Project Name: Ontario International Airport Guardian Jet Center Lease Renewal
Client: Ontario International Airport Authority (OIAA)
Purpose: As part of its program management tasks, the Ontario International Airport Authority (OIAA) asked Johnson Aviation to lead the negotiations with Guardian Jet Center on a new, long-term lease amendment that required building and capex in exchange for the long term opportunity. The new lease not only re-visited rates and charges since the change in ownership from Los Angeles World Airports (LAWA) to the OIAA, but also required an extensive rewrite of the OIAA Standard Terms and Provisions. The OIAA was interested in maximizing revenue from this lease and wanted to first verify that the existing leasehold was correctly depicted, and then was also willing to negotiate the leasehold; looking at additional parcels that could be included in the new lease as well as an investment from Guardian that would support demands from the FBO, the authority, and not require the authority to go out with an RFP.
Tasks: Johnson Aviation coordinated with OIAA staff, legal counsel (Lori Ballance), and the Guardian Jet Center Team, which included ownership, management, and their legal counsel throughout negotiations, land verifications, and contract creation. A survey to verify existing conditions was performed and an appraisal was completed to gain a better understanding of market conditions and revenue potential for the OIAA. This exercise captured actual space utilization and identified retroactive rent for the space. A term sheet with Guardian started the negotiation process that included revising and negotiating standard terms and provisions. During negotiations, Guardian development plans came to light and had to be assessed against OIAA development plans to make sure there were no conflicts with ultimate future development. The new lease provided for annual rent adjustments and five-year market adjustments, with a capital expenditures requirement over the term of the lease to ensure that quality of facilities was maintained. A Phase I Environmental Site Assessment (ESA) was coordinated and performed on the additional premises to make sure there were no hazards or other impacts that would prevent the property from being utilized in the most beneficial manner by the FBO and the OIAA. Once negotiations were completed Johnson Aviation was tasked with compiling a staff report for presentation to the OIAA Airport Commission. The lease was vetted by the Commission prior to the meeting and Johnson Aviation played a key role in identifying the benefits of the lease to the airport.
Outcome: The Guardian Jet Center Lease was approved by the FBO, the OIAA, and the Commission. The lease was viewed favorably by all parties. The contract language provided a template for future use and lease agreements. Johnson Aviation continues to work with the OIAA and Guardian on development plans and phasing of those plans and construction so that it is completed in a way that complies with OIAA guidelines, environmental standards, and TSA and FAA regulations.
Reference: Amy Goethals – Director of Commercial Real Estate; AGOETHALS@flyontario.com; 909-452-5586