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Budget committee recommends six 10‑year airline leases at SFO, notes revenue estimate and rent adjustments
Summary
The Budget and Finance Committee recommended that the full Board approve six 10‑year airline leases and modifications to two existing leases at San Francisco International Airport, projecting roughly $356 million in revenues over the term and noting specific rent reductions tied to modified leases.
The San Francisco County Budget and Finance Committee, chaired by Supervisor John Avalos, recommended that the Board of Supervisors approve six 10‑year airline lease and use agreements for San Francisco International Airport and modifications to two existing leases that would change terminal footprints and rental terms. The clerk noted the items will be placed on the Board agenda on 10/26/2010.
Kathy Widener of the San Francisco Airport told the committee the lease terms mirror an earlier package the Board approved in May and that the agreements continue the airport’s annual service payment to the city. "Under the terms of the leases before you, the airport anticipates revenues of approximately $356,000,000 over the 10 year term of the lease," Widener said. She said airlines are signing in rolling batches and the airport expects an additional seven to 10 carriers to execute the new form of lease early next year.
Committee staff noted that modifications to two existing leases with Alaska Airlines, Inc. and Continental Airlines, Inc. would reduce those carriers’ overall square footage by about 5.1% and would lower annual rent to the airport on those spaces by $767,027. "However, under the breakeven policy, those revenues are recovered from all of the airlines if another tenant is not found for that space," Mister Rose said, summarizing the fiscal report. The staff report lists a similar 10‑year projected total—about $355,390,000—based on the tables in the packet.
No members of the public spoke during public comment. Supervisor McRae moved to forward the items with the committee’s recommendation to the full Board, and the committee took that motion "without objection," with no roll call vote recorded in the committee minutes. The items will appear on the Board of Supervisors agenda for consideration on the date noted by the clerk.
Next steps: the items will be transmitted to the full Board for decision; any change in tenancy or an inability to re‑tenant vacated space would affect the airport’s realized revenues under the breakeven policy.
