Item Number: 10
City Council / Board of Directors
Written Communications
Meeting of: October 6, 2026
Submitted By:
James Murawski, Airport Director
Subject:
Standard Lease Agreement for Building 553 by and between the Southern California Logistics Airport Authority and Aviation Property Management, LLC Recommendation:
That the Southern California Logistics Airport Authority (“SCLAA”) Board of Directors:
(1) Approve entering into a Standard Lease Agreement for Building 553 (“Agreement”), by and between the SCLAA and Aviation Property Management, LLC (“APM”); and
(2) Authorize the Executive Director to execute said Agreement.
Fiscal Impact:
Approval of the Agreement presented herein will generate approximately $892,796.41 in gross lease revenue over the initial term (November 01, 2026 – October 31, 2031). A maximum rent credit of $250,000 is contained in the Agreement for specific tenant improvements, which if fully realized will reduce the net revenue generated by this Agreement to approximately $642,796.41. The table below outlines the fiscal impact of the initial 4 years of the Agreement.
Fiscal
Year
July 01, 2026 –
June 30, 2027
July 01, 2027 –
June 30, 2028
July 01, 2028 –
June 30, 2029
July 01, 2029 –
June 30, 2030
Gross
Revenue $86,806.20 $177,084.65 $182,397.19 $187,869.10
Rent
Credit $0 $0 ($83,333.34) ($166,666.66)
Net
Revenue $86,806.20 $177,084.65 $99,063.85 $21,202.44
The revenue associated with this Agreement is in line with budgeted expectations for Building 553 revenue account code 4501103A-45200 and does not require an additional appropriation. Future appropriations for the subject Agreement will be considered at the time the annual budget is approved.
This agreement contains provisions for tenant improvements and rent credits. The agreed-upon tenant improvements consist of remodeling the women's restroom, relocating interior walls to expand office space, replacing carpet and installing fresh paint, enlarging the main entrance, upgrading the electrical system, adding landscaping to the northern side, installing new HVAC and repairing existing HVAC throughout the building, and completing other general repairs and upgrades as approved. These improvements will enhance the property's value for future use, extend the building's useful life, and improve its overall functionality.
Rent credits are issued in accordance with the terms of the Agreement following substantial completion of the Tenant Improvements, after a thorough review of all cost documentation, including proof of payment, and documented pre and post tenant improvement inspections by SCLAA staff. In the case of this Agreement, the tenant has until October 31, 2028, to substantially complete the contemplated improvements. The rent credits for the anticipated tenant improvements are scheduled to begin on January 1, 2029, and will be budgeted for in the appropriate fiscal years. The maximum amount of rent credits allowed in this Agreement are fixed at a not to exceed amount of $250,000, which shall be applied over approximately 18 consecutive months in an amount not to exceed $14,000 per month. The number of months that the rent credits are applied could be less than 18 months, but in no circumstance will the rent credit amount per month exceed $14,000 and the final accumulation of rent credits will not exceed the stated Agreement amount of $250,000, regardless of the actual number of months that rent credits are applied. Actual rent credits could be substantially lower than $250,000, depending on what work is completed. Staff is confident that any completed tenant improvements listed in this Agreement will add considerable long-term value.
Strategic Plan Goal:
The City of Victorville Strategic Plan 2023-2026 identifies multi-year strategic goals and various strategies toward achieving those goals. Goal A fosters fiscal health through disciplined long-term planning, cost control, increased revenues, and cost recovery.
Background:
APM has been a tenant at the Southern California Logistics Airport (“SCLA”) since 2022 and has leased office space in a portion of Building 728 for the purposes of performing administrative duties related to their business of selling aircraft parts and components, and storage of aircraft records. APM has also had a Facility Use Agreement since July 2024 for one of the warehouse bays located in Building 553.
Building 553 at the Southern California Logistics Airport was constructed in 1979. It is located at 13123 Aerospace Drive, which is outside the current Airport Operations Area.
The building is split into two parts, a high ceiling warehouse section and a regular ceiling office space. The building also has approximately 1.6 acres of fenced yard space. A previous tenant utilized the building for aircraft records and parts storage purposes and after they vacated in 2024, the building had a new foam roof installed in 2025 in preparation for future tenancy. Since the roof installation, Airport staff have rehabilitated certain interior portions of the building to increase its marketability.
Discussion:
APM currently utilizes approximately 5,680 square feet of warehouse space in Building 553 under a Facility Use Agreement. Recent business growth has required APM to seek additional administrative, showroom, and warehouse space for its sales and storage of aircraft parts. Upon commencement of the proposed Agreement with APM, the existing Facility Use Agreement with APM will be terminated.
The proposed Agreement for Building 553 entails an initial term of five-years with a commencement date of November 1, 2026. The Agreement also contemplates one additional five-year option term. The Leased Premises consist of the entirety of Building 553 which is comprised of approximately 22,258 square feet of office and warehouse space and 71,291 square feet of fenced yard space. The fenced yard space is included in the lease and has no stated cost since it surrounds the building and there is no practical way to lease it separately from Building 553. APM has agreed to pay $7,233.85 per month for the first four months of the Agreement and thereafter $14,467.70 per month with an annual 3% inflator. The rent reduction for the initial four months was included as an incentive to APM to offset the cost of new servers, computers, furniture, communication and other utility set up costs, warehouse racking, permits, security systems, and other immediate initial expenses associated with setting up an office in a new location. The $14,467.70 amount is $.65 per square foot per month for the 22,258 square feet of building space, which is comparable with similar SCLA buildings.
This Agreement will provide a steady revenue stream for the SCLAA and maintain local employment since the company currently employs eight people. Therefore, staff recommends that the Southern California Logistics Airport Authority Board approve the Standard Lease Agreement with Aviation Property Management, LLC for Building 553 and authorize the Executive Director to execute said agreement. 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
Lilly Franco, Airport Administrative Manager
Attachments: A. General Site Map
B. Standard Lease Agreement for Building 553