HomeMy WebLinkAboutContract 28547 CITY SECRETARY
04-18-03P03 :23 RCVD CONTRACT No.
AMENDMENT NO. 3 TO
CITY SECRETARY CONTRACT NO. 20060
AGREEMENT FOR THE MANAGEMENT, OPERATION AND MAINTENANCE OF
FORT WORTH ALLIANCE AIRPORT
This AMENDMENT NO. 3 TO CITY SECRETARY CONTRACT NO. 20060;
AGREEMENT FOR THE MANAGEMENT, OPERATION AND MAINTENANCE OF
FORT WORTH ALLIANCE AIRPORT ("Amendment") is entered into by and between the
CITY OF FORT WORTH, TEXAS (the "City"), a home rule municipal corporation organized
under the laws of the State of Texas and acting by and through Marc Ott, its duly authorized
Assistant City Manager, and ALLIANCE AIR MANAGEMENT, LTD. ("Operator"), a
Texas limited partnership acting by and through Timothy D. Ward, the President of Alliance Air
Services, Inc., a Texas corporation and Operator's sole general partner.
The following introductory provisions are true and correct and form the basis of this
Amendment.
A. On or about December 15, 1993, the City and Alliance Air Services, Inc. entered
into City Secretary Contract ("CSC") No. 20060, an agreement for the management, operation
and maintenance of Fort Worth Alliance Airport, which was subsequently amended pursuant to
CSC Nos. 20994 and 21.756 (collectively,the"Agreement").
B. On or about April 24, 1995 Alliance Air Services, Inc. transferred, assigned and
conveyed all of its right,title and interest in and to the Agreement to Operator.
C. The City and Operator wish to extend the term of the Agreement and to revise the
Operator's revenue sharing obligations under the Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the City and Operator agree as follows:
1. Section 1.1 of the Agreement(Term) is hereby amended to state the following:
1.1. The term of this Agreement shall be for a thirty (30) year period
commencing on January 1, 1994 and expiring on December 31,2023. Not
more than three(3) years prior to expiration of this Agreement, Operator
may notify the City in writing of a desire to renew this Agreement for an
additional ten (10) year term (the "Renewal Request"). The City, in the
City's sole discretion, may(i) grant the Renewal Request or (ii) deny the
Renewal Request, provided that the basis for such denial, is not
unreasonable under the circumstances.
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Amendment No.3 to City Secretary Contract No.20060
Page 1
2. Section 5.9 of the Agreement (Operator's Revenue Sharing) is hereby amended to state
the following:
5.9. Operator's Revenue Sharing.
(1) From January 1, 1994 through December 31, 1998, the City shall
retain the following percentages of Airport Revenue: zero percent (0%) of
the first $500,000; fifteen percent (15%) of the amount in excess of
$500,000 but less than $1,500,000.00; and twenty and seven-tenths
percent (20.7%) of the amount in excess of $1,500,000.00. During that
same period, as total compensation for all services and obligations
performed by Operator under this Agreement, Operator shall receive the
following percentages of Airport Revenue: one hundred percent(100%) of
the first $500,000; eighty five percent (85%) of the amount in excess of
$500,000 but less than $1,500,000.00; and seventy-nine and three-tenths
percent (79.3%) of the amount in excess of$1,500,000.00.
(2) From January 1, 1999 through December 31, 2008, the City shall
retain the following percentages of Airport Revenue: fifteen percent(15%)
of the first $1,500,000.00 and twenty and seven-tenths percent (20.7%) of
the amount in excess of$1,500,000.00. During that same period, as total
compensation for all services and obligations performed by Operator
under this Agreement, Operator shall receive the following percentages of
Airport Revenue: eighty-five percent (85%) of the first $1,500,000.00 and
seventy-nine and three-tenths (79.3%) of the amount in excess of
$1,500,000.00. .
