SR-08-12-2014-8ACity Council Meeting: August 12, 2014
Agenda Item: 8 ~A
To: Mayor and City Council
From: Martin Pastucha, Director of Public Works /Airport Director
Subject: Santa Monica Airport Leasing Guidelines
Recommended Action
Staff recommends that the City Council approve the attached Leasing Guidelines for the
leasehold and license management of properties at the Santa Monica Airport (Airport or
SMO).
Executive Summary
The Santa Monica Airport Leasing Guidelines (SMO Leasing Guidelines) set forth the
general policy objectives and practices for leasing and licensing for all properties
currently situated at the Airport. The parameters provided are intended to promote
standardized, equitable, efficient, and transparent management of the tenant
recruitment, selection, and negotiation process, as well as identify the standards of
performance that are expected of the Airport tenants. If Council approves these
proposed guidelines, staff will administer them and approve leases that are consistent
with them; leases not conforming to the proposed guidelines would require Council
approval.
These guidelines were formulated based on: Council's direction to staff at its meeting on
March 25, 2014; the legal obligations and legal constraints presently associated with the
Airport land and its uses; environmental and remediation requirements; concerns about
compatibility with surrounding neighborhoods; and the viability of the Airport Fund to
remain independent from General Fund subsidies.
Background
Santa Monica Airport is located on 227 acres, closely surrounded by single - family
residential neighborhoods. The Airport consists of 187 acres of land currently
designated and used for aviation activities and 40 acres currently used for other
purposes compatible with airport activities. As of the date of these guidelines the
Airport facilities are comprised of approximately 114 non - aviation and 11 aviation leases
as well as 186 license agreements for airplane hangars and aircraft parking areas (tie-
downs).
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The current Non - Aviation Airport Property leasing guidelines were approved by Council
at its December 5, 2000 meeting. A major objective of those leasing guidelines was to
provide leasing opportunities for the local arts community, which was being forced out of
the City by new development and rising land values. Through the years artists have
occupied various spaces at the Airport.
In recent years the City undertook an extensive visioning process for the future of the
Airport property. Among other things, that process was intended to identify any
opportunities for the Airport's future, short of closure, that would be more compatible
with surrounding neighborhoods and to identify improvements to the infrastructure that
might benefit the community.
Most recently, at the March 25, 2014 meeting Council provided direction to staff that,
upon expiration, current leases may be renewed for three years with unlimited one -year
renewals at the City's option. The direction to staff was to develop leasing guidelines
sensitive to the environment, to neighbors' concerns and to remediation needs; and,
once adopted, to apply the guidelines in assessing applications for lease renewals.
Council also directed staff to consider the former Light Manufacturing and Studio District
zoning standards as a model and to evaluate options regarding fuel sales at the Airport.
Presently, use of the non- aviation Airport property is diverse and comprised of a
museum, technical offices, artist day studios, educational facilities, contractor facilities,
architectural offices, law offices, film related businesses, and general office space.
Aviation use leases include flight schools, aviation service providers, hangars, and
Fixed Based Operators (FBOs).
All Airport leases will expire on or before June 30, 2015. Staff from various City
departments collaborated in engaging a qualified appraiser and auditors to establish
future lease rates that will be applied to all new leases on the Airport in 2015. Prior to
negotiating new leases with existing tenants staff will ensure that the tenants have met
their obligations under their current lease agreements.
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Discussion
The proposed Guidelines contain new policies and practices for leasing and licensing of
Airport properties (Attachment A). They would supersede the current guidelines and
become effective upon the date of Council's adoption.
The Guidelines identify programs that mitigate, as much as possible, environmental
impacts to the community, and maintain the viability of the Airport Fund independent
from General Fund subsidies while the legal constraints on the City's authority to control
the Airport and Airport usage is resolved.
The new Guidelines have been developed with the following objectives:
1. Establish practices and procedures for evaluating potential leasehold interests,
and for lease management and administration.
2. Foster uses and practices that are sensitive to the environment and protect the
health of Airport neighbors and users and protect the City from future
environmental exposure.
3. Maintain compatibility of uses of non - aviation airport property with Santa Monica
Airport operations and, consistent with applicable law, promote use of the
aviation property in a manner compatible with the adjacent residential
community.
4. Continue to provide opportunities for arts, education, and culture, including, but
not limited to, the Artist Space Program administered in conjunction with Cultural
Affairs Division.
5. Serve as the framework for achieving and maintaining a viable, sustainable
Airport Fund that is independent from the General Fund and other subsidies.
6. Incorporate within these Guidelines the City's rights, legal obligations and legal
constraints that relate to the Airport, the aviation leases and the use of the
Airport.
To ensure that the leasing program achieves its objectives it shall be managed in a
manner consistent with the following standards:
1. Term: The lease term may be month -to- month, or year -to -year for up to three -
years. However, the initial term of leases approved under these guidelines shall
expire by June 30, 2018. After that date, annual renewals may be granted
pursuant to these guidelines at City's discretion. Leases longer than three years
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are outside the purview of these guidelines and therefore require Council
approval.
2. Allowable Uses: To the extent allowed by law, uses would be aviation,
arts /cultural, creative space, professional, theaters, museum, educational,
professional offices and other uses that are low intensity and serve the adjacent
community while implementing standards that are sensitive to the environment.
3. Environmental Responsibility: New lessee requests shall be reviewed to
assess potential negative effects on the environment. The Airport may require
environmental studies or testing as appropriate and necessary, and any needed
remediation shall be performed prior to establishment of new uses. Lessees
seeking renewal or extended leases will also be responsible for any
environmental contamination, resulting from their prior use, as a condition to a
renewed or extended lease. At the time of the application, an assessment of the
proposed use will be conducted, and appropriate insurance and /or remediation
requirements will be incorporated into the lease based on proposed usage.
4. Right of Refusal: The Airport may refuse a lease application if it determines that
the proposed use may create a high intensity use and /or expose the City to
additional environmental exposure, or otherwise poses an unacceptable potential
for harm to the public health and welfare or the environment.
The majority of the Airport revenue is derived from leases. To help support the Airport's
fiscal self- sufficiency, all rents, fees, and charges on the Airport must reflect fair market
value for both aviation and non - aviation properties. Fair market rents for individual
buildings on non - aviation airport properties and prevailing market rents for aviation
properties will be appraised in the as -is condition quantified in the spring 2014
appraisal. Rental rates for new or renewed leases of airport properties will be set as
Ifell o
1. Rates: All new and renewed leases will be leased at Market Rate based on the
appraisal commissioned by the City in 2014. The initial lease rates will be
adjusted by the change in the Consumer Price Index (CPI) to stay accurate with
market conditions as new /renewed leases arise.
2. Renewals: For tenants who have three year leases, and who wish to be
considered for lease extensions, would need to contact City staff in writing, no
more than one year or less than 60 days before the lease terminates, to request
the one -year lease extension. The City at its own discretion will approve or
disapprove the one year extension for that year or any year thereafter.
3. Percentage Rent Provision: In addition to a base rent, the City may elect to
require that certain leases include a percentage rent provision, which can be
differentiated by categories of sales. The City, as Landlord, shall have the right to
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audit tenant's financial records to ascertain that the gross sales figures reported
by the tenant are accurate.
4. Existing Tenants: All existing airport tenants in good standing that are current in
rent payments, not otherwise in default of their current agreements, and agree to
abide by the rules of the Airport as stipulated in Section 5 "Performance
Standards" of the guidelines, will be offered the opportunity to retain use and
occupancy of their currently leased premises subject to the "Term" provisions.
5. Whole Building Leases: Whole building leases may, at the City's discretion, be
subject to public Requests for Proposals intended to optimize leasehold
occupancy and the self - sustainability of the airport
6. Sub - Leases: Assignment or subletting of leases or space sharing is prohibited
without the written consent of the City, and granting or withholding consent will
be conditioned on express standards and conditions set forth in the lease.
7. Lease and License Areas: Operation and improvements to lease and license
areas are subject to the City's standard regulatory rules, review and approval
process.
8. Triple Net Leases: Unless otherwise specified, tenants shall pay all property
taxes and assessments (including Possessory Interest Tax), insurance, and
utilities.
9. Commercial Operations Permit (COP): Prospective tenants proposing to use
the Santa Monica Airport to engage in an activity that requires a business license
from the City, are required to acquire a commercial operations permit issued by
the City Manager. All COPS will be presented to the Airport Commission for their
recommendation and comment prior to City Manager's approval.
10.Annual Adjustments: All leases will be subject to annual CPI adjustment on
their anniversary month.
11. Appraisals: Properties will be appraised for fair market rental rates at three year
intervals.
