HomeMy WebLinkAboutContract 28552 CITY SECRE�°qRY
04-18-03P03 :44 RCVD CONI ACT .
AMENDMENT NO. 1 TO
CITY SECRETARY CONTRACT NO. 20061
LEASE AGREEMENT BETWEEN
CITY OF FORT WORTH AND ALLIANCE AVIATION INVESTORS,L.P.
FOR PARCEL NO. 3 AND FIRE STATION TRACT
AT FORT WORTH ALLIANCE AIRPORT
J
.� This AMENDMENT NO. 1 TO CITY SECRETARY CONTRACT NO. 20061,
("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
r� AVIATION INVESTORS, L.P. ("Lessee"), a Texas corporation, acting by and through
Hillwood Operating, L.P., Lessee's general partner, -by and through Hillwood Development
Cvef fwetien, Hillwood Operating, L.P.'s general partner, by and through M. Thomas Mason, its
duly authorized Vice President.
The following introductory provisions are true and correct and form the basis of this
Amendment.
A. On or about November 23, 1993, the City and Lessee entered into City Secretary
Contract No. 20061 (the "Lease"), a lease of real property at Fort Worth All Airport
generally known as Parcel No. 3 and the Fire Station Tract, as more specifically defined and
depicted in the Lease.
B. The term of the Lease is thirty(30) years. Lessee wishes to extend the term by an
additional ten (10) years. Article XIV, Section 17 of the City's Minimum Standards for Fixed
Base Operators and Other Airport Tenants, a public document adopted by the Fort Worth City
Council on June 16, 1992, limits the term of any lease of property on a City-owned airport to a
maximum of thirty (30) years, with an option or options to renew the lease for up to ten (10)
additional years. Therefore, Lessee can only be granted by amending the Lease to grant Lessee
an option to renew the Lease for a ten(10) year term following expiration of the initial thirty(3 0)
year term of the Lease.
NOW,.THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the City and Lessee agree as follows:
1. Article 1 (Term) of the Lease is hereby amended by deleting Section. 1.1 in its entirety
and replacing it with the following:
1.1. The term of this lease shall be for a period of thirty (30) years beginning
on September 27, 1995 (which is the date on which"the City approved
plans and specifications and issued a building permit 1
Improvements and is the "Effective Date" as used in this l�, nMI.e i�C��S�
�J FI , 1.
U11y17 )EC ! PV
Amendment No. 1 to City Secretary Contract No.20061
Page 1
sooner terminated in accordance with the provisions hereof ("Initial
Tern!").
1.1.1 If Lessee performs and abides by all provisions and conditions of this
lease, then upon expiration of the Initial Term Lessee will have an option
to renew this lease for an additional term of ten (10) years ("Renewal
Term"). Lessee may exercise this option by providing written notice of
its intent to renew this lease for the Renewal Term not less than one (1)
year prior to the expiration of the Initial Term. If Lessee exercises its
option to renew this lease for the Renewal Term, all terms and conditions
of this lease shall continue in full force and effect during the Renewal
Term.
1.1.2. Not more than three (3) years prior to expiration of the Renewal Term,
Lessee may notify the City in writing of a desire to renew this Lease for an
additional ten (10) year term (the "Subsequent Renewal Request"). The
City, in the City's sole discretion, may (i) grant the Renewal Request,
either by entering into a new lease or, if.allowed by then-current laws
and/or City regulations, by amending this lease, or (ii) deny the Renewal
Request, provided that the basis for such denial is not unreasonable under
the circumstances.
2. Unless otherwise specifically indicated, references in the Lease to the "term"of the Lease
shall,without limitation, include the Initial Term and the Renewal Term.
3. All terms in this Amendment that are capitalized but not defined shall have the,meanings
assigned to them in the Lease.
4. This .Amendment contains the final written expression of the City and Lessee with
respect to the subject matter hereof. This Amendment shall be effective upon execution by both
the City and Lessee and may be executed in multiples.
EXECUTED as of the day of .,)0y1 UCV J, . , 2003:
CITY OF FORT WORTH: ATTEST:
By:I M a� B
Marc Ott U Gloria Pearson
Assistant City Manager City Secretary
61_F 2 AI I
Amendment No. 1 to City Secretary Contract No.20061
Page 2
APPROVED AS TO FORM AND LEGALITY:
By:
-_L ��/?�l/ _
Peter Vaky
Assistant City Attorney
M&C No. C-18972 02-19-02
ALLIANCE AVIATION INVESTORS, L.P.,
a Texas limited partnership
By: Hillwood Operating, L.P.,
a Texas limited partnership, its general partner t
C3i�'L ic'Ll'G✓
11M,.
1 M,.-cd l 1&b.I Lj c r
By: Hillwood Develop Coffwatieii, C c d-YiP6 njt
a Texas c its general partner
By: �7
Name:
Title: M. THOMAS-1 I ON
VICE PRESIDENT
Amendment No. 1 to'City Secretary Contract No.20061
Page 3
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 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 f"3 day
2003.
HETTIE LANE
Notary Public,State of Texas
tvtyy Commission Expires Notary Public in and for the State of Texas
July 26,2 003
E J
y
C
Q STATE OF TEXAS §
9 COUNTY OF bo 1 §
ID PA
This instrument was acknowledged before me on Tariocir . c;L--_,/21003, by
-_ i 6 rmi5 muSo,\ , v YCe of Hillwood Development C,9$emfie6, a Texas
eerparatien, on behalf of said caxpor-atien, in its capacity as general partner of Hillwood
Operating, L.P., a Texas limited partnership, on behalf of said limited partnership, in its capacity
as general partner of Alliance Aviation Investors, L.P., a Texas limited partnership, on behalf of
said limited partnership.
�N s Notary Public, S to of Texas
00f MW LDECEMBER 810q'EXPIREB:
of 16,2004
Amendment No. 1 to City Secretary Contract No.20061
City of Fort Worth, .Texas
"avow a"d cou"Cit commu"Icatio"
DATE REFERENCE NUMBER LOG NAME PAGE
2/19/02 C_18972 55EXTENSION i 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 cou"Cil COMI"U"icatio"
DATE REFERENCE NUMBER LOG NAME PAGE
2/19/02 C-1 8972 755EXTENSION 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