessionaire shall take appropriate action to exterminate and prevent the presence of rodents and other vermin. Concessionaire shall keep all garbage and putrescible materials in durable, fly- and rodent-proof, fireproof containers that are easily cleaned. The containers shall have tight-fitting lids, doors, or covers, and shall be kept covered when material is not being deposited in them. Concessionaire shall clean the containers as necessary to prevent odors. Concessionaire shall not allow boxes, cartons, barrels, or other similar items to remain within view of the public Concessionaire shall develop and keep on file with the Airport Director a restaurant grease management plan to ensure the proper disposal of restaurant oils and greases. 14

15 4. Waste Reduction, Recycling, Refuse: 4.1. General. Concessionaire shall gather, sort, and transport all garbage, refuse, and recyclable materials daily to the central collection point designated by the Airport Director. Concessionaire shall place all garbage, refuse, and recyclable materials in the appropriate containers at the designated collection point. Concessionaire is encouraged to maximize its participation in a recycling program Garbage. Concessionaire shall take all reasonable measures to reduce the amount of waste it generates by requiring suppliers to remove nonessential overwraps, containers, and other packaging, and to use recyclable materials for essential packaging Recyclable Materials. Airport Director reserves the right to institute a recycling program on which Concessionaire shall participate. Recyclable materials collected by Concessionaire shall be stored separately form trash and refuse. 5. Deliveries: All deliveries shall be scheduled during non-peak aircraft arrival and departure times. Airport Director may issue schedules of acceptable delivery times and locations, which, upon notice to Concessionaire, Airport Director may adjust from time to time, and from which concessionaire shall not deviate without Airport Director s prior consent 6. Transportation: Concessionaire shall ensure that inventory, merchandise, supplies, trash, refuse and recyclable materials being transported within the Terminal are handled with care in a manner that ensures that items do not spill or leak. Inventory, merchandise and supplies transported from the non-secured side of the Terminal to the secured side of the Terminal may be required to pass through x-ray inspection units. In transporting inventory, merchandise, supplies, trash, refuse and recyclable materials associated with Concessionaire's operations within the Terminal, Concessionaire shall use only those delivery and receiving routes established by the Airport Director and shall use appropriate carts, vehicles, or other conveyances. If delivery and receiving routes are carpeted, delivery carts must be equipped with wheels suitable for operating on carpets without causing damage to them. 7. Non-Interference with Utilities: Concessionaire shall do nothing, and shall permit nothing to be done, that may interfere with the drainage or sewerage systems, fire hydrants, heating and air conditioning systems, electrical systems, domestic hot water, domestic cold water, gas, fire suppression systems, fire alarm system, or plumbing at the Terminal or elsewhere at the Airport. Concessionaire's duty under this Section includes, but is not limited to, preventing grease and oils from entering waste lines, drains, and sewers. 8. Management: The operation and maintenance of the Leased Premises shall be under the constant, direct supervision of a trained, qualified, and experienced manager employed by Concessionaire. Concessionaire s manager shall be authorized to accept any notice required or allowed by this Agreement, and shall have authority to make all decisions reasonably necessary in the day-to-day operation of the concession, including, without limitation, decisions regarding merchandise quality, merchandise price, and employee conduct. Concessionaire's manager or a designated supervisor with the authority to make decisions shall be available on-site during business hours, provided that a subordinate may be designated as an acting manager during brief absences of the manager. Concessionaire may employ more than one manager to satisfy the requirements of this Section. 15

