STRATEGIC PRIORITY: Economic and Neighborhood Vitality
AGENDA DATE: August 12, 2020
COUNCIL DISTRICT(S):|910|DEPARTMENT: Office of Economic Development
EXECUTIVE: Dr. Eric A. Johnson
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SUBJECT
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Authorize City of Dallas nomination of Southwest Airlines 2195 Research Row Project to receive designation as an Enterprise Zone Project under the Texas Enterprise Zone Act, as amended (Texas Government Code, Chapter 2303) to the Office of the Governor, Economic Development and Tourism division, through the Economic Development Bank - Financing: No cost consideration to the City
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BACKGROUND
Founded in 1967, Dallas-headquartered Southwest Airlines ("Southwest" or "Company") has become a significant fixture in the low-cost domestic travel market and has been the leading US domestic air carrier since 2003. Southwest employs more than 12,000 in the Dallas area, and recently invested $700 million in its corporate headquarters on Denton Drive, directly to the west of Love Field Airport, including state of the art training facilities, aircraft simulators, office space, and parking facilities.
A significant reduction in travel due to COVID-19 has resulted in an unprecedented economic impact to the aviation industry. Per a company announcement on July 24, Southwest has lost approximately $1.6 billion year-to-date (with 95% of that loss occurring in Quarter 2 2020). The company is losing approximately $20 million every day, equating to a billion dollar loss every two months. To compensate, the company has cut projects, cut shareholder returns, worked with the United States (US) government to secure $3.2 billion in funds via the CARES Act, sold $2.2 billion in company stock to investors, and borrowed more than $12 million from lenders. Nearly 17,000 Southwest employees have taken voluntary separation packages and extended time off from the company, at a cost of $1.7 billion.
Accordingly, to mitigate ...
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