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HomeMy WebLinkAboutIR 7748 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7748 0 To the Mayor and Members of the City Council Augmt 3, 1993 0 X Subject: '071 MANAGEMENT OF THE OAK GROVE AREA AT SPDiRS AIRPORT On March 1, 1988 the City Council, by M&C C-10821, approved a management and maintenance services agreement with Staci's Jet Construction, Inc., for the City owned portion of Spinks Airport known as the Oak Grove area. The Oak Grove area constitutes 45 acres and includes seventeen (17) commercial buildings and aircraft hangars with associated ramps,taxiways,tiedowns,roadways, and parking lots. The terms of the agreement were for five (5) years at a lease rate of 25% of gross revenues. On April 4, 1989, the City Council, by M&C C-11552, amended the lease to change the lease rate to 25% of monthly net revenue. The justification for the change in rate was: OrL ■ Several of the buildings required costly modifications to meet City Building Codes, and ■ Some of the buildings required demolition due to their obsolescence, thus reducing the revenue potential of the lease. The lease with Staci's Jet Construction, Inc., expires on August 31, 1993. For the past year the Department of Aviation has thoroughly reviewed and evaluated Staci's operation to determine whether we should continue the lease, or manage the properties in-house. Staffs review indicates that the modifications to buildings to meet City codes did not occur and only one building was demolished. Additionally, any repairs or maintenance work to the Oak Grove area is deducted as expenses from gross revenue. Staci's also deducts over $3,100 a month for administrative expenses. Financially, the City derives little benefit from the Oak Grove area. Total revenues as reported by Staci's over the last four fiscal Years are as follows: 0MCK RECORD ON SECRETARY T. WOR L7FT v Tfft Ta -ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7748 sop), To the Mayor and Members of the City Council August 3, 1993 0 Page 2 of 3 Subject: MANAGEMENT OF THE OAK GROVE AREA AT SpINKS t.]3 AIRPORT FY89 FYN FY91 M2 Total Revenue $126,926 $135,319 $1292142 $142,860 Total Expenses 105,452 108,957 64,414 Net Profit 29,867 20,185 78,446 City's Share 16,163 J =11,444 9,799= 1 19,611 Expenses for the first four months were not reported since the City of Fort Worth's share was based on total revenue instead of net profit. Note: For the first nine months of FY93 StacPs had revenues of$105,614 and expenses of$43,721 for a net profit of $61,894 of which the CiWe she"was$15,474. From a maintenance stand point the condition of the taxilanes and roadways at the Oak Grove area continues to deteriorate and little to no work has been done by Staci's to maintain or improve their condition. Additionally, repairs are charged off to the City as maintenance expenses, thus we pay for a portion of any improvements to the area. The Department of Aviation has received numerous complaints from the Oak Grove area tenants regarding Staci's management and maintenance operations. At least one tenant has relocated because of his inability to get anything done. The Spinks Master Plan recognizes the value of the Oak Grove area and recommends that the City of Fort Worth's Department of Aviation manage the Oak Grove properties. The Aviation staff feels that this is an excellent alternative that will maximize revenue for the City and lead to improvements to the Oak Grove and west side areas. City expenses would increase but will be more than offset by the increases in revenue to the City. The Department of Aviation estimates that the rental income from the Oak Grove area would allow the staff to program repairs to the area over the next four years to bring it to a better condition. The repair work, using projected revenues, would allow the Department to upgrade the Oak Grove area and still reduce the subsidy for Spinks Airport. LOAF-11CM�LRE�CORD CITY CITY SECRETARY ff fT WORTH, Tu. -ISSUED BY THE CITY MANAGER S INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7748 ,0i To the Mayor and Members of the City Council August 8, 1993 Page 3 of 3 x Subject: MANAGEMENT OF TM OAK GROVE AREA AT SpEglo 1073 AIRPORT The Aviation staff anticipates maintaining the current occupancy level of 100%in the Oak Grove area. More importantly, there is a waiting list for hangar space at Spinks. There are several options the City Council can consider regarding the management of the Oak Grove area of Spinks Airport. The options are as follows: 1) Lease all or a portion of the Oak Grove area at the City Council approved rental rate, and 2) Lease the area for a percentage of gross revenue, and 3) Lease the area for a percentage of the net profits, and 4) Allow the Aviation staff to manage the property and lease directly to the airplane owners. The Aviation Advisory Board, the Spinks Tenant's Association, and the South Area Chamber of Commerce Spink's Task Force were briefed on the option of the City managing the Oak Grove area. Each of the groups concurred with this option. Bob Terrell City Manager OMCIAL RECORD MY SECRETARY Ft WORTH, TEL ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS