The San Francisco County government meeting on July 4, 2025, focused on the approval of a new lease and use agreement for San Francisco International Airport (SFO), which is set to replace the previous agreement that expired on June 30, 2023. This new agreement is crucial as it establishes the framework for airlines to operate and rent terminal space at the airport, while also ensuring a significant financial contribution to the city's general fund.

The 2023 lease is projected to generate approximately $6 billion in airline revenue over its term, providing the airport with the financial stability needed for future planning and recovery from the pandemic's impact. The agreement retains a residual rate-setting methodology for terminal rentals and landing fees, which will continue to apply to all air carriers, including new entrants.

Kevin Cohn, the airport's assistant chief financial officer, presented details on the revenue structure, highlighting that the agreement includes terminal rental rates and landing fees as primary sources of income. The airport anticipates receiving around $3.4 billion from terminal rentals and $2.6 billion from landing fees over the next decade.

A notable addition to this agreement is the establishment of an Operating Reserve and Capital Investment Fund, which is expected to accumulate over $800 million during the lease term. This fund will be utilized for aviation-related projects, including IT components and other capital expenditures that do not have a long lifespan. The first deposit into this fund is scheduled for July 1, amounting to $250 million.

The fund aims to enhance the airport's financial resilience, allowing it to manage operational costs effectively during economic downturns or crises similar to the COVID-19 pandemic. Additionally, it may facilitate the development of revenue-generating ventures, such as a gas station or a mini-mart at the airport, and educational initiatives like the proposed SFO Academy to engage local youth in aviation careers.

Overall, the new lease and use agreement represents a significant step towards ensuring the airport's financial health and operational efficiency, while also contributing to the broader economic recovery of San Francisco.