City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: JANUARY 16, 2024 FROM: GENERAL SERVICES DEPARTMENT WARD: 3 SUBJECT: SUPPLEMENTAL AGREEMENT TO FEDERAL AVIATION ADMINSTRATION BUILDING LEASE DUE TO REPAIRS TO FLIGHT STANDARDS DISTRICT OFFICE BUILDING ISSUE:
The building at Riverside Municipal Airport (Airport) that houses the Federal Aviation Administration (FAA) Flight Standards District Office (FSDO) has become structurally unsound. During an exterior inspection by Airport staff in September 2023, significant issues with the roof and parapet wall were discovered. Upon consulting with General Services and a General Contractor, a decision was made to relocate FAA personnel to the main terminal building. The FAA FSDO building has been vacant since September 19, 2023. The FAA has requested rent reduction due to vacating the building and relocating to the airport terminal building.
Airport staff have worked with the FAA to determine an equitable agreement with no rent on their vacated building and standard rent for their new office and conference room in the terminal building. This rent adjustment is set to expire on February 28, 2024, which is the projected date for completion of the FAA FSDO building repairs.
RECOMMENDATIONS:
That the City Council authorize the execution of Supplemental Agreement No. 2 to Federal Aviation Administration (FAA) Contract No. 2 DTFAWN-13-L-00082.
COMMISSION RECOMMENDATION:
On January 11, 2024, the Airport Commission will hear this item and provide a recommendation regarding City Council approval for the Supplemental Agreement No. 2 to FAA Contract No. DTFAWN-13-L-00082 with the Riverside Municipal Airport.
BACKGROUND:
On August 27, 2013, the City Council approved a lease agreement with the Federal Aviation Administration for an approximately 9,500-square-foot building at the Riverside Municipal Airport located at 6951 Flight Road.
In early September 2023, during an exterior inspection of the airport building housing the FAA FSDO, significant structural concerns were noted. After consultation with General Services and a General Contractor. The decision was made to vacate the building until repairs could be completed. The Airport provided the terminal conference room and an office to house FAA personnel.
DISCUSSION:
FAA Realty Services has negotiated a supplemental agreement to significantly reduce the rent paid for their airport facilities. The FAA now occupies a 632 sq ft conference room, 135 sq ft office, and a 156 sq ft shared breakroom in the airport terminal. Additionally, the FAA has been provided required telecommunications services, including wi-fi and a dedicated phone line. They continue to occupy six dedicated and secure parking spaces for government vehicles. The monthly rental fee is as follows:
Terminal building office space ($1.25/sq ft/mo)
First floor conference room: 632 sq ft $790.00 Second floor office: 135 sq ft $168.75 Shared breakroom: 156 sq ft $ 97.50 Telecommunications (actual cost) $155.94 Parking ($50/spot) 6 spaces $300.00 Total Monthly Rent: $1,512.19
By accepting the reduced rent in the form of a supplemental agreement, the FAA and airport will continue a mutually beneficial business relationship while repairs are made to their office building.
STRATEGIC PLAN ALIGNMENT:
The supplemental agreement to FAA Contract No. DTFAWN-13-L-00082 contributes to Strategic Priority 6 – Infrastructure, Mobility & Connectivity, Goal 6.2 – Maintain, protect, and improve assets and infrastructure within the City’s built environment to ensure and enhance reliability, resiliency, sustainability, and facilitate connectivity.
This item also aligns with each of the five Cross-Cutting Threads, as follows:
1. Community Trust –By vacating personnel from the FAA building once structural concerns were observed, trust was engendered by placing the life and safety of all FAA employees as top priority.
2. Equity – Agreeing to a reduced rent demonstrates the Airport’s intent to fairly and equitably manage its operating budget and tenant relations.
3. Fiscal Responsibility – By remaining fiscally responsible and arranging office space for the FAA in existing vacant terminal space, the Airport has demonstrated intent to be fiscally responsible with facility use and airport funds.
4. Innovation – Being open to alternate arrangements while the FAA building is vacated, including creating office space in the terminal building to house FAA personnel, conveys an innovative management approach.
5. Sustainability and Resiliency –Creating alternative office space in the terminal for the FAA ensured their continued operations.
FISCAL IMPACT:
The fiscal impact of this action is a reduction in monthly FAA rental income in the amount of $10,869.89 per month through Feb 28, 2024, totaling $54,349.45 in reduced revenue to the Airport Fund from October 1, 2023 - February 28, 2024. Upon completion of the repairs, the FAA will move back into the prior rental space and the rent will commence at the higher monthly rate of $12,382.08.
Prepared by: Daniel Prather, Airport Manager
Approved by: Carl Carey, General Services Director Certified as to
Availability of funds: Kristie Thomas, Finance Director/Assistant Chief Financial Officer Approved by: Edward Enriquez, Assistant City Manager/Chief Financial Officer/ Treasurer Approved as to form: Phaedra A. Norton, City Attorney Attachment: Supplemental Agreement
FAA Supplemental Lease Page 2