To: Board of Supervisors
From: Greg Baer, Director of Airports
Report Title: Terminate Guaranty of Lease Associated with the Buchanan Fields Golf Club Lease
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE the rescission of the Guarantee of Lease executed by Mary Dodge and Michael Dodge as part of the Board approved Consent to Assignment for the Buchanan Fields Golf Club lease on October 12, 2023 (Pacheco Area).
FISCAL IMPACT:
There is no impact to the General Fund, nor the Airport Enterprise Fund.
BACKGROUND:
On October 12, 2023, the Board approved the assignment of the lease for the golf course located adjacent to the Buchanan Field Airport, from Buchanan Fields Golf Course, Inc. (Assignor) to Buchanan Fields Golf Club, LLC (Assignee). Because the Assignee (Golf Club) was a newly formed Limited Liability Corporation where its members did not have a long history in leasing and operating golf courses, County staff required a five-year personal guarantee for all payments due under the lease as a condition of the assignment. To meet the financial threshold needed to guarantee the lease, two partners, Mary Dodge and Michael Dodge each provided assets to secure the lease.
Since the Golf Club took over the lease and daily operations of the site, a tremendous amount of capital improvements and operational changes have been done to improve the 9-hole course and driving range. As a result of this transformation, the site has become much more active, resulting in substantially higher concession revenue for the Airport Enterprise Fund. The Golf Club has made all rent payments and quarterly concession payments in full, and on time.
Because of their flawless payment record and clear commitment to investing both time and money into their business and leasehold over the last two plus years, the Airports managements no longer see the need for the two personnel guarantees. To that end, the Director of Airports recommends Board approval to rescind the requirement for the guarantees.
CONSEQUENCE OF NEGATIVE ACTION:
The two separate personal guarantees would remain in effect until October 2028.