flying crown's dalfort legend presentation proposal 03 dec 2014

8/10/2019 Flying Crown's Dalfort Legend Presentation Proposal 03 Dec 2014

1/22

Proposal

Regarding

Former Dalfort/Legend Facilities

December 08, 2014


2/22

Table of Contents

SECTION I: PROPOSAL

Team 3

Key Terms 4

Exterior 5

Interior 9

SECTION II: IMPACTS

Environmental 12

Social 13

Jobs 14

Financial 15

Funding 16

SECTION III: EXECUTIONBudget 17

Timetable 18

Lease 19

Summary 22


3/22

Team

Developer

Nonprofit organization created to relieve the burdens

of government

500,000 sq. ft. of aviation hangar and office under

management in four states

Completed aviation projects in four states

Renovated facilities at Bridgeport Sikorsky Airport and

Owatonna Municipal Airport

In operation since August 2007

www.flyingcrown.org

Jason Hutton

Stephen Birch

Architectural

Design

Construction

Old Parkland Renovation (for Crow Holdings)

Interurban Building Lofts Historic Conversion

Adaptive Reuse of Fidelity Union Life Building

Gables Republic Tower lobby

Republic Tower elevation

Cathedral Guadalupe

Santa Fe 4 A Loft Hotel Conversion

Majestic Lofts

Mosaic Loft Historic Conversion

Dallas Power & Light Lofts Historic Conversion

www.gff.com

www.andresconstruction.com

Award-winning 100 person firm in practice for 31

years. Architectural Top 250 Firms nationwide and

Top 100 Green Design firms. Recent projects

include:

City of Dallas: Perot Museum of Nature and ScienceArts District Parking Garage

Fair Park Renovations 1987-2012

Dealey Plaza

Crow Holdings at Old Parkland

Melrose Hotel Renovation and Expansion

Park Lane

Park Seventeen

Jeff Good

Wade Andres

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http://www.gff.com/http://www.andresconstruction.com/http://www.andresconstruction.com/http://www.gff.com/


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Key Terms

Proposal

Introduction: Flying Crown Land Group is pleased to present to the Aviation Department this

revised proposal to develop the former Dalfort/Legend facilities

Compromise: Compromise among aviation, historic preservation and neighborhood groups

Strategy: Renovate existing aviation facilities and parking garage

Construct new office building and aviation structures

Retail and restaurants along Lemmon Avenue

Development: Renovation: Operations and Maintenance Building (OMB)

Annex, North and South

Parking Garage

Construction: Office Building/Underground Parking Garage

Hangars (2)/Fuel FarmRetail/Restaurants

Budget: $92,424,000

Mixed-Use: Aviation: FBO, aviation offices, new hangars (including 145 facility); fuel farm

Commercial: Class A office space

Retail: High quality owner/chef restaurants and retail spaces

Civic: Ballroom and meeting spaces for public and private events

Governmental: CBP/Secure facility for dignitaries (Secret Service input)

Community: Natural, park-like setting; designated space on Ground Level

Design: Restore mid-century modern design to OMB and carryover design to other buildings

Retain highest artistic design elements of original architects

Environmental: Green buildings; LEED certifiable

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Exterior

Page 5


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Exterior

Outdoors: Courtyard (park) feel

Efficient outdoor lighting

Parking lots (natural materials, crushed stone)

Extensive new trees and plantings

Fountain (front entrance)

Benches (exterior seating areas)

Sustainable gardens (on roof tops)

Outdoor restaurant seating areas (covered and

uncovered) on ground and balcony levels

Site Work: Demolition (Partial South and North Annexes, and

other structures on South perimeter)

Underground parking garage (new office building)

Second entrance to underground parking and FBO

Redesign parallel access road along Lemmon

Design and construct new main entrance

Install new median break at main entrance

Retail Spaces: Converted ground floor of Parking garage

New construction on South side of Parking garage

Ground floor of office building

Ground floor of OMB

Square Footage: Retail: 38,100

Office: 100,000

Existing Aviation: 440,300

New hangars: 42,000 (18,000 x 2) + (Office: 6,000)

Automotive: 20,000

Parking: New underground parking garage - office building (123)

New parking lot - new office building (160)

Reconfigured existing parking garage (745)

New underground parking OMB (110)

Reconfigured front parking lot and new retail parking

(along Lemmon) (274)

Total spaces (1,412)

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Exterior

Floors: FiveQuality: Class A

Size: 100,000 sq. ft.

