COUNCIL COMMUNICATION

DATE:

 

12-16-02

 

 

 

 

SUBJECT:   FINAL READING OF ORDINANCE NO. 2002-O-327

Authorizing the City Manager to execute a Subordination, Non-Disturbance and Attornment Agreement between the City of Laredo, as Landlord, General Electric Capital Business Asset Funding Corporation, a Delaware corporation, as Mortgagee, and Fedlaredo Partnership, LP, a Pennsylvania limited partnership, as Tenant, thereby subordinating the lease agreement authorized by Ordinance No. 2001-O-042 dated February 20, 2001 and assigned on November 4, 2002 as authorized by Ordinance No. 2002-O-285, at the Laredo International Airport to the Lender’s mortgage.

INITIATED BY:  Cynthia Collazo

                           Assistant City Manager

 

 

STAFF SOURCE:  Jose L. Flores

                               Airport Director

 

PREVIOUS COUNCIL ACTION: On December 2, 2002, Ordinance was introduced by City Council, and Staff was instructed to proceed.

BACKGROUND:     

 

FedJones Laredo, LLC leased approximately 2.82 acres located on Tract 8 of the Subdivision Plat of the Laredo International Airport Passenger Terminal Subdivision, which is directly north of the passenger terminal on Bob Bullock Loop.  Lessee constructed an approximate 33,500 square foot building which in turn was subleased to Federal Express.  Federal Express uses the premises for retail sale of time-definitive delivery services.  The lease agreement was subsequently assigned to Fedlaredo Partnership, LP, a Pennsylvania corporation.

 

Lease term ends on February 28, 2041.  Current monthly rent is $1,783.76 and will be adjusted annually according to changes in the Consumer Price Index and further adjusted at every 10th anniversary by Fair Market Value appraisal.

 

GE Capital is financing the assignment of the airport lease from FedJones, LLC to Fedlaredo Partnership, LP, and requests that the lease be subordinate to the loan.

 

FINANCIAL IMPACT:   None.  Airport Rent Account No. 242-000-361-2070 Aeronautical Land

 

 

 

 

COMMITTEE RECOMMENDATION: The Airport Advisory Committee recommends approval.

 

 

 

STAFF RECOMMENDATION: That the City Manager be authorized to execute said Agreement.

 

 

 

 

ORDINANCE NO. 2002-O-327

 

AUTHORIZING THE CITY MANAGER TO EXECUTE A SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT BETWEEN THE CITY OF LAREDO, AS LANDLORD, GENERAL ELECTRIC CAPITAL BUSINESS ASSET FUNDING CORPORATION, A DELAWARE CORPORATION, AS MORTGAGEE, AND FEDLAREDO PARTNERSHIP, LP, A PENNSYLVANIA LIMITED PARTNERSHIP, AS TENANT, THEREBY SUBORDINATING THE LEASE AGREEMENT AUTHORIZED BY ORDINANCE NO. 2001-O-042 DATED FEBRUARY 20, 2001 AND ASSIGNED ON NOVEMBER 4, 2002 AS AUTHORIZED BY ORDINANCE NO. 2002-O-285, AT THE LAREDO INTERNATIONAL AIRPORT TO THE LENDER’S MORTGAGE.

 

            WHEREAS, the Airport Director recommends that the City Council approve a Subordination, Non-Disturbance and Attornment Agreement between the City of Laredo, as Landlord, General Electric Capital Business Asset Funding Corporation, a Delaware corporation, as Mortgagee, and FedLaredo Partnership, LP, a Pennsylvania limited partnership, as Tenant, thereby subordinating the lease agreement authorized by Ordinance No. 2001-O-042 dated February 20, 2001, and assigned on November 4, 2002, as authorized by Ordinance No. 2002-O-285, to the Lender’s Mortgage, as a contract and in furtherance of the development of the Laredo International Airport.

 

            WHEREAS, the Airport Advisory Committee finds that said Agreement is in the best interest of the Airport; and

 

            WHEREAS, the City Council of the City of Laredo is of the same opinion.

 

            NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LAREDO THAT:

 

Section 1:         That the City Manager be and is hereby authorized to execute a Subordination, Non-Disturbance and Attornment Agreement between the City of Laredo, as Landlord, General Electric Capital Business Asset Funding Corporation, a Delaware corporation, as Mortgagee and FedLaredo Partnership, LP, a Pennsylvania limited partnership, as Tenant, a copy of which Agreement is attached hereto as Exhibit A, and incorporated herein as if set out at length.

 

Section 2:         This Ordinance shall become effective upon passage hereof.

 

 

 

 

 

 

            PASSED BY THE CITY COUNCIL AND APPROVED BY THE MAYOR ON THIS THE _______ DAY OF __________________, 2002.

 

 

 

 

_______________________

ELIZABETH G. FLORES

MAYOR

 

 

ATTEST:

 

_______________________

GUSTAVO GUEVARA, JR.

CITY SECRETARY

 

 

APPROVED AS TO FORM:

JAIME L. FLORES

CITY ATTORNEY

 

 

BY:________________________

VALERIA M. ACEVEDO

ASSISTANT CITY ATTORNEY