HomeMy WebLinkAboutContract 58786-A4CSC No. 58786-A4
F4OURTH AMENDMENT TO THE LEASE AGREEMENT
BETWEEN THE CITY OF FORT WORTH AND
MTU MAINTENANCE DALLAS, INC.
This Fourth Amendment to the Facility Lease Agreement (City Secretary Contract No.
58786) ("Fourth Amendment") is made and entered into by and between the City of Fort Worth,
a home -rule municipal corporation of the State of Texas ("Landlord"), acting by and through its
duly authorized Assistant City Manager, Valerie Washington, and MTU Maintenance Dallas,
Inc. ("Tenant"), acting by and through its duly authorized President and General Manager, Gernot
Sell.
WHEREAS,_ Landlord and Tenant entered into a certain Facilities Lease Agreement
("Lease"), executed January 25, 2023 per City Secretary Contract No. 58786 for Tenant's use of
Buildings # 12. # 13, 915 located at 2100, 2014 and 2112 Eagle Parkway, Fort Worth Texas, 76177
("Leased Premises") at the Alliance Fort Worth Maintenance Base; and
WHEREAS Landlord and Tenant ("parties) executed a First Amendment (City
Secretary Contract No. 58786-A1) to establish the deferred maintenance obligations of the
parties under the Lease; and
WHEREAS the parties executed a Second Amendment (City Secretary Contract No.
58786-A2) to extend the Construction Period for an additional two months to expire September
25, 2023 under the Lease; and
WHEREAS, the parties executed a Third Amendment (City Secretary Contract No. 58786-
A3) to relocate the location of the one hundred (100) exclusive parking spots from the West
side to the East side of the existing parking lot; and
WHEREAS, In November 2024, Tenant requested the Landlord to amend the lease to
change the terns length to thirty (30) years and provide additional base rent credits (abatement)
as part of an Economic Development Incentive package for the Tenant's planned operations
expansion.
NOW THEREFORE, in consideration of the covenants and agreements set forth in the
Lease and herein, Landlord and Tenant agree to amend the Lease as follows:
Section 2.1 (b) Demise; Lease Term.
Landlord and Tenant agree that the term of this Lease shalt be extended by (30) years
commencing on July 1, 2025 and expiring June 30, 2054,
2. Section 2.2 Early Termination Option. Deleted in its entirety.
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
Fourth Lease Amendment bet%veen
MTU and City of Dort Worth
?, Section 9,1 (a) Base Rent. Shall be amended with the following:
Tenant agrees to pay "Base Rent" to Landlord throughout the Term, with Base rent
beginning upon the July 1, 2025 ("Commencement Date"), of this Fourth Amendment, in
accordance with the chart below, without demand or notice, in advance per month in the following
amounts, as shown in the green highlighted column below, (prorated on a per diem basis for any
partial month) which are based upon 423,840 square feet. The Base Rent chart below reflects (a) a
Base Rent Abatement, as further described in paragraph 4 herein; and (b) base rent escalation,
Term Total Leased Base Rent Total Annual Base Base Rent Total Annual Base Rent Annual Base Rent ease Rent due per
Year Premises SF Price per SF Rent Before Rent Abatement % Abatement Amount After Rent month
Abatement Abatement
1
2
3
4
423.840 $1.25
423,840 S1.25
423,840 $1.25
423,640 $1.25
$529.800.00
$529,800.00
$529.800.00
$529,800.00
75.00%
75.00%
75.00%
75.00%
$397,350.00
$397,350.00
$397,350.00
$397,350.00
$132,450.00
