HomeMy WebLinkAboutResolution 5070-03-2019A Resolution
NO. 5070-03-2019
WHEREAS, as of December 21, 1998 the City of Fort Worth ("Fort Worth"), the
City of Dallas ("Dallas"), the City of Irving, Texas ("Irving"), and the Dallas/Fort Worth
International Airport Board ("DFW") each entered into that certain Interlocal Agreement on
file as City Secretary Contract No. 24539, as amended by that certain First Amendment to
Interlocal Agreement on file as City Secretary Contract No. 24539-Al executed by and
between Fort Worth, Dallas, Irving and DFW as of April 2, 2009 (collectively, the
"Interlocal Agreement") pursuant to which Irving agreed to share with Fort Worth and
Dallas certain tax revenues received by Irving from economic development projects at any
portion of Dallas/Fort Worth International Airport located within the corporate limits of
Irving (the "Affected Airport Property"); and
WHEREAS, Section III of the Interlocal Agreement provides that Irving will not
grant any tax abatement agreements or create any tax increment reinvestment zones or
public improvement districts, or grant or create any similar types of incentive plans, without
the written consent of Fort Worth, Dallas, and DFW, including economic development
program grants authorized by Chapter 380 of the Texas Local Government Code ("380
Grants") that are calculated on the basis of tax revenues which fall within the definition of
"Increased Revenues" under Section II of the Interlocal Agreement; and
WHEREAS, as of February 22, 2001 Irving and Aviall Services, Inc. ("Aviall")
entered into a 10-year Economic Incentive Agreement pursuant to which Aviall agreed to
construct an office/warehouse at least 280,000 square feet in size and to provide at least 340
new jobs at a location on the Affected Airport Property in return for Irving's payment of
certain economic development program grants equal to Aviall's ad valorem personal
property taxes paid to Irving on items that would qualify as "Freeport Goods" under Article
VIII, Section 1-j of the Texas Constitution (the "Irving Incentive Agreement"); and
WHEREAS, the Irving Incentive Agreement was approved by the City Council
pursuant to Resolution No. 2710; and
WHEREAS, the term of the Irving Incentive Agreement was extended for an
additional 10-year term in return for Aviall's expansion of its facility by approximately
250,000 square feet and construction of a new, approximately — 75,000 square foot facility
(collectively, the "Aviall Facilities") pursuant to that certain Economic Incentive Agreement
Renewal dated as of September 7, 2006 (the "First Amendment") in which the City of Fort
Worth, City of Dallas and DFW did not object; and
WHEREAS, a second amendment was made to the Irving Incentive Agreement on
February 6, 2014 to amend the definition of "Freeport Goods" to reflect the amended
Constitutional provision which was approved by Fort Worth, Dallas, and DFW in accordance
with the Interlocal Agreement (the "Second Amendment") and was approved by Fort Worth
in Resolution No. 4305-03-2014; and
WHEREAS, Now the City of Irving and Aviall request Fort Worth, Dallas and DFW
to consent to the attached Third Amendment to the Irving Incentive Agreement (the "Third
Amendment") in order to add four (4) definitions to Article I of the Economic Incentive
Agreement for "Affiliate," "Company,", "Event of Force Majeure" and "Premises" and to
amend the Term of the Agreement to extend for an additional ten (10) years until 2031.
Aviall, in turn, is committed to maintaining the employment of at least nine hundred and
fifty-one (951) company or affiliate jobs until December 31, 2023; and the addition of at
least one hundred (100) new company or affiliate jobs to achieve a minimum one thousand
fifty-one (1,051) jobs by January 1, 2024, and continuously thereafter maintain at least one
thousand fifty-one (1,051) jobs until December 31, 2031.
WHEREAS, the Fort Worth City Council is willing to approve the Third Amendment
solely in accordance with the terms and conditions of this Resolution;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS, THAT:
1. The Third Amendment attached hereto as Exhibit "A" is hereby approved, subject to the
following:
That the only revenues defined in the Interlocal Agreement as "Increased Revenues"
that Fort Worth agrees to exempt from the tax sharing obligations of the Interlocal
Agreement are those ad valorem tax revenues generated from tangible personal
property located in the Aviall Facilities which are used to calculate the amount of a
380 Grant paid by Irving to Aviall pursuant to and in accordance with the Irving
Incentive Agreement, as amended by the First Amendment, the Second Amendment
and this Third Amendment (the "Exempted Revenues").
2 That notwithstanding anything to the contrary in Section III of the Irving Incentive
Agreement, if Aviall applies for additional extensions as authorized under such
Section and any such additional extension is granted by Irving, such extension shall
not be deemed to be approved by Fort Worth, and any Increased Revenues used by
Irving to calculate the amount of any 380 Grants during such extended terms shall not
be exempted from the tax sharing requirements of the Interlocal Agreement, unless
the Fort Worth City Council, the Dallas City Council and DFW each approve such
extensions by resolution.
1.3 That if the Irving Incentive Agreement, as amended by the First Amendment and
Second Amendment and this Third Amendent, is further amended to extend the term
or number of 380 Grants payable thereunder, or is otherwise amended or restated, or
if any other agreement between Irving and Aviall is executed, so that the amount of
the 380 Grants payable thereunder calculated on the basis of the revenues that are
deemed "Increased Revenues" under the Interlocal Agreement are greater than those
anticipated in the Irving Incentive Agreement, as amended by the First Amendment,
Second Amendment and this Third Amendment, such additional "Increased
1.4Revenues: will not be exempted from the tax sharing obligations of the Interlocal
Agreement unless the Fort Worth City Council, the Dallas City Council and DFW
each approve such amendment or other agreement by resolution.
Resolution No. 5070-03-2019
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1.5 That approval of the Third Amendment is conditioned on Irving's agreement that if
Aviall pays Irving, as liquidated damages on account of default under Section V of
the Irving Incentive Agreement, or otherwise reimburses Irving all or any portion of
any 380 Grant(s) paid pursuant to the Irving Incentive Agreement, plus any interest
thereon, Irving will, within thirty (30) calendar days following receipt thereof, pay
Fort Worth a percentage of all such sums, calculated in accordance with Section 11 of
the Interlocal Agreement.
1.6 That if Irving withholds any Exempted Revenues from its payment to Fort Worth of
revenues subject to the tax sharing obligations of the Interlocal Agreement, Irving
will, if requested by Fort Worth, provide reasonably adequate documentation that
allows Fort Worth to verify that the amounts withheld as Exempted Revenues were
actually paid by Irving to Aviall as a 380 Grant under the Irving Incentive
Agreements.
1.7 That approval of the Third Amendment attached hereto is approved only for
purposes of Fort Worth's consent to exempt any affected Exempted Revenues from
the tax sharing obligations of the Interlocal Agreement, and that Fort Worth does not
ratify or approve any particular provision of the Third Amendment for any other
purpose.
1.8 That, as a condition precedent to the effectiveness of this Resolution the Third
Amendment attached hereto must also be approved by resolution of the Dallas City
Council on substantially the same conditions as those set forth herein, and by DFW.
2. Subject to the conditions set forth in Section I above, this Resolution shall take
effect on the date of its adoption.
Adopted this 26th day of March 2019.
...........
ATTEST: ...
By — -------------
Mary Kayser. Cit Secretary ........ ....
Resolution No. 5070-03-2019
Page 3
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 3/26/2019 - Resolution No. 6070-03-2019
DATE: Tuesday, March 26, 2019 REFERENCE NO.: **G-19516
LOG NAME: 55AVIALL AMENDMENT3 CH380 AGRMT
SUBJECT:
Adopt Resolution Approving Execution of Third Amendment to Economic Incentive Agreement between
City of Irving and Aviall Services, Inc., for Purposes of Tax Revenue Sharing Obligations at Dallas/Fort
Worth Airport (NO COUNCIL DISTRICT)
RECOMMENDATION:
It is recommended that the City Council adopt the attached Resolution approving the Third Amendment to
Economic Development Incentive Agreement between the City of Irving and Aviall Services, Inc., for
purposes of the City of Irving's tax revenue sharing obligations at Dallas/Fort Worth Airport.
DISCUSSION:
On December 21, 1998, the City of Fort Worth executed an Interlocal Agreement with the Dallas/Fort
Worth (D/FW) Airport Board (the Board), the City of Dallas and the City of Irving (City Secretary Contract
No. 24539, as amended by City Secretary Contract No. 24539-A1) (Interlocal Agreement). This Interlocal
Agreement provides that specified tax revenues attributable to property located in the City of Irving's
corporate limits within the fence at D/FW Airport (the Irving Airport Property) will be shared between the
City of Irving (1/3) and the Cities of Fort Worth and Dallas (2/3 collectively, with that amount divided
between the City of Fort Worth [4/11] and the City of Dallas [7/11]). The Interlocal Agreement prohibits the
City of Irving from granting tax abatements and other incentives, including economic development grants
calculated on the basis of tax receipts that would impact the amount of taxes payable to the Cities of Fort
Worth and Dallas under the Interlocal Agreement, without approval by the Cities of Fort Worth, Dallas and
the D/FW Board.
On February 27, 2001 (M&C G-13171), the City Council adopted Resolution No. 2710 consenting to an
Economic Incentive Agreement between the City of Irving, Texas and Aviall Services, Inc. (Aviall), a
Boeing subsidiary, in order to relocate the company's headquarters to Dallas/Fort Worth International
Airport (DFW Airport) (Irving Incentive Agreement). In 2006, this Irving Incentive Agreement was
amended to renew the term for an additional ten years, which would end in 2021.
On March 18, 2014 (M&C G-18144), the City Council adopted Resolution No. 4305-03-2014 approving
execution of a second amendment to the Irving Incentive Agreement between the City of Irving and Aviall
in order to change the definition of "Freeport Goods".
This third amendment will add four definitions to Article I of the Irving Incentive Agreement and extend the
term of their lease of office and warehouse space, totaling six hundred five thousand (605,000) square
feet, until 2031. Aviall has committed to maintaining the employment of at least nine hundred ,and fifty one
(951) company or affiliate jobs until December 31, 2023; and the addition of at least one hundred (100)
new company or affiliate jobs to achieve a minimum one thousand fifty one (1,051) jobs by January 1,
2024, and continuously thereafter maintain at least one thousand fifty one (1,051) jobs until December 31,
2031.
Lon e: 55AVIALL AMENDMENT3 CH380 AGRMT Page 1 of
Aviall is the world's largest diversified aircraft parts distributor delivering airplane parts and repair services.
The company manages inventory for the global aerospace and defense industry and holds significant
inventory at its facility in Irving.
The City of Irving approved this agreement at their February 14, 2019 City Council Meeting and the DFW
Airport Board approved this amendment at their March 7, 2019 board meeting.
This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that this action will have no material effect on City funds.
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CERTIFICATIONS:
Submitted for Citv Manaaer's Office bv:
Oriainatina Department Head:
Additional Information Contact:
Fernando Costa (6122)
Bill Welstead (5402)
Dakota Shaw (5407)
Logname: 55AVIALL AMENDMENT3 CH380 AGRMT
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