SR-102285-11CAP:HED:mh
City Council Meeti.n~ 14/22/85
TO: Mavor and City Council
FROM: City Staff
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OCt 2 2 1985
Santa Monica, California
'fir ? ~
SUBJECT: Authorization for Staff to Neeotiate Leases with
Gunnell Aviation, Inc, and Danforth Aviation for Fixed
Base Operations at the Santa Monica Airport.
Introduction
This report transmits the results of a staff review of fixed base
operator. Leasehold proposals at the Santa Monica Airport and
requests that the City Council authorize City staff to negotiate
a lease with Gunnell Aviation, Inc. and Danforth Aviation for 2
Fixed Base Operations at the Santa Monica Airport and reject the
proposal. received from California Aviation, Tnc.
Background
As part of the overall implementation of the City's agreement
with the Federal Aviation Administration concerning the Santa
Monica Ai.rAOrt, the Citv committed to the location of three
Airport fixed base operator facilities on the north side of the
runway. On June 1, 1985, City staff issued a Request for
Proposals (RFP) for three full service Fixed Base Operator
leaseholds on 23 acres of vacant land situated north of the
runway adjacent to the Santa Monica Business Park. The responses
to the Request for Proposal were due at the close of business on
Friday, August 30, 1985. /~
OCT 2 2 1985
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she BFP was advertised in the Los Angeles Times, the Evening
Outlook, Pacific Flyer and Business Aviation Weekly. A total of
35 Requests for Proposal were sent to current airport tenants and
to aviation businesses throuehout the country.
Proposals were received from three firms by the closing date of
August 30, 1985. All three proposers are businesses currently
located at the Airport. The three proposers are Danforth
Aviation, Gunnell Aviation Inc., and California Aviation/C&K
Aviation. A City staff committee consisting of the City Manager,
and the Airport Director reviewed the proposals according to
criteria specified in the RFP. This evaluation criteria
cansidered such factors as quality of the proposed development,
extent of developer's investment, experience and qualifications
of the developer, potential of proposer as a tenant (track
record), number of lobs to be created, demonstrated knowledge of
and willingness to comply with the noise abatement program and
related factors. Staff analysis of the proposals is summarized
below:
Danforth Aviation
Danforth Aviation in association with David G. Price proposed to
develop a site of 9 acres as a full service fixed base operation.
Danforth proposed to sell fuel. The site would include an
officelterminal building of 7,800 sq. ft.; a hangar/shop building
of 12,000 sq. ft., and 23 individual aircraft storage hangars.
The remainder of the site would be paved. for aircraft tiedown and
auto parkin. Danforth Aviation has been in business at the
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Airport r"or a number of years. its owner has manased several
fixed base operations. The business has been extremely
cooperative with regards to the noise abatement program and its
owner has participated in the Airport Working Group. The
Danforth proposal contains a demonstrated commitment for
financing of the required development cost of $2.14 million. For
this reason, staff recommends that Danforth Aviation be accorded
an exclusive right to negotiate an FBO lease with the City.
Danforth is currently a subtenant on the Airport and has
indicated willingness to vacate for a north side parcel.
Gunnell Aviation
Gunnell Aviation and affiliates proposed to develop a parcel of
10.15 acres as a full service fixed base operation including the
sale of aviation fuel. Gunnell proposes an office/terminal
complex of 44;000 sa, ft.; a connected hangarlshop area of 30;000
sq. ft. and 24 individual aircraft storage hangars. The
remainder of the site would include a fuel farm, aircraft tiedown
areas, and automobile parking. The total cost of the proposed
development is $5.8 million.
Gunnell Aviation has been in business at the Airport since 1958.
They have been an excellent tenant. The company has never
violated the noise ordinance and has cooperated in teaching noise
abatement techniques through its flight school and aircraft
rental activities. The Gunnells are active participants in the
Airport Warki.n~ Group. Gunnell Aviation and its affiliate the
J.M. Foster Company has submitted sufficient evidence of
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financial commitment to the project and have proposed a project
completion schedule of seventeen months. Gunnell Aviation has
indicated its willingness to locate on a ten acre parcel but has
also proposed for a fifteen acre parcel. The City's commitment
to accommodate three full fixed base operators dictates a ten
acre maximum parcel size.