Budget: $22,584,615 (approx. $200/s.f.)

Design: Inspired by Lever House (in NYC); design tied to OMB

Exterior: Open foyer space for outside dining and other garden areas

Balcony: Additional outside seating

Lead Tenant: FlexJet

Retail: Local bank branch and two restaurants; additional

retail along Lemmon

Restaurant: Two (5,000 sq. ft. each) and One (3,600 sq. ft.)

Parking: Underground (123 spaces) and new surface lot (160

spaces); street parking off Lemmon

Efficiency: Central plant and solar powered

Green: LEED Certifiable

Office Retail

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Exterior

Ground Level: Reconfigure 50% of ground level for retail (front

along Lemmon)

New Retail: New construction (South end) for retai l orrestaurant

Enclosure: Redesign entire building with decorative louvers

(increase curb appeal)Design: Exterior design ties to OMBBudget: $4,821,000Ramp: Remove existing ramp; construct new speed

ramp on North side

Sq. Ft.: Retail (converted and new) of 24,500Exterior: Outside dining and gardens

Restaurant: Space for restaurant (South end)

Balcony: On second level (South end)

Parking: 458 existing spaces (garage)

New Parking: Additional new street parking off Lemmon (90 spaces)

Tenants: Sewell Automotive Group

Marketing: Demand-driven leasing strategy

Demand: Expecta tion of close to 100% pre-leased before

construction commenced

Green: LEED Platinum Certifiable

Parking Garage

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Interior

Lower Level

Theme: Connection (setting new standards for private FBO

facility experience)

Size: FBO/Offices: 38,000 sq. ft.

Parking: 26,000 sq. ft.

Hangars: 140,000 sq. ft.

Hangar Capacity: Accommodate 72 mid-sized private jets

Use: Operational aviation (FBO, private offices and

hangars)

Exclusive clients, highest public officials and

dignitaries

Public Access: Restricted area (no public access)

Design: Luxury FBO (non-public) and private offices

Exclusive, private, high security area

FBO entrance (private/secured)

Hangars (upgraded with unique features)

Convenient, private parking (adjacent to hangars)

Fitness center and locker rooms (private use only)

US Secret Service input (on security matters)

Marketing: Highest demand (invitation only)

Pre-sold in advance of construction

Tenants: Undetermined (National FBO Chain)

New corporate clients

Relocated clients (within Love Field)

US Customs and Border Protection

OfficeCustoms BPHangarParking

Private FBO

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Ground Level

Theme: Community (entire level dedicated to aviation and

non-aviation community activities)

Size: Commercial: 37,000 sq. ft.

Ballroom: 20,000 sq. ft.

Atrium: 13,000 sq. ft.

Use: Various community activities and events

Ballroom (public and private events); kitchen facilities

Fitness Center

Commercial demonstration kitchen (aviation use)

Conference rooms, aviation library and training center

Public Access: Full, unrestricted

Design: Atrium (two-story Atrium through center of building)

Ballroom

Marketing: Strong demand expected

Pre-leased before construction completed

Tenants: Undetermined FBOCessna Aircraft

Bell Helicopter

Air Culinaire

Augusta Westland

Leading Edge

Public Space

Showroom

Interior

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Upper Level

Theme: Collaboration (incubator for community groups and non-profits)

Provide infrastructure, support and office space in central place

Similar to The Meadows Foundation (Wilson Historic District)

Size: Offices: 31,000 sq. ft.

