SUBJECT: APPROVAL
OF A MINOR AMENDMENT TO THE AIRPORT MASTER PLAN AND AUTHORIZATION TO PROCEED
WITH AN EARLY TERMINATION AND REMOVAL
OF THE 94TH AERO SQUADRON (RESTAURANT) LEASEHOLD INTEREST FOR
INTERIM CONSTRUCTION SUPPORT OF THE RUNWAY 12R-30L RECONSTRUCTION PROJECT
COUNCIL DISTRICT: City-Wide
In very recent discussions with 94th Aero Squadron an opportunity arose to locate a cement batch plant associated with the 12R-30L reconstruction project on their current leased space. This site would be preferable to the previously chosen site and in order not to delay the 12R-30L project the site must be made available to the Contractor by mid January 2002.
Adoption of a Resolution:
A. Approving a Minor Amendment to the adopted Airport Master Plan to terminate and remove the 94th Aero Squadron Restaurant leasehold improvements prior to the 2004 expiration date of the existing lease and to reuse the site on an interim basis for a cement batch plant for the Runway 12R-30L reconstruction project.
B. Authorizing the City Manager to exercise the City’s option to terminate the Lease between the City and Specialty Restaurant Corporation (94th Aero Squadron), by negotiating and executing a leasehold termination agreement with Specialty Restaurant Corporation in an amount to be paid by the City not to exceed $100,000.
BACKGROUND
The current Airport Master Plan, adopted by the City Council in June 1997, serves as a long term guide to airport development and includes a program of facility improvements to adequately accommodate projected commercial aviation demand by the year 2010. In support of the Master Plan objective to maximize use of Airport property for aviation purposes, one of the specific projects identified in the current Master Plan (Project “G-3”) is the removal of the 94th Aero Squadron Restaurant facility upon expiration of the existing lease in 2004 and conversion of the site for general aviation use.
In September 2001, Council awarded a contract for the reconstruction of the existing main runway, 12R-30L (part of Master Plan “Project A-14”). In preparation for actual construction beginning in Spring 2002, the Airport conducted a site survey for a temporary location for a concrete batch plant required for the runway project. One of the sites identified was the southern portion of the Westside public parking lot, a second site was the 94th Aero Squadron Restaurant site. A cost-benefit analysis has indicated that the 94th Aero Squadron site is the preferred site, as this would not impact public parking or the resultant revenue stream. Implementation of this proposal requires an amendment to the Airport Master Plan to allow for early removal of the existing 94th Aero Squadron and interim use for a cement batch plant. The 94th Aero Squadron Lease provides that the City has an option to terminate the Lease prior to its February 29, 2004 expiration date by paying to the 94th Aero Squadron an amount equal to the unamortized value of the leasehold improvements.
The San Jose Municipal Code, Chapter 25.02, provides certain procedural requirements for formally amending the adopted Airport Master Plan. In accordance with these requirements, four Minor Amendments have been approved to date, as follows: interim relocation of Airport Department offices/reuse of vacated terminal space (6/30/98), interim relocation of the federal inspection services facility (6/29/99), interim rental car facility consolidation (4/18/00), and modifications to the Airport terminal area development program (11/13/01).
Under the current Airport Master Plan, the 94th Aero Squadron Restaurant would be removed upon the lease expiration in 2004, with the site converted for use by general aviation, consistent with other land uses along the Southwest side of the Airport. However, the scheduled implementation of the reconstruction of Runway 12R-30L, one of the most critical Master Plan projects, requires a suitable location for a concrete batch plant to produce the pavement material to be placed on the runway. The 94th Aero Squadron site, immediately adjacent to the airfield on one side and Coleman Avenue on the other side, offers the most efficient location for the runway project while minimizing impacts on nearby non-Airport land uses, roadways, Airport public parking and traffic. The batch plant would be operational for a six month period commencing Spring 2002. Upon completion of the runway reconstruction project, the batch plant will be removed and the site will be made available for general aviation development consistent with the adopted Airport Master Plan
Although the Lease provides that the 94th Aero Squadron has sixty (60) days from the City’s first notice to vacate the premises, the 94th Aero Squadron has agreed to vacate and surrender the premises to the City by January 10, 2002. Pursuant to the early termination provisions of the Lease, the City will pay to the 94th Aero Squadron an amount not to exceed $100,000, as the agreed unamortized value of the leasehold improvements.
Not applicable
This project has been coordinated with the City Attorney’s Office and the Environmental Services Department.
FY2001-2002 $100,000.00(not to exceed purchase price)
$109,200.00 estimated lost rental income for 26 months
Fund: Airport Revenue Bond Improvement - 526
Amount: $78,840,000.00
Budget Document: 2001-2002 Adopted Capital Budget Page 27 Item 6
(Open Amended by Council on 10/16/01 ordinance 26492)
CEQA: Resolution No. 67380
RALPH G. TONSETH
Director of Aviation
Airport Department