REPORT TO THE CITY COUNCIL FROM: MARK THORPE, Director of Aviation Airports Department BY: JOSHUA CASTELLANO-GONZALEZ, Assistant Director of Finance and Administration Airports Department BRITTNEY VERROS, Airports Property Supervisor Airports Department SUBJECT ..Title Actions related to Aviation Land and Building Lease and Agreement with Flight Level Aviation, LLC. (Council District 3) 1. Adopt a finding of Categorical Exemption pursuant to section 15301/Class 1 (Existing Facilities) of the California Environmental Quality Act (CEQA) Guidelines 2. Approve a Lease between the City of Fresno and Flight Level Aviation, LLC., to expand services as a Fixed Based Operator and related aviation operations at Fresno Chandler Executive Airport, estimated generated revenue of $487,156.80 plus annual CPI adjustments with a five-year term ..Body RECOMMENDATION Staff recommends that City Council 1) adopt a finding of Categorical Exemption pursuant to section 15301/Class 1 (Existing Facilities) of the California Environmental Quality Act (CEQA) Guidelines; 2) approve the Aviation Land and Building Lease and Agreement (Lease) with Flight Level Aviation, LLC., (Flight Level), to expand services as a Fixed Based Operator (FBO) and related aviation operations at Fresno Chandler Executive Airport (FCH) for a term of five years and an estimated generated revenue of $487,156.80 plus annual CPI adjustments; and approve for the City Manager, or designee, to sign all documents related to this agreement. EXECUTIVE SUMMARY Flight Level has been operating at Fresno Chandler Executive Airport since 2019. They provide aircraft maintenance, private pilot support services, fuel sales, etc. and wish to expand those services. The Agreement for 524 and 548 West Kearney Boulevard expired on May 30, 2024, and has been in month-to-month status since expiration. Flight Level has been operating the fuel tank at 970 West Chandler under a long-term Temporary Use Permit (TUP). Flight Level continued to operate under TUP as Airports Department does not have staff who are certified or trained in operating an airplane fuel tank. That TUP was then rolled over to a new TUP in 2025 when Flight level was awarded FBO services at 970 West Chandler. Flight Level has remained under TUP while Lease Agreement was negotiated for 524 and 548 West Kearney Boulevard and 970 West Chandler. The term of the Lease is for five years, with five-year option. BACKGROUND In 2024, Airports Department issued a Request for Qualifications (RFQ) for 970 West Chandler. The initial respondents chosen were disqualified either by their volition or due to Airport Executive Team decision. Flight Level Aviation provided a response that was approved by Airport Executive Team and lease negotiations began. Negotiations were stalled for a time due to the untimely passing of Airport Director, Henry Thompson. Once Interim Director was named and brought up to speed on conversations, negotiations continued. The Lease will allow Flight Level to continue operating a maintenance facility and to provide a full range of aviation services as an FBO, as well as to grow business brought to Fresno Chandler Executive Airport. This Agreement will allow Flight Level to operate as a full service FBO at FCH including overseeing all aircraft tie down locations on the general ramp, along with operations at 524 and 548 W. Kearney and 970 W. Chandler Avenue. An FBO allows support of aircraft up to 12,500 pounds gross weight and can include, (i) retail sales and delivery into-plane of aircraft fuel, lubricants and additives, (ii) overnight tie-down and aircraft storage, (iii) minor aircraft maintenance, servicing and repair, (iv) tire "airing" and battery "boosts," (v) pilot and passenger waiting lounge with restrooms, phones and direct-access to the most current aviation weather information, (vi) air-to-ground radio communications, and (vii) removal of disabled Aircraft from the Aircraft Operations Area. The leasehold includes a combined total of 22,370 square feet of office and hangar space, and 84,637 square feet of open aircraft ramp and fueling space. The City Attorney has reviewed and approved the amendments and the new Lease as to form and content. ENVIRONMENTAL FINDINGS Staff has determined this project falls within the Class 1 Categorical Exemptions set forth in the Section 15301 of the CEQA Guidelines for Existing Facilities, as it involves the use of existing structures in place at Fresno Chandler Executive Airport, with no changes to usage. Furthermore, staff has determined none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, Section 15300.2 apply to this project. LOCAL PREFERENCE The City's Local Preference Ordinance was not applied because Leases do not include a bid or award of a construction or services contract. FISCAL IMPACT The first-year rent is $97,431.36 due to the tenant being credited for 6 months of rent for work required on all three buildings. Rent is subject to annual Consumer Price Index (CPI) adjustments. The rent is based on Fair Market Value, which is required by Federal Aviation Administration (FAA) Revenue Policy. The estimated revenue generated under the Lease for the initial five-year term will be $487,156.80 plus annual CPI adjustments. All revenue will be deposited into the Airports Enterprise Fund and will contribute to the operation and maintenance of FCH. There is no impact to the General Fund from this action. Flight Level will provide a necessary and valuable service at FCH and contributes to the economic development of the community and surrounding region. The ability to provide additional services as an FBO will further enhance the viability of FCH and the economic impact. Attachments: Aviation Land and Lease & Agreement - Chandler Airport Categorical Exemption