Item Number: 18
City Council / Board of Directors
Written Communications
Meeting of: February 20, 2024
Submitted By:
C. Eric Ray, Airport Director
Subject:
Standard Lease Agreement for Building 685C by and between the Southern California Logistics Airport Authority and Anduril Industries, Inc.
Recommendation:
That the Southern California Logistics Airport Authority (“SCLAA”) Board of Directors:
(1) approve entering into a Standard Lease Agreement for Building 685C (“Agreement”), by and between the SCLAA and Anduril Industries, Inc., (“Anduril”); and
(2) authorize the Airport Director to execute said Agreement; and (3) adopt Resolution No. SCLAA-24-001 amending the 2023/2024 budget increasing revenue in account 4501119A-45200 by $59,856.
Fiscal Impact:
The Agreement presented herein will generate approximately $649,905 in gross lease revenue over the initial term (March 1, 2024 – February 28, 2027). The table below outlines the fiscal impact of the Agreement.
FY 2023-2024
(March – June)
FY 2024-2025 FY 2025-2026 FY 2026-2027
(July – March)
$70,088 $212,366.64 $218,737.64 $148,712.72
The revenue associated with this Agreement increases the budgeted revenue established for Building 685 for fiscal year 2023/2024 and thereby requires an additional revenue appropriation in the amount of $59,856 in account 4501119A-45200. Resolution No.
SCLAA-24-001 is presented herein for the purpose of requesting approval of the required budget adjustment as outlined below.
5 7
0 Building 685 Original FY23/24 Budget
Revenue Expense
Account 4501119A-45200 $328,793 $0
Building 685 Revised FY23/24 Budget
Revenue Expense
Account 4501119A-45200 $388,649 $0
Future appropriations for the subject Agreement will be considered at the time the annual budget is approved.
Strategic Plan Goal:
The City of Victorville 2023-2026 Strategic Plan identifies multi-year strategic goals and various strategies to work toward achieving those goals. Goal A fosters fiscal health through disciplined long-term planning, cost control, increased revenues, and cost recovery.
Background:
Anduril Industries, Inc., is an American defense company that specializes in autonomous systems. It was founded in 2017 by inventor Palmer Luckey and a team of founders formerly with Palantir and SpaceX. Anduril has raised over $2.1 billion from some of the most renowned investors in the global technology landscape, including: Andreessen Horowitz; Founders Fund; General Catalyst; Lux Capital; Thrive Capital; Valor Equity Partners; and Elad Gil, among others. As of December 2022, the company was valued at over $10 billion.
Anduril states that at its core, it is a defense products company. Unlike most defense companies, Anduril does not sit idly waiting for its customers to tell them what they need.
Anduril identifies problems, and privately funds research and development while working to break into large programs of record and sells finished products off the shelf in order to get relevant technologies into the hands of war fighters as quickly and effectively as possible. Ideas are turned into deployed capabilities in months, not years, saving the government and taxpayers money along the way. Military veterans make up more than 20% of Anduril’s team and their defense experience is leveraged to ensure that the company’s products meet the needs of servicemen and women in the battlefield.
Anduril’s family of systems is powered by the proprietary Lattice OS, an artificial intelligence powered open operating system that brings autonomy to the Defense Department’s toughest missions. Lattice OS connects autonomous sensemaking and command and control capabilities with open, modular, and scalable hardware components for a layered family of systems approach. Some of the major systems that Anduril has deployed or publicly acknowledged to be developing are the Sentry Towers, Roadrunner, Ghost Shark XLAUV, Dive LDAUV, Altius and Fury. 5 7
0 The facility at the SCLA will support Anduril’s group 5 autonomous air vehicle program, called Fury, a single engine jet drone. Additionally Andril will perform related independent research and development and contracted efforts.
Discussion:
The proposed Agreement for Building 685C entails an initial term of three-years with a commencement date of March 1, 2024. The Agreement also contemplates one, three- year, option term. The Leased Premises consist of Building 685C which is comprised of approximately 11,168 square feet of hangar and office space, approximately 12,000 square feet of Ground Control Center Space, and 11,435 square feet of Aircraft Shade Structure Space. Anduril has agreed to pay $17,522 per month with an annual 3% inflator. This amounts to $1.50 per square foot per month for Building 685C which is a market high for Building 685C, and $.05 per square foot for the Ground Control Center Space and Aircraft Shade Structure Space.
Because the Standard Lease Agreement will increase local employment, and produce a steady revenue stream, staff recommends that Your Honorable Southern California Logistics Airport Authority Board approve the Standard Lease Agreement with Anduril Industries, Inc., for Building 685C and authorize the Airport Director to execute said agreement and adopt Resolution No. SCLAA-24-001 amending the 2023/2024 budget increasing revenue in account 4501119A-45200 by $59,856. Such approval is being requested, subject to any minor, non-substantive modifications to the Lease Agreement as approved by the Southern California Logistics Airport Authority Legal Counsel and the Southern California Logistics Airport Authority Executive Director.
Staff remains available for any questions or comments you may have.
CER/lf
Attachments: A. General Site Map
B. Standard Lease Agreement for Building 685C
C. Resolution No. SCLAA-24-001