Signature, Atlantic Await Decision on San Jose Airport FBO

 - April 2, 2013, 4:05 AM

A final decision could come this month on a contested development plan at California’s Norman Mineta San Jose International Airport. While Signature Flight Support’s bid to build an $82 million FBO facility received an official endorsement from the airport’s evaluating staff in February, Atlantic Aviation–currently the lone service provider at the airport–appealed that recommendation. The City Council is set to consider the award on or after April 9.

Signature submitted the bid in partnership with Blue City Holdings of San Jose, a corporation that represents the personal aircraft of the principals of Google, headquartered nearby in Mountain View, Calif. “Signature Flight Support is proud to be chosen as the successful bidder for the west side development project at Mineta San Jose International Airport,” said Maria Sastre, Signature’s president and COO, upon the release of the evaluation committee’s decision. The BBA Aviation subsidiary noted that San Jose has long been in the company’s sights as one of its most desirable expansion locations. “We plan to bring the benefits of our global network to San Jose and offer a world-class flight support experience and a new choice for customers traveling to the [Silicon] valley,” Sastre added.

Those plans call for the new 29-acre facility on the west side of the airport, in response to anticipated growth in general aviation demand. The development project–part of the airport’s master plan–was submitted during a request for proposals (RFP) process issued last summer, which attracted bids from Atlantic Aviation and Ross Aviation as well as the Signature partnership. “The airport completed a $1.4 billion upgrade to the terminal area in 2010, and now our focus must be the proposed private development and $82 million investment of the west side by Signature Flight Support, to support the private aviation needs of local high-tech companies, most notably the personal aircraft of the principals of Google,” said Bill Sherry, the city’s director of aviation.

Atlantic Appeal

Atlantic–which built a $20-plus million facility at the airport in 2008 and claims millions more in investment overall at the airport–had the right to appeal and had met the appropriate deadline to do so, according to Sherry. “Appeals are part of the due process afforded to all participants, and Atlantic Aviation is exercising its rights under the RFP process. Atlantic will have an opportunity to appeal the disqualification of its proposal to the City Council when the Council considers the award of a ground lease and operating agreement on SJC’s West Side on or after April 9,” he noted. “We’re confident in our decisions, given the facts, and we look forward to hearing the appeal and moving on afterward.”

If the recommendation stands, Signature’s proposal–which scored 991 out of a possible 1,000 points during the evaluation process–could receive full approval for an operating permit and 50-year-lease at the upcoming city council meeting.

According to Signature, the new environmentally friendly facility will include 240,000 sq ft of hangar space capable of accommodating the latest generation of large-cabin business jets; 24,000 sq ft of office and shops; a 10,000-sq-ft executive terminal, 3,600 sq ft of ground service equipment shops; and 18.5 acres of ramp space. In return, Signature agreed to $2.6 million in annual rent and a minimum guarantee of $400,000 in annual fuel flowage fee revenue to the Silicon Valley airport.

Atlantic CEO Lou Pepper questions the need for another FBO at the airport, noting that only 60 percent of Atlantic’s 250,000 sq ft of hangar space is currently occupied. Another issue, according to Pepper, is the airport’s plan for the future of Runway 11-29, which directly abuts Atlantic’s leasehold. At 4,599 feet, the runway is the shortest on the airport (the other two parallel runways are both 11,000 feet long) and has been idle for the past several years. The airport has vacillated about permanently closing it, according to Pepper, and he remains concerned that should the decision eventually be made to lengthen the runway the airport will requisition property from Atlantic’s leasehold, compromising its ability to service aircraft. Pepper hopes for a resolution on this matter before a new FBO lease is offered. “At that point we would know if we are still in a solid position there at San Jose or we need to expand somewhere else. It’s just an issue, and if the airport were to resolve it everything else would take care of itself.”