DALLAS — Alliance Texas, one of the most successful multi-modal inland ports in the nation, will suffer a blow to employment when bankrupt AMR Corp. closes its American Airlines maintenance base in Fort Worth.
AMR defaulted on its $357 million of bonds for the maintenance facility when it filed for bankruptcy protection last November.
The debt was already considered junk when the original 1991 bonds were refinanced in 2007. Standard & Poor’s rated the refunding bonds CCC-plus at the time.
The most recent yields on 5.25% coupons maturing in 2029 and callable in 2012 were 21.764%.
The bonds, issued through the Alliance Airport Authority, were backed only by the revenues from AMR Corp., which used the base in north Fort Worth to service its wide-body jets.
The Fort Worth City Council serves as the board of the airport authority.
Under AMR’s reorganization plan, unveiled Wednesday, the airline would eliminate 13,000 jobs, terminate employee pension plans, and close the maintenance base, among other measures. The cuts are designed to save the company $2 billion per year.
“All work groups will have total costs reduced by 20%, including management,” chief executive Tom Horton wrote in a letter to employees. “While the savings from each work group will be achieved somewhat differently, each will experience the same percentage reduction.”
At Alliance, the cuts would mean the loss of about 1,200 jobs.
“It’s unfortunate that we’re losing 1,200 employees from American but they’re a small percentage of the total employment base of 30,000,” said Christina Weeks, spokeswoman for Hillwood Properties.
Hillwood developed the former commuter airport into a major trade hub with adjacent rail lines and major corporate operators such as FedEx Corp.
FedEx, which issued $245 million of revenue refunding bonds for its sorting facility at Alliance, is seeing its credit go the opposite direction of AMR’s. Moody’s Investors Service on Jan. 12 upgraded the Alliance Airport Authority’s bonds used to build that project to Baa1 from Baa2.
Just a day before American revealed that it was planning to close the maintenance base, Hillwood announced plans to expand and diversify its operations with a major residential development at the site.
The company’s Hillwood Multifamily subsidiary plans more than 3,000 residential properties over the next 10 years within the 17,000-acre Alliance Texas development.
Most of the planned multifamily units will be concentrated in the 900-acre Alliance Town Center mixed-use development, which runs along Interstate 35W.
Headed by Ross Perot Jr., Hillwood developed Alliance as a public-private partnership.
Fort Worth owns the airport, but Alliance operates it and developed the property around it.
“For every $1 of public money, we provide $17 of private investment,” Weeks said.
Among the 265 companies operating at Alliance Texas is BNSF Railroad, which is based in Fort Worth.
Nearly 32 million square feet of property has been developed so far, including 7,600 single-family homes and 288 apartment homes.
Hillwood estimates the port’s economic impact at more than $40 billion.
Hillwood developed the 4,474-acre Alliance Florida at Cecil Commerce Center.
It also developed the 2,000-acre Alliance California.