To: Board of Supervisors
From: Greg Baer, Director of Airports
Report Title: AUTHORIZE Legal action to regain possession of real property located at 145 and 161 John Glenn Drive at Buchanan Field Airport
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Director of Airports to terminate the ground lease for real property located at 145 and 161 John Glenn Drive, at Buchanan Field, Concord, between the County and FM Aviation, Inc., dba, Sterling Aviation, at the Buchanan Field Airport.
AUTHORIZE County Counsel to pursue legal action to regain possession of the real property.
FISCAL IMPACT:
The Airport Enterprise Fund will fund the cost for the requested actions.
BACKGROUND:
On June 7, 2011, the County entered into a lease with FM Aviation, Inc. dba Sterling Aviation (Sterling), for the use of the property located at 145 and 161 John Glenn Drive at Buchanan Field Airport in Concord. Under the terms of the lease, Sterling is obligated to use the premises to conduct a “Fixed Base Operation,” which requires Sterling to perform various aviation-related services onsite. A Fixed Base Operation, (i) affords the tenant favorable ground lease rates, (ii) ensures that aircraft operators who use the airport receive adequate services, (iii) provides income to the Airport in the form of additional rent based on a percentage of the tenant’s revenues, (iv) increases sales and possessory interest tax revenue to the County, and (v) adds to the economic vitality of the Airport. As part of its obligation to conduct a Fixed Base Operation, Sterling is required to sell two types of aircraft fuel, jet fuel and avgas. Sterling has not been selling either fuel. Sterling is also in violation of other provisions of the lease, including the obligation to pay rent on time, and the obligation to comply with all State and local laws, including those related to the environment.
To facilitate the sale of aviation fuel, the leased premises includes two 10,000-gallon underground fuel storage tanks (USTs). Both USTs are single-walled, and in September 2014, California’s Health and Safety Code was amended to require all single-walled USTs to be removed on or before December 31, 2025. On July 2, 2025, the Contra Costa County Health Department “red-tagged” both tanks due to significant outstanding violations, preventing any future use of the tanks.
Airports management staff have been working with Sterling for several years to resolve the fuel service provisions of the lease and have encouraged the development of a feasible plan to comply with State law regarding the removal of the USTs. Despite these efforts, Sterling has not provided a plan to resume selling fuel or a plan to meet the State’s mandate to remove the USTs by the end of the year.
Airports staff is requesting authority to terminate the lease and to pursue legal action to regain possession of the premises.
CONSEQUENCE OF NEGATIVE ACTION:
Failure to terminate the lease and pursue legal action to regain possession would result in the Airport being unable to enforce the lease or to take appropriate action to comply with State law.