HomeMy WebLinkAboutResolution 4056-01-2012A Resolution
NO. 4056 -01 -2012
TO INCREASE THE MAXIMUM AMOUNT TO BE PAID TO
ANDREW J. ROGERS AND THE LAW FIRM KELLY, HART AND
HALLMAN P.C. AS OUTSIDE LEGAL COUSEL TO ADVISE THE CITY
ON LEGAL ISSUES RELATED TO A COMMERCIAL CONSTRUCTION
LOAN TO FWS REALTY, LTD AND RATIFY PAYMENT OF SAME
WHEREAS, the City of Fort Worth would extend a commercial construction loan
to FWS Realty, Ltd. for the development of an approximately 14,420 square foot hangar
on 17,600 feet of real property located at Fort Worth Spinks Airport; and
WHEREAS, a specific need has arisen to address legal issues involved with a
commercial construction loan; and
WHEREAS, the City Council approved compensation not to exceed $10,000.00 on
May 18, 2010; and
WHEREAS, it is necessary to increase the amount authorized for compensation by
$6,082.61 to pay the final invoice from Kelly, Hart and Hallman, P.C.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS:
That the maximum amount authorized to be paid to Andrew J. Rogers and the law
firm Kelly, Hart and Hallman, P.C. as outside counsel pursuant to Section 3, Chapter VI
of the City Charter to assist the City Attorney on legal matters related to the commercial
construction loan to FWS Realty, Ltd. is hereby increased by $6,082.61 to an amount not
to exceed $16,082.61 and payment of same is hereby ratified.
ADOPTED this 10th day of January, 2012.
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Ronald P. Gonzales As ant City Secretary *% °° Q,
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FORM WORT
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 1/10/2012 - Ordinance Nos. 20037 -01- 2012 & 20038 -01
2012 and Resolution No. 4056 -01 -2012
DATE: Tuesda y, January 10, 2012 REFERENCE NO.: * *C- 25389
LOG NAME: 55FWS NWTHREE
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 Pagel 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 ROM 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:
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 bv:
Originating Department Head:
Additional Information Contact:
Logname: 55FWS NWTHREE
Fernando Costa (6122)
Kent Penney (5403)
Jonnie Huitt (5409)
$600,000.00
$600,000.00
$6,082.61
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