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Tuesday, Jul 23, 2024

Airport Authority Makes Deal for $315M

Landmark Aviation gets to stay as the fixed-base operator at Lindbergh Field.

The San Diego County Regional Airport Authority, which manages the day-to-day operations at Lindbergh, has approved a 37-year lease valued at $315 million for Landmark to manage the fixed-base operations (private plane facilities) at San Diego International Airport.

Houston-based Landmark beat out two competing bids and was deemed the best by a four-member evaluation panel, airport officials said.

Under the proposal by Landmark, the company will invest $39 million into construction of a new terminal, hangars, and ramp for planes that will replace an aging terminal formerly operated by Jimsair.

“They (Landmark) will be constructing an entirely new facility on a new site,” said Troy Leech, Lindbergh Field’s director of real estate. “This will be a larger, more modern facility with a high level of customer service. We expect that it will be a dramatic improvement over what we have today.”

The new terminal will be moved from its current site south of the runway to the northwest part of the airport, closer to Sassafras Street. Landmark has been the airport’s fixed-base operator at the site since July 2008, when it acquired the leasehold from Jimsair.

“We view this as a very good investment for the airport and our company,” said Dan Bucaro, CEO. “San Diego is an important location for our whole network.”

Landmark operates 51 other FBOs in this country, as well as Canada and Europe.

Developing a New Site

Leech said all the contract bidders were pre-screened for their experience and financial capability, and the final round of bidding was more focused on what each company proposed to develop the new FBO site. Landmark’s $39 million capital investment it plans to do in the next two years equaled that of Atlantic Aviation FBO Inc., but its proposed annual rent of $5.25 million after year three was well above the latter’s proposed $1.35 million, according to an Airport Authority staff report.

The other bidder, Signature Flight Support Corp., proposed an annual rent of $4.5 million for years three to 37. All three bidders met the $2 million mandated annual rent for the first two years that was included in the request for proposal package.

In addition to a 20,400-square-foot terminal costing an estimated $9.5 million, Landmark proposed an office with 16,500 square feet; 106,000 square feet spread over five hangars; and a 250,000-square-foot ramp.

The Airport Authority’s evaluation panel ranked Landmark’s proposal first, with 374 points out of a maximum 400. Signature was second with 303 points, and Atlantic third with 22 points. The categories evaluated were management plan; envisioned development project; financial; lease modifications; and a personal interview, with various weights for each, according to the report.

Paying More in Rent

Jack Monger, a local consultant who represented Signature, based in Orlando, Fla., and owned by BBA Aviation Plc. of Great Britain, said Landmark put together an aggressive proposal that “clearly was an excellent one from the airport’s perspective, and we wish them luck.”

The number of firms qualified to bid on the lease was culled to seven companies initially, then five, and finally three.

Will Harton, vice president of corporate development for Hawthorne FBO Holdings LLC of Charleston, S.C., said his company was eliminated in the second stage, but wasn’t certain of the reasons. He declined comment on whether it was due to his firm’s proposed capital investment.

The rent for the planned 12.4-acre site for the FBO is far higher than what the authority now receives, which is $761,868 annually. Landmark will begin paying the new rent of $2 million starting in May. Landmark will own the improvements it makes, but will pay the authority to lease both the facility and the 12.4 acres that it will occupy.

During the 37 years, Landmark would pay the authority $315.2 million, according to the agency’s staff report.


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