More leased space vacated at airport

AIRPORT DISTRICT — A third major tenant at Bob Hope Airport has vacated about 44,000 square feet of leased space, bringing the total space returned to the airport to more than 500,000 square feet in less than one month.

The leased space had generated roughly $305,000 each year for the airport.

Executives said the lease giveback by Million Air Burbank, which includes hangar and aircraft parking ramp space, came as no surprise given warnings during the budgeting process.

The Burbank-Glendale-Pasadena Airport Authority budgeted for potential tenant losses of $1.3 million, Executive Director Dan Feger said.

“We factored in the numbers because we saw what the economic climate was like,” Commissioner Charles Lombardo said.

Million Air’s giveback reduces total rent in the fiscal year by $538,728, a relatively small proportion of the roughly $13 million officials expected to make from tenant leases this year.

Still, it was the latest in a string of new vacancies to hit the airport in recent weeks.

Last month, Affordable Storage ceded five of its 15 acres for an annual savings of about $235,000. The Simi Valley-based company agreed to pay $470,448 for the remaining 10 acres, manager Jorge Palafox said.

Atlantic Aviation turned over more than 300,000 of its 1.2 million square feet of space in the northwest quadrant of the airport.

Under the updated contract, Atlantic Aviation will pay the airport roughly $1.65 million annually, according to the agreement.

“As you know, we don’t like to reduce our rent,” Feger said. “If we do anything, we take back space and try to find other vendors.”

He added that officials do not expect to lose more than about $800,000 for lease agreements to Bob Hope Airport.

The 555-acre airport, which in 2009 served about 4.6 million passengers last year and housed about 45 private jets, approved a $76.3-million budget for 2010, down $12.6 million from the year prior. Executives at the time cited dwindling revenues and shrinking passenger numbers that had yet to recover amid the ongoing recession.

Million Air Director of Operation Ron Reynolds said the aviation industry has been hit particularly hard throughout the economic downturn. And a glut of hangar space in Van Nuys and Long Beach has contributed to reduced rents across the region, officials said.

In Burbank, despite a serge in traffic for Million Air and Atlantic Aviation from the Tournament of Roses, Rose Bowl and BCS Championship — 270 aircraft flew in and out of the two facilities in about three days — the companies were no exception, Reynolds said.

“The economy is not sinking any worse, but we’re not rising either,” he said. “It’s a just a tough time.”