On November 10, 2015 the City Council adopted Ordinance No. 21968-11-2015 (M&C G-18605) designating Tax Abatement Reinvestment Zone No. 91, City of Fort Worth, Texas, and approved execution of a Tax Abatement Agreement with American Airlines, Inc. (Company), and the Dallas/Fort Worth International Airport Board for development of a corporate headquarters facility ("Headquarters Project") on property at Dallas-Fort Worth International Airport located within the City of Fort Worth (City Secretary Contract No. 47341, as amended). Under the Tax Abatement Agreement, the City has agreed to abate a maximum of between 75 to 90 percent of the incremental real and personal property taxes from the site for a period of one year provided that Company expended at least $200 million in real property improvements by December 31, 2019 on property in the reinvestment zone and consider up to $2,000,000.00 for enhanced community facility funds for public infrastructure projects associated with the Headquarters Project.
As part of the project the Company anticipated expending approximately $1,650,000.00 for the construction of road improvements including deceleration lanes, turn lanes, signaling, sidewalks and street light improvements on Trinity Boulevard, American Boulevard and US Highway 360 Frontage Road ("Public Infrastructure"). The Company has agreed to provide at its expense, all necessary rights-of-way and easements across the property controlled by the Company as necessary to construct the Public Infrastructure. On June 13, 2017, the City Council authorized execution of an Enhanced Community Facilities Agreement ("ECFA") (M&C C-28274) under which the City would reimburse Company up to $950,000.00 of construction costs.
The Company has now proposed to expand the scope of the Public Infrastructure project to include widened roadways and turn lanes on Trinity Boulevard and US Highway 360 Frontage Road to accommodate the planned additional employee traffic at a total approximate cost of $7,000,000.00 it is anticipated that the Regional Transportation Council of the North Central Texas Council of Governments will receive a recommendation to authorize funding in support of this project. As a result, the Economic Development Department is recommending that the City Council rescind M&C C-28274, thereby cancelling the 2017 ECFA, which never was executed, and approving a new ECFA increasing the City's participation in an amount not to exceed $1,700,000.00 to satisfy the local match of twenty percent (20%). The Public Infrastructure must still be completed by December 31, 2019, subject to extensions due to delays by weather, force majeure, and City and other governmental changes or delays in review procedure, approvals, or inspections.
If the Public Infrastructure is not completed by then, Company will be in default under the ECFA, and the City will then have the right to utilize a financial guarantee provided by Company in accordance with the City's CFA Policy to complete the Public Infrastructure. If the Headquarters Project is not completed by the established deadline under the Tax Abatement Agreement, Company will still be required to complete the Public Infrastructure in accordance with the ECFA, but it will not be entitled to any portion of the $1,700,000.00 reimbursement.
A portion of the expenses associated with this ECFA will be funded from the 2014 Bond Program. Available resources within the General Fund will be used to provide interim financing for those expenses until debt is issued. Once debt associated with this project is sold, bond proceeds will reimburse the General Fund in accordance with the statement expressing official Intent to Reimburse that was adopted as part of the ordinance canvassing the bond election.
The Project is located in COUNCIL DISTRICT 5.This M&C does not request approval of a contract with a business entity.