Gunnell. Aviation's proposal is responsive to the City`s Request
For Proposal. Gunnell has proposed to vacate its present south
side parcel upon completion of north side facilities and to
dismiss all pending claims against the City upon execution of a
lease. City staff recommends that the Citv Council authorize the
City Manager to negotiate a lease for a ten acre parcel for a
maximum thirty year period with Gunnell Aviation, Inc.
California Aviation
California Aviation proposed to the City as developer for a ten
acre parcel to accommodate C&K Aviation as lessee/fixed base
operator. The proposal envisions a 6;000 sq. ft. office/general
aviation terminal building; a 30;000 sq. ft. hangar/shop building
and ten individual aircraft storage hangars. The remainder of the
site would be devoted to aircraft tiedown; auto parking and. fuel
farm. The proposed development cost is $2.4 million.
California Aviation and its corporate predecessors have occupied
a leasehold on the Airport since 1965. The lease runs until
1996. C&K Aviation has managed the fixed base operation for
California Aviation since 1983, California Aviation and its
corporate predecessor. Cloverleaf Aviar.ian have been served with
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at least five Pay Rent or Quit Notices, since 1.974, have
deposited bad checks twice (most recently in July 1985) and have
been sent eight notices of delinquent rent. The company has not
actively participated in the Airport Working Group and has
aeressively marketed to transient let aircraft which violate the
noise Iimit. California Aviation has offered to relinquish its
south side parcel only upon award of a north side lease and upon
settlement of all outstanding legal disputes between California
Aviation and the City of Santa Monica. Award of a north side
parcel at this time to California Aviation would result in the
corporation having two leases for fixed base operations at the
Airport.
The corporation has not evinced a funding commitment and has
asserted that proof of financing can only be made available to
the City upon execution of a lease. To sum, City staff has the
following concerns about the proposal: the corporation's poor
record in paying rent, an apparent lack of commitment to noise
abatement; the terms of relinquishment of its present lease with
the City, and the lack of committed financing for the project.
Far this reason, Citv staff recommends that the California
Aviation proposal be rejected as unresponsive to the stated
cri. teria .
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In summary. then, the proposal received from Gunnell Aviation is
clearly responsive. The Danforth proposal is responsive. Staff's
concerns with the California Aviation proposal are enumerated
above. In view of the fact that it is desirable to respond
favorably to the two responsive proposers, City staff recommends
that both Danforth Aviation and Gunnell Aviation be accorded the
right to negotiate a lease with the City for full service fixed
base operations on the Airport. City staff recommends that the
California Aviation proposal be rejected far the reasons
enumerated above. Leases with Danforth and Gunnell will be
brought back to the City Council for approval within 60 days.
The City's agreement with the FAA commits the City to
accommodating three full service fixed base operations at the
Airport. California Aviation currently operates a full service
fixed base operation on a lease extending until 1996, Successful
lease negotiations with Danforth and Gunnell would thus result in
the satifaction of the FAA requirement. Staff is therefore
recommending that the remaining acreage on the north side be
devoted to City tiedown in order to meet the based fleet
requirement of 550 aircraft imposed by the FAA Agreement.
Fiscal/Budgetary Im,~act
The fiscal and budgetary impact of these actions will be explored
in the staff report approving full service fixed base operator
leases. Staff will recommend any needed bud~etarv adiustments at
that time.
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Recommendation
City staff respectfully recommends that the City Council:
1) Authorize the City Manager to negotiate a leases with
Gunnell Aviation, Inc., for a 10.5 acre parcel and with
Danforth Aviation for a 9 acre parcel based on the
development concepts embodied in their respective
proposals.
2) Reject the proposal received from California Aviation, Inc.
Prepared by: Hank Dittmar, Airport Director
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Reference Contract
Nos. 4596 and
4597 (CCS).