Independence from General Fund Subsidies
All Airport leases expire on or before June 30, 2015. Whatever the Airport's future, it is
a City asset used by members of the public. And, to support its core public services, it
must be self- sustaining as an enterprise and not dependent upon alternate funding.
Given that the Airport's future is presently unknown and that it may take years until the
City's legal authority is clarified by the courts, lease revenues at the Airport must be
maintained to promote the Airport's ongoing self- sufficiency, avoid future subsidies from
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the General Fund, and repay the General Fund, which has historically subsidized the
Airport.
General Fund subsidies, as of June 30, 2013, reached $13.6 million. In contrast, during
fiscal year 2013 -14, the Airport Fund remained free of additional General Fund
subsidies due in part to the adoption of the new landing fee structure that became
effective August 1, 2013.
Leasing is the Airport Fund's main revenue source. Revenue from current leases
comprises approximately 63% of total Airport revenues, which is the largest component
of the Airport Fund. The percentage of lease revenue contributing to the Airport Fund's
total revenue will increase after July 1, 2015 with the addition of properties that will
revert back to the City of Santa Monica. Atlantic Aviation and Gunnell Properties
manage two of these properties. Both are located on Donald Douglas Loop North and
were established under a 30 year development agreement, which currently provides a
land lease rental rate to the Airport. As the development agreements expire, the lease
revenue for these properties will significantly increase as a result of new rental
agreements with prospective tenants, which include improvements on the properties.
Use of Low Intensity Zoning Regulations
Council suggested the use of the former Light Manufacturing and Studio District (LMSD)
zoning standard as a model for the Guidelines. Some community members and the
Airport Commission recommended LMSD as a viable solution in drafting the Airport's
guidelines with the belief that LMSD satisfies the current federal obligations for the
Airport. However, staff has significant concerns about the legality of this approach.
LMSD's only permitted aviation use is for aircraft parts other than engines. Staff doubts
that this sole aviation use will satisfy the City's current federal obligations. Nonetheless,
the former LMSD standards may be useful, later, for planning future use of the Airport
land.
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Environmental Concerns and Impacts on the Community
At Council's direction to evaluate options regarding fuel sales at the Airport, staff has
been in contact with major fuel providers to find alternative solutions to current aviation
fuels available throughout the aviation industry today capable of reducing the
environmental impact to the community. Although some community members believe
that the City can cease allowing the sale of fuel altogether, it is staff's opinion that such
action would most likely lead to litigation.
It is uncertain when an alternative to 100 low lead (100LL) Avgas will become available
in the industry. 100LL is the standard fuel used by piston engine aircraft and has been
in the center of controversy due to the low levels of tetraethyl lead contained in the fuel.
Although the federal government has provided funding to find an unleaded alternative to
this fuel, staff's research revealed that it will be a long and timely process until a
replacement fuel to 100LL makes its way to common use. Staff has continued their
efforts and found approved alternatives to 100LL available in the market today.
Currently, only a handful of aviation fuel manufacturers have an unleaded aviation fuel
alternative that can be used by most piston engine aircraft based at the Airport. The
unleaded fuel requires operators to acquire an approved Supplemental Type Certificate
(STC) from the Federal Aviation Administration (FAA) prior to utilizing the fuel and it
also requires that the Airport build the appropriate infrastructure (i.e. fuel tanks) to
support the storage and dispensing of the fuel. Also, there is a 100 octane very low
lead (100VLL) alternative fuel that can replace the 100LL and can be used by the entire
mix of aircraft using the Airport. This fuel does not require an STC prior to dispensing
nor does it require additional infrastructure. The 100VLL fuel uses approximately 20-
30% less tetraethyl lead than the maximum allowed for standard 100LL fuel. Staff is
currently in talks with fuel manufacturers to determine the timeline of availability of these
fuels. Once commercially available, fuel service providers at the Airport would be
required to offer unleaded avgas and 100VLL in lieu of 100LL.
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The proposed Guidelines also address a replacement fuel for JetA, the common fuel for
reducing the turbine engine aircraft. The Guidelines propose that once an alternative
fuel (e.g. biofuel) becomes available in the industry, fuel service providers at SMO will
be required to sell a blended biofuel in lieu of JetA. Staff conducted research in the
areas of biofuel, specifically blended biofuels (usually up to 50/50 blends), that could be
used by all turbine engine aircraft without the requirement of an STC from the FAA.
Studies have shown that biofuels, even at a 50/50 blend, could reduce ultra -fine
particulars by as much as 60 %. Furthermore, on June 4, 2013 United Airlines
announced that they have executed an agreement with AltAir for delivery of 5 million
gallons of biofuel sometime in 2014 for United Airline's operations out of Los Angeles
International Airport. Staff is currently in talks with biofuel manufacturers, including
AltAir, to determine biofuels' environmental benefits and timeline of availability to the
industry of such biofuels. Because of these recent developments, staff is confident that
biofuels could be made available at SMO in the future.
Offering alternative aviation fuels would be an incremental step in the City's effort to
mitigate Airport impacts on the community, and it would avoid litigation as to whether
the City has a federal obligation in providing fuel available for all aircraft currently using
the Airport.
Additional provisions in the proposed guidelines that would address impacts on
neighbors and the environment are as follows:
1. Flight schools will be requested to use newer type of aircraft that are quieter or
use Federal Aviation Administration approved noise reduction technologies and
leasing preference would be given to those that do.
2. Flight schools and tenants of the Airport will be requested to avoid pattern
operations during certain hours (i.e. weekends, holidays, nights) and leasing
preference would be given to those that do.
3. Fixed Based Operators will be required to provide annual inspection reports to
the City that show the condition of the existing underground fuel tanks, to make
repairs and remediate leaks, and to install any new tanks above ground.
4. Fixed Based Operators, maintenance facilities, and flight schools will have one
year to replace existing gas or diesel - powered vehicles used to perform their
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primary functions (i.e. fleet vehicles, Ground Power Units, aircraft tugs, etc.) with
alternative fuel vehicles (i.e. CNG, Electric, etc.)
Environmental Analysis
The leasing guidelines identify the types of airport leases that will be within the authority
of the City Manager to administer and approve. There is no issuance of a lease
involved, nor do any of the guidelines commit the Manager to approve certain leases, or
limit the Manager's discretion to impose mitigation measures, adopt alternatives, or
deny a lease application altogether. Further, these guidelines do not limit the City
Council's full leasing authority going forward, nor do they commit the Council to lease or
not lease any property in the future. Because the City Council's action to approve the
guidelines does not commit the City to a definite course of action on a project, it does
not involve a project "approval" within the meaning of CEQA Guidelines section
15352(a). In addition, the approval of the guidelines is not a "project" under CEQA
pursuant to CEQA Guidelines section 15378(b)(2), which excludes "general policy and
procedure making." Finally, even if the guidelines may be viewed as an activity that will
ultimately involve the issuance of a lease, there is no possibility that their approval may
have a significant effect on the environment given that they do not commit the City to
any course of action and are so general as to make the evaluation of particular impacts
too speculative for review. Consequently, even if the guidelines were to constitute a
CEQA project, their approval is subject to the common sense exemption pursuant to
CEQA Guidelines section 15061(b)(3).
Commission Action
Staff presented an overview of the objectives and standards of the proposed leasing
guidelines to the Airport Commission during their meeting on July 28, 2014 for
consideration and comment. The Commission did not provide a formal
recommendation or feedback regarding these guidelines.
M
Financial Impacts & Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action.
Prepared by: Stelios Makrides, Airport Manager
Approved:
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Martin Pastucha
Director of Public Works /Airport Director
Forwarded to Council:
Rod Gould
City Manager
Attachments:
A — Proposed Santa Monica Airport Leasing Guidelines
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ATTACH M ENT A
Approved by the Airport Commission:
Approved by City Council: _
SANTA MONICA AIRPORT LEASING GUIDELINES
The Santa Monica Airport Leasing Guidelines ( "Guidelines ") provide the framework for
fair and consistent leasing and licensing of City -owned properties a t the Santa Monica
Airport. The Guidelines provide parameters and general policy on allowed uses,
standards and terms, and tenant recruitment and selection. They reflect the general
intent and goals of the City of Santa Monica ( "City'), at the time they were approved
and do not convey any right upon anyone, or impose any obligation on the City.
INTRODUCTION
Santa Monica Airport is one of the oldest single- runway, general aviation airports in the
country. It is located on 227 acres, bordered on three sides by single- family residential
neighborhoods. The Airport consists of 187 acres currently designated for aviation related
activities and 40 acres currently designated for compatible "non- aviation" uses — specifically
commercial activities that do not depend or rely on the airport for their business.
As of the date of these guidelines there are approximately 11 aviation leases, 186 licenses
for airplane hangars and aircraft parking areas (tie- downs) and 114 non - aviation leases and
licenses on the Airport. Aviation uses include flight schools, aviation service providers,
hangars, and Fixed Based Operators. Non - aviation uses are diverse, and include
restaurants, museum, theatre, arts studios, and creative and general office uses.
Lease and license revenue accounts for 63% of total annual Airport revenues and supports
the Airport's goal of achieving financial self- sufficiency, reduction in future subsidies from
the General Fund; and the repayment of the principal of past General Fund subsidies.
Historically, the Airport's operation and maintenance has been subsidized by the General
Fund. As of June 30, 2013, the Airport has a principal debt obligation to the General Fund
of $13.6 million.
All Airport leases expire on or before June 30, 2015. Whatever its future, the airport and
its property remains a City asset. These leasing guidelines take into account Council's
direction on March 25, 2014, the legal obligations and constraints relating to the airport,
the aviation leases and the use of the airport, and the purpose for which airport leases
have been developed, as specified below.
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1. PURPOSE OF THESE LEASING GUIDELINES
These guidelines have been developed to:
I. Establish practices and procedures for evaluating potential leasehold
interests, and for lease management and administration.
II. Foster uses and practices that are sensitive to the environment and
protect the health of Airport neighbors and users and protect the City
from future environmental exposure.
III. Maintain compatibility of uses of non - aviation airport property with Santa
Monica Airport operations and, consistent with applicable law, promote
use of the aviation property in a manner compatible with the adjacent
residential community.
IV. Continue to provide opportunities for arts, education, and culture,
including, but not limited to, the Artist Space Program administered in
conjunction with Cultural Affairs Division.
V. Serve as the framework for achieving and maintaining a viable, sustainable
Airport Fund that is independent from the General Fund and other
subsidies.
VI. Incorporate within these guidelines the City's rights, legal obligations and
legal constraints that relate to the airport, the aviation leases and the use
of the airport.
2. MANAGEMENT STRUCTURE
Leasing and licensing at the Airport is the responsibility of the City of Santa Monica
Airport Division in coordination with the City's Economic Development Division.
3. GENERAL LEASING STANDARDS
To ensure a program that achieves the purposes described above, the leasing
program at the Airport shall be managed in a manner consistent with the following
standards:
Term: The lease term may be month -to- month, or year -to -year; for up to
three - years. However, the initial term of leases approved under these
guidelines shall expire by June 30, 2018. After that date, annual renewals
may be granted pursuant to these guidelines at City's discretion. Leases
longer than three years are outside the purview of these guidelines and
therefore require Council approval.
II. Allowable Uses: To the extent allowed by law, uses would be aviation,
arts /cultural, creative space, professional, theaters, museum, educational,
professional offices and other uses that are low intensity and serve the
adjacent community while implementing standards that are sensitive to the
environment.
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III. Environmental Responsibility: New lessee requests shall be reviewed to
assess potential negative effects on the environment. The Airport may require
environmental studies or testing as appropriate and necessary, and any
needed remediation shall be performed prior to establishment of new uses.
Lessees seeking renewal or extended leases will also be responsible for any
environmental contamination, resulting from their prior use, as a condition to
a renewed or extended lease. At the time of the application, an assessment of
the proposed use will be conducted, and appropriate insurance and /or
remediation requirements will be incorporated into the lease based on
proposed usage.
IV. Right of Refusal: The Airport may refuse a Tease application if it determines
that the proposed use may create a high intensity use and /or expose the City
to additional environmental exposure, or otherwise poses an unacceptable
potential for harm to the public health and welfare or the environment and
it's within the City's legal constraints presently associated with the Airport
land and its uses
4. RATES AND RENEWALS
Rents, fees and charges on the Airport shall ref e ct fair market value for both
aviation and non - aviation properties. Fair market rents for individual buildings on
non - aviation airport properties and prevailing market rents for aviation properties
will be appraised in the as -is condition quantified in the spring 2014 appraisal.
Rental rates for new or renewed leases of airport properties will be set as follows:
I. Rates: All new and renewed leases will be leased at Market Rate based on
the appraisal commissioned by the City in 2014. The initial appraisal lease
rates will be adjusted by the change in the Consumer Price Index (CPI) as to
stay accurate to market conditions as new /renewed leases arise, and until
the next market study is conducted.
