Authorize Execution of  Amendment to Enhanced Community Facilities Agreement with American Airlines, Inc. with City Participation for the Construction of Road Improvements on Trinity Boulevard, American Boulevard and US Highway 360 Frontage Road (City Secretary Contract No. 51820) and Amendment to Tax Abatement Agreement with American Airlines, Inc. Related to the American Airlines Headquarters Facility (City Secretary Contract No. 47341) to Extend the Completion Deadlines Under Both Agreements (COUNCIL DISTRICT 5)

It is recommended that the City Council:

1.  Authorize the execution of  an amendment to City Secretary Contract No. 51820, an Enhanced Community Facilities Agreement with American Airlines, Inc. with City participation for the construction of road improvements on Trinity Boulevard, American Boulevard and US Highway 360 Frontage Road to extend the completion deadline from December 31, 2019 to July 31, 2020; and

2.  Authorize the execution of an amendment to City Secretary Contract No. 47341, the Tax Abatement Agreement with American Airlines, Inc. for the American Airlines headquarters facility, to extend the completion deadline from December 31, 2019 to July 31, 2020.

(COUNCIL DISTRICT 5)

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 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 in 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, US Highway 360 Frontage Road (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 proposed to expand the scope of the Public Infrastructure project to include widened roadways and turn lanes on Trinity Boulevard, US Highway 360 Frontage Road, and American Blvd. to accommodate the planned additional employee traffic at a total approximate cost of $7,000,000.00. On June 12, 2018, by M&C C-28730, the City Council rescinded M&C C-28274 to cancel the 2017 ECFA that was never executed and authorized execution of a new ECFA with City Participation in an amount not to exceed $1,700,000.00.

After further design and discussions with the Company, City Council rescinded M&C C-28730 and entered into a new agreement (M&C C-28898) increasing the City's participation in the Public Infrastructure project to $2,000,000.00 representing the entire commitment in the original tax abatement agreement. The M&C authorized execution of an Advance Funding Agreement (AFA) between the City and the State of Texas, acting through Texas Department of Transportation, (TxDOT) for Regional Toll Revenue (RTR) for the public infrastructure improvements along Trinity Boulevard, American Boulevard and US Highway 360 Frontage Road.  The AFA would have a project amount not to exceed $7,000,000.00, which would provide the City with RTR funds not to exceed $5,600,000.00, with a twenty percent local match requirement not to exceed $1,400,000.00.  The M&C also authorized the execution of one or more ECFAs with the Company consisting of the RTR funds as well as Non-RTR Funds comprised of ECFA funds and Transportation Impact Fee funds in an amount not to exceed $2,000,000.00 for the Public Infrastructure.

The Company is responsible for all costs exceeding the RTR funds received by the City from TxDOT under the AFA and the City's participation of Non-RTR funds.  On April 29, 2019, the Company informed the City that due to delays in the Texas Transportation Commission not approving the TxDOT funding until January 31, 2019 that it was not feasible for the Company to mobilize their construction contractor until after the January 31^st AFA approval.  Due to this delay, the Company is requesting an extension to the deadline of the completion of the ECFA improvements to July 31, 2020 under the force majeure provision of the ECFA.  Since the ECFA improvements are “required public improvements” subject to the Tax Abatement and Economic Development Program Agreement, Company is requesting a force majeure extension under those agreements as well for completion of the “required public improvements” to July 31, 2020. Only the Tax Abatement Agreement needs to be amended in order to accomplish that goal.  This amendment will be contingent on approval by the Dallas/Fort Worth International Airport Board, which, as lessor of the facility, is also a party to the Tax Abatement  Agreement.

All other requirements contained in the Agreements would be unaltered by the proposed amendments. 

The Project is located in COUNCIL DISTRICT 5.

A Form 1295 is not required for this contract because:  This contract will be with a publicly-traded business entity or a wholly-owned subsidiary of a publicly-traded business entity: American Airlines, Inc.