$132,450.00
$132,450.00
$132,450.00
$11,037.50
$11,037.50
$11.037.50
S11,037,50
5
423.840 $1.25
$529,800.00
75.00%
$397,350.00
$132,450.00
$11,037.50
6
423,840
$1.25
$529,800.00
75.0091)
$397350.00
$1321450.00
$11,037.50
7
423,840
$1.25
S529,800.00
75.0095
4397,350.00
$132,450.00
$11,037.50
8
423,840
$1.25
S529,800.00
75.00",1
$397'350.00
$132,450.00
$11,037.50
9
423,840
$1.25
$529,800.00
75.00%
5397,350.00
$132,450.00
$11,037.50
10
423,840
$1.25
$529,800.00
75.00%
$397,350.00
$132,450,00
S11,037.50
11
423,840
$1.29
$546,753.60
50.00%
$273,376.80
$273,376.80
$22,781.40
12
423,840
$1.29
$546,753.60
50.0096
$273.376.80
$273,376.80
$22.781.40
13
423.840
$1.29
$546,753.60
50.00%
$273,376.80
$273,376.80
$22,781.40
14
423,840
$1.29
$546,753,60
50.00%
$273,376.80
$273,376.80
, $22,781.40
15
423.840
$1.29
$546,753.60
50,00%
$273,376.80
$273,376.80
$22,781.40
16
423,840
$1.33
$563.707.20
50.00%
$281,853.60
$281,853.60
$23,487.80
17
423,840
$1.33
$563,707.20
50.00%
$281,853.60
$281.853.60
S23,487.80
18
423,840
$1.33
$563,707.20
50.001,15
$281,853.60
$281,853.60
$23,487.80
19
423,840
$1.33
$563,707.20
50.00%
$281.853.60
$281,853.60
$23,487.80
20
423.840
$1.33
$563,707.20
50.00%
$281,853.60
$281,853.60
$23,487.80
21
423,840
$1.37
$580,660.80
50.00%
$290,330.40
$290,330.40
$24,194.20
22
423.840
$1.37
$580,660.80
50.00%
$290.330.40
$290,330.40
$24,194.20
23
423,840
$1.37
$580,660.80
50.00%
$290,330.40
$290,330.40
$24,194.20
24
423,840
$1,37
$580.660.80
50.00%
$290,330.40
$290.330.40
$24,194.20
25
423.840
$1.37
$580,660.80
50.00%
$290.330.40
$290,330.40
$24,194.20
26 I
423,840
$1.41
$597,614.40
50.00%
$298,807.20
$298.807.20
$24,900.60
27
423.840
$1.41
$597,614.40
50.00%
$298,807.20
$298,807.20
$24.900.60
28
423,840
$1.41
$597,614.40
50.00%
$298,807.20
$298,807.20
$24,900.60
29
423,840
$1.41
$597,614.40
50.0016
$298,807.20
$298,807.20
$24,900.60
30
423,840
$1.41
$597,614.40
50.00%
$298,807.20
$298.807.20
$24,900.60
Total
$9,695,340.00
$7,046,340,00
Fourth Lease Amendment between
MTU and City of Fort Worth
4. Base Rcnt Abatement. In recognition and consideration of 'I'cnant's future completion of
Tenant Improvements and Capital Investments, collectively known as ("TI"), as further described
in Exhibit M, the long-term interest to expand and preserve its facility in the City of Fort Worth
and to grow its staft'signiticantly and brings value for the city and the community and consequently
the execution of this 30-year extension of the lease agreement, Landlord agrees to provide Base
Rent Abatements totaling nine million, six hundred ninety five thousand, three hundred forty dollars
and zero cents ($9,695,340.00) amortized over the thirty (30) year term, as shown in the green
highlighted column in the table below,
Term
Year
1
2
3
Total Leased
Premises SF
423.840
423.840
423,840
Base Rent
Price per SF
$1.25
$1.25
$1.25
Total Annual Base
Rent Before Rent
batement
$529$00.00
$529,800.00
$529,800.00
Base Rent
Abatement ?5
75,00%
75.00%
75.001%
Total Annual Base Rent
Abatement Amount
$397,350.00
$397,350.00
$397,350.00
Annual Base Rent
Alter Rent
Abatement
S132,450.00
$132,450.00
$132.450.00
Base Rent due per
month
$11,037.50
$11.037.50
$11,037.50
4
423.840
$1.25
$529,800.00
75,00%
$397.350.00
$132,450.00
$11.037.50
5
423,840
$1.25
$529.800.00
75.0M
$397,350.00
$132.450,00
$11,037.50
6
423.840
$1.25
$529,800.00
75.001/a
S397,350.00
t 132,450.00
$11.037.50
7
423,840
$1.25
$529.800.00
75.00°.5
$397,350.00
5132.450.00
$11,037.50
8
423,840
$1.25
$529,800.00
75.0VS
$397.350.00
S132.450.00
$11,037.50
9
423,840
$1.25
$529.600.00
75.OV4
5397,350.00
$132,450.00
$11,037.50
10
423,840
$1.25
$529.800.00
75.M'a
$397,350.00
S132,450.00
$11.037.50
11
423,840
$1.29
$546,753.60
50.00%
$273,376.80
$273,376.80
$22,781.40
12
423,840
$1.29
$546,753.60
50.Mb
$273,376.80
S273,376.80
$22,781.40
13
423,840
$1.29
$546,753.60
50.00%
$273,376.80
$273,376.80
S22,781.40
14
423,840
$1.29
$546,753.60
50.00%
$273,376.80
$273,376.80
S22,781.40
15
423,840
$1.29
$546,753.60
50.00115
$273,376.80
S273,376.80
$22,781.40
16
423,840
$1.33
$563.707.20
50.00°II�
$281,853.60
$281,853.60
$23,487.80
17
423,940
$1.33
$563,707.20
50.001n
$281,853,60
$281.853.60
$23.487.80
18
423,840
$1.33
$563,707.20
50.00%
$281,853.60
$281,853.60
S23,487.80
19
423,840
$1.33
$563,707.20
50.00%
$281.853.60
$281,853.60
$23,487.80
20
423,840
$1.33
$563,707.20
50.00%
$281,853,60
$261,853.60
S23,487.80
21
423,840
$1.37
$580,660,80
50.00%
$290,330.40
$290.330.40
$24.194.20
22
423,840
$1.37
$580,660.80
50.00%
$290,330.40
$290,330.40
$24.194.20
23
423,840
$1.37
$580,660.80
50.00%
$290.330.40
$290,330.40
$24,194.20
24
423,840
$1.37
$580,660.80
50.00%
$290.330,40
$290.330.40
$24,194.20
25
423,840
$1.37
$580.660.60
50.00%
$290,330.40
S290,330.40
$24,19420
26
423.840
$1.41
$597.614.40
50.00%
$298,807.20
$298.807.20
$24.900.60
27
423.840
$1.41
$597,614.40
50.0056
$298,807.20
$298,807.20
$24.900.60
28
423,940
$1.41
$597,614.40
50.00%
$298,807.20
$298,807.20
$24,900.60
29
423.840
$1.41
$597.614.40
50.M"i
$298,807.20
$298,807.20
$24,900.60
30
423.840
$1.41
$597,614.40
50.001,16
$298.807.20
$298,807.20
S24,900,60
Total
$9,695,340.00
$7,046,340.00
Fourth Lease Amendment between
MTU and City of Fort Worth
5, TI Commitment, Employment 'I'tu•Qets and Compliance. As part of' this agreement, Tenant
commits to the following:
a) Tenant Improvements. Tenant to invest no less than fifty Million Dollars
($50,000,000.00) in TI, as part of the total planned investments in the amount of
$120,000,000.00 as described in Exhibit M, within the first ten (10) years of this Fourth
Amendment. The Ti shall include but are not limited to (a) Fnhancements and upgrades
to the Engine Test Cell, (b) Moderniation and efficiency improvements to the MRO
Building, and (c) Facility and mechanical system upgrades.
b) Employment Targets. Tenant's current projections ofemployment level increases over
the thirty (30) year term are further described in Exhibit M. 'Tenant shall work in good
faith to achieve these employment increase levels; however, the parties agree these are
non -binding targets due to several factors beyond Tenant's control and may be adjusted
as needed.
c) Compliance. To track and ensure Tl and employee level increase compliance, Tenant
agrees to meet with Landlord annually at the end of each year in the lease term and
provide a report of the TI completed, in progress and planned TI for the upcoming year,
along with employment level increases. In the event the TI and/or employment levels
do not meet the thresholds and details identified in Exhibit M, due to circumstances out
of the control of the Tenant, including but not limited for Force Majure, the parties
may, by mutual agreement, agree to extend and/or adjust the Ti and/or employment
level increase targets as needed to continue to provide base rent abatements.
6. Future expansion of the Leased Premises. The Parties agree future expansion of the Leased
Premises may be required (establishment of a logistic center) to align with Tenant's long-term
growth plans. Any future expansions shall be detailed in a separate agreement and/or lease
amendment as needed. The Parties shall jointly define the area suitable for the logistic center, which
shall be ready for operation no later than 2028. The Landlord agrees not to offer any of the future
expansion areas, identified in Exhibit N ("Expansion Areas"), in consideration to any other lessee
until the ioint evaluation is finalized and to reserve the selected area for the logistic center until start
of construction.
7. Right of First Refusal. During the Term, Tenant shall have the right of first refusal to lease
any or all of the Expansion Areas at such time that Landlord receives a bona fide offer to lease one
or more of the Expansion Areas, at which time Landlord shall notify Tenant together with a true
and correct copy of said bona fide offer. 'Tenant may, at Tenant's option and within ten (10) days
after receipt of Landlord's notice of said bona fide offer and receipt of a copy thereof, give Landlord
written notice of Tenant's desire to (i) exercise its right of first refusal and lease the Expansion
Area(s), after which Landlord and Tenant agree to promptly execute an amendment to this Lease
which will, among other things, amend the description of the Leased Premises to include the
Expansion Area(s); or (ii) waive its right to exercise the option to lease the Expansion Area(s)
pursuant to the terms of the bona fide offer, after which 'Tenant agrees that Landlord shall have the
right to enter into a lease for the Expansion Area(s) with the third party that made such bona fide
Fourth Lease Amendment bets+peen
MTU and City of Fort Worth
offer. Not\vithstanding anything herein to the contrary, (i) in the event Landlord fails to enter into
a lease for the Expansion Arca(s) with such third party in accordance with the terms of the bona
fide offer, (ii) or such lease for the Uxpansion Areas) with such third party in accordance with the
terns of the Bona tide offer has expired, then Tenant shall once again have the right of first refusal
to lease the Expansion Arca(s).
S. Rebrandine: Prior to September 1 ", 2025 of this Fourth Amendment, Tenant agrees to a
rebranding of the name "MTU Maintenance Dallas" to "MTU Maintenance Fort Worth". Tenant
shall inform Landlord promptly upon execution of the name change. Thereafter, any information
regarding this location shall be referred to as MTU Maintenance Fort Worth, no amendment of the
Facility Lease Agreement shall be required.
All other terms and conditions of the Facility Lease Agreement (City Secretary Contract No. 58786)
remain unchanged and in full force and effect.
If any terns in this Fourth Amendment conflict with the I-acility Lease Agreement, this Fourth
Amendment shall take precedent.
[SIGNATURES ON FOLLOWING PAGE]
Fourth Lease Amendment between
MTU and City of Fort Worth
S
c
L'XU,CUTED on this day of-V day of - �.�uF-_ , 2025
LANDLORD:
CITY OF FORT WORTH
tl & W
Va[erieWashington(Jul1,202512:13CDT) By:
Valerie Washington
Assistant City Manager
APPROVED BY:
By:
Marilyn Marvin
Director
Property Management Department
TENANT:
MTU MAINTENANCE: DALLAS, INC.
By_-_--
Name: G U ger SIELL - -
Title G Ey EgAL T1Agwk`e3IT);`,PT-
City of Fort Worth Contract Compliance Managcr:
By signing I acknowledge that I am the person responsible
for the monitoring and administration of this contract, including
ensuring all performance and reporting requirements.
