City of San Antonio - File #: 19-2597

• File #: 19-2597
• Type: Real Property Lease
• In control: City Council A Session
• On agenda: 5/30/2019
• Posting Language: Ordinance amending the lease agreement with the United Services Automobile Association (USAA) to share costs related to roof repairs to the hangar and covered parking structure roof at 10500 John Cape Road at a cost to the City of $91,889.00 from the Aviation Department Operating and Maintenance Fund; update the maintenance and repair provisions; and update the rental rate process. [Carlos Contreras, Assistant City Manager; Russell Handy, Director, Aviation]
• Indexes: Aviation Lease Agreements, Aviation Maintenance Work, Aviation Other

DEPARTMENT: Aviation


DEPARTMENT HEAD: Russell J. Handy


COUNCIL DISTRICTS IMPACTED: Citywide


SUBJECT:

Amendment to the Lease Agreement with the United Services Automobile Association (USAA) at the San Antonio International Airport


SUMMARY:

Council consideration for authorization of an amendment to the lease agreement with the United Services Automobile Association (USAA) for its leasehold at 10500 John Cape Road. The amendment includes a memorandum of agreement to share costs related to roof repairs to the USAA hangar and covered parking structure with each party contributing $91,889.00 to the overall project cost of $183,778.00 and certain adjustments related to maintenance and rent escalation.


BACKGROUND INFORMATION:

On December 1, 2005, City Council authorized a 15-year lease agreement with USAA with the option of two five-year extensions for the use of approximately 80,532 square feet of ground space and a 25,862 square foot building at 10500 John Cape Road.

In April 2016, the hangar and the parking structure received hail damage. Both the tenant and City recognized conflicting language in the 2005 lease agreement regarding responsibility for roof repairs.

This amendment to the lease agreement addresses the roof repairs and replaces the conflicting language. The amendment also replaces the outdated appraisal adjustment process with the now standard process of a 15% rental escalation every five years for the rest of the term, which will begin on March 1, 2020.

ISSUE:

The ordinance authorizes an amendment to the lease agreement with USAA including:

Roof Repairs to Hangar and Covered Parking Structure at USAA
Both parties agreed to share the costs for the roof repairs. USAA will obtain the Contractor and pay for the work in totality with the City reimbursing USAA for its share in the amount of $91,889.00.

Maintenance and Repairs Provision
The new language clarifies that USAA will be responsible for utility fees and the repair and maint...