C E 1 W 

MAR 2 4 2010 

AIRPORT/ENVIRONMENTAL 

LAW, AGC-600 

U.S. DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

In the Matter of the Federal Aviation 

Administration Part 16 Formal Complaint 

of: 

DESERT WINGS JET CENTER, LLC, an 

Oregon Limited Liability Company, and 

SPIRIT FLIGHT, INC. dba WINGS OF 

THE CASCADES, an Oregon Corporation, 

Complainant. 

Docket No. 16-09-07 

CITY OF REDMOND'S RESPONSE 

TO FAA REQUEST FOR 

ADDITIONAL INFORMATION 

- H 

- C 5 

C"^ 

In response to the Federal Aviation Administration's request for additional information. 

Respondent, City of Redmond, responds as follows: 

1. Copies of Respondent's letters from lenders indicating that the leasehold mortgage 

protections provisions in the Airport lease are acceptable to support leasehold 

financing of tenant. 

Neither Respondent or Respondent's counsel have received any letters, email, or other 

correspondence from lenders concerning the leasehold mortgage protections provisions in the 

Airport lease. In addition, neither Respondent or Respondent's counsel have received any letters, 

email, or other correspondence from lenders requesting additional information or clarification 

regarding the leasehold mortgage protections provisions in the Airport lease. Attached as Exhibit 

1 is a copy of a recent leasehold mortgage protection agreement used to finance a hangar purchased 

at Respondent's Airport. 

Page 1 - CITY OF REDMOND RESPONSE TO FAA 

REQUEST FOR ADDITIONAL INFORMATION BRYANT, EMERSON & FITCH, LLP 

ATTORNEYS AT LAW 

888 S.W. EVERGREEN AVENUE 

RO. BOX 457 

REDMOND, OREGON 97756-0103 

TELEPHONE (541) 548-2151 

FAX (541) 548-1895 
2. Please detail the status of the Respondent's counsel's communications with the 

Complainant's lender about the leasehold mortgage protection clauses. 

Respondent's counsel had no conmiunications with Complainant's lender about leasehold 

mortgage protection clauses. In addition, none of Respondent's staff have had any communication 

with Complainant's lender about leasehold mortgage protection clauses. Respondent and 

Respondent's counsel are unaware of the identity of Complainant's purported lenders. Respondent 

repeatedly advised Complainant or Complainant's attorney of Respondent's willingness to 

communicate with any potential lenders concerning the leasehold mortgage protection clauses. 

3. Please provide a timeline schedule for tenant construction of improvements on the 

Airport with all necessary steps including Airport and City approvals required for a 

tenant to commence business on the Airport. 

Under Respondent's development code there are different Site and Design requirements if 

the construction is entirely on and interior to the Airport versus if the construction is fronting a street. 

Complainant's property fronted a street and so Respondent will address the process under that 

applicable code provision. 

Tenant submits its building and site plan to Respondent's Community Development 

Department for review. If the submission is complete (contains all the plans necessary for review) 

the site and design review takes approximately 75 days. This time is required to accommodate the 

public comment period, agency comment period, and to prepare staff findings and decision. There 

is an appeal process for the Tenant or an adversely impacted property owner to seek review of the 

staff findings and decision document. The time for appeal is in addition to the 75 day review period. 

The site and design review is not complete until all appeals are exhausted. 

Once the findings and decision are final. Tenant can request a building permit from the city. 

During this process Tenant will provide the detail plans (plumbing, electrical, structural, etc.) for 

review. This review takes 3 to 4 weeks. The building permit application is reviewed by the Building 

Department, Public Works, Waste Water Department, Engineering, Airport, and Finance. Once 

Page 2 - CITY OF REDMOND RESPONSE TO FAA 

REQUEST FOR ADDITIONAL INFORMATION BRYANT, EMERSON Sc FITCH, LLP 

ATTORNEYS AT LAW 

888 S.W. EVERGREEN AVENUE 

RO. BOX 457 

REDMOND, OREGON 97756-0103 

TELEPHONE (541) 548-2151 

FAX (541) 548-1895 
approved, the Tenant or contractor is notified to come in, pick up the building permit and inspection 

cards, and pay any required fees (e.g., building permit, inspections, system development charges). 

Tenant can now begin construction. Under the terms of Complainant's lease, it must begin 

construction within 180 days of final site and design approval (see Pg 1 of Ex 7 to Respondent's 

Answer). During construction. Tenant will call for progress inspections, which are conducted the 

next day. Once the building is completed Tenant notifies the Building Department to prepare a 

certificate of occupancy. That process takes approximately two weeks to allow for the certificate 

to be routed to and signed off by all city departments. 

