Dallas City Council reviews aviation lease in South Dallas

By DIANE XAVIER The Dallas Examiner

Dallas City Hall Mark Duebner 002
Dallas City Hall Mark Duebner

During the Dallas City Council meeting, held Sept. 11, Pastor Steve Wilder read from Psalms 23:1-3 before offering a special prayer in commemoration of 9/11 during the invocation.

During the meeting, council members discussed the authorization of a lease agreement with Dallas Jet Holdings LLC. The lease agreement with Dallas Jet at Dallas Executive Airport would allow for approximately 824 square feet of lobby and office space within the airport terminal and 97,049 square feet of airport land and facilities for aviation-related operations.

Kimberly Bizor Tolbert, chief of staff to the city manager, explained that the aviation group is a subsidiary of Aero Management Group Inc., which operates independent fixed-base operator facilities at multiple general aviation airports around the United States. AMG provides FBO services including fueling, aircraft tie-downs, parking, hangar services, flight instruction, aircraft rentals and aircraft charter services, and now desires, through Dallas Jet, to expand its operations to the airport.

The city desires to lease to Dallas Jet approximately 97,049 square feet of land and facilities at the airport for its new FBO operation for an initial term of 20 years, with two 10-year renewal options.

The city would also lease to Dallas Jet approximately 824 square feet of lobby and office space within the airport terminal for an initial term of five years, with four five-year renewal options.

Tolbert said this lease would generate over $8 million in revenue.

“This lease would generate an estimated revenue of approximately $8.7 million to the city over the initial 20-year term and will bring new amenities and business operations to Dallas Executive, which will help spur continued future development at the airport,” Tolbert said.

George Moussa, president and CEO of Ambassador Jet Center, the other FBO on the field, said he is not opposed to competition from Dallas Jet but is concerned about the unfair advantage given to Dallas Jet.

“To allow Dallas Jet Holdings the opportunity to run their FBO operations from their terminal creates an economic disadvantage against Ambassador and shows favoritism to a newcomer over an operation that has been on the field over 15 years,” Moussa said. “For 19 years, Ambassador Jet Center has had a committed investment and continues to make improvements to the airport, and we believe in a level playing field for all. I encourage you to vote no on this portion of the agenda and keep the terminal building off limits.”

Brian Myler, general manager of Ambassador Jet Center and an employee of Dallas Executive Airport in South Dallas, also agreed that allowing Dallas Jet the opportunity to take over the terminal building would be unfair and difficult.

“Our location is not directly next to the restaurant where people can easily go and eat, so if we have a new FBO in the building, then all their customers can easily go to the restaurant, and if somebody comes to get picked up from the terminal there, it’s an easy drive, and it terminates right at the end of the road, and we are off to the side, and one has to circumvent many hangers to get to the building,” Myler said. “We have been down there and working there since 2001. We are part of South Dallas and Oak Cliff and part of that infrastructure, and we just want to be fair.”

Mark Duebner, director of aviation for the city of Dallas, said his organization feels like this connected type of fixed-based operator enterprise is beneficial to the airport.

“We’ve seen a steady rise in the fuel sales average monthly gallons flow at Dallas Executive since we have made the major investment on expanding the runway, and so we felt like that there is enough business at Dallas Executive; it is steadily growing significantly the investment,” Duebner said. “Bringing a fixed-based operator with a national network would help drive  additional traffic as well as other development we are doing at Dallas Executive. We think we have been fair about the opportunities at Dallas Executive, and so when Dallas Jet approached us about negotiating terms of coming to Dallas Executive, we were receptive, and that is how we came to negotiate this deal.”

Council member Tennell Atkins for District 8 wanted to know what the current volume of fuel was for the airport.

“In 2019, we are averaging 60,604 gallons monthly,” Duebner said. “So we are seeing an increase in fuel sales, an increase in activity, which lets us know our and the council commitment to the investment in the  airport is paying off.”

Atkins also had questions about the lease agreement and wanted to know why the lease agreement called for a 20-year lease when initially he was told it would be a temporary lease agreement.

“It could be extended to 20 years, but the original term is five years,” Duebner said. “However, the last part of that clause in the lease does say either party may at any time terminate this lease with respect to the terminal space upon 180 days prior written notice to the other party. It is the intent in discussing with Dallas Jet that it is a temporary use of that space while they do renovations. They intend to consolidate their operations at 5555 Apollo [Drive], and that will be their place of business. Given the variabilities that happen in construction in this market and indications of a looming recession really affects general aviation sort of as a leading casualty, they wanted some option of staying in the terminal if something went wrong so they wouldn’t be displaced or have no place to have their reception space and office space.”

Atkins said he believes it should not be a long-term lease of 20 years.

“When they do improvements to their property, and they didn’t come back and negotiate,” Atkins said. “I don’t think it should be a long-term lease. I think it’s unfair with more than one FBO there and to have an exclusive right for the plane to drive up in front of the terminal building. Instead, the city of Dallas let you drive up, drop the passenger off, and you have another space on the property that is unfair because it is an impression that the city of Dallas is part of the FBO, in my opinion, as part of general aviation. It is not a Love Field or DFW, but it is a general aviation airport. So I think to lease something in the terminal building for 20 years for a revenue of $10,000 a year for a 1,000 square feet – that is less than 80 cents a square foot. That is below market. I think we should do a short-term lease and not a 20-year lease.”

Council member Carolyn King Arnold of District 4 noted having concerns because she had questions for the district’s council member about what his constituents have said, but that representative was not present.

Arnold made a motion to delay the vote of this subject for 30 days.

“It’s about stewardship and accountability,” Arnold said. “I have a number of concerns about the statements made today, and I just want to err on the side of getting enough information so we can vote in terms of accountability for this community of which I am also affected.”

The council agreed to defer the item for 30

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