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Home My WebLink AboutOrdinance 20038-01-2012Ordinance No.20038 -01 -2012 AN ORDINANCE INCREASING THE ESTIMATED RECEIPTS AND APPROPRIATIONS IN THE AIRPORTS GAS LEASE PROJECT FUND IN THE AMOUNT OF $600,000.00, FROM AVAILABLE FUNDS, FOR THE PURPOSE OF FUNDING A CONSTRUCTION LOAN AGREEMENT PURSUANT TO A CHAPTER 380 ECONOMIC DEVELOPMENT AGREEMENT WITH FWS REALITY, LTD; 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 2011 -2012 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 $600,000.00, from available funds, for the purpose of funding a construction loan agreement pursuant to a Chapter 380 economic development agreement with FWS Reality, Ltd. 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. 19911 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in which instance said conflicting provisions of said prior ordinances and appropriations are hereby expressly repealed.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: & a'--t�VAA - Assistant City Attorney ADOPTED AND EFFECTIVE: January 10, 2012 City of Fort Worth, Texas Mayor and Council Communication DATE: Tuesday, January 10, 2012 LOG NAME: 55FWS NWTHREE REFERENCE NO.: * *C -25389 SUBJECT: Authorize Execution of a Ground Lease Agreement with Mandatory Improvements with FWS Realty, Ltd., for 17,600 Square Feet of Ground Space Known as Lease Site NW -3, a Right of First Refusal on 31,327 Square Feet of Ground Space Known as Option D, a Construction Loan Agreement and Advance Promissory Note in the Amount of $600,000.00 at Fort Worth Spinks Airport, Adopt Appropriation Ordinances and Adopt Resolution Related to Payment of Associated Legal Fees (COUNCIL DISTRICT 8) RECOMMENDATION: It is recommended that the City Council: 1. Authorize execution of a Ground Lease Agreement with Mandatory Improvements with FWS Realty, Ltd., for 17,600 square feet of ground space known as Lease Site NW -3; 2. Authorize execution of a Right of First Refusal on 31,327 square feet of ground space known as Option D at Fort Worth Spinks Airport; 3. Authorize execution of a Construction Loan Agreement and Advance Promissory Note in the amount of $600,000.00 to stimulate and encourage business development on Lease Site NW -3; 4. Authorize use of revenue derived from mineral leases on City -owned airports in the amount of $600,000.00 for the construction loan to FWS Realty, Ltd; 5. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the amount of $600,000.00 in the Airports Gas Lease Project Fund from available funds; 6. Authorize transfer of funds from the Airports Gas Lease Project Fund to the Municipal Airports Fund in the amount of $600,000.00; 7. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Municipal Airports Fund in the amount of $606,082.61, from available funds; and 8. Adopt the attached Resoltuion increasing the maximum amount by $6,082.61 to be paid to the law firm of Kelly, Hart & Hallman, P.C., for legal services related to the Loan Agreement and Promissory Note which a portion of the costs are subject to reimbursement by FWS Realty, Ltd. under the proposed Ground Lease Agreement. DISCUSSION: Staff has received a request from FWS Realty, Ltd., to lease approximately 17,600 square feet of ground Logname: 55FWS NWTHREE Page 1 of 3 space on the west side of Spinks Airport to construct a 14,000 square foot hangar. FWS Realty, Ltd. has also requested a Right of First Refusal (ROFR) on 31,327 square feet of ground space for future hangar development. To aid in the development of the mandatory improvements and as an economic incentive to stimulate and encourage business development on Lease Site NW -3, FWS Realty, Ltd., has been offered and has accepted a construction loan in the amount of $600,000.00. As recommended by the City's 2010 Comprehensive Plan, adopted by the City Council pursuant to Ordinance No. 19044 -02 -2010 and in accordance with Resolution No. 3716 -03 -2009, the City has established an economic development Program pursuant to which the City will, on a case -by -case basis, offer economic development incentives authorized by Chapter 380 of the Texas Local Government Code that include monetary