REPORT TO THE CITY COUNCIL FROM: HENRY THOMPSON, Director of Aviation Airports Department THROUGH: BRITTNEY VERROS, Airports Property Supervisor Airports Department BY: MELISSA GARZA-PERRY, Airports Properties Manager Airports Department SUBJECT ..Title Actions related to the Non-Exclusive License Agreement to Conduct Commercial Aviation Ground Handling and Support Services and Office Space Lease with G2 Secure Staff, LLC, a Texas Limited Liability Company, at Fresno Yosemite International Airport. (Council District 4) 1. Adopt a finding of Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the California Environmental Quality Act Guidelines; and 2. Approve a Non-Exclusive License Agreement to Conduct Commercial Aviation Ground Handling and Support Services and Office Space Lease (License) with G2 Secure Staff, LLC., a Texas Limited Liability Company (G2), at Fresno Yosemite International Airport (FAT) for the Initial Term of three (3) years, with one (1) option to extend the Initial Term for an additional three (3) years for a total Extended Term of six (6) years. The amount of potential revenue generated by this License is approximately $512,887.83 annually, which represents the sum of eleven percent (11%) of G2's monthly gross revenue from all its operations at FAT. Total anticipated revenue during the life of this License (including the Extended Term) is approximately $1,538,663.49. ..Body RECOMMENDATION Staff recommends that the City Council (Council) adopt a finding of Categorical Exemption, pursuant to Section 15301 of the California Environmental Quality Act (CEQA) Guidelines, and authorize the Director of Aviation, or designee, to execute this three (3) year License, which includes one (1) three-year option, with G2 Secure Staff, LLC., a Texas Limited Liability Company (G2), to continue operating and providing Commercial Aviation Ground Handling and Support Services and Office Space Lease at FAT. The amount of potential revenue generated by this License is approximately $512,887.83 annually, which represents the sum of eleven percent (11%) of G2's total monthly gross revenues from all its operations at FAT. Total anticipated revenue during the life of this License (including the Extended Term) is approximately $1,538,663.49. EXECUTIVE SUMMARY G2 is operating as a commercial aviation ground handler, which includes providing various support services, to one or more air carriers who are variously engaged in the transportation by air of persons, property, cargo, and mail to and from FAT. G2's latest agreement to operate at FAT as a commercial aviation ground handler expires on October 24, 2024. This License would allow G2 to continue operating at FAT potentially through October 24, 2030. BACKGROUND G2 has operated as a commercial aviation ground handler, which includes providing support services, to one or more air carriers at FAT since October 2021. G2 initially entered a non-exclusive License Agreement with the City of Fresno, Airports Department (Airports Department), on October 25, 2021, which was subsequently amended by a First Amendment (dated February 16, 2023). Under its latest agreement, which expires on October 24, 2024, G2 has paid an annual sum of $512,887.83 (July 1, 2023, through June 30, 2024), which represented the sum of ten percent (10%) of G2's total monthly gross revenues from all its operations at FAT. Due to the increase in air carrier operations (including ramp activities/movements) at FAT, for the life of this proposed License, the Airports Department and G2 agreed to increase the percentage sum of G2's total monthly gross revenues by one percent (1%) to eleven percent (11%). Consequently, under this proposed License, the annual amount of potential revenue generated by G2's total monthly gross revenues from all its operations at FAT and office space rent would be approximately $1,538,663.49. In addition, this proposed License would allow G2 to continue to operate, without any disruption, as a commercial aviation ground handler, which includes providing support services, to more than one air carrier (i.e., Southwest Airlines and AeroMexico Airlines) currently servicing FAT. The City Attorney has reviewed and approved this License as to form, and Risk Management has reviewed and approved all insurance requirements. ENVIRONMENTAL FINDINGS This Agreement falls within the Class 1 Categorical Exemption for Existing Facilities set forth in CEQA Guidelines, Section 15301 for existing facilities, as it involves no alteration of existing facilities, with no expansion of use, and will not result in any significant negative effects relating to traffic, noise, air quality or water quality. Furthermore, none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, Section 15300.2 apply to this project. LOCAL PREFERENCE Local preference is not applicable to this Project pursuant to Fresno Municipal Code 4-109(b). FISCAL IMPACT The total potential revenue during the life of this License (including the Extended Term) will be approximately $1,538,663.49. All revenue will be deposited into the Airports Enterprise Fund and will contribute to the operation and maintenance of FAT. There is no impact to the General Fund or ratepayers of the City of Fresno from this item. Attachment: Non-Exclusive License Agreement with G2 Secure Staff, LLC.