(3) From January 1, 2008 through December 31, 2013, the City shall
retain twenty percent (20%) of all Airport Revenue and, as total
compensation for all services and obligations performed by Operator
under this Agreement, Operator shall receive eighty percent (80%) of all
Airport Revenue.
(4) From January 1, 2014 until December 31, 2023, and, if Operator
exercises its option to renew this Agreement, during the Renewal Term,
the City shall retain twenty-five percent (25%) of all Airport Revenue and,
as total compensation for all services and obligations performed by
Operator under this Agreement, Operator shall receive seventy-five
percent(75%) of all Airport Revenue.
3. All terms in this Amendment that are capitalized but not defined shall have the meanings
assigned to them in the Agreement.
4. This Amendment contains the final written expression of the City ar H Operator with
respect to the subject matter hereof. This Amendment shall be effective upon etpP fi
parties and may be executed in multiples.
NO SIAM
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Amendment No.3 to City Secretary Contract No.20060
Page 2
EXECUTED as of the � Y da of , 2003:
CITY OF FORT WORTH: ATTES
By: By:
Marc Ott 61oria Pears
Assistant City gager City Secretary
APPROVED AS TO FORM AND LEGALITY:
By:_ / �a
Peter Vaky
Assistant City Attorney
M&CNo.
ALLIANCE AIR MANAGEMENT, ATTEST:
LTD.:
By: Alliance Air Services, Inc.;
a Texas corporation and its
sole general partner:
By: By: �� n'
Tirno y D Ward Name:Wri-Aina Wtarti^
Presi t Title. ftd�n nisi�a Hv� (kss�s �
Amendment No.3 to City Secretary Contract No.20060
Page 3
STATE OF TEXAS §
COUNTY OF TARLZANT §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas, on
this day personally appeared Marc'Ott,known to me to be the person whose name is subscribed to
the foregoing instrument, and acknowledged to me that the same was the act of the City of Fort
Worth and that he executed the same as the act of the City of Fort Worth for the purposes and
consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 1 . day
2003.
„•.ILL/a HETT
r . A A N Oary PubIIC�State of Texas
MAY commission Expires
Jul y 26 2003
Public in and for the State of Texas
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, a Notary Public in and.for the State of Texas, on
this day personally appeared Timothy D. Ward, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that the same was the act of
Alliance Air,Services,Inc. on behalf of Alliance Air Management,Ltd. and that he executed the
same as the act of Alliance Air Services, Inc. and Alliance Air Management, Ltd. for the
purposes and consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this a day
a n U O, V % ,2003.
REM KOLLM9AIN
6�0'F S PUBLIC Not Public in and for the State of Texas
N late ail Tei(aa '
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Amendment No.3 to City Secretary Contract No.20060
C`aty of Fort Worth, Texas
iyDagor and Cou"C141 Communkation
DATE REFERENCE NUMBER LOG NAME PAGE
2/19/02 - C-18972 1 55EXTENSION 1 of 2
SUBJECT AMENDMENT OF CITY SECRETARY CONTRACT NO. 20060, AGREEMENT WITH
ALLIANCE AIR MANAGEMENT, LTD. FOR THE MANAGEMENT, OPERATION, AND
MAINTENANCE OF THE FORT WORTH ALLIANCE AIRPORT AND EXTENSION OF
TERMS OF RELATED FORT WORTH ALLIANCE AIRPORT LEASES
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to amend City Secretary Contract- No. 20060, a Management
Agreement with Alliance Air Management, Ltd. for the management, operation, and maintenance of
the Fort Worth Alliance Airport extending the term and revising the compensation; and
2. Authorize an amendment to City Secretary Contract No. 20061, a Lease Agreement with Alliance
Air Services, Inc. extending the term; and
3. Authorize an amendment to City Secretary.Contract No. 23512, a Ground Lease for Parcels 2 and 5
at Fort Worth Alliance Airport extending the term; and
4. Authorize an amendment to City Secretary Contract No. 23685, a Ground Lease for Parcel 3 at Fort
Worth Alliance Airport extending the term.
