TITLE
Recommendation to authorize City Manager, or designee, to execute all documents necessary for a new sublease to Lease No. 35335 between LGB CA Holdings, LLC, a Delaware limited liability company, dba Atlantic Aviation, and the City of Long Beach, for leased office space at 3250 Airflite Way for continued occupancy by the Airside Operations and Noise Compliance Divisions of the Airport Department. (Districts 4,5)
Levine Act: Yes
DISCUSSION
On January 20, 1987, the City Council authorized the execution of Lease No. 19331 (Master Lease) with Airflite, predecessor-in-interest to Atlantic Aviation (Master Tenant), for the development of approximately 12 acres of land at the Long Beach Airport (Airport). The Master Tenant provides fixed base operator (FBO) services for general aviation, including the leasing of office space, meeting facilities, aircraft hangars, aircraft tie-downs, and the sale of fuel to based and transient aircraft.
On March 13, 2018, the City Council authorized the execution of Sublease No. 34904 (Sublease) with the Master Tenant, then dba Ross Aviation, for approximately 2,736 sq. ft. of office space at 3250 Airflite Way (Subleased Premises) for an initial term of approximately five years with an option to renew for an additional five years. In 2019, the Master Lease was amended and restated (Lease No. 35335).
The Subleased Premises is utilized by the Airport’s Airside Operations and Noise Compliance Divisions, benefiting from office space with both direct airfield access and visibility. The Master Tenant and the Airport initiated negotiations for a modified extension term, with the understanding that the existing Sublease terms would be honored until a new agreement was approved and executed. Negotiations have concluded and a new sublease has been negotiated containing the following major terms and provisions:
• Master Lessor: City of Long Beach, a municipal corporation.
• Master Tenant: LGB CA Holdings, LLC, a Delaware limited liability corporation, doing business as Atlantic Aviation.
• Sublessee: City of Long Beach, a municipal corporation.
• Subleased Premises: Approximately 2,736 sq. ft. of office space located at 3250 Airflite Way, Suite 201.
• Sublease Term: The term of the sublease will be for a period of three years beginning August 1, 2023, through July 31, 2026, with an option to further renew for two additional, one-year renewal periods.
• Base Rent: The initial monthly base rent shall be $2.04 per square foot, or $5,582 per month. The base rent shall increase annually based on the percentage change in the Consumer Price Index; however, the increase shall be no less than three percent nor greater than five percent.
• Utilities: The monthly base rent shall be inclusive of the costs for utilities and janitorial services including heating, ventilation, air-conditioning, electricity, and water service.
• Parking: The City shall have the right to use up to 15 parking spaces for employees at no charge. The City shall also be allowed to park two airfield operations vehicles on the landside and three operations vehicles on the airside at no charge.
This matter was reviewed by Principal Deputy City Attorney Richard F. Anthony on July 17, 2023 and by Budget Analysis Officer Greg Sorensen on July 20, 2023.
TIMING CONSIDERATIONS
City Council action is requested on August 8, 2023, to execute the new sublease in a timely manner.
LEVINE ACT
This item is subject to the Levine Act. The Mayor, Councilmembers, and Commissioners who have received a contribution of more than $250 within 12 months prior from a party, participant, or their representatives involved in this proceeding may do either of the following: (1) disclose the contribution on the record and recuse themselves from this proceeding; OR (2) return the portion of the contribution that exceeds $250 within 30 days from the time the elected official knew or should have known about the contribution and participate in the proceeding.
All parties, participants, and their representatives must disclose on the record of this proceeding any contribution of more than $250 made to the Mayor or any Councilmembers within 12 months prior to the date of the proceeding. The Mayor, Councilmembers, and Commissioners are prohibited from accepting, soliciting, or directing a contribution of more than $250 from a party, participant, or their representatives during a proceeding and for 12 months following the date a final decision is rendered.
FISCAL IMPACT
The initial annual base rent shall be $66,984 and shall increase annually by a minimum of three percent with a maximum of five percent. Sufficient appropriation for the initial annual base rent exists in the Airport Fund Group in the Airport Department. Appropriation for subsequent years rent increases will be included as part of the annual budget process. This recommendation has no staffing impact beyond the normal budgeted scope of duties and is consistent with existing City Council priorities. There is no local job impact associated with this recommendation.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
CYNTHIA GUIDRY
DIRECTOR, LONG BEACH AIRPORT
APPROVED:
THOMAS B. MODICA
CITY MANAGER