Livermore will begin negotiating a lease with Five Rivers Aviation, LLC, to serve as a full service fixed base operator (FBO) at the Livermore Airport.
The city council approved the negotiations by a unanimous vote (Laureen Turner absent). Councilmembers noted that negotiations did not mean a contract would be signed. Once negotiations are completed, the agreement will come back to the council for a public hearing.
Karen McMullen, an activist opposed to expansion at the airport, had asked the council to delay a decision on negotiating a lease until a more fully noticed public hearing could be held. She pointed out that there had been a great deal of opposition to any expansion at the airport. She viewed the FBO as an expansion.
According to airport manager Leander Hauri, the need for an FBO was identified during the airport master plan update process in 2001. “An FOB would provide a variety of specialized services expected by the air community that the Livermore Airport does not provide at this time,” he declared.
In 2010, the city council approved a rezoning of the Airport and approved an EIR for the airport that examined, at a broad programmatic level, environmental impacts of the ultimate build-out of the airport development envisioned by the rezoning. This includes development of a full service FBO, a new administration building with a restaurant, and future hangar construction.
A lease was negotiated in 2007 to build the FBO. However, it was never built because of the recession. A new request for proposals was issued by the city, which includes the fuel concession. There was one response from Five Rivers Aviation, LLC.
An FBO would provide a full line of service including fueling, towing, lavatory and cabin cleaning; catering and concierge services, including crew support and crew cars; overnight and long-term hangar storage for all aircraft sizes; and aircraft maintenance, engine overhaul and avionics installation.
In addition, Five Rivers will offer services to the general public, such as an aircraft dealership row, charter service support, passenger concierge services, rental cars, hotel reservations, emergency services and law enforcement support and additional disaster relief support equipment and amenities.
Hauri told the council that the airport is the aviation gateway to Livermore. An FBO will improve the image of the city, contributing to a good first impression of Livermore.
Hauri said an FBO would allow airport personnel to focus on maintenance of the airport. He noted that currently inadequate staff time is available to provide both fueling and airport facility maintenance services, creating a significant backlog in maintenance projects that must be addressed. Shifting the workload would increase expenditures by $290,000.
Under the proposed lease, the Airport Enterprise Fund would forfeit approximately $360,000 in net income as a result of relinquishing the fuel sales and shifting permanent staff from fueling activities to deferred maintenance activities. However, according to Hauri the Airport is still projected to generate a positive cash flow of approximately $260,000 at the end of the first year of FBO operation.
During the public hearing, McMullen noted that the Livermore Airport Citizens Group is very opposed to the airport’s master plan update and development at the airport. “You should allow time for citizens to speak on this issue. An FBO will attract more aircraft.”
Her remarks were echoed by Matthew Steinberg. He said that he was attending the council with his Scout Troop. “This is the first I’ve heard of an FBO.”
It was pointed out that an FBO would mean fewer flights operations at the airport. Jets don’t fly in for service; they are dropping off and picking up passengers. They fuel up and receive services at other sites. By offering service, one of the trips could be eliminated.
Hauri was asked if there were data available to support that claim. He said there wasn’t.
One concern raised by Councilmember Bob Woerner was the cost of fuel. He said it looks like there would be an increase, which will have an impact on the average pilot.
Hauri said that Five Rivers has agreed to keep prices competitive. In 2012, the average fill-up cost $136. That would increase by an average of $13 under the lease. The price is comparable to that charged by nearby airports.
Councilmember Stewart Gary asked for a copy of the old master plan, environmental review and other documents related to changes at the airport. He also requested a legal review of the rezoning and rulings to determine if they still stand. He suggested that maintenance should be reviewed to determine what is the best way to go economically; perhaps it should be privatized as well.
Councilmember Doug Horner pointed out that the negotiated lease will come back to the council. “We will hear all of the details, before we agree to anything.”
Under the lease, Five Rivers would construct the FBO building and the required 25,000 square foot of hangar space in the form of five 4,000 square foot hangar units and one 5,000 square foot hangar unit.
Five Rivers estimates the development would cost approximately $3 million. Two modern, compact and self-contained self-serve fueling facilities would be installed, one each on the north and south side of the airfield. These facilities would dispense aviation gasoline only (no Jet-A fuel), and would be accessible on a 24-hour basis.
Five Rivers also proposes to construct additional hangar storage space in future years through a phased, demand-based approach.