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Supervisors forward new airline lease deals at SFO, hailed for protecting service payments
Summary
The Budget & Finance Subcommittee forwarded resolutions approving new airline lease-and-use agreements at San Francisco International Airport that staff say protect an annual service payment projected at $323 million over 10 years and preserve residual cost‑center accounting; amendments were recommended to note lease forms on file with the Clerk.
The Budget and Finance Subcommittee on May 11 forwarded to the full Board of Supervisors two resolutions authorizing new and modified lease and use agreements at San Francisco International Airport meant to preserve city revenue and provide flexibility for airline space.
Director John Martin of the airport told the committee the negotiated 2011 lease package preserves the city—s residual cost‑center accounting system and adds an annual reallocation provision allowing the airport to reassign airline space each year. "We—re the only airport in the country that has this kind of deal," Martin said, and he said the arrangement is intended to "protect the annual service payment to the general fund, which over a 10 year period is projected to be worth $323,000,000."
Budget Analyst Mister Rose praised airport negotiators and said the city will continue to receive 15 percent of concession revenues (with a minimum guarantee of $5,000,000); he said concession receipts totaled $26,000,000 last year. Rose recommended administrative amendments to the files so that the 2011 lease form is placed on record with the Clerk before the full Board acts.
The items cover: a set of 25 new lease-and-use agreements to allow airline domestic and international operations at SFO, and modifications to several existing airline leases (including one provision allowing early termination of a lease). The airport also told supervisors that the deal—s structure — which lets airlines return terminal space early — made the negotiations possible.
Chair Supervisor John Avalos and members praised staff and accepted the budget analyst—s recommendation to amend the files; without objection the committee forwarded the items to the full Board for final action.
What happens next: The committee—s recommendation will be considered by the full Board of Supervisors; staff told the committee the form of the lease will be placed on file with the Clerk as recommended.
