Thursday, June 26, 2014

Napa County Airport (KAPC) fills vacant Japan Airlines facility

The Napa County Airport is due for a major boost in economic development this fall when it fills the former Japan Airlines training facility with a new tenant that could hire more than 100 employees locally.

Since Japan Airlines, an anchor tenant at the airport since 1971, departed Napa four years ago in the midst of bankruptcy proceedings, the county has been looking to line up a new user for the 730,000 square feet of space.

The new occupant will be the International Airline Training Academy, which has struck agreements with the airport to train pilots and lease the space starting in October and running through 2019, Airport Manager Martin Pehl told the Board of Supervisors Tuesday.

The board voted to approve the agreement Tuesday, which will entail having the academy lease the county-owned building for $2.6 million over its five-year lifespan. Two additional five-year options are available for the academy after that, Pehl said.

The academy is a new company that registered with the Secretary of State’s Office in April, although its co-founder, Phil Sweeney, runs a flight academy in Australia, Pehl said. The other co-founder has a similarly deep background in pilot training, he said.

Pehl said the company expects to have about 300 commercial airline students train at the facility, although it will take some time to reach that total. Prospective pilots will be able to train for several airlines, he said.

“They found out about us and came in for a visit, liked what they saw and made an offer,” Pehl said.

The revenue will go into the county’s airport enterprise fund, which helps pay for operations, maintenance and improvement of the airport.

“We’ve been working diligently for the last several years to find a new tenant, and we think we’ve found them,” Pehl told the supervisors.

After Japan Airlines left, a company called IASCO Flight Training, which was a JAL client, kept training a smaller number of pilots in the space from 2011 to 2013 before ultimately leaving as well, according to a Napa County staff report.

Japan Airlines had trained more than 2,500 student pilots at the facility over the four decades it had a presence in Napa; pilots would then continue their training with bigger jets in Japan. At its peak, Japan Airlines accounted for at least half the flights at the airport, and 15 percent of its revenue, records show.

Pehl said getting that level of activity to return to the airport is crucial in maintaining operation of an airport control tower — something the Federal Aviation Administration threatened to close during budget cutbacks last year — and in competing for federal funding.

Public Works Director Steve Lederer said the county had received several inquiries from companies interested in leasing the training facility over the last several years.

Boeing had expressed interest, and gave a presentation to the Airport Advisory Commission last fall, while in 2012 business leaders in Napa had pitched using it for a business incubator — a space for new businesses to occupy while they launch and move through infancy.

But Lederer said the training academy was ultimately the superior choice.

“None of them came to the table the way this group did,” Lederer said.

Representatives from the training academy gave a presentation to the advisory commission in May, and that group voted earlier this month to recommend the agreement to the Board of Supervisors.

The company is facing some steep expenses to get off the ground in Napa, including $500,000 in improvements it will have to make to the training facility, according to the staff report.

For that reason, the cost of the lease agreement steadily escalates from $195,000 this year, to $426,000 in 2015, and will eventually top out at $710,000 in 2019. The rental market will be re-assessed to determine a fair rental amount for any renewal of the lease, according to the report.

Supervisor Brad Wagenknecht said he was pleased to get a tenant back into the training facility.

“We’ve talked a lot of different things,” Wagenknecht said. “This is wonderful to have this back in our airport.”

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