Dining Club: 15,000 sq. ft.

Atrium: 11,000 sq. ft.

Deck: 5,000 sq. ft.

Public Access: Full public access

Use: Centralized office space designated for non-profit organizations

Private Dining Club

Design: Two-Story Atrium (sky light)

Restore observation deck

Marketing: Strong Interest

Advance commitments expected

Tenants: ClubCorp

Community groups and non-profits (aviation and non-aviation)

Interior

Public Space

Offices

Walkway

Atrium

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Environmental

Concern

Metal Dust Soil/Groundwater Mold/Fungus

Cause

Assessment

Action

Building Materials

Elevated levels of metal dust

Spread through building

Plating Room

Paint Booth and

Sand Blasting Rooms

Farmer Interior Sampling

Report (6/10/09)EFI Global Memo No. 2

(7/16/12)

Clean up: Qualified

abatement contractor

Contamination by COCs in

excess of regulatory guidelines

Plating room,

Hazardous materials (storage)

USTs,

Waste water sand traps and

Water separators

Limited Phase II ESA/Farmer

Report Re Subgrade Soil &

Water (5/29/09)

Remove UST

Remove oil water separator

Remove sand traps

Plug/Abandon monitoring wells

Mold/fungus in Legends

office space

Roof leaks

Pipe leaks

Other moisture

Limited Fungal Growth

and Bio aerosol

Assessment (7/3/09)

Remove contaminated

ceiling tile

Repair sources of

moisture (roof/pipe leaks)

Lead paint

Asbestos

PCB

Materials used in 1950s

construction

Phase I ESA (11/17/08)

Asbestos Assessment (not

available)

Removal: Qualified

abatement contractor

Takeaways

Environmental issues are typical of aviation facilities

Expected remediation is limited, contained and manageable

Cost of remediation has been properly accounted for

No off-site environmental concerns have been identified

Environmental considerations are not likely to be a significant community concern

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Social

Comparison

Takeaways

ConcernsBenefits

Employment (Job Creation)

Aviation Development/Growth

Community Development

Removal of eye sore

Historical Preservation

Furtherance of policy (Good Neighbor Plan

Initiative)

Residential neighborhood - Impact to adjacent residential

neighborhoods from increased air traffic, noise or congestion

Potential increased traffic on Lemmon (partially caused by loss

of parallel access road)

o Proposal benefits different groups within the community

o No adverse impact or disproportionate disadvantage to a particular group

o No significant negatives identified that cannot be managed or mitigated

o Mitigation factors: retail/restaurants improve quality of life for residents and office is good neighbor

(quiet at night)

Support

Focus

For Against

Business neighbors

Residential neighbors

District Council Member

Southwest Airlines

Love Field Pilot/Aviation groups

None identified

To assess impact on the Community

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Jobs

OMB

TotalNewExisting

Total

Number of Jobs Payroll Number of Jobs Payroll Number of Jobs Payroll

Tenant:

Building:

Tenant:

Building:

Retail:

Restaurant:

Labor:

133 $5,200,000 106 $9,905,000

327 5,108,105

239 $15,105,000

327 5,108,105

368 31,708,200

10 500,000

368 31,708,200

10 500,000

64 2,698,306

150 4,497,750

64 2,698,306

150 4,497,750

84 4,200,000 84 4,200,000

133 $6,500,000 1,109 $58,617,361 1,242 $63,817,361Annually:

Office

Building

Retail

Construction

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Financial

ProposalOriginal

Factors

Takeaways

Result

Revenues:

Ground Lease (Approx.):

Other:

Capital Commitment/Residual Value:

Demolition:

Less: $5m Rent Rebate

Capital Outlay (by City):

Financial Commitment (by City):

Environmental/Clean-Up:

Mitigated Costs:

(Maintenance/Preservation)

TOTAL

$1m $1m

Sales/Property Taxes (Higher)

