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DATE: |
December 10, 2025 |
04 |
SUBJECT
Title
BORREGO VALLEY AIRPORT - FIFTH AND SIXTH AMENDMENTS TO AVIATION LEASES WITH JOHN S. WATKINS AND FIFTH AMENDMENT TO AVIATION LEASE WITH LARRY H. STRASBAUGH 1999 REVOCABLE TRUST AND FALLBROOK COMMUNITY AIRPARK - FIRST AMENDMENT TO RECREATIONAL GROUND LEASE WITH FALLBROOK SPORTS ASSOCIATION AND RELATED CEQA EXEMPTION (DISTRICT: 5)
Body
OVERVIEW
The County of San Diego (County) operates both Borrego Valley, a general aviation airport located in Borrego Springs, and Fallbrook Community Airpark (Airpark), a general aviation airport two miles south of downtown Fallbrook. These airports are part of the seven-airport system owned by the County and operated by the Department of Public Works (DPW) using funding from the Airport’s self-sustaining maintenance and operations fund, known as the Airport Enterprise Fund (AEF), at no cost to the General Fund. These airports serve the Borrego Springs and North San Diego County communities, respectively, by providing facilities for general and non-aviation uses. Varying by airport, uses include search and rescue, fire emergency services, parks management, and law enforcement for various government agencies, as well as agriculture and recreation uses, including the operation and maintenance of ball fields and tennis courts.
The proposed actions today include the approval to amend four total leases. Three of these four leases are at Borrego Valley Airport: two aviation leases with John S. Watkins (Watkins) and an aviation lease with Larry H. Strasbaugh 1999 Revocable Trust (Strasbaugh). The fourth lease being amended is a recreational ground lease with the Fallbrook Sports Association (FSA) at Fallbrook Community Airpark. The amendments are as follows:
Watkins - County Lease #75727R (Borrego Valley Airport, aviation lease)
1. A 0.69-acre, 35-year aviation ground lease that was approved by the Board of Supervisors (Board) on January 7, 2004 (6) for aircraft storage. This lease terminates on January 6, 2039. The last amendment to this lease in 2024 added the Working Families Ordinance (WFO) provision to bring the lease into compliance with the ordinance adopted in 2022 and extended the lease’s term by five years. The County and John Watkins have negotiated a lease amendment that will increase the rent from $364.48 to $376.07 per month starting on September 1, 2025. In addition to adjusting the monthly base rent, the new amendment will also change the frequency of the rent renegotiation period from five to 10-year increments, with the next rent renegotiation due in 2035. This is being done to align this lease with current County practices and increase leasing efficiency.
Watkins - County Lease # 503253 (Borrego Valley Airport, aviation lease)
2. A 0.33-acre, 35-year aviation lease that commenced on September 16, 2010 and was approved by the Board on September 15, 2010 (9). This lease terminates on September 15, 2045. The last amendment to this lease in 2024 added the Working Families Ordinance (WFO) provision to bring the lease into compliance with the ordinance adopted in 2022 and extended the lease’s term by five years. The County and John Watkins have negotiated a lease amendment that will increase the rent from $173.28 to $178.79 per month starting on September 1, 2025. In addition to adjusting the monthly base rent, the new amendment will also change the frequency of the rent renegotiation period from five to 10-year increments, with the next rent renegotiation due in 2035. This is being done to align this lease with current County practices and increase leasing efficiency.
Strasbaugh - County Lease # 503252 (Borrego Valley Airport, aviation lease)
3. A 0.85-acre, 35-year aviation ground lease that commenced on September 16, 2010 and was approved by the Board on September 15, 2010 (9). This lease terminates on September 15, 2045. The last amendment to this lease in 2024 added the Working Families Ordinance (WFO) provision to bring the lease into compliance with the ordinance adopted in 2022 and extended the lease’s term by five years. The County and Larry Strasbaugh have negotiated a lease amendment that will increase the rent from $448.13 to $462.38 per month starting on September 1, 2025. In addition to adjusting the monthly base rent, the new amendment will also change the frequency of the rent renegotiation period from five to 10-year increments, with the next rent renegotiation due in 2035. This is being done to align this lease with current County practices and increase leasing efficiency.
Fallbrook Sports Association (FSA) - County Lease # 315014 (Fallbrook Community Airpark, recreational ground lease)
4. A 13.5-acre, 20-year recreational ground lease that commenced on April 1, 2015 and was approved by the Board of Supervisors on March 18, 2015 (04). This lease terminates on March 31, 2035. The original lease with the FSA commenced in 1998. The County and FSA have negotiated a lease amendment that will increase the rent from $2,642.16 to $2,721.42 per month starting on April 1, 2025. In addition to adjusting the monthly base rent, the new amendment also incorporates the Working Families Ordinance (WFO) provision to bring the lease into compliance with the ordinance adopted in 2022.
This is a request to approve: (1) the Fifth and Sixth Amendments to aviation ground leases with John S. Watkins and the Fifth Amendment to the aviation ground lease with Larry H. Strasbaugh 1999 Revocable Trust at Borrego Valley Airport; and (2) the First Amendