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HomeMy WebLinkAboutMINUTES - 05232006 - SD.3 PtD61fO: . BOARD OF SUPERVISORS >'`-- tra FROM: MAURICE M. SHIU, PUBLIC WORKS DIRECTOR Costa Y•: "`40 DATE: May 23, 2006 `°sr��:oh�" `3 County SUBJECT: Contra Costa Airports—Authorization to Select a Master Developer and Negotiate Ground Lease Terms and Development of approximately 9 Acres of County-Owned Land at the Buchanan Field Airport, Pacheco Area. (District IV) SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICA'T'ION I. Recommended Action: A. SELECT Aviation Development Group as the Master Developer of approximately 9 acres of land on the southwest side of the Buchanan Field Airport and south of the Airport Offices; as recommended by the Airport Ad Hoc Subcommittee, and APPROVE and AUTHORIZE the Public Works Director, or designee, to NEGOTIATE a long-term ground lease and development terms between the County, as Landlord, and Aviation Development Group. B. APPROVE the property development and developer selection process for Buchanan Field and Byron Airports as recommended by the Airport Ad Hoc Subcommittee. II. FINANCIAL IMPACT: There is no negative impact on the General Fund. The Airport Enterprise Fund could realize lease and other revenues and the County General Fund could realize sales tax and other revenues if a lease is successfully negotiated. (L Continued on Attachment: N SIGNATURE: 4a V _RECOMMENDATION OF COUNTY ADMINISTRATOR _RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON APPROVED f AS RECOMMENDED 1 hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: JOHN CULLEN,Cler the Board of Supervisors and County Administrator VQ�OF SUPERVISORS tX/ UNANIMOUS(ABSENT AYES: NOES: By , Deputy ABSENT: ABSTAIN: Orig.Div: Public Works 0 Contact: Q cc: SUBJECT: Approve Selection of Master Developer for a 9-Acre Parcel, Buchanan Field Airport DATE: May 23, 2006 PAGE 2 III. REASONS FOR RECOMMENDATION/BACKGROUND: A. Nine (9) Acre Parcel Development. The southwest development site is approximately 9 acres of land owned by the County and located south of the County Airport offices as shown on the attached parcel page. The parcel is proximate to the Buchanan Field runways and adjacent to other aviation uses. The parcel is designated for aviation use on the Buchanan Field Master Plan. The parcel is under the jurisdiction of the Buchanan Field Airport and entirely within the unincorporated County. On August 16,2005,the Contra Costa County Public Works—Airports Division received a letter of interest from a private party to develop the approximate 9 acre project on the subject site. Per the Federal Aviation Administration's (FAA) Airports District Office (ADO) regarding development at Buchanan Field, the County notified existing commercial tenants at Buchanan Field and Byron Airport to solicit other competitive interest in the property. The County also published a solicitation advertisement in the Contra Costa Times September 16, 2005, edition to broaden the solicitation of competitive interest. The development solicitation letter and publication process provided a response deadline of October 7,2005,for all competitive interests in the approximate 9 acre parcel to be submitted to the County Airport Office. The County received five (5) additional letters of interest in developing this property. On October 25, 2005, the Board of Supervisors (Board) authorized staff to convene Selection Committee, consisting of County staff and representatives from the Airport businesses and surrounding neighborhood (members of the Aviation Advisory Committee), to assist Airport staff in the review, interview (if deemed necessary) and selection of the preferred Master Developer. Airport staff subsequently sent the six interested parties a request for further inforination that included a requirement for a$25,000 development deposit and a response deadline of December 23, 2005. The County received three information packets and development checks from Airport Partners, Silver Pacific Aviation and Aviation Development Group. A financial consultant was retained to also assist in the selection process. Airport staff and the Selection Committee reviewed the additional submittals, financial consultant's information and then interviewed all three proposal teams. All teams were excellent and worthy of consideration which made the ranking determination difficult for Selection Committee members. The proposal ranking outcome was determined by the following factors: • Project concept (rental versus condominium approach) • Project design and associated level of proposed investment • Schedule and timing for construction of improvements and infrastructure Applying the above factors, the proposal submitted by Aviation Development Group (ADG) was top ranked by the Selection Committee. The concept of an aviation condominium approach is new to Contra Costa County but, upon further research, we have learned that this is highly valued approach and will provide financial and business advantages for the County. Airport Partners was ranked a close second and Silver Pacific Aviation was ranked third. SUBJECT: Approve Selection of Master Developer for a 9-Acre Parcel, Buchanan Field Airport DATE: May 23, 2006 PAGE 3 This item was originally scheduled for consideration by the Board of Supervisors at their March 7, 2006, meeting. At that meeting, the second ranked party(Aviation Partners) and several members of the MDPA flying club raised concern with the ranking determination and displacement of the flying club at that location should the action be approved. In response to the concerns, the Board referred the matter back to the Board's Airport Ad Hoc Subcommittee to review and discuss the selection process with Airport staff and other interested parties. It was also stated that this matter should be brought back to the Board for consideration within 60 days. On March 20,2006,the third ranked party, Silver Pacific Aviation, sent a letter to Airport staff withdrawing their proposal to develop the 9 acre parcel. Silver Pacific Aviation requested their deposit be returned minus any applicable expenses associated with the selection process. Their withdrawal leaves ADG and Airport Partners as the two remaining interested development parties for the 9 acre parcel. On April 27, 2006, the Board's Airport Ad Hoc Subcommittee held a public meeting regarding this project at the Airport Offices. A brief history, background and review of the selection process used for ranking and selecting a master developer were provided. Interested parties then had the opportunity to state their issues and concerns. The Board's Airport Ad Hoc members directed staff to identify and address the concerns and issues raised at this meeting and include that information with this Board order (see attachinent). Upon conclusion of this meeting, ADG remained the top ranked developer and Airport Partners ranked second for developer negotiation considerations. Negotiation of lease terms