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INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10279
June 4,2019
To the Mayor and Members of the City Council
Page 1 of 2
SUBJECT: AMENDMENT NO. 1 TO ENHANCED COMMUNITY FACILITIES
AGREEMENT WITH AMERICAN AIRLINES, INC., TO EXTEND THE
COMPLETION DEADLINE
On November 10, 2015 the City Council adopted Ordinance No. 21968-11-2015 (M&C G-18605)
designating Tax Abatement Reinvestment Zone No. 91, City of Fort Worth, Texas, and approved
execution of a Tax Abatement Agreement with American Airlines, Inc., (Company), and the
Dallas/Fort Worth International Airport Board for development of a corporate headquarters facility
(Headquarters Project) on property at Dallas-Fort Worth International Airport located within the City
of Fort Worth (City Secretary Contract No. 47341, as amended). Under the Tax Abatement
Agreement, the City agreed to abate a maximum of between 75 to 90 percent of the incremental
real and personal property taxes from the site for a period of one year provided that Company
expended at least $200 million in real property improvements by December 31, 2019 on property
in the reinvestment zone and consider up to $2,000,000.00 in enhanced community facility funds
for public infrastructure projects associated with the Headquarters Project.
As part of the project, the Company anticipated expending approximately $1,650,000.00 for the
construction of road improvements including deceleration lanes, turn lanes, signaling, sidewalks
and street light improvements on Trinity Boulevard, American Boulevard, US Highway 360
Frontage Road (Public Infrastructure). On June 13, 2017, the City Council authorized execution of
an Enhanced Community Facilities Agreement (ECFA) (M&C C-28274) under which the City would
reimburse Company up to $950,000.00 of construction costs.
The Company proposed to expand the scope of the Public Infrastructure project to include widened
roadways and turn lanes on Trinity Boulevard, US Highway 360 Frontage Road, and American
Blvd. to accommodate the planned additional employee traffic at a total approximate cost of
$7,000,000.00. On June 12, 2018, by M&C C-28730, the City Council rescinded M&C C-28274 to
cancel the 2017 ECFA that was never executed and authorized execution of a new ECFA with City
Participation in an amount not to exceed $1,700,000.00.
After further design and discussions with the Company, City Council rescinded M&C C-28730 and
entered into a new agreement (M&C C-28898) increasing the City's participation in the Public
Infrastructure project to $2,000,000.00 representing the entire commitment in the original tax
abatement agreement. The M&C authorized execution of an Advance Funding Agreement (AFA)
between the City and the State of Texas, acting through Texas Department of Transportation,
(TxDOT) for Regional Toll Revenue (RTR) for the public infrastructure improvements along Trinity
Boulevard, American Boulevard and US Highway 360 Frontage Road. The AFA would have a
project amount not to exceed $7,000,000.00, which would provide the City with RTR funds not to
exceed $5,600,000.00, with a twenty percent local match requirement not to exceed $1,400,000.00.
The M&C also authorized the execution of one or more ECFAs with the Company consisting of the
RTR funds as well as Non-RTR Funds comprised of ECFA funds and Transportation Impact Fee
funds in an amount not to exceed $2,000,000.00 for the Public Infrastructure.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10279
June 4,2019
To the Mayor and Members of the City Council
Page 2 of 2
SUBJECT: AMENDMENT NO. 1 TO ENHANCED COMMUNITY FACILITIES
AGREEMENT WITH AMERICAN AIRLINES, INC., TO EXTEND THE
COMPLETION DEADLINE
The Company is responsible for all costs exceeding the RTR funds received by the City from
TxDOT under the AFA and the City's participation of Non-RTR funds. As a part of the ECFA, the
Company was not authorized to proceed to construction on the Trinity Boulevard improvements
until the AFA was executed. Under the agreement, the Public Infrastructure would still need to be
completed by December 31, 2019, subject to extensions due to delays by weather, force majeure,
and City and other governmental changes or delays in review procedure, approvals, or inspections.
If the Public Infrastructure was not completed by then, Company would be in default under the
ECFA.
On April 29, 2019, the Company informed the City that since the Texas Transportation Commission
approval of TxDot funding was delayed until January 31, 2019 that it was not feasible for the
Company to mobilize their construction contractor as originally planned. Due to this delay, the
Company is requesting an extension to the deadline of the completion of the ECFA improvements
to July 31, 2020 under the force majeure provision of the ECFA. Since the ECFA improvements
improvementshe Tax Abatement and Economic Development
Program Agreement, Company is requesting a force majeure extension under those agreements
as well for completion of the required public improvements to July 31, 2020.
All other requirements contained in the Agreement would be unaltered by the proposed
amendment. Staff will place an M&C for City Council consideration on the June 18, 2019 agenda,
recommending amendment of the Agreements as outlined above.
If you have any questions concerning this information, please contact Robert Sturns, Economic
Development Director at 817-392-2663 or robert.sturns@fortworthtexas.gov.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS