STRATEGIC PRIORITY: Mobility Solutions, Infrastructure, and Sustainability
AGENDA DATE: March 24, 2021
COUNCIL DISTRICT(S): 2
DEPARTMENT: Department of Aviation
EXECUTIVE: Majed Al-Ghafry
______________________________________________________________________
SUBJECT
title
Authorize the Seventh Amendment to the 1999 lease agreement with MLT Development Co. to extend the primary term of the lease by thirty-one years, require a new capital improvement investment of no less than $5,000,000.00 on the construction of new leasehold improvements within 36 months, and provide rent abatement in consideration for the City’s use of an undeveloped portion of the leased premises and the granting of a temporary working space easement on an undeveloped portion of property adjacent to the leasehold that is owned by MLT Development Co. for use as a staging and batch plant area for Dallas Love Field Airport’s runway reconstruction project and subsequent airfield projects - Estimated Net Revenue: $53,834,264.60
body
BACKGROUND
MLT Development Co. (“MLT”) currently leases approximately 1,275,241 square feet of land at Dallas Love Field under that certain Lease of Land and Facilities dated January 1, 1999. The lease has a thirty-year primary term plus two five-year extension options.
As part of the Love Field Runway Reconstruction Project necessary to address pavement issues and bring the runway to current Federal Aviation Administration (FAA) requirements, the City requires use of an undeveloped portion of the MLT leased premises and an undeveloped portion of property adjacent to the leased premises that is owned by MLT to accommodate the staging area for the project for a period of five years with two additional one-year options. MLT will grant the City a temporary working space easement on the adjacent land and allow the City access to and use of the leased premises for the described purposes. The land will also be used as a staging yard to store the required construction equipment and materials, as well as contractor parking and field offices.
MLT has also agreed to make a capital investment of no less than Five Million and No./Dollars ($5,000,000.00) in the construction of new leasehold improvements within thirty-six months as consideration for abating rent for the leasehold during the time the City uses the leased premises and the adjacent property for the project as well as adding an additional thirty-one years to the primary term of the lease.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On August 12, 1998, City Council authorized a thirty-year primary term lease with two five-year options to extend the lease of approximately 21.29 acres of land improved with an aircraft ramp, taxiway facilities, and automobile parking with MLT Development Co. at Dallas Love Field Airport by Resolution No. 98-2271.
On August 11, 1999, City Council authorized the First Amendment to the Lease of Land and Facilities with MLT Development Co., which will grant MLT an additional twelve months in which to expend $6,000,000.00 for capital improvements to the leased premises and add approximately 48,755 square feet of land to the Base Lease at Dallas Love Field by Resolution No. 99-2286.
On February 13, 2002, City Council authorized the Second Amendment to the Lease of Land and Facilities with MLT Development Co., which will grant MLT an additional twelve months in which to expend $6,000,000.00 for capital improvements to the leased premises and add approximately 48,755 square feet of land to the Base Lease at Dallas Love Field by Resolution No. 02-0627.
On August 9, 2006, City Council authorized the Third Amendment to the lease agreement with MLT Development Co. to add approximately 3.794 acres of unimproved land at Dallas Love Field and increase the annual rent, in the amount of $52,890.00, from $258,956.00 to $311,846.00, by Resolution No. 06-2000.
On April 10, 2013, City Council authorized the Fourth Amendment to the 1998 lease agreement with MLT Development Co. to provide rent abatement in consideration for the City’s temporary use of an undeveloped portion of land of approximately 123, 475 square feet of the leased premises as a staging area for runway 31R/13L safety enhancement phase II project at Dallas Love Field by Resolution No. 13-0604.
On January 14, 2015, City Council authorized the Fifth Amendment to the lease agreement with MLT Development Co. to add approximately 1.229 acres of unimproved land and increase the annual rent at Dallas Love Field, in the amount of approximately $21,412.00, from $318,777.00 to $340,189.00, by Resolution No. 15-0104.
On December 14, 2016, City Council authorized the Sixth Amendment to the 1999 lease agreement with MLT Development Co. to provide rent abatement in consideration for City’s temporary use of an undeveloped portion of approximately 163,349 square feet of the leased premises as a staging area for the Airfield Pavement Repair Project as well as four subsequent airfield related projects for sixteen months beginning January 1, 2017 at Dallas Love Field by Resolution No. 16-1905.
FISCAL INFORMATION
Estimated Net Revenue: Aviation Fund $53,834,264.60
OWNER
MLT Development Co.
MLT Holding, L.P., Managing Partner,
MLT GP, LLC, General Partner
William H. Oates, President
MAP
Attached