By:
Mark Drn m0 25.)02511:11 CDT)
_ —
Name:
Title: Lease Manager, Property Management Department
APPROVED AS TO F0101
AND LEGALITY:
C�uuiace-P��%aNiz
By: Candace Pagllara(Ju 0,202507:I6CDT)
Candace Pagliara
Assistant City Attorney
ATTEST:
By:
Jannette S. Goodall
City Secretary
�aL
p@FORT na
oo.o.o,, dyad
Opo
Pie � -0d
OOo �=d
oa,�ooQ as*�
�a°a���zos4
Contract Authorization
Form 1295: 2025-1321917
M&C: 25-0617
OFFICIAL RECORD
Date: 6/24/2025 CITY SECRETARY
FT. WORTH, TX
Fourth Lease Amendment between
MTU and City of Fort Worth
Exhibit N1
Tenant Improvements and Capital Investments
Slide 15 and 10 from MTU Power Point Presentation
(extract front MTU Business Case)
Enj�ne Teti Cell
Estimated Start Estimated
Improvement Item
Benefit Of file Improvement
Expense (in SM)
I Date Completion Dot*
_
Test cell:
.
test cell readiness / upgrade to
.._.,..art
11.9
-
2026 2026
Upgrade o the corrolete electronic, sensorics and data acquisition system tosUV
to
state-of-thet ri
of the arc test cell standards
Edstin6 Encino Overhaul Estllll
Estimated Estimated Start
Improvement Item
Benefit of Improvement
Expense (fo SM)
Completion Date
Shop If WImprovements: --
_ _
Facility upgrade/operational
55.4
2040 2025
- Evaluation of whole building and preventive maintenance of all equipment, Including
readiness / optinylatlon of business
Wilily (fresh water, waste water, pressured air, HVAC, atc1, electrical syltams, etc
operations
New building mange minl system
Upgrade of complete shop floor and new top layer, including new foundations
- Upgrade, and update of the crane system in Building 12 and Building S
- update of all shop f low lights
IM and 2.d floor office reactivation /
ry pg operational
upgrade
12,3
2040 2025
leant
readinesls /op ss
I
cislumbrintubathrdms,l�obbyloor,windows,walls,offices,
conference
Facility upgrade/operational
17,4
2030 2025
IWarehouse:
- Budd up interim warehouse in Building 12 for spare parts, outside vendor / repair parts,
( readiness / optimization of business
stod" customer owned material
operations
Preparation for expansion to an additionaf warah_o_u_se buddirie
It.Ylilne.
I Facility upgrade I
1'6
2032 2012
Construction of a antMe for uo to 1,SQJ employees In 3 shiNP
Training academy:
Facility upgrade
5,5
2026 2025
- Establishment and set-up of a training edemy for theoretical and practical engine
meinte ranee training in the systems and prop cut, to Qualify needed workforce with
various qualifiaaon levels
- Procurement of mining engines
Chemical cleaning and Inspection line:
Facility upgrade/operational
16,1
2027 I025
�• Conctrumom of a new cleaning line (multiple leaning baths)
readiness / optimization of business
(
st • Conruction of a new Inspection line for non-destructiven teOrig(e X. FPI)
mtlnnt
isubtital
i
120,1
2040 2025
MTU intends to create approx. 1,200 highly skilled new jobs at Alliance Maintenance base
1.000 — 1,200
800 — 1.000
2025 2026 7077 2028 2029 2030 2031 7032 2033 2034 2035 2036 7037 2038 2039 2040
IAIU's Fir ranip up plan currently considers both engine progianis' t CAP and GEnx.
Fourth Lease Amendment between
M'FU and City of tort Worth
ls�
F,xhibit Nl Apmtsion areas in blue.
Exhibit N
W .