II. Renewals: For tenants who have three (3) year leases, and who wish to be
considered for lease extensions, would need to contact City staff in writing,
no more than one year or less than 60 days before the lease terminates, to
request the one -year lease extension. The City at its own discretion will
approve or disapprove the one year extension for that year or any year
thereafter.
III. Percentage Rent Provision: In addition to a base rent, the City may elect to
require that a lease include a percentage rent provision, which can be
differentiated by categories of sales. The City, as Landlord, shall have the right
to audit tenant's financial records to ascertain that the gross sales figures
reported by the tenant are accurate and that the appropriate percentage rent
amount is paid.
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IV. Existing Tenants: All existing airport tenants in good standing that are current
in rent payments, not otherwise in default of their current agreements, and
agree to abide by the rules of the Airport as stipulated in Section 5
"Performance Standards" below, will be offered the opportunity to retain use
and occupancy of their currently leased premises subject to the "Term"
provisions prescribed in Section 3.1 of this report.
V. Whole Building Leases: Whole building leases may, at the City's discretion, be
subject to public Requests for Proposals intended to optimize leasehold
occupancy and the self - sustainability of the airport..
VI. Sub - Leases: Assignment or subletting of leases or space sharing is prohibited
without the written consent of the Landlord. Landlord's granting or
withholding consent will be subject to express standards and conditions set
forth in the lease.
VII. Lease and License Areas: Operation and improvements to lease and license
areas are subject to the City's standard regulatory rules, review and approval
process.
VIII. Triple Net Leases: Unless otherwise specified, tenants shall pay all property
taxes and assessments (including Possessory Interest Tax), insurance, and
utilities.
IX. Commercial Operations Permit (COP): Prospective tenants proposing to use
the Santa Monica Airport to engage in an activity that requires a business
license from the City, are required to acquire a commercial operations permit
issued by the City Manager. All COPS will be presented to the Airport
Commission for their recommendation and comment prior to City Manager's
approval.
X. Annual Adjustments: All leases will be subject to annual CPI adjustment on
their anniversary month.
XI. Appraisals: Properties will be appraised for fair market rental rates at three
year intervals.
5. PERFORMANCE STANDARDS
All lessees shall use the airport and any airport property in a manner that is
compatible with Santa Monica Airport operations and with the adjacent residential
uses; to encourage activities that complement adjacent residential and commercial
uses; and to establish practices that are sensitive to the environment and protect the
City from future environmental exposure.
i. Flight Schools & Flying clubs
Existing flight schools and flying clubs will be provided the opportunity to renew
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their leases and preference will be given to prospective tenants that abide by the
following performance standards:
a. All flight schools and flying clubs will be requested to use newer type aircraft
that are quieter (i.e. light sport) or use Federal Aviation Administration
approved noise reduction technologies in reducing their noise footprint.
b. All flight schools and flying clubs will be requested to avoid performing
pattern operations at Santa Monica Airport during weekends, holidays, and
evening hours.
Ii. Fixed Based Operators (FBOs)
Existing FBOs will be provided the opportunity to renew their leases and
prospective FBOs to obtain a lease if they abide by the following environmental
standards. All FBOs will be required to minimize their environmental impact by
performing the following improvements to current or as applicable proposed
facilities:
a. Ground Power Units (GPU) used to power jet aircraft on the ramp must be
performed by CNG or electric power vehicles, or by in- ground wiring. FBOs
will have 1 year from the signing of the lease to meet this requirement.
b. All new fuel tanks constructed must be above ground.
c. Annual inspection reports will be provided to the Airport that shows the
condition of the existing underground tanks.
d. All diesel- or gas - powered vehicles and equipment used by the FBOs to
perform their primary functions, such as fleet vehicles and equipment, must
be powered by alternative fuels (i.e. CNG, Electric, etc.). FBOs will have 1 year
from the signing of the lease to meet this requirement.
e. Hangars must be used only for the storage of aircraft and auxiliary
equipment.
f. Biofuels will be sold in lieu of 1etA and 100 Very Low Lead and aviation
unleaded fuels will be sold in lieu of 100 Low Lead as soon as these fuels are
approved and commercially available.
Ill. Aviation Maintenance Facilities
Maintenance facilities will be required to minimize their environmental impact by
ensuring that all vehicles used inside the Airport Operations Area (AOA) are
powered by alternative fuels.