Sub-Lease Rents (Higher)BETTER

$21m $84m BETTER ($63m)

$8m $0

$3m BETTER ($3m)

$0 $0 SAME

$0 $0 SAME

SAME$[3]m $[3]m

$1m $0 BETTER ($1m)

BETTER ($67m or more)

Budget:

Economic:

Risk:

Stable and constant rent revenues

No capital outlays (initially or in the future) by the City

No financial guarantee or credit supportBenefits aviation and general funds

Greater residual value

Greater upside potential (sales/property taxes and sub-leasing revenue)

Greater multiplier effect

Execution: Greater expertise (GFF, DEVCO and Andres)

Financial: Additional financial specialists (Raymond James/Amegy)

Stability: Strategic business plan diversifies and decreases risk

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29.0%

27.1%

84.1%

30.0%

BRANIFF OMB SOURCES OF CAPITAL

Equity Debt Government Incentives EB-5

Funding

Sources

of

Capital

Detail

Federal Historic Tax Credit available due to National Park Service eligible status of 20%

Newly enacted State Historic Tax Credits of 10% by legislation implemented this year Love Field Area is in Highly Distressed economic identification zone as per the 2010 US

Census making it eligible for New Market Tax Credits (NMTC)

Eligible for Brownfield Development Improvement Funds due to EPA registered cleanup site

Chapter 380 Guaranty from the City of Dallas

Property remains FAA grantee site and eligible for HUD Section 108 loan guarantees