I Z t 4 CENTRAL 7 *1-4
Yd K
` 11"It St
. �>t
I FUTURE r
EXPANSION 0
AMUCAW ei
„
trulvatl j
TVIMINE CISMF v
OVERRAM O
PLATINS Ito
f ; (Fulull)
IMR .11
idTW1R11 IM?Qli1lY ,cc4 * ,
Z
r
VG-CR
POOL ,
AREI
i
T RAY S IV
sENGAR PETUVE-
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AIRCRA)M RASIP
Fourdi Lease Amendment between
MTU and City of Port Worth
M&C Review Page 1 of 2
0
Official site of the City of Fort Worth, Texas
CITY COUNCIL AGEND FORT V RRTTH_
Create New From This M&C
DATE: 6/24/2025 REFERENCE NO.: **M&C 25-0617 LOG NAME: 21 MTU LEASE
EXTENSION
CODE: C TYPE: CONSENT PUBLIC NO
HEARING:
SUBJECT: (CD 10) Authorize the Execution of a Lease Amendment with MTU Maintenance Dallas,
Incorporated to Extend the Current Lease Term For Thirty (30) Years, Effective July 1,
2025 and Expiring June 30, 2054
RECOMMENDATION:
It is recommended that the City Council authorize the execution of a lease amendment with MTU
Maintenance Dallas, Incorporated to extend the current lease term for thirty (30) years, effective July
1, 2025 and expiring June 30, 2054.
DISCUSSION:
On January 25, 2023, the City entered into a Facilities Lease Agreement (Agreement) with MTU
Maintenance Dallas, Inc. (MTU) (City Secretary Contract No. 58786 and Mayor & Council
Communication 22-1058) for MTU's use of the Jet Engine Overhaul and Maintenance Building
#12, Heat, Treat and Blast Building #13 and the Jet Engine Test Cell Building #12, all totaling
approximately 423,840 square feet of space, located at the Alliance Maintenance Base (Base).
The current term is for ten (10) years; commencing on January 1, 2023 and due to expire on
December 31, 2033.
In 2024, due to new contracts MTU has entered into for testing, repairs and maintenance of new jet
engines types, MTU requested to extend the lease term for thirty (30) years to accommodate the
increase of their business.
Through discussions and negotiations with the Property Management Department (PMD) and City
Management (CMO), the parties agreed to amend the lease with the following terms:
Lease extension term:
Thirty (30) years, commencing on July 1, 2025 and expiring June 30, 2054.
Base rent schedule:
Years
July 2025 - June 2034
July 2034 - June 2039
Price per Square foot
$1.25
$1.29
July 2039 - June 2044 $1.33
July 2044 - June 2049 $1.37
July 2049 - June 2054 $1.41
MTU will also be responsible for their operating expenses, which include their pro rate share
of utilities, capital reserve contributions and common area fees throughout the thirty (30) year term.
City Manager or his designee may negotiate adjustments to the base rent schedule.
This property is located in COUNCIL DISTRICT 10.
http://apps.cfwnet.org/council_packet/mc review.asp?ID=33478&councildate=6/24/2025 6/24/2025
M&C Review
Page 2 of 2
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendation and execution of
the lease amendment, funds will be deposited into the Alliance Maintenance Fund. The Property
Management Department and Financial Management Services is responsible for the collection and
deposit of funds due to the City.
TO
Fund Department Account Project Program Activity Budget Reference # Amount
ID ID I Year (Chartfield 2)
FROM
Fund I Department Account Project Program Activity I Budget Reference # Amount
ID ID Year (Chartfield 2)
Submitted for Citv Manager's Office bv: Valerie Washington (6199)
Originating Department Head: Marilyn Marvin (7708)
Additional Information Contact: Mark Brown (5197)
ATTACHMENTS
FID for MTU Extended Term.pdf (CFW Internal)
Form 1295 Certificate 101381331 Executed.gdf (CFW Internal)
MTU LEASE EXTENSION M AND C MAP.pdf (Public)
http://apps.cfwnet.org/council_packet/mc review.asp?ID=33478&councildate=6/24/2025 6/24/2025