would expand economic development activity at the Buchanan Field Airport, provide additional revenues to the Airport Enterprise Fund, and allow Contra Costa County expand aviation related business available at the airport. A business proposal must be consistent with the Airport Master Plan and General Plan for consideration. The proposed aviation development is consistent with the existing Buchanan Field Airport Master Plan. Additionally, the proposed development is also consistent with the analysis and needs assessment being performed for the updated Airport Master Plan. B. Developer Selection Process. The Board's Airport Ad Hoc Subcommittee meeting provided staff with a process template for future development at both Buchanan Field and Byron Airports. For projects where there is competitive interest, a similar process to the one used for the 9 acre Master Developer selection will be utilized as follows: (1) request for project information submittals and development deposit; (2) convening a master developer selection committee; (3) reviewing, interviewing and ranking the proposals; (4) seek Board approval of ranking order and authorization to negotiate lease terms; (5) facilitate meetings between project developer and stakeholders; and (6) seek Board approval of final lease. The environmental review process proceeds on a parallel path and would be scheduled for Board approval either before, or concurrently with, lease approval. For projects without a competitive interest, projects will proceed with the traditional environmental review and lease development processes (all but the first three steps of competitive interest process). All projects will be presented to the Aviation Advisory Committee, neighbors and/or other interested stakeholders/parties as deemed relative to enhance community relations and collaborative relationships. IV. CONSEQUENCES OF NEGATIVE ACTION: Delay in approving the project will result in a delay of developing vacant land at Buchanan Field Airport and may negatively impact the Airport Enterprise Fund and County General Fund. Airport Ad Hoc Subcommittee Response to Comments April 27, 2006 Meeting Issue or Comments Response 1. If Aviation Development Group (ADG) is 1. See response for each bullet item: selected as the developer then apply the following requirements: • Project to be built in one phase • Proposal had development in one phase but noted that market conditions may alter final schedule. • They must provide a facility for MDPA • Proposal included a public use or funds to relocate to another site on the clubhouse; the final terms to be subject Airport to negotiation and would consider other displaced entities and clubs. • Project to be under construction by May • The lease will detail the construction 2008 and, if not,then negotiate with the schedule. It is impractical to set a second ranked party definitive timeline in advance of the environmental review and lease negotiations process being completed. • They should pay $0.615 per square foot • The ground rent rate is a negotiated item annually and is determined by both the level of development investment and rent levels for comparable projects. ADG proposed the highest initial per square foot rental rate of all interested parties and they also offered over$2 million more in development investment. The other candidates subsequently increased their ground rental rates to be more competitive with the higher offer. • Require sufficient fill to address • The County Public Works and Building flooding concerns Inspection Departments are authorized to set building and site standards for proposed County developments. 2. Request the County set minimum experience 2. The FAA requires that all parties be given criteria for future projects of 10 years equal access to development opportunities aviation construction and minimum of and would not support such standards. The ._... .::.:.. ..... 500,000 square feet constructed in the past County, however,.did issue standards that 10 years. included objectives/criteria that was FAA acceptable and was compatible with the size and scale of the proposed 9-acre project. 1 Airport Ad Hoc Subcommittee Response to Comments April 27, 2006 Meeting Issue or Comments Response 3. Concern that having 44 hangars completed 3. The ADG proposal serves a different market at one time would flood the market. sector than any other current hangar project. Based on their experience at other Airports, a for-sale commodity sells quickly in advance of construction start, minimizing market saturation concerns. 4. Consider delaying the demotion of the 4. County staff will work with the developer to MDPA clubhouse until the hangars are all defer demolition of the existing facilities sold. until it is absolutely necessary to proceed with the project. Please note that MDPA is only one existing interest and the County is equally concerned about protecting the four existing Executive Hangar and Concord Flying Club (CFC)tenants. 5. MDPA requested a commitment from 5. All the existing tenants at this site are on a Contra County to make a shared use facility month-to-month tenancy and do not have that is equal to or better than the current Iona-term land rights. The County, however, MDPA facility in either the 9 Acre or in the supports keeping existing tenants at recently proposed 11 Acre developments. Buchanan Field Airport. In fact. the Stage 2 materials distributed to interested parties included an objective to minimize disruption to, and permanent displacement of; the existing tenants at the 9 acre site. As such, all three final proposals included a public use facility on the 9 acre parcel that could be used by groups for meetings. The use terms for the public facilities would be part of the lease negotiation process. 6. Delay demolition of the MDPA clubhouse 6. See response to #4 above. Additionally, for as long as possible to allow maximum there are currently several locations on the time to find an alternative facility. Airport that can temporarily accommodate MDPA and other displaced tenants: - Airport Ad Hoc Subcommittee Response to Comments April 27, 2006 Meeting Issue or Comments Response 7. MDPA requested that they help and oversee 8. MDPA and CFC and Executive Hangar the lease negotiations process with the tenants currently have month-to-month developer so that their interests are properly tenancy with the County for their facilities. represented. None of these parties own any of, and or have long-term land rights to, these facilities. The County recognizes the historical and current value of these parties at Buchanan Field and, as such, is working both with the developers and independently to find alternative facilities. It would not be appropriate for third parties to negotiate business and lease terms on behalf of the County. It is appropriate, however. to bring the tenants and neighbors together with the developer to hear and address their concerns as they relate to the proposed project as is planned by County staff.