IV. Hangars
a. Hangars that have a land lease agreement with the City will be on a month to
month tenancy under a City approved lease agreement which will be
updated as deemed necessary by the City.
b. Hangars must be used only for the storage of aircraft and auxiliary
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equipment.
c. No subleasing is allowed.
d. The City will request hangar owners to avoid from performing pattern
operations at Santa Monica Airport during weekends, holidays, and evening
hours.
V. Tenants shall respond to Landlord's written inquiries regarding any complaints or
issues, including postings on social media sites related to Tenant's operations.
Tenant will provide an action plan for improvement if so requested by the
Landlord.
VI. As applicable, the above requirements may be incorporated in leases, licenses
and other agreements. In addition, the City may add to any Lease or License
further or different or additional operational and performance standards as the
airport concludes are appropriate to the particular Tenant's operation.
6. MAINTENANCE AND TENANT IMPROVEMENTS
All leaseholders shall be responsible for maintaining their facilities in attractive and
safe condition, in compliance with applicable building and life safety codes and all
applicable environmental laws, ordinances, regulations and standards.
Airport facilities will be inspected prior to new or extended leasehold occupancy and
refurbished, by the City or tenant (at the City's election), to a decent, safe and sanitary
condition appropriate for use. If tenant makes improvements to the facility as a
mutually agreed upon condition of a lease, the City must first review and approve the
proposed design and scope of work. All necessary building permits must be obtained
and the work must be inspected for compliance with applicable code(s). Appropriate
rental credits for the approved work performed may be negotiated as part of the
lease. Any Tenant Improvement Credit that exceeds two months' worth of tenant
monthly rent must be approved by the Airport Director.
7. TENANCY RELATIONSHIPS
Each tenant or licensee will be responsible for interior maintenance and repair at its
sole expense, and the City generally will retain responsibility for maintenance and
repair of roofs, building exteriors, landscaping and common use parking for all Airport -
managed leaseholds unless otherwise specified in the lease or license. Tenants who
lease whole buildings from the City will be responsible for any and all maintenance,
repair and improvements including roofs, building equipment and exteriors of the
facilities as well as interior maintenance and repairs.
8. TENANT RECRUITMENT
All City -owned buildings appropriate and suitable for leasing may be subject to a
public procurement and solicitation process to identify prospective tenants and
licensees whose financial and professional experience, and products and /or
services are consistent with the Leasing Standards set forth herein.
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All prospective tenants must submit a Lease or License Application to the City.
Information contained in the Lease Application shall describe the proposed use
for the available space; provide information about the respondent; provide
references; describe in detail the financial capability of the respondent to perform;
and set forth preliminary terms and conditions.
Upon confirmation that the proposed tenancy is consistent with: General Leasing
Standards; verification of references and credit history; mutual preliminary
concurrence in proposed lease terms and conditions; and approval of a Commercial
Operations Permit, a lease agreement will be prepared for review by the City
Attorney and execution by the prospective tenant before being referred to the City
Manager for approval. Leases for terms greater than terms specified in these
guidelines require Council approval.
Staff may cooperate with commercial real estate brokers who are authorized to
negotiate leases on behalf of prospective tenants.
Recruitment for artist day studios will adhere to the criteria set forth by the Cultural
Affairs Division of Community and Cultural Services Department. The Airport and
Cultural Affairs work together to maintain the list and update financial
qualifications. Candidate tenants for available Artist Day Studio space are required
to file Program applications for screening purposes, and qualifying artists are
selected only from the screened waiting list.
9. LEASE APPROVALS & DELEGATION OF AUTHORITY
The City Manager has the authority to negotiate and execute leases with terms of
three years or less on terms consistent with these Leasing Guidelines. To be valid,
such leases must be on the basis of written agreements prepared and approved as
to form by the City Attorney. Leases for terms of occupancy greater than three years
or otherwise outside the parameters established by these guidelines will be
negotiated by City staff under the direction of the City Manager and will require City
Council approval.
10. GENERAL PROVISIONS
These guidelines may be altered by the City at any time, in its sole discretion, and
shall not create any right or reliance interest for any person. These guidelines are
intended to be consistent with, and subject to all requirements of law applicable to
the City's operation of the airport, and shall not be interpreted or construed to
conflict with or to violate any such provision of law.
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