COUNCIL COMMUNICATION
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DATE: 12-16-02 |
SUBJECT: FINAL READING OF ORDINANCE NO.
2002-O-328 Authorizing the city manager to execute an amendment to the lease agreement approved by Ordinance No. 98-O-053 dated February 17, 1998, between the City of Laredo, as Lessor, and UETA of Texas, Inc., a subsidiary of Duty Free International, Inc., as Lessee, to amend the lease area at the Laredo International Airport Passenger Terminal and rental obligation, extend the term of the agreement by 30 months, consolidate duty free and news/gift shop merchandise, provide for additional modifications and improvements to the new leased area and amend hours of operation, providing for effective date. . |
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INITIATED
BY: Cynthia
Collazo Assistant City Manager |
STAFF SOURCE: Jose L. Flores Airport Director |
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PREVIOUS
ACTION: On December 2,
2002, Ordinance was introduced by City Council, and Staff was instructed to
proceed. BACKGROUND: When TAESA suspended international
passenger service in November 1999 the UETA Duty Free Store was forced to
close. International passenger
service resumed in April 2002 when Azteca and Mexicana initiated daily
service to Mexico City. Since April
2002 the frequency of international passenger service has been reduced from 7
round trips per week to 5. During the
absence of international passenger service the UETA lease was dormant for
(30) months. However, since May 1,
2002 UETA’s rental obligation of $ 2,083.00 resumed and remains in
effect. The UETA lease will
terminate by February 2003 unless extended by the number of months the lease
was dormant. UETA is considering releasing a
portion of the current (not active) duty free store (1,254 square feet). The Airport has a tenant in the
Transportation Security Administration (TSA) who is requesting to lease the
area for offices and security related activities. The Airport would lease the space to TSA in “as is” condition
for a two year term. Post September 11, 2001, public access
to the departure lounge was limited to ticket passengers only this caused for
Margarita’s Gift Shop to close. The proposal is to relocate to the
downstairs and combine both activities (duty free and gift shop) at one
location, one tenant on the first floor to the former travel agency space
consisting of approximately 400 square feet.
UETA would invest approximately $25,000 to $30,000 of which amount the
Airport would contribute an equal amount up to 50% and not to exceed
$16,664.00 which ever amount is less to
modify and make improvements to the remaining space upstairs and to
the new downstairs location. |
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FINANCIAL: First 6 months $1,000.00/mo., next 6 months $1,500/mo. and
$2,083/month thereafter for the combined duty free / gift shop or 10% of
gross receipts from Duty Free sales. In the event International passenger
service ceases or is withdrawn the monthly rent shall be reduced to
$1,000.00. The vacated duty free
space in the second level approximately 625 square feet leased to TSA would
generate additional rental income. Aeronautical Building Rent 242-0000-361-1086 |
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COMMITTEE
RECOMMENDATION: The Airport Advisory Committee recommend
approval of the amendment. |
STAFF
RECOMMENDATION: That the City
Manager be authorized to execute the proposed lease amendment with UETA of
Texas, Inc. |
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ORDINANCE NO. 2002-O-328
AUTHORIZING THE CITY MANAGER TO EXECUTE AN AMENDMENT TO THE LEASE AGREEMENT APPROVED BY ORDINANCE NO. 98-O-053 DATED FEBRUARY 17, 1998, BETWEEN THE CITY OF LAREDO, AS LESSOR, AND UETA OF TEXAS, INC., A SUBSIDIARY OF DUTY FREE INTERNATIONAL, INC., AS LESSEE, TO AMEND THE LEASE AREA AT THE LAREDO INTERNATIONAL AIRPORT PASSSENGER TERMINAL AND RENTAL OBLIGATION, EXTEND THE TERM OF THE AGREEMENT BY 30 MONTHS, CONSOLIDATE DUTY FREE AND NEWS/GIFT SHOP MERCHANDISE, PROVIDE FOR ADDITIONAL MODIFICATIONS AND IMPROVEMENTS TO THE NEW LEASED AREA AND AMEND HOURS OF OPERATION, PROVIDING FOR EFFECTIVE DATE.
WHEREAS,
the Airport Director recommends that the City Council approve the proposed
Amendment to the Lease Agreement authorized by Ordinance No. 98-O-053 dated
February 17, 1998, between the City of Laredo, as LESSOR, and UETA of Texas,
Inc., as LESSEE, to partially relocate duty free operations and consolidate
duty free and retail news/gift shop operations to an area of approximately 1,313
square feet comprising of 913 square feet in suite number 223 on the second (2nd)
floor and 400 square feet in suite no. 100 on the first floor of the airport
passenger terminal located at 5210 Bob Bullock Loop at the Laredo International
Airport, as a contract and in furtherance of the development of the Laredo
International Airport and as a support to the maintenance and operation of the
Laredo International Airport.
WHEREAS,
LESSOR and LESSEE wish to Amend said Lease Agreement for the purpose of partially
relocating the duty free operations and consolidating duty free operations with
retail news/gift shop operations; and
WHEREAS, the Airport Advisory Committee finds that said lease and
contract are in the best interest of the Airport and recommends that the City
Council approve the proposed lease; and
WHEREAS, the City Council of the City of Laredo having
heard the recommendations of the Airport Director and of the Airport Advisory
Committee agrees with same.
NOW,
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LAREDO THAT:
Section 1: The
City Manager be and is hereby authorized to execute an Amendment to the Lease
Agreement authorized by Ordinance No. 98-O-053 dated February 17,. 1998,
between the City of Laredo, as Lessor and UETA of Texas, Inc., as Lessee, a
copy of which Amendment is attached hereto as Exhibit A, and incorporated
herein as if set out at length for all intents and purposes.
Section 2: This
Ordinance shall become effective upon passage hereof.
AN ORDINANCE AUTHORIZING
AN AMENDMENT BETWEEN THE CITY OF LAREDO AND UETA OF TEXAS, INC.
PASSED
BY THE CITY COUNCIL AND APROVED 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:________________________
ALLAN W. McGRAW
ASSISTANT CITY ATTORNEY