4. If the Airport Sponsor records a tenant's lease, is the Sponsor granting a property 

interest to the tenant on the Airport? Please identify the nature and extent of that 

property interest. 

It is Respondent's policy not to record a tenant's lease. However, Respondent (and Oregon 

law) considers a written lease, whether or not recorded, an interest in the real property for the term 

of the lease, provided tenant complies with its obligations imder that lease. 

Dated this 17th day of March, 2010. 

BRYANT, EMERSON & FITCH, LLP 

STEVEN D. BRYANT, OSB #915302 

Of Attorneys for Sponsor, City of Redmond 

Page 3 - CITY OF REDMOND RESPONSE TO FAA 

REQUEST FOR ADDITIONAL INFORMATION BRYANT, EMERSON & FITCH, LLP 

ATTORNEYS AT LAW 

888 S.W. EVERGREEN AVENUE 

RO. BOX 457 

REDMOND, OREGON 97756-0103 

TELEPHONE (541) 548-2151 

FAX (541) 548-1895 
LEASEHOLD MORTGAGE PROTECTION AGREEMENT 

THIS AGREEMENT is made this _ ^ day of May, 2009 by and between THE CITY OF 

REDMOND, a municipal corporation of the State of Oregon, hereinafter called "OWNER", 

and ^GARY ROBERTS, hereinafter called "LENDER". 

WITNESETH : 

Whereas, Owner owns certain real property located at Roberts Field, Redmond Municipal 

Airport that is subject to a Lease, a copy of that Lease is attached as Exhibit 1 to this Agreement; 

and 

Whereas, Lender is providing financing to the current holder of the above described Lease 

(Tenant) for Tenant's purchase of the Lease and leasehold Improvements; and 

Whereas, City and Lender desire to provide security for Lender in the above described Lease. 

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS, 

TERMS, AGREEMENTS, PRIVILEGES AND OBLIGATIONS CONTAINED IN THIS 

AGREEMENT, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES 

HERETO AS FOLLOWS: 

1. Owner agrees that it will not terminate the Lease as to Lender, so long as Lender 

performs promptly all of its obligations under this Agreement. Lender agrees it will perform 

promptly all of its obligations under this Agreement. 

2. Any notice, demand, or other document of any kind whatsoever served by Owner upon 

Tenant including, but not limited to notice of default under the lease, shall also be served on 

Lender. Service shall be accomplished as provided in the Lease and shall be delivered to Lender 

at the following address (or such other address as designated by Lender in writing to Owner): 

Gary Roberts 

70 Passage 

Irvine, CA 92603 

PACiV / 

Page I - Leasehold Mortgage Protection Agreement 

EXHiBrr 

PAOE /of? ) 
Owner shall not be required to serve an assignee of the Lender unless and until a copy of the 

assignment is serv^ upon the Owner. In addition, whenever ownership of the mortgage passes 

into the hands of more than one party, all parties to the mortgage must furnish the Owner a 

written designation of a single party to be served with notices, which will be deemed to be 

service on all parties to the mortgage. 

3. Any diange of the above address or any other notice required by this agreement shall be 

served on Owner at the following address: 

City of Redmond 

PO Box 726, 

Redmond, Oregon 977S6 

4. Lender shall have the right to cure any of Tenant's defaults or perform any of Tenant's 

covenants as required under the Lease. 

a) For any default or breach of covenant that can be cured by Lender without taking 

possession of the leased property, the Lender shall have sixty (60) days to cure such default or 

breaches after Owner has given Lender notice of intention to terminate the Lease or dispossess 

Tenant. 

b) For any de&ult or breach of covenant that can only be cured by taking possession. 

Owner may require Lender to furnish a reasonable guarantee of its performance under the Lease 

of all Tenant's obligations, including the care of all defaults and breaches. Owner will permit 

Lender reaswiable time to take possession of the Leased property through an assignment of 

Lease, Court Order, or other means. 

