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C. 9
To: Board of Supervisors
From: Keith Freitas, Airports Director
Date: November  7, 2017
The Seal of Contra Costa County, CA
Contra
Costa
County
Subject: Update Regarding the Economic Development Incentive Program and Strategic Plan Priority Initiatives for the Buchanan Field and Byron Airports
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On:   11/07/2017
APPROVED AS RECOMMENDED OTHER
Clerks Notes:

VOTE OF SUPERVISORS

AYE:
John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Diane Burgis, District III Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor
Contact: Beth Lee, (925) 681-4200
cc: Laura Strobel, Senior Deputy County Administrator    
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  7, 2017
David Twa,
 
BY: , Deputy

 

RECOMMENDATION(S):

RECEIVE update regarding the Economic Development Incentive Program and Strategic Plan priority initiatives to strengthen and grow the Buchanan Field and Byron Airports. Concord and Byron Areas (District III and District IV).

FISCAL IMPACT:

Positive economic impacts from increased rent revenue, possessory interest taxes, transient occupancy tax, and sales tax would benefit both the Airport Enterprise Fund and County General Fund. Any expenditures would be only by Airport Enterprise Fund.

BACKGROUND:
BACKGROUND: (CONT'D)
    In 2013, the Airports Division created a business retention and attraction program to strengthen and grow the Buchanan Field and Byron Airports (Airports). Airports staff began an Economic Development Incentive Program (EDIP) process to develop a program that would be most successful in retaining and attracting new aviation tenants and businesses. The EDIP had a diverse working group that represented leasehold tenants, businesses, flight clubs, County hangar and tie-down tenants, and the Aviation Advisory Committee. The EDIP was designed to address a variety of airport issues and generate high stakeholder involvement to best address business/tenant needs and be consistent with the Airport Master Plan. The goal was to inspire creativity and innovative approaches to make the Contra Costa County Airport system unique and entice people and businesses to come check out the Airports. The EDIP process was completed in late 2015 and concluded with a large projects/programs prioritization list for both Airports.

    After completing the EDIP process, the Airports Division completed an update to its strategic plan, in August 2017, to create a pathway that best positions the Airports for regional competiveness. The top identified priority projects/programs mirrored those identified during the EDIP Process. The top four priorities are listed and detailed below:  

    1. Evaluate rates and charges to increase regional marketplace competitiveness
    2. Develop a Terminal building to create a hub or “heart” of Buchanan Field
    3. Construct hangar(s) with office space at Byron Airport to attract new business tenants
    4. Make aesthetic improvements to signage and landscaping at both airports
    1. Evaluate rates and charges to increase regional marketplace competitiveness.   
    Airports staff initiated this project in 2013 by conducting a market rate rent comparison. Staff found that, in general, aviation rents at the Airports are at the high end for the regional market, which could negatively affect our ability to attract new and retain existing tenants. Many, but not all, of the Airports leases and rental agreements include annual Consumer Price Index (CPI) rent adjustment. To keep the rates from further increasing above the region, a one-year waiver CPI was approved in 2013 and another 3 year waiver was approved in 2016 by the Board of Supervisors (Board) for aviation tenants. The CPI waivers have been a crucial component in the economic retention and development program for the Airports and are set to expire on April 1, 2019.  
      
    The next step will be updating the Airports rates and charges. Airports staff will convene a diverse working group of various aviation tenants and the Aviation Advisory Committee, to help staff develop rates and charges that would be more competitive in the regional marketplace. As such, it is likely that Airports staff will later recommend a fee reduction of its hangar and tie-down rates. It is expected that if rates and charges ultimately go down, the reduced revenue may delay implementation of some improvement projects at the Airports. The rates and charges schedule will be vetted through the public process in advance of scheduling this item before the full Board for their review and approval, which is anticipated in mid-2018.  
      
    2. Develop a terminal building to create a hub or “heart” of Buchanan Field.   
    A terminal building will create a central airport destination that is absent from Buchanan Field. The hub will provide a permanent home for the Airports Division as it currently rents office space from a tenant. The general design is a facility that would also accommodate the Airports Administration Office (converting our rental stream into an ownership opportunity) with additional flexible space that can be used for public meetings, serve the general aviation community, and potentially attract commercial or charter aviation service.  
      
    3. Construct hangar(s) with office space at Byron Airport to attract new business tenants.  
    Byron Airport does not have available hangar and office space to attract new tenants. Development of business hangar(s) with office space will provide the foundation to increase services and grow aviation use at the airport. Attracting new businesses is necessary for Byron Airport to achieve financial self-sufficiency.  
      
    4. Make aesthetic improvements to signage and landscaping at both Airports.  
    Aesthetic improvements at both Airports’ major entry ways will improve public perception and perceived Airports value. New signage is necessary to better market the Airports by increasing visibility through improved advertisement of airport services. Enhanced landscaping will provide an inviting, memorable and welcoming atmosphere for new and longtime tenants and visitors.  
      
    The projects will be vetted through the public process in advance of scheduling before the full Board for their review and approval.

    CONSEQUENCE OF NEGATIVE ACTION:

    Failure to better position the Airports Division in the competitive regional market may prompt a loss of aviation tenants, businesses and associated revenue.  

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