City, airport contract leads to confusion
There appears to be some confusion between the City of Hollister
and the airport’s fixed-base operator over obligations in their
contract, and it is important for officials to clear up those
discrepancies so that each side has a firm understanding of the
agreement and citizens have full confidence in the operation.
City, airport contract leads to confusion
There appears to be some confusion between the City of Hollister and the airport’s fixed-base operator over obligations in their contract, and it is important for officials to clear up those discrepancies so that each side has a firm understanding of the agreement and citizens have full confidence in the operation.
The city for more than 10 years has contracted with Gavilan Aviation, the fixed-base operator that collects rents for 24 T-hangars and pumps fuel at the Hollister Municipal Airport. Hollister council members in recent months extended an overly generous FBO contract another 10 years and shortly after added the airport’s biggest tenant yet, Aris Helicopters, to Gavilan’s list of commission-baring check writers. The airport’s hangar tenants altogether are scheduled to net Gavilan Aviation about $200,000 over the next decade just to collect rent and do a survey each year.
Besides the city basically giving away another 10-year sweetheart deal to Gavilan Aviation, which receives an astonishing 20 percent of all hangar rents, it now appears the city and FBO have diverging perceptions about duties in the contract.
The city’s staff in pushing for the contract extension late last year emphasized that Gavilan, a business that is unrelated to the community college, recruits new tenants into vacant hangar spaces. A November city staff report regarding the largest hangar’s vacancy noted how Gavilan Aviation “currently had tenants looking for space and [were] available for immediate occupation” of the hangar. Those tenants did not materialize, and Aris Helicopters ended up directly approaching the city about renting it. When questioned last week about the state requiring the business to maintain a real estate broker’s license, though, owner David Leonardo contended that he does not broker any tenants.
Regardless, the state does also mandate such a broker’s license to collect rents for a third party, such as for the city. Even more egregious than that likely oversight, though, is that the city is paying Gavilan Aviation a commission figure in 20 percent that is about three times the market rate – while the business performs a fraction of standard commercial broker services.
While the contract is an enormously poor business decision for the city – and you certainly can’t blame Gavilan Aviation for that – officials must comb over details in the contract to ensure everybody’s on the same page and the public receives the best service possible.
