Item Number: 11
City Council / Board of Directors
Written Communications
Meeting of: February 17, 2026
Submitted By:
James Murawski, Airport Director
Subject:
Standard Lease Agreement for Buildings 867, 867A and Cut-Up Pad Space by and between the Southern California Logistics Airport Authority and Aircraft Recycling Corporation
Recommendation:
That the Southern California Logistics Airport Authority (“SCLAA”) Board of Directors:
(1) Approve entering into a Standard Lease Agreement for Buildings 867, 867A and Cut-Up Pad Space (“Agreement”), by and between the SCLAA and Aircraft Recycling Corporation; and
(2) Authorize the Executive Director to execute said Agreement; and (3) Adopt Resolution No. SCLAA 26-002 amending the 2025/2026 budget increasing revenue in Airport account 4501174A-45200 by $471.48 and Airport account 4501185A-45220 by $10,053.40.
Fiscal Impact:
The Agreement presented herein will generate approximately $2,381,008.76 in gross lease revenue over the initial term (March 01, 2026 – February 29, 2036). The table below outlines the fiscal impact of the initial 4 years of the Agreement.
FY 2025-26
March 26 – June 26
FY 2026-27
July 26 – June 27
FY 2027-28
July 27 – June 28
FY 2028-29
July 28 – June 29
$69,232.20 $209,773.57 $216,066.77 $222,548.78
The revenue associated with this Agreement increases the budgeted revenue established in Airport account 4501174A-45200 by $471.48 and 4501185A-45220 by $10,053.40 for fiscal year 2025-2026 and thereby requires an additional revenue appropriation as displayed in the following table.
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Current Budget Fiscal Year 2025-2026
Building 867 & 867A Revenue 4501174A-45200 $142,298.00
Ground Lease Revenue 4501185A-45220 $31,523.00
Proposed Budget Fiscal Year 2025-2026
Building 867 & 867A Revenue 4501174A-45200 $142,796.48
Ground Lease Revenue 4501185A-45220 $41,576.40
Resolution No. SCLAA 26-002
Building 867 & 867A Revenue 4501174A-45200 $471.48
Ground Lease Revenue 4501185A-45220 $10,053.40
Future appropriations for the subject Agreement will be considered at the time the annual budget is approved.
Strategic Plan Goal:
The City of Victorville Strategic Plan 2023-2026 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:
Aircraft Recycling Corporation (“ARC”) has been a tenant at the Southern California Logistics Airport (“SCLA”) since April 2006. Their business operations entail two related activities. The first involves dismantling, inventorying, and selling all valuable parts and assemblies from the aircraft it purchases as well as dismantling services for other aircraft owners. The other business component pertains to an aircraft recycling operation that is performed on the Cut-Up Pad Space. This work consists of removing all remaining non- metal aircraft parts before cutting the aircraft into small pieces that are recycled into new aluminum products. ARC frequently supports military operations by facilitating training exercises through the use of its aircraft and equipment which brings additional operations to the SCLA. They also provide specialized equipment to assist other tenants at the SCLA.
Discussion:
The proposed Agreement for Buildings 867, 867A, and the Cut-Up Pad Space entails an initial term of ten-years with a commencement date of March 1, 2026. The Agreement also contemplates one additional five-year, option term. The Leased Premises consist of Buildings 867, which is comprised of approximately 8,576 square feet of hangar and storage space, 867A which is comprised of approximately 2,880 square feet of office space and Cut-Up Pad Space which is comprised of approximately 345,000 square feet of ground space. ARC has agreed to pay $17,308.05 per month with an annual 3% inflator. This amounts to approximately $.94 per square foot for Building 867, approximately $1.42 per square foot for Building 867A, and $.015 per square foot of ground space for the Cut-Up Pad Space, which are comparable with similar SCLA buildings and ground lease space.
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Because the Standard Lease Agreement will maintain local employment, ARC currently has 12 employees, and produce a steady revenue stream, staff recommends that the Southern California Logistics Airport Authority Board of Directors: (1) approve the Standard Lease Agreement with Aircraft Recycling Corporation for Buildings 867, 867A and the Cut-Up Pad Space and (2) authorize the Executive Director to execute said agreement and (3) adopt Resolution No. SCLAA 26-002 increasing revenues in account 4501174A-45200 by $471.48 and 4501185A-45220 by $10,053.40. 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.
Prepared By:
Jacob Kern, Airport Leasing Technician
Attachments: A. General Site Map
B. Standard Lease Agreement for Buildings 867, 867A and Cut-Up Pad Space
C. Resolution No. SCLAA 26-002