HomeMy WebLinkAboutOrdinance 22528-12-2016 ORDINANCE NO.22528-12-2016
AN ORDINANCE INCREASING THE ESTIMATED RECEIPTS AND
APPROPRIATIONS IN THE AIRPORTS GAS LEASE PROJECT FUND IN THE
AMOUNT TO $4,400,000.00, FROM AVAILABLE FUNDS, FOR THE PURPOSE
OF PURCHASING LEASEHOLD INTEREST OF MULTIPLE AIPORT
HANGARS; PROVIDING FOR A SEVERABILITY CLAUSE; MAKING THIS
ORDINANCE CUMULATIVE OF PRIOR ORDINANCES; REPEALING ALL
ORDINANCES IN CONFLICT HEREWITH; AND PROVIDING AN EFFECTIVE
DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH,
TEXAS:
SECTION 1.
That in addition to those amounts allocated to the various City departments for Fiscal Year 2016-2017 in the
Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the
Airports Gas Lease Project Fund in the amount of$4,400,000.00, from available funds, for the purpose of
purchasing leasehold interest of multiple airport hangars.
SECTION 2.
That should any portion, section or part of a section of this ordinance be declared invalid, inoperative or
void for any reason by a court of competent jurisdiction, such decision, opinion or judgment shall in no way
impair the remaining portions, sections, or parts of sections of this ordinance, which said remaining
provisions shall be and remain in full force and effect.
SECTION 3.
That this ordinance shall be cumulative of Ordinance No. 22394-09-2016 and all other ordinances and
appropriations amending the same except in those instances where the provisions of this ordinance are in
direct conflict with such other ordinances and appropriations, in which instance said conflicting provisions
of said prior ordinances and appropriations are hereby expressly repealed.
SECTION 4.
This ordinance shall take effect upon adoption.
APPROVED AS TO FORM AND LEGALITY:
P 'ge Meban ,Assistant City Attorney Mary J. a er ity Secretary
ADOPTED AND EFFECTIVE: December 6,2016
Ordinance No.22528-12-2016
Page 1 of 1
Mayor and Council Communication Map
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 121612016 - Ordinance No. 22528-12-2016
DATE: Tuesday, December 6, 2016 REFERENCE NO.: C-28022
LOG NAME: 55FWS 3LEASETERM CLENDENEN
SUBJECT:
Authorize Termination of Three Ground Lease Agreements with Darrell Clendenen at Fort Worth Spinks
Airport, Authorize Amendment to the Municipal Airports Capital Improvement Plan for Fiscal Year 2016 -
2017 to Increase Appropriations to $4,400,000.00 for the Acquisition of Leasehold Interests, Authorize
Payment of$1,660,120.00 to Spinks Air Associates, LLC, Authorize Payment of$419,380.00 to Spinks
West Side Associates, LLC, and Authorize Payment of$2,320,500.00 to Spinks East Side Executive
Hangars, Inc. to Acquire the Remaining Leasehold Interests, Authorize Use of Mineral Lease Revenue
from City Airports and Adopt Appropriation Ordinance (COUNCIL DISTRICT 6)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the termination of three Ground Lease Agreements with Spinks Air Associates, LLC, Spinks
West Side Associates, LLC, and Spinks East Side Executive Hangars, Inc.;
2. Authorize amendment to the Municipal Airports Capital Improvement Plan for Fiscal Year 2016 - 2017
to increase appropriations to $4,400,000.00 for the acquisition of leasehold interests;
3. Authorize payment of$1,660,120.00 to Spinks Air Associates, LLC, authorize a payment of
$419,380.00 to Spinks West Side Associates, LLC, and authorize a payment of$2,320,500.00 to Spinks
East Side Executive Hangars, Inc. to acquire the remaining leasehold interests; and
4. Authorize the use of mineral lease revenue from City Airports for the purchase of the leasehold
interests and adopt the attached appropriation ordinance increasing estimated receipts and appropriations
in the Airports Gas Lease Project Fund in the amount of$2,800,000.00.
