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E16 FBO and hangar update


The current FBO property lease at San Martin Airport expires December 11, 2020.  The County issued an RFP and is currently negotiating with San Martin Aviation (the maintenance provider on the FBO property) to execute a new 7-year lease with three 1-year options.  The new lease will include the maintenance hangar building, offices and ramp space (1 and 3) and space for the fuel tank and equipment (2).  It will not include the adjacent hangars currently situated on the FBO property (Classic Hangars).
New FBO leasehold

New FBO Leasehold

The Classic Hangars are divided into two distinct groups.  Phase-1 hangars were constructed around 1986 and are shown as orange in the image below. Phase-2 hangars were constructed around 1996 and are shown as blue in the image below.  The Phase 1 and 2 hangars were constructed under different circumstances and have different ownership profiles.  In general, the Phase 1 hangar structures are owned by their occupant and may be removed from the premises by the owner before December 12, 2020.  The Phase 2 hangars are owned by the County and may not be removed from the airport. 

San Martin Airport - FBO Leasehold Hangars

It is the County’s desire to maintain the current level of FBO service at the airport while improving the level of County services.  To facility these goals, we anticipate submitting a report to the Board of Supervisors at their November 17, 2020 meeting that incorporates the following staff recommendations:  ​

  • FBO property
    • Issue a 7-year lease with three 1-year options to San Martin Aviation for the FBO building and adjacent ramp space;
    • Issue a fueling permit to San Martin Aviation for the distribution of aviation fuel;
    • Recommend the County take over management of the Classic Hangars;
  • Classic hangars
    • Set the hangar rental rates for the Classic Hangars at $0.40 per square foot per month beginning December 12, 2020 and expiring December 31, 2021;
    • As consideration for not removing the hangars, Phase-1 hangar owners will receive a discount of 50% off the base rent for the period beginning December 12, 2020 and ending December 31, 2021;
    • Beginning January 1, 2022, adjust the Classic Hangar rental rate to $0.53 per square foot per month;
  • Other provisions 
    • Beginning January 1, 2021, reduce the County-owned hangar rental rates from the current range of $0.761 to $0.839 per square foot per month to $0.60 per square foot per month;
    • Reduce the open tie-down parking rate by 50% effective January 1, 2021;
    • Freeze all other aircraft parking rate adjustments until the regularly-scheduled CPI adjustment of July 1, 2023;
    • Add one Airport Operations Worker to the County staff for full-time coverage at San Martin Airport.

The anticipated income generated by the Classic Hangars presents an opportunity to better balance the funding of airport operations while also providing a means of adjusting existing aircraft parking rates.  We feel that this proposal will ultimately lead to greater utilization of the airport through higher occupancy of the hangars and tie-downs.

I will be presenting this information to SCAPA at their meeting this Tuesday at 5:00 P.M.  If you are interested in attending, please contact the SCAPA Board for a link to the meeting.

Best Wishes,

Eric Peterson
Director County Airports

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