Agenda

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Item # 6.b.

City Council (FY24)

Meeting Date:	04/09/2024
Department:	Airport
Key Focus Areas:	Mobility and Connectivity Infrastructure Development and Maintenance

AGENDA CAPTION:

Present, discuss, and consider action on an Ordinance approving a Developer Participation Agreement with Addison Hangars, LLC for the reconstruction of certain public improvements within Addison Airport to include a portion of the airport vehicle service road and aircraft apron along Taxiway Alpha; providing for the Town’s participation in the cost of the improvements in conformance with Chapter 212 of the Tex. Loc. Gov. Code (“Code”); authorizing the City Manager to execute the Agreement; and providing an effective date.

BACKGROUND:

The Town of Addison entered into a 40-year ground lease with Addison Hangars, LLC on June 28, 2022. According to the lease, Addison Hangars is obligated to construct a 100,000 square-foot executive jet hangar facility on 6+ acres located on the north side of Claire Chennault Drive. The ground lease was later amended in January 2023 to include a second phase of development, which consists of an additional 100,000 square feet of executive jet hangar facilities. The total construction value for both phases is expected to exceed the required minimum capital investment of $20 million.

As part of the amended ground lease, Addison Hangars is responsible for constructing approximately 53,000 square feet of heavy-aircraft apron along Taxiway Alpha at its own cost. Additionally, airport management determined that it would be beneficial to reconstruct a 15,000 square-foot section of the adjoining airport vehicle service road in connection with the Addison Hangars project. The estimated cost for this road reconstruction is $474,000. In return for executing the amendment, Addison Hangars has agreed to reconstruct 1,000 square yards of the airport vehicle service road (valued at approximately $223,000) at its sole expense. Consequently, the Town’s net cost for this project is expected not to exceed $251,000, which will be funded from the Airport Fund.

According to Chapter 212 of the Code, the Town has the authority to contract with a developer, as long as the Town’s share does not exceed 30% of the total project cost (excluding any Town-required upgrades). To qualify, the work must focus on public improvements and must not involve vertical structures. The engineer’s estimate of probable cost for the overall project, including a 10% contingency expense, is $1,316,992.

The proposed reconstruction of the airport vehicle service road aligns with the Code’s criteria.

Benefits of approving the Developer Participation Agreement include:

Improved Airport Infrastructure: The airport vehicle service road, which serves the airport public, will see significant enhancements.
Economies of Scale: Combining the apron and vehicle service road reconstruction may lead to cost savings due to the larger scope of work and unit volumes.
Minimized Disruption: The integrated project will result in less disruption to airport operations.

The City Attorney has reviewed the Developer Participation Agreement and deems it acceptable for the Town’s purposes.

RECOMMENDATION:

Staff recommends approval.

Attachments
Presentation - Addison Hangars DPA
Ordinance w/ Exhibit A
Location Map