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AIRPORTS COMMITTEE

Meeting Date:	03/08/2017
Subject: 700 Sally Ride Drive Aircraft Hangar Vacancy at Buchanan Field (Review & Discuss)
Submitted For:	Keith Freitas
Department:	Airports
Referral No.:
Referral Name:
Presenter:		Contact:	Beth Lee, (925) 681-4200

Information

Referral History:

In December of 2015, the current lessee (TDMC) gave their 12-month notice to terminate their lease. The ground rent received from this leasehold represents approximately 5% of the Airports Enterprise Fund’s annual revenue.

In anticipation of the Premises reverting to the County, in October 2016 had a marketing advertisement created which was then broadly distributed (over 800 printed mail and emails) for the upcoming aircraft hangar availability. As a response to the aggressive marketing effort, Airports Division staff several letters of interest to lease the Premises.

In accordance with the approved selection process by the Board of Supervisors, on November 15, 2016, Airports staff sent notices for competitive interest to lease the Premises to businesses at both airports and to our interested party list. The solicitation provided a response deadline of 5:00 p.m. on Tuesday, December 6, 2016.

Competitive interest responses were required to include specified detailed information related to the proposed use of the Premises, the proposed business use or other business activities, desired lease term details and supplemental information, proposed building improvements, and a performance guarantee cashier’s check in the amount of $10,000. The performance guarantee would be returned to unsuccessful party(ies) at the completion of the selection process. For the successful candidate, the guarantee would be applied to cover the cost of the projects’ lease development process and any remaining funds could be applied to the ground rent or refunded. The solicitation also advised recipients that the County may elect to negotiate with another candidate, in priority ranked order, if we are unable to consummate a lease with the top ranked candidate.

The County received 3 information response proposals by the deadline. a selection committee (comprised of County staff, an Aviation Advisory Committee member and a District IV staff) reviewed and ranked the proposals. The proposal ranking outcome was determined by the following factors:

Compatibility of proposed use(s) with governing policies
Proposed financial and lease terms (to provide the highest positive impact to the Airport Enterprise Fund)
Proposed enhancements to the Premises
Track record and experience relative to proposed use of the Premises
Proposed schedule and timing

Applying the above factors, the proposal submitted by The Conco Companies was top ranked by the selection committee. Pacific States Aviation was ranked second and Blackhawk Aviation/ Vietnam Helicopters Museum was ranked third.
On December 13, 2016, the Board of Supervisors authorized the Director of Airports, or designee, to negotiate a long-term lease with the three respondents in priority ranking order for the 5.3-acre property located at 700 Sally Ride Drive at Buchanan Field Airport. Subsequent to this action, Airports staff met with top ranked proposer, Conco Companies, representatives to negotiate the lease terms.

Referral Update:

County staff have negotiated lease terms for, and prepared a draft lease with, the Conco Companies. It is anticipated that the lease will be scheduled on the Board of Supervisors in March 14, 2017 agenda for review and consideration.

Recommendation(s)/Next Step(s):

700 Sally Ride Drive Aircraft Hangar Vacancy at Buchanan Field (Review & Discuss). This is a general discussion about the outcome for selecting a tenant to enter into a long-term lease with the County.

Fiscal Impact (if any):

The revenue derived from the ground rent of this property represents about 5% of the Airport Enterprise Fund annual revenue. The property has been vacant for over two months now which negatively impacts the Airport Enterprise Fund and the County general fund (due to loss of possessory tax revenue).

Attachments
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