DISCUSSION:
On February 24, 2004, (Mayor and Council Communication (M&C) L-13765), City Council approved an
unimproved ground lease, City Secretary Contract (CSC) 30198, with Darrell Clendenen with Spinks Air
Associates, LLC, at Fort Worth Spinks Airport (Spinks Airport). Spinks Air Associates, LLC, constructed
three hangar facilities, collectively consisting of 49,301 square feet, on the east side of Spinks Airport.
On July 19, 2005, (M&C C-20855) City Council approved an unimproved ground lease, CSC No. 34065,
with Darrell Clendenen with Spinks West Side Associates, LLC, which resulted in the construction of one
18,420 square foot hangar facility on the west side of Spinks Airport.
On March 4, 2008, (M&C C-22703) City Council approved an unimproved ground lease, CSC No. 36733,
with Darrell Clendenen with Spinks East Side Executive Hangars, LLC, which resulted in the construction
of two executive hangar facilities, collectively consisting of 54,600 square feet, on the east side of Spinks
Airport.
Logname: 55FWS 3LEASETERM CLENDENEN Page 1 of 3
Mr. Clendenen recently approached the City expressing his desire to terminate all of his Lease
Agreements. Mr. Clendenen asked if the City would be interested in purchasing the leasehold interests in
these properties. Recognizing the good condition and value that the hangar facilities possess, the
Aviation Department had the leasehold interests appraised to determine the appropriate value. Based on
the appraised value, the Aviation Department and Mr. Clendenen have tentatively agreed on a purchase
price of$4,400,000.00 for all three of the aforementioned leasehold interests, contingent on City Council
approval.
The net profit received from leasing these facilities will be approximately $327,600.00 annually, or
$27,300.00 per month. The annual net income will surpass the overall cost of the facilities in year 12.
These projected revenues are based in accordance with the Aviation Department's Schedule of Rates and
Charges. At present, all facilities are fully occupied and a waiting list has been established.
Spinks Airport is currently not financially self-sufficient and operates at a net deficit of approximately
$320,000.00 annually. It is being subsidized through Meacham Airport's revenue. With the acquisition of
these hangar facilities, revenue will increase and, in turn, bridge the budget gap for Spinks Airport. The
Federal Aviation Administration requires public use airports to try to be as self-sustaining as possible and
is documented through Grant Assurances. In particular, Grant Assurance No. 24 states, "Airport will
maintain a fee and rental structure for the facilities and services at the airport which will make the airport
as self-sustaining as possible."
On September 13, 2016, City Council (Ordinance 22394-09-2016) approved the Municipal Airports Capital
Improvement Plan for Fiscal Year 2016 - 2017 which included a project to acquire hangar leasehold
interest in the amount of$1,600,000.00. The Aviation Department would like to amend the plan to
increase the amount appropriated for this project by $2,800,000.00 for a total project cost of
$4,400,000.00. This increase will allow for the Aviation Department to purchase additional hangars.
Staff recommends approval to terminate the Ground Lease Agreements and approve the payment to
Spinks Air Associates, LLC, Spinks West Side Associates, LLC, and Spinks East Side Executive Hangars,
Inc. to purchase leasehold interest.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations and adoption of the
attached appropriation ordinance, funds will be available in the current capital budget, as appropriated, of
the Airports Gas Lease Project Fund. The Aviation Department is responsible for the collection and
deposit of funds due to the City under this Agreement, if approved.
FUND IDENTIFIERS (FIDs):
TO
Fund Department ccoun Project Program ctivity Budget Reference # �71
ID ID Year Chartfield 2
FROM
Fund Department ccoun Project Program ctivity Budget Reference # moun
ID ID Year Chartfield 2
CERTIFICATIONS:
Submitted for City Manager's Office by: Fernando Costa (6122)
Logname: 55FWS 3LEASETERM CLENDENEN Page 2 of 3
Originating Department Head: Bill Welsted (5402)
Anne-Marie Stowe (5415)
Additional Information Contact: Aaron Barth (5434)
Logname: 55FWS 3LEASETERM CLENDENEN Page 3 of 3