loans and grants of public money to businesses and entities that the City determines will promote state or local economic development and stimulate business and commercial activity in the City in return for verifiable commitments from such businesses or entities. By the terms identified in the Advance Promissory Note, the interest rate will be the current 10 year U.S. Treasury Bill rate plus 1 percent and will reset every 10 years. The loan will be repaid using an amortization schedule of 20 years with payments of principal and interest made in equal monthly amounts. The loan repayment schedule will begin on the first day of the month following the Occupancy Date. Construction of the 14,000 square foot hangar shall begin within six months following the later of (a) receipt of written Federal Aviation Administration (FAA) Airspace Study approval on the design of same, (b) receipt of the City of Fort Worth Aviation Department's approval of plans as set forth in the lease and (c) issuance of a building permit with the completion and issuance of the Certificate of Occupancy to be no later than 12 months after construction commences. Rental rates are to begin on the date the first certificate of occupancy is issued. The initial term for Lease Site NW -3 and the ROFR shall commence on the date of its execution and expire on September 1, 2041, with two five -year options to renew. At a ground rate of $0.27 per square foot per year, Lease Site NW -3 will generate estimated revenue of $4,752.00 per year or $396.00 per month. At a rate of $0.01 per square foot per year, the ROM will generate estimated revenue of $313.27 per year or $26.11 per month. Rental rates shall be subject to an increase on October 1 of any given year to reflect the upward percentage change, if any, in the Consumer Price Index for the period since the last adjustment, as described in the Schedule of Rates and Charges in effect at the time. All Agreement terms will be in accordance with established City and Aviation Department policies. By adoption of M &C G -16923 and Resolution No. 3882 -05 -2010, the City Council approved Andrew J. Rogers and the law firm Kelly, Hart and Hallman as legal counsel to assist the City of Fort Worth in drafting the necessary commercial construction loan documentation and authorized payment to Andrew J. Rogers and the law firm Kelly, Hart and Hallman for their services in an amount not to exceed $10,000.00. To date, Andrew J. Rogers and the law firm Kelly, Hart and Hallman have billed the City $16,082.61 for their services and have been paid that amount. This action both approves the increase of the maximum amount to be paid and ratifies the payment of $6,082.61. The Ground Lease Agreement provides for partial reimbursement by FWS Realty, Ltd., of reasonable outside counsel fees, in an amount up to $12,500.00, related to the preparation and negotiation of the NW3 and related leases and the Chapter 380 Construction Loan Agreement and Advance Promissory Note. The property is located in COUNCIL DISTRICT 8. FISCAL INFORMATION / CERTIFICATION: Logname: 55FWS NWTHREE Page 2 of 3 The Financial Management Services Director certifies upon approval of the above recommendations and adoption of the attached appropriation ordinances, 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. FUND CENTERS: TO Fund /Account/Centers 1) PE40 491052 0551201 2) PE40 491472 0551201 5) P240 446200 551929990100 5)P240 538040 551929990100 6)PE40 476240 0551002 7) PE40 539120 0551002 7) PE40 476240 0551002 CERTIFICATIONS: Submitted for City Manager's Office by: Oriainatinq Department Head: Additional Information Contact: Fernando Costa (6122) Kent Penney (5403) Jonnie Huitt (5409) $600.000.00 $600.000.00 $6,082.61 Logname: 55FWS NWTHREE Page 3 of 3 FROM Fund /Account/Centers $4,752.00 7) P240 538040 551929990100 313.27 7) PE40 539120 0551002 $600.000.00 9) PE40 539120 0551201 $600.000.00 $600.000.00 $600.000.00 $600.000.00 Submitted for City Manager's Office by: Oriainatinq Department Head: Additional Information Contact: Fernando Costa (6122) Kent Penney (5403) Jonnie Huitt (5409) $600.000.00 $600.000.00 $6,082.61 Logname: 55FWS NWTHREE Page 3 of 3