Job creation meets both EB-5 and NMTC requirements

170.1%

FUNDING BREAKDOWNEquity

Charitable Donations $ 500,000 1.1%

Owner Cash Contribution $ 2,000,000 4.3%

Foundation Support $ 4,619,863 10.0%

Land Lease Equity $ 6,287,243 13.6%

Debt

Section 380 Guarantees $ 2,500,000 5.4%

Bank Debt Financing $ 5,000,000 10.8%

Section 108 Guarantees $ 5,000,000 10.8%

Government Incentives

Brownfield Development $ 2,500,000 5.4%

CDBG $ 4,000,000 8.66%

State Tax Credits $ 4,619,863 10.0%

Historic Tax Credits $ 9,239,727 20.0%

New Market Tax Credit $ 18,479,454 40.0%

EB-5 Funding $ 13,859,590 30.0%

$ 78,605,741 170.1%

Project Cost $ 46,198,635

FCLG Confidential and Proprietary Page 16


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Budget

OMB Renovations

SQUARE FOOTAGE (SF) LEVELSTOTAL FIRST SECOND THIRD

Office 33,847 0 12,510 21,337

Special Events 64,510 20,040 29,699 14,771

Hangar & Showrooms 191,213 162,104 29,109 0

Civic 2,902 0 0 2,902

Support 1,927 0 0 1,927

Atrium 62,326 18,163 31,256 12,907

Restrooms 5,213 1,250 2,904 2,309

Parking 25,540 25,540 0 0

Total 387,478 225,847 105,478 56,153

RENOVATIONS SF PRICE/SF COST TOTAL

Office 33,847 80 2,707,760

Special Events 64,510 60 3,870,600

Hangar & Showrooms 191,213 50 9,560,650

Civic 2,902 120 348,240

Support 1,927 120 231,240

Atrium 62,326 120 7,479,120

Restrooms 5,213 80 417,040

Parking 25,540 40 1,021,600

387,478 25,636,250

DEMOLITION

In te ri or - Mez za nine le ve ls 137, 508 2 275 ,016

Hangars (Level 1) 162,104 3 486,312

Atrium 62,326 10 623,260

Parking 25,540 4 102,160

Existing Building 16,168 20 323,360

1,810,108

HISTORIC RESTORATION

Hangar Door 832 500 416,000

Precast Skin 543,060 10 5,430,600

Storefront Glass 19,200 65 1,248,000

Clearstory Glass 7,152 45 321,840

Roof 225,847 12 2,710,164

Tarmac 395,266 4 1,581,064

11,707,668

TOTAL OMB 39,154,026

New Construction

SF PRICE/SF COST TOTAL

EXISTING AVIATION

BLDGS

North Annex 74,000 30 2,220,000

South Annex 21,000 30 630,000

2,850,000

NEW HANGARS (2) 42,000 125 5,250,000

5,250,000

FUEL FARM

Building 5,272 80 421,760

Equipment 500,884

922,644

OFFICE BUILDINGStandard Class A 100,000 200 20,000,000

Parking 2,584,615

22,584,615

PARKING GARAGE

Exterior Features 55,720 25 1,393,000

Ramp 190,000 2 380,000

Retail 38,100 80 3,048,000

4,821,000

SITE WORK

Surface Parking 130,150 12 1,561,800

Landscaping 400,000

Curb Cut 50,000

Sidewalks 66,263 8 530,104

2,541,904

CENTRAL PLANT

6,300,000

PROJECT TOTAL 84,424,189

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Timetable

Construction Schedule

Pre-Construction Period: Finalize ground lease terms

Finalize architectural drawings

Complete environmental clean up

Projected Capital Expenditures

Construction Period: Begin renovations on OMB, Annex and site work (Day 1)

Construction of new hangars projected to commence 9 months after Day 1

Renovations on Parking Garage, Automotive and Retail projected to commence 15 months after Day 1

Construction of new office building projected to commence 18 months after Day 1

First Year Second Year Third Year Total

Start Date Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12

OMB Q1 1,603,938 4,558,560 6,880,050 8,061,898 8,061,898 6,880,050 4,558,560 1,603,939 42,208,893

OMB Annex Q1 1,097,250 1,601,700 151,050 2,850,000

Sitework Q1 1,664,947 876,957 2,541,904

New Hangars Q4 1,907,347 3,364,091 901,206 6,172,644

Parking Garage Q6 1,685,904 2,973,520 796,576 5,456,000

Office Building Q7 2,716,056 6,977,026 8,198,005 5,805,882 1,220,979 24,917,948

Quarterly Totals 4,366,135 7,037,217 7,031,100 9,969,245 11,425,989 9,467,160 10,248,136 9,377,541 8,198,005 5,805,882 1,220,979 -

Annual Totals 28,403,697 40,518,826 15,224,866 84,147,389

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In General

Aviation

Parties: City of Dallas (Lessor)

Reed Enterprises Investment Holdings, L.P. (Lessee)

Reed Enterprises Management, LLC (General Partner)

Randall L. Reed (Manager)

Term: Forty (40) years (to commence fourteen (14)months from Effective Date)

Effective Date: Date upon which lease is executed

Property: 635,538 sq. ft. (Total)600,858 sq. ft. (Improved Land)

34,680 sq. ft. (Unimproved Land)

Rate: $0.65 per sq. ft. (Improved Land)

$0.40 per sq. ft. (Unimproved Land)

Rent: Amount: $404,429 (Annually)

Computation: (600,858 * 0.65) + (34,680 * 0.40)

Payable: Begins fourteen (14) months from the Effective Date

Period: First three years

RentIncrease:

Timing: Every three years

Computation: Greater of (1) percentage increase in CPI over previous 3-yr

period, (2) Prevailing rate for similar properties at Love Field or (3) 6 %

Cap: 12% (of previous 3-year period)Period: Years 4 through 30

Amount: Collection of rent at then prevailing market rate at Love Field

Period: Years 31 through 40

Permanent

Improvements:

$9 million (within 24 months of Effective Date)

$4 million (within 10 years of Effective Date)

Title: Title to Improvements vests to Lessor upon completion of construction

Parties: Braniff International Property

Company (Lessee)

Effective Date: No Change

Rate: No Change

Rent Increase: No Change

Title: No Change

Term: [40] years (or longer toaccommodate financing) and [24] months

(longer construction period)