DISCUSSION:
On December 15, 1993 (City Secretary Contract No. 20060), a twenty-year Management Agreement
was executed with Alliance Air Management, Ltd. (Contractor) for the management, operation, and
maintenance of the Fort Worth Alliance Airport. On the same date.(City Secretary Contract No. 20061),
a Lease Agreement with Alliance Air Services, Inc. was executed for certain parcels of property on the
eastside of Fort Worth Alliance Airport.
Under the Management Agreement, the Contractor is obligated to operate Fort Worth Alliance Airport
as a public airport while maintaining and repairing all buildings, structures, runways, taxiways, roads,
and any additions or installations and other property of the City located on Fort Worth Alliance Airport at
the Contractor's sole expense.
The Contractor is also responsible for the administration of construction, submittal of federal and state
grant requests, providing aircraft fueling services, all airport marketing, and making daily deposits of all
airport revenues in an account established by the City.
During the first 5 years (1993 to 1998) of the-Agreement, the City received 0% of the first $500,000,
15% of any amount from $500,000 to $1.5 million, and 20.7% of any amount over $1.5 million.
Beginning in 1998, the City began receiving 15% of any revenue up to $1.5 million and 20.7% over$1.5
million. To date, the City has received $768,542 under the Agreement.
City of Fort Worth, Texas
"agor and C,ouncil mmunkat
M�o 1 . ion
DATE REFERENCE NUMBER LOG NAME PAGE
2/19/02 C-18972 55EXTENSION .2 of 2
SUBJECT AMENDMENT OF CITY SECRETARY CONTRACT NO. 20060, AGREEMENT WITH
ALLIANCE AIR MANAGEMENT, LTD. FOR THE MANAGEMENT, OPERATION, AND
MAINTENANCE OF THE FORT WORTH ALLIANCE AIRPORT AND EXTENSION OF
TERMS OF RELATED FORT WORTH ALLIANCE AIRPORT LEASES
The Lease Agreement stipulates that the Lessee (Alliance Air Services, Inc.) has the right to divide the
premises into separately platted portions in order to construct improvements. As those improvements
are constructed, the lease agreement states that a separate lease agreement will be executed for each
portion with a term coinciding with the issuance of the certificate of occupancy for the improvement. To
that end, a separate lease agreement has been executed for Parcels 2 and 5, and one for Parcel 3.
Now in an effort to establish longer term stability and to increase the City's share, the Contractor
requests a 10-year extension with one 10-year option.to renew the Management Agreement as well as
the Lease Agreement and the separate Ground Leases for Parcels 2, 5, and 3.
In exchange for the extension, the City's share of the gross revenue will remain the same until
December 31, 2008, but beginning January 1, 2009 to December 31, 2013, the City will receive 20% of
all revenues. Then, beginning January 1, 2014 to December 31, 2023, the share will increase to 25%
of all revenues.
Under the proposed share agreement, the City will receive an additional $309,288 over the amount in
the current Management Agreement.' If the Management Agreement ended by its term on December
31, 2013, assuming annual revenues increase by 5%, and annual expenses increase by 3%, the City
will reap an estimated $5,326,303 over the life of the Management Agreement. If the proposed
Management Agreement extension is approved, the City will reap an estimated $13,764,699 from the
beginning of the original agreement, an increase of$8,438,366.
Due to the proposed increase in revenue to the City and the benefit of proving longer term stability and
continuity for the management of the Fort Worth Alliance Airport, City staff recommends that the
proposed extension be approved.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that the Finance Department, Revenue Office will be responsible for the
collection and deposit of funds due to the City under all documents referenced herein.
MG:n
Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY
Office by: (to)
PE40 491022 0552003
Mike Groomer 6140
Originating Department Head:
Lisa A.Pyles 5403 (from) APPROVED 02/19/02
Additional Information Contact:
Lisa A.Pyles 5403