The San Bernardino International Airport Authority (SBIAA) Commission unanimously approved the final ground lease for the Eastgate Air Cargo Facility with Hillwood Enterprises during a special meeting on Monday, Dec. 30, one week after receiving clearance from the Federal Aviation Administration (FAA).
Principal lease terms cited at end of article.
The six SBIAA members who voted to approve the development are City of San Bernardino Mayor and SBIAA President John Valdivia, Loma Linda Councilman Obvidiu Popescu, Highland Mayor Pro Tem Penny Lilburn, County Supervisor Dawn Rowe, Colton City Councilman Jack Woods, and San Bernardino Councilman Theodore Sanchez.
“The Eastgate logistics facility will help give our airport its much needed rebirth. Not only does it have a great economic benefit for our airport, but it also provides great benefits for the residents of San Bernardino,” said Mayor Valdivia. “I hope to inspire our local residents to take advantage of this great opportunity and apply for the jobs that will be created. This development will provide a great renaissance for our economy and help us move towards a better, more prosperous future in San Bernardino.”
The Inland Empire Economic Partnership (IEEP), an organization focused on economic development in the region, supports AllianceCalifornia efforts. IEEP President and CEO Paul Granillo noted, “The logistics industry has fueled the Inland Empire’s spectacular recovery by generating an estimated 84,000 new jobs – that’s nearly one out of every four new jobs – over the past 10 years. Eastgate will continue to grow the region’s economy in air cargo, so we can work closer to home and create good jobs for workers of all skill and education levels.”
The development has been met with resistance from local organizations such as the Center for Community Action and Partnership (CCAEJ) and Inland Congregations United for Change (ICUC) who would like to see a Community Benefits Agreement to mitigate environmental and employment impacts.
“We’re not convinced by Hillwood and the SBIAA’s claims that this project will bring good-paying jobs, nor are we convinced of the FAA’s claims that Eastgate will not have severe air quality impacts on our communities,” remarked Ben Reynoso, Economic Justice Organizer for ICUC. “The approved ground lease fails to provide sufficient information that we trust will benefit our community. The lack of transparency throughout this entire approval process has left us extremely doubtful about any job guarantees at all.”
Located at SBD International Airport, the project is part of the Airport’s master plan (AllianceCalifornia) to revitalize the former Norton Air Force Base (NAFB).
The Commission’s decision concludes a multi-year environmental and community review process, which included input from the FAA, the South Coast Air Quality Management District, and many other resource agencies and community participants. SBIAA Commissioners are elected officials from the County of San Bernardino, and cities of: San Bernardino, Colton, Loma Linda and Highland. Since base closure, they have worked to help ensure that the needs of the surrounding communities are addressed.
It is still unclear who the new tenant at the facility will be. Rumors are that it may be Amazon, but there is no confirmation.
“A gag order making the public unaware who the ultimate tenant is for this project is extreme and wrongheaded for a government agency supposedly serving the people,” says Adrian Martinez of Earthjustice. “The San Bernardino International Airport Authority clearly does not care about meaningful public input and overall transparency by holding such a consequential meeting for such a massive project at an inconvenient time during the holidays with marginal notice.”
According to a release issued by the SBD International Airport, this ground lease development with Hillwood Enterprises, L.P is 100% privately funded and includes approximately 100 acres of land. 658,500 square feet for the cargo sortation building, two 25,000 square foot ground support buildings and 41 acres of structured parking and gate positions. Initial monthly lease revenues from the ground lease are estimated to bring $2,587,804 annually and a 2.69% annual step increase.
“Since 2002, AllianceCalifornia has created over 12,645 permanent jobs, surpassing the 10,000 jobs that were lost when Norton Air Force Base had to close its doors,” said SBD International Airport’s Executive Director Michael Burrows. “Almost 20 years in the making, this Eastgate project is an incredible chapter in our public-private partnership with Hillwood. On aeronautically-restricted property, this was one of the more challenging yet truly vital elements of our multi-year revitalization efforts. It is a major step towards innovating a green, sustainable air cargo complex that flies and drives our economy without the use of public subsidies.”
The project would require Hillwood to construct two new bridge crossings onto 3rd Street, on the west and east portions of the project site, including signal and traffic lane improvements. Proposed air operations include 12 daily flights initially, increasing up to 26 flights at full build-out.
“The proposed lease gives Hillwood the right to use our airport runways, taxiways, ramps, public highways, and streets and bring airplane and truck pollution for decades to come without benefiting our community,” expressed Tammy Viescas, San Bernardino resident. “We are not against development — we are for development that guarantees benefits for our community.”
Principal lease terms are as follows:
- Premises: 97.4 acres of land.
- Initial Payment: 24 months at $112,000 per month, pre-paid and non-refundable.
- Monthly rent: $215,650.33.
- Initial lease term of thirty-five years (35) years with 2.69% annual step increases through Year 20.
- Two (2) five-year; and One (1) four-year options to extend the lease.
- Fair Market Value adjustments at Years 21, 26, 31, 36, 41, and 46.
- Hillwood to construct all improvements at its sole cost and expense, including applicable permit and entitlement fees.
- Triple-Net lease; Hillwood to pay all maintenance, taxes, utilities, and insurance costs throughout initial term and any option terms.