Revised property line:

788,855 sq. ft. (Improved Land)

No Change (Unimproved Land)

Amount: $526,627

Computation: (788,855* 0.65) + (34,680* 0.40)

Payable: [24] months

$[35] million within [36] months

$[15] million within [5] years

Subsequent Rent: Subsequent Rent: No change

Lease

Original Proposal

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Lease

Commercial

Original Proposal

Property:

Rate:

Rent:

RentIncrease:

Permanent

Improvements:

Title:

Rate: No Change

Rent Increase: No Change

Title: No Change

$[20] million within [60] months

Percentage Rent:

414,600 sq.ft. (Unimproved and Improved Land)

$0.75 per sq. ft.

$240,000 annually (parking garage)

Amount: $521,809 (Annually)

Computation: ((414,600 less 38,865 for parking garage)

multiplied by $0.75 rate) plus $240,000

Payable: Begins fourteen months from the Effective Date

Period: First three years

Timing: Every three years

Computation: Lessor of (1) percentage increase in CPI overprevious 3-year period or (2) Maximum of 2 percent per year

Excess CPI Amount: Any CPI increase over 2 percent shall be

payable on a pro rata basis over 5 years

Period: Years 4 through 40

Lessor shall receive percentage rental equal to excess of (1)

10% of gross retail rentals collected by Lessee under subleases

of the property over (2) amount of base rent otherwise payable

by Lessee for same periodPeriod: Years 20 through 40

$8 million (within 24 months of Effective Date)

Upon completion of construction, Lessee retains ownership

of permanent improvements through remainder of Term

(which will be subject to ad valorem property taxes)

261,283 sq.ft.

Amount: $406,814

Computation: ((261,283 less 38,865 for

parking garage) multiplied by $0.75 rate)

plus $240,000

Payable: Begins [24] months

Percentage Rent: No change

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Other

Original Proposal

No Change

At Maturity: At expiration of the Term, Lessor retains right

to require Lessee (at Lessees expense) to

demolish the improvements or leave them in place

Right of

First Refusal:

Lessor remains responsible for environmental clean-up and

remediation of environmental contaminates, not caused by

Lessee, after Lessors initial demolition of the structural

improvements. If, during Lessees construction of new

improvements on the leased premises, environmental

contaminates requiring remediation are found on the site for

which Lessor is responsible, Lessee may remediate the site

to acceptable levels and Lessor shall reimburse Lessee for

the cost of such remediation through rent abatements in an

amount not to exceed one years rent under both leases

Environmental: Lessor remains responsible for environmental clean-up and

remediation of environmental contaminates, not caused by

Lessee, after Lessors initial demolition of the structural

improvements. If, during Lessees construction of new

improvements on the leased premises, environmental

contaminates requiring remediation are found on the site for

which Lessor is responsible, Lessee may remediate the site to

acceptable levels and Lessor shall reimburse Lessee for thecost of such remediation through rent abatements in an amount

not to exceed one years rent under both leases

Renewal: The Parties agree to enter into negotiations in the thirty sixth

(36th) year regarding possible ten (10) year extension of the

Term. If no agreement is reached (by the beginning of the 37th

year), Lessee has right to terminate the lease upon written

notice. Lessee has limited right of first refusal for third party

offers

No Change

No Change

[NA, no demo of historical property]

Lease

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Summary

Conclusion

Next Steps

Endorsement to proceed

Finalize lease terms

Finalize architectural designs

Schedule environmental clean-up

Identify any other concerns

Thank you for the opportunity to present our proposal

Win-win solution that is superior to the original plan

Compelling financial deal for the City

More positive impacts to the community (e.g., creates more jobs, preserve

historical building, and furthers Good Neighborhood Initiative)

Less risk (execution, funding and ongoing risk)

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flying crown's dalfort legend presentation proposal 03 dec 2014

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