Agenda

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C. 8

To:	Board of Supervisors
From:	Keith Freitas, Airports Director
Date:	November 3, 2009

Contra

Costa

County

Subject:

Authorization to Negotiate Ground Lease and Development Terms for Approximately 0.86 Acres of County-Owned Land at the Buchanan Field Airport

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 11/03/2009

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Gayle B. Uilkema, District II Supervisor
Mary N. Piepho, District III Supervisor
Susan A. Bonilla, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

Beth Lee, (925) 646-5722

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: November 3, 2009
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

AUTHORIZE the Director of Airports, or designee, to negotiate a long-term ground lease and development terms between the County, as Landlord, and the Aviation Development Group, LLC as the developer for approximately 0.86 acres of land on the north side of Sally Ride Road and east of Marsh Drive at the Buchanan Field Airport. Pacheco Area (District IV).

FISCAL IMPACT:

There is no negative impact on the General Fund. The Airport Enterprise Fund could realize lease and other revenues and the County General Fund could realize sales tax and other revenues if a lease is successfully negotiated.

BACKGROUND:

The development site is approximately 0.86 acres of land owned by the County and at the northerly end of Sally Ride Drive as shown on the attached map. The parcel is proximate to the Buchanan Field runways and is designated for aviation use on the Buchanan Field Master Plan. The parcel is under the jurisdiction of the Buchanan Field Airport and entirely within the unincorporated County.

BACKGROUND: (CONT'D)

On August 8, 2006, the Board of Supervisors approved a Mitigation Monitoring Plan and lease for DHI Northwest, LLC (DHI) to develop hangar and office space on this site. The project included approximately 19,000 square foot of corporate hangar space for single piston and turbo-prop engine aircraft, twin piston and turbo-prop engine aircraft and potentially small jet aircraft. The number of aircraft to be stored was anticipated to range from 1 to 12 in total. DHI then encountered financial difficulty and was not able to commence project construction.

On December 16, 2008, the Board of Supervisors approved a lease assignment from the tenant, DHI Northwest, LLC, to Wings of Buchanan, LLC (Wings). The Board of Supervisors also approved a first lease amendment which provided Wings an opportunity to terminate the lease on or before May 15, 2009, without penalty. On June 2, 2009, the Board of Supervisors approved a second lease amendment that extended the termination period until July 31, 2009. On July 30, 2009, Wings of Buchanan terminated their lease because they were not able to construct the project.

On August 18, 2009, Airport staff solicited for new development interest in this site. The solicitation included a September 2, 2009, deadline to receive letters of development interest. The Airports Division received three letters of development interest prior to the deadline.

Consistent with the June 13, 2006 Board of Supervisor’s approved selection process for airport projects, Airport staff sent the three interested parties a request for further information that required a $25,000 development deposit and a response deadline of October 7, 2009. The County received one response packet and development check from the Aviation Development Group (ADG).

Negotiation of lease terms would expand economic development activity at the Buchanan Field Airport, provide additional revenues to the Airport Enterprise Fund, and allow Contra Costa County to expand aviation related business available at the airport. The ADG proposed project is consistent with the Airport Master Plan and General Plan plus the previously approved Mitigation Monitoring Plan.

CONSEQUENCE OF NEGATIVE ACTION:

Delay in initiating the lease development process and, if necessary, further environmental review will result in a delay of developing vacant land at Buchanan Field Airport and will negatively impact the Airport Enterprise Fund and County General Fund.