News Article | 4/4/2007

Rialto council approves payment to San Bernardino airport

To clear the way for an ambitious new development and satisfy federal government regulations, the Rialto City Council on Tuesday approved an agreement to pay $49.5 million to San Bernardino International Airport.

The payment was required so the federal government would allow closure of Rialto Municipal Airport, where city officials plan to build Renaissance Rialto, a 1,500-acre development along Interstate 210 divided among residential, industrial, commercial and public uses. The development will bring millions of dollars in revenue to the city, said Robb Steel, the city’s economic development director.

The payment to San Bernardino International Airport will come from the $120 million the city expects to receive through the sale of Rialto Municipal Airport.

“Before we embarked on this path, the airport was operating with $200,000 in the red, which cost the city’s general fund a significant amount to keep it going,” Steel said. “With what the airport can be replaced with will generate substantial revenue for the city.”

Legislation authorizing the closure of the Rialto Municipal Airport was approved by the federal government in August 2005. The city, Federal Aviation Administration and San Bernardino International Airport Authority have been negotiating the terms of the closure.

The legislation requires 45 percent of the fair market value of the Rialto airport property be paid to the San Bernardino International Airport, records show.

But $10 million of the net payment given to San Bernardino International Airport will be used to fund specific hangers and improvements related to displaced long-term aviation leaseholders from the Rialto Municipal Airport, Steel said. Of that amount, up to $400,000 may be used to subsidize lease rates for hanger tenants for a period of two years after relocation, the agreement reads.

Rents at Rialto Municipal Airport are below market value in most cases because of a rent freeze that was approved during discussions to close the airport, Steel said. Under the agreement, tenants that relocate to San Bernardino will be able to continue paying low rents for two years.

Forty hangers will be developed to accommodate displaced Rialto aircraft owners, according to the agreement.

For tenants who want to relocate to the airport in San Bernardino, there are about 18 to 20 acres available for facilities to be built, Mike Burrows, assistant director of the San Bernardino International Airport Authority has said. The goal is to have the facilities ready for tenants in about a year, he has said.

Burrows could not be reached for comment Tuesday.

The next step is for the San Bernardino International Airport board to ratify the agreement, Steel said.

Councilman Joe Baca Jr. said the real value of the Rialto Municipal Airport property is going to come from future revenue that the Renaissance Rialto project will bring.

“We are projecting anywhere from $2 million to $3 million per year in revenue once the project is completely built out,” Baca said.

The time frame on when Renaissance Rialto is built out depends on progress, negotiations and construction schedules, he said.

“We are talking perhaps 10 years, but who knows, it may be sooner, it may be later,” he said.