5. If Owner terminates the Lease for default or breach of covenant by Tenant, Lender may 

serve notice on Owner of its desire to enter into a new Lease for the balance of the term at the 

same rentals and with the same covenants contained in the original Lease. Lender shall service 

notice of its election to enter into a new Lease on Owner at least thirty (30) days prior to 

termination by Owner. The notice shall be accompanied by a payment of all arrears of lease 

payments and a reasonable sum to compensate the Owner for expenses, including reasonable 

attorney fees for establishing the new Lease, and a guarantee satisfactory to Owner that lender 

will cure all Tenant's defaults and breaches other than arrears in Lease payments. The new lease 

EXHBir ' 

Page 2 - Leasehold Mortgage Protection Agreement ,•} /^ « 

PAGE J . 0)r 6 
will commence as of the termination of the old Lease, but shall be deemed effective as of the 

effective date of the original lease 

6. Owner shall permit Lender to acquire the Lease in the name of a nominee. 

IN WITNESS WHEREOF the parties hereto have caused this agreement to be executed. 

LENDER: 

GARY ROBEl 

OWNER: 

THE aX Y OF REDMOND 

George Endicott, Mayor 

ATTEST: 

City Recorder 

Page 3 - Leasehold Mortgage Protection Agreement 

EXHIBTF / 

PACE , ? pf 3 
CERTIFICATE OF SERVICE 

I hereby certify that I served the foregoing CITY OF REDMOND'S RESPONSE TO FAA 

REQUEST FOR ADDITIONAL INFORMATION on the following by depositing a true copy of 

same in the U.S. Mail in Redmond, Oregon, on the 17* day of March, 2010, contained in a sealed 

envelope, with postage paid and addressed as follows: 

Office of the Chief Counsel 

Attention: FAA Parti 6 Airport Proceedings Docket 

AGC-610, Room 925 

Federal Aviation Administration 

800 Independence Avenue, S.W. 

Washington, D.C. 20591 

Desert Wings Jet Center L.L.C. 

Spirit Flight Inc. dba Wings of the Cascades 

c/o Mary A. Schu, President and Owner 

777 S.E. Salmon Avenue 

Redmond, Oregon 97756 

George Endicott, Mayor 

City of Redmond 

716 S.W. Evergreen Avenue 

Redmond, OR 97756 

BRYAMIIEMERSON & FITCH, LLP 

STEVEN D. BRYANT, OSB #915302 

Of Attorneys for Sponsor, City of Redmond 

I hereby certify that the foregoing is a true and correct copy of the original. 

DATED this 17* day of March, 2010. 

BRYANT, EMERSON & FITCH, LLP 

/s/ STEVEN D. BRYANT 

STEVEN D. BRYANT, OSB #915302 

Of Attorneys for Sponsor, City of Redmond 

BRYANT, EMERSON & FITCH, LLP 

ATTORNEYS AT LAW 

888 S.W. EVERGREEN AVENUE 

RO. BOX 457 

REDMOND, OREGON 977560103 

TELEPHONE (541) 548-2151 

FAX (541) 548-1895 
CERTIFICATE OF SERVICE 

I hereby certify that I served the foregoing CITY OF REDMOND'S RESPONSE TO FAA 

REQUEST FOR ADDITIONAL INFORMATION on the following by depositing a true copy of 

same in the U.S. Mail in Redmond, Oregon, on the 17* day of March, 2010, contained in a sealed 

envelope, with postage paid and addressed as follows: 

Office of the Chief Coimsel 

Attention: FAA Parti 6 Airport Proceedings Docket 

AGC-610, Room 925 

Federal Aviation Administration 

800 Independence Avenue, S.W. 

Washington, D.C. 20591 

Desert Wings Jet Center L.L.C. 

Spirit Flight Inc. dba Wings of the Cascades 

c/o Mary A. Schu, President and Owner 

777 S.E. Salmon Avenue 

Redmond, Oregon 97756 

George Endicott, Mayor 

City of Redmond 

716 S.W. Evergreen Avenue 

Redmond, OR 97756 

BRYANT, EMERSON & FITCH, LLP 

/s/ STEVEN D. BRYANT 

STEVEN D. BRYANT, OSB #915302 

Of Attomeys for Sponsor, City of Redmond 

I hereby certify that the foregoing is a true and correct copy of the original. 

DATED this 17* day of March, 2010. 

BRYANI^MERSON & FITCH, LLP 

STEVEN D. BRYANT, OSB #915302 

Of Attomeys for Sponsor, City of Redmond 

BRYANT, EMERSON & FITCH, LLP 

ATTORNEYS AT LAW 

888 S.W. EVERGREEN AVENUE 

RO. BOX 457 

REDMOND, OREGON 97756-0103 

TELEPHONE (541) 548-2151 

FAX (541) 548-1895