16 9. Restaurant License; Liquor License: Concessionaire shall file the appropriate applications to obtain a restaurant license and the liquor license from the City of Mosinee and/or the State of Wisconsin for its operations at the Airport and shall diligently prosecute such applications until such licenses are issued. Concessionaire shall not serve prepared food or alcoholic beverages at the Airport until the necessary permits and/or licenses have been secured and the required liquor liability insurance coverage have been obtained. SECTION 18. MAINTENANCE AND REPAIRS WITHIN THE LEASED PREMISES: 1. Concessionaire shall at all times and at its sole expense keep the Leased Premises and all improvements, including furnishings, fixtures, and equipment, whether installed by Concessionaire or by the Airport, in a safe, neat, clean and orderly condition and appearance, normal wear and tear excepted. Without limiting the generality of the foregoing, Concessionaire shall, at its sole cost and expense, be responsible for performing the following: 1.1. Janitorial services, providing janitorial supplies, window washing, and trash removal to the central collection point designated by the Airport Director Replacement of light bulbs in the Leased Premises Cleaning of stoppages in sinks, plumbing fixtures and drain lines to the first "clean-out" outside the Leased Premises Cleaning and maintaining grease traps in accordance with the approved Restaurant Grease Management Plan Cleaning and replacement of filters in exhaust hoods Cleaning and maintaining the fire suppression system and related components required over the cooking appliances (e.g., grill, fryer), including required periodic inspections Regularly scheduled maintenance of Airport-owned equipment and fixtures in conformity with manufacturer's recommendations. (If necessary to prevent voiding manufacturer's warranties, such maintenance shall be performed only by certified or authorized technicians.) 1.8. Cleaning floors and floor coverings in and around the Leased Premises Maintaining electrical loads within the designed capacity of the Leased Premises electrical system Upon termination of this Agreement, Concessionaire shall deliver the Leased Premises, and all improvements thereon, including all Airport owned furnishings, fixtures and equipment, to the Airport in the same condition and repair as the same existed on the commencement date of this Agreement, reasonable wear and tear excepted. The Airport Director shall be the sole judge of the quality of maintenance. 2. Repairs: 16

17 2.1. The Airport shall keep the structural components of the Leased Premises (including the walls and roof), the mechanical systems (i.e., HVAC, plumbing, electrical and natural gas systems) in good repair, subject to Concessionaire's maintenance obligations set forth above. Airport shall not be required to make any repairs to the Leased Premises, mechanical systems or Airport owned equipment or fixtures or any other elements of the Leased Premised unless and until Concessionaire has notified Airport in writing of the need for such repairs. Airport shall have a reasonable period of time following receipt of such written notice to commence and complete said repairs. Notwithstanding the foregoing, Concessionaire shall repair all damage to the Leased Premises and all improvements, including furnishings, fixtures, and equipment, caused by the negligence or willful acts or omissions of Concessionaire, its employees, agents, servants, or licensees. All repairs or improvements to the Leased Premises done by or on behalf of Concessionaire shall be of first-class quality in both materials and workmanship, shall be equal to or better than the original in materials and workmanship, and, except in emergencies requiring immediate response, shall have the prior written approval of the Airport Director. All repairs shall conform to the applicable rules and regulations and building codes prescribed from time to time by federal, state, or local authority having jurisdiction over the Leased Premises. The Airport Director shall be the sole judge of the quality of the repairs. Concessionaire expressly waives any and all claims for damages of any kind, including but not limited to loss of profits as a result of the interruption of Concessionaire's business, resulting from the need for repairs or improvements to the Leased Premises, the mechanical systems or Airport-owned equipment or fixtures, whether such repairs are undertaken by the Airport or Concessionaire Concessionaire shall repaint, refinish or replace, at its sole cost and expense, high traffic areas of the Leased Premises subject to greater-than-normal wear on a schedule to be specified by Concessionaire, or as may be directed by the Airport Director if Concessionaire fails to specify a reasonable schedule. Concessionaire shall repair or replace Concessionaire's trade fixtures and equipment that become worn, chipped, dented, or gouged. All repainting, refinishing, or replacement shall have the prior written approval of the Airport Director. 3. Right to Enter: 3.1. The Airport shall have the right to enter the Leased Premises at reasonable times during Concessionaire's regular business hours to inspect the Leased Premises and to determine whether Concessionaire has complied with and is complying with the terms and conditions of this Agreement The Airport shall have the right to enter the Leased Premises to cure any material breach that remains uncured by Concessionaire after reasonable notice and opportunity to cure The Airport shall have the right to enter the Leased Premises at any time to respond to any emergency. SECTION 19. CONCESSIONAIRE S COVENANTS: 1. Concessionaire shall comply with all laws, ordinances, rules, regulations, policies, and orders now in effect or hereinafter adopted of the United States, the State of Wisconsin, the City, and the Airport and any agency, department or governmental subdivision thereof, including but not limited to the Department of Homeland Security, the Occupational Safety and Health Administration ("OSHA") and 17