Title
Consider/Discuss/Act on a Resolution Authorizing the City Manager to Execute a Takeover Agreement with Lexon Insurance Company to Complete the FBO Terminal at McKinney National Airport; and Providing for an Effective Date
Summary
COUNCIL GOAL: Maximize the Development Potential of McKinney National Airport
(3D: Continually maintain national recognition for excellence in Fixed Base Operations)
MEETING DATE: October 18, 2022
DEPARTMENT: City Council
CONTACT: Mark Houser, City Attorney
Barry Shelton, Assistant City Manager
Ken Carley, Airport Director
RECOMMENDED CITY COUNCIL ACTION: Approve a Resolution authorizing the City Manager to execute a Takeover Agreement for completion of the FBO Terminal at McKinney National Airport.
ITEM SUMMARY:
* The City's general contractor for completion of the FBO Terminal at McKinney National Airport defaulted under its construction contract and filed for Chapter 7 bankruptcy on June 14, 2022.
* The City is protected by a performance bond which requires a surety bond company to complete the construction in the event of contractor default.
* The Takeover Agreement will bind the surety bond company, Lexon Insurance Company, to complete the Project, as originally designed.
* The City agrees to make periodic payments to the surety in amounts up to the balance of the construction contract, $2,507,923.00, to cover its expense of completing the project.
* Lexon Insurance Company has the responsibility to contract for and oversee the completion of the project.
BACKGROUND INFORMATION:
* The City contracted with McRight-Smith Construction, LLC for the completion of the FBO Terminal on July 26, 2020 for a Guaranteed Maximum Price of $6,888,150.00.
During construction, the City made progress payments to McRight-Smith in the amount of $4,380,227.00 during the progress of the work.
* The City required McRight-Smith to provide payment and performance bonds to insure the completion of the project.
* McRight-Smith ...
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