STRATEGIC PRIORITY: Economic Development
AGENDA DATE: April 26, 2023
COUNCIL DISTRICT(S):|910|DEPARTMENT: Department of Aviation
EXECUTIVE: Kimberly Bizor Tolbert
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SUBJECT
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Authorize a Termination of Lease Agreements with DCS Aviation, LLC ("DCS") dba Development & Construction Services, LLC to terminate two leases at Dallas Executive Airport and to pay DCS a termination payment - Not to exceed $6,000,000.00 - Financing: Aviation Fund
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BACKGROUND
On November 1, 2016, the City of Dallas ("City") entered into a thirty-year Lease of Land (the "Base Lease") with DCS Aviation, LLC ("DCS") dba Development & Construction Services, LLC, with two five-year renewal options, for approximately 91,700 square feet (2.11 acres) of land (the "Leased Premises") at Dallas Executive Airport (the "Airport"). Pursuant to the Base Lease, DCS was required to develop and construct new aircraft hangars with vehicular parking and aircraft ramp area on the undeveloped land, which was completed in April 2019. The City collects monthly ground rent from DCS for the Leased Premises.
On July 1, 2017, the City entered into a twenty-nine year and four-month Lease of Land and Facilities (the "Lease-Back") with DCS with two five-year renewal options, to run concurrently with the Base Lease, whereby the City of Dallas ("City") leased back the Leased Premises with the hangar improvements constructed by DCS. The City entered into the Lease-Back in an effort to better manage aviation-related operations and provide a higher quality and standard of hangar availability at the Airport. Under the Lease-Back, the City makes monthly rent payments to DCS for both the ground and hangar improvements.
The City has since subleased all eight (8) aircraft hangars constructed by DCS to various end-users of the facilities. While the City continues to make monthly rent payments to DCS, the City also collects rent from the sublessees f...
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