To: Board of Supervisors
From: Greg Baer, Director of Airports
Report Title: Approval and Authorization to Execute a Lease with Delux Public Charter, LLC for Use of the Airport’s new ARFF/Administration/Terminal Building at Buchanan Field Airport, Concord (District IV).
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Director of Airports, or designee, to execute a lease between the County, as Lessor, and Delux Public Charter, LLC (branded as JSX), as Tenant, for 532 square feet of office space and non-exclusive use of another room in the County-owned building located at 181 John Glenn Drive, Concord, for a three-year term at an initial annual rent of $14,856 for the first year with annual increases thereafter, and three options to renew for a term of one-year for each option.
FISCAL IMPACT:
The Airport Enterprise Fund will receive annual lease revenues of $14,856 as well as an enplanement fee of $5.00 for each passenger that departs on JSX from Buchanan Field. Additional revenue will be derived through fuel flow fees ($0.08/gallon) for fuel purchased by JSX from one of Airport’s Fixed Base Operators. The monthly rent during the term of the lease will increase annually by 3%, and the enplanement fee will remain static at $5.00 per passenger. The County will reimburse JSX through enplanement fee credits for shared janitorial costs, estimated at $3,900 per month.
BACKGROUND:
Delux Public Charter, LLC is the entity that operates the aircraft charter company JSX (formerly, JetSuiteX). In 2016, Buchanan Field was the destination airport when JSX launched its service. For the next seven years, JSX served Buchanan Field and operated out of the Airport’s double wide trailer located at 181 John Glenn Drive.
As of early last month, Airports staff took occupancy of its new Aircraft Rescue and Fire Fighting (ARFF)/Administration/Terminal building. Because of the long-standing relationship between the Airport and JSX, JSX was anticipated to be a tenant of the new building, and the subject of this staff report.
A draft, the lease anticipates that JSX will be leasing three office spaces, as well as having use of other parts of the building, including the non-exclusive area that makes up the passenger holdroom. The key terms of the agreement include a three-year term, with three one-year renewal periods, monthly rent that will escalate annually by 3%, reimbursement for janitorial services, and an enplanement fee of $5.00 per passenger. For context, in calendar year 2023, there were 16,530 enplanements on JSX at Buchanan Field, resulting in $82,650 in airport revenue. Additional annual revenue is derived from JSX’s ongoing operations through fuel flowage fees, totaling $29,806 in 2023.
The continued partnership between JSX and the County allows for a travel option that doesn’t exist anywhere else in the east bay, and also provides for an ongoing revenue stream for the Airport Enterprise Fund. To that end, both Airport and JSX staff are excited and encouraged by the new facility and recommend approval of this lease.
CONSEQUENCE OF NEGATIVE ACTION:
JSX would most likely discontinue their operations out of Buchanan Field and the Airport Division would not realize the anticipated lease, enplanement fee, and fuel flowage fee revenues.