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Farmers Branch approves modified $112,500 economic agreement with Southwest Airlines
Summary
City council approved an amended economic development agreement with Southwest Airlines that removes a 20,000-room cap, switches to annual verification of room nights and sets a $5-per-room reimbursement. The resolution passed unanimously Dec. 10 after staff explained the changes and praised the city—s tourism work.
Farmers Branch City Council unanimously approved a modified economic development agreement with Southwest Airlines on Dec. 10, authorizing the city manager to execute the contract at a not-to-exceed amount of $112,500.
Perla Tavera, director of economic development, tourism and planning, told council staff had redlined three key contract provisions requested by Southwest and then adjusted them to protect the city—s interests. She said staff removed a proposed 20,000-room limit so the airline would not be artificially restricted, changed quarterly reimbursements to an annual verification process and simplified the calculation to a flat $5 reimbursement per room night. "We removed the limit of 20,000," Tavera said. "So we're just saying $5 per room reimbursement."
Council members praised the tourism team's outreach and the potential revenue benefits of bringing Southwest employees and contractors to local hotels. One council member said the arrangement offered "a really great opportunity for Farmers Branch revenue and some visibility for people that are coming here to work for one of the best airlines in the industry."
The council's action was procedural: members moved to approve Resolution 2024-232 with the staff-suggested modifications and approved the motion by show of hands. City attorneys reviewed the amended terms and staff confirmed the changes were negotiated with the airline.
Staff said the annual verification of room nights will allow the city to confirm stays before payments are made, and the flat-per-room approach simplifies administration in lieu of a percentage-based calculation tied to a specific tax rate. The agreement is intended to increase hotel occupancy in Farmers Branch and capture related hotel-motel tax revenue.
Next steps: staff will finalize contract language and the city manager will execute the agreement; council will receive any implementation details and reporting as needed.
