Two years ago, Oceanside Municipal Airport appeared to be fighting for its very existence. Now, it may be getting a 70-year lease on life.
On Wednesday, the City Council will consider approving a lease with a private company, Airport Property Ventures of Los Angeles, to operate the airport for 50 years with two 10-year extensions included in the deal.
The proposed lease is geared to return $11.3 million to the city in rents and loan repayments over the first 25 years. The company also would build new hangars, tie-downs and a terminal.
The municipal airport was built in 1963 and is located along state Route 76 in the San Luis Rey Valley about two miles east of Interstate 5. The airport, which has one 3,000-foot-long runway suitable primarily for propeller aircraft, is home to about 60 planes.
According to the proposed lease, the private company is to build out a 1997 master plan “adjusted for market demand.” That plan called for 100 hangars. There are 34 hangars on the 50-acre property now.
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Oceanside City Council meeting
When: 5 p.m. Wednesday
Where: City Hall, 300 N. Coast Highway
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The proposed lease calls for a minimum annual rent plus 40 percent of all net income generated above that. The minimum rent in the first year would be 11 payments of $9,000 each.
Airport Property Ventures is expected to repay a $744,000 loan the city received from the state for airport improvements, and repay the city general fund $450,000 that was used to help operate the airfield when revenues there did not meet expenses.
A staff report says new construction on the south side of the airport will begin first and should be completed in about three years.
Before the lease can be executed, the agreement calls for a 90-day due diligence period in which the city and Airport Property Ventures can review documents related to the airport.
In May, the City Council voted 4-1 to negotiate a lease with Airport Property Ventures rather than two other applicants.
Jerry Kern, who cast the dissenting vote, said yesterday that he still “does not have a warm fuzzy feeling” about the deal and was concerned about the 90-day wait.
He said, however, that he has been assured the delay is only a precaution to check out the condition of some underground fuel tanks that are only eight years old and should pass inspection easily.
“I'm thinking they will take it over Nov. 1,” Kern said. “That could be optimistic, but is should be by Dec. 1.”
Under the terms of the lease, the company agrees to tailor the architectural style of new buildings to community and city tastes. It also will abide by the “good neighbor policy” agreed upon by the city and Citizens for a Better Oceanside, which sued the city over noise and safety issues at the airport. The private company is to include the city in any complaint resolution.
One other item in the lease stipulates that nothing can be done on the north side of the airport until a legal issue is resolved.
A Santa Monica company called AELD, LLC told the city in May that it has a legal right to buy back 14.7 acres on the north side of the airport.
The issue dates back to 2003, when Oceanside obtained a federal grant to buy the acreage from a company called Deutsch Engineered Connecting Services. AELD is the successor to Deutsch. The sales agreement stated that the seller could buy back the land if the property wasn't put to airport use within five years.
City officials say the vacant property is being used as a buffer between the runway and endangered natural habitat and that constitutes airport use. The Federal Aviation Administration, which gave the city $2.2 million to buy the property, says it can't be resold.
The City Council's decision to turn the airport over to a private operator comes after several years of controversy involving lawsuits, city studies, election campaigns and rebukes from the FAA.
During the election campaign of 2006, airport lobbyists spent $65,000 campaigning for winning pro-airport candidates Jerry Kern and Rocky Chavez.
Supporters were disturbed when a majority of the council voted in 2005 to commission a study of possible alternative – and more lucrative – uses for the airport.
The Federal Aviation Administration sternly told the city that the airport could not be closed, leading the council to seek a private operator.
Lola Sherman: (760) 476-8241; lola.sherman@uniontrib.com
