COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

December 22, 2005

BOARD MEETING DATE:

January 10, 2006

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

4/5ths

TO:

Honorable Board of Supervisors

FROM:

Steve Alms, Manager, Real Property Services

SUBJECT:

San Carlos Airport- First Amendment to Concession Agreement with Silicon Valley Aviation, LLC and consent to the extension of an existing sublease agreement between Dankers-Ersted Partnership and Silicon Valley Aviation, LLC.

RECOMMENDATION:

Adopt a Resolution:

1. authorizing the execution of the First Amendment to Concession Agreement with Silicon Valley Aviation, LLC allowing them to provide aircraft management, flight training, aircraft sales, aircraft rental, aircraft maintenance services, air taxi and charter services and limited fueling services at the San Carlos Airport, and

2. consenting to the amendment of an existing sublease agreement between Dankers-Ersted Partnership and Silicon Valley Aviation extending the term of the agreement, and

3. authorizing the County Manager, or designee, to accept or issue on behalf of the County, any and all notices, options, consents, approvals, terminations and documents in connection with the Concession Agreement and the consent to amendment of the sublease agreement .

VISION ALIGNMENT:

Commitment: Responsive, effective and collaborative government

Goal 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or gain. The First Amendment to Concession Agreement and consent to the extension of the Sublease Agreement contribute to this commitment and goal by providing needed services to the public at the San Carlos Airport.

BACKGROUND:

Since June 1, 2000, Silicon Valley Aviation, LLC (SVA) has operated a concession at the San Carlos Airport. The initial term of the Concession Agreement ended May 30, 2005, and SVA currently operates on a month-to-month basis under the holdover provision set forth in that agreement. The Concession Agreement provides SVA two five-year options to extend the term. SVA and the Director of Public Works desire to extend the term through May 30, 2010 as provided in the first option.

SVA offers aircraft sales and management services under the terms of the existing Concession Agreement, and wishes to amend the Agreement to add limited fueling services to its authorized operational activities to improve service to existing airport customers and to attract new clientele.

Dankers-Ersted Partnership leases a parcel of land from the County on the west side of the San Carlos Airport and owns a structure on the site. SVA subleases the facility for its concession operations. SVA and Dankers-Ersted have agreed to extend the term of that sublease through May 31, 2010. The sublease amendment includes two options, each to extend the term of the sublease for five years, and an additional option to extend for two years and seven months to the end of the Dankers-Ersted ground lease. Dankers-Ersted, as required under the terms of its lease with the County, has requested the County’s consent to extension of the sublease agreement with Silicon Valley Aviation.

DISCUSSION:

The First Amendment to Concession Agreement adds limited fueling services to Silicon Valley Aviation’s permitted operations, and extends the term through May 31, 2010. Further extension under the terms of the Concession Agreement will require the approval of the County Manager or his designee at the time the second option is exercised.

Consent to amendment of the sublease between Dankers-Ersted and SVA allows extension of the sublease through May 31, 2010 to coincide with extension of the Concession Agreement, and provides additional extension options that could run through May 31, 2022.

The Public Works Director concurs in this recommendation.

FISCAL IMPACT:

There is no impact on the General Fund. All fees are paid to the airport enterprise fund, including the monthly concession fee for SVA, which will remain at $1,000 per month and $100 for each aircraft sold by SVA, and the new fee of $0.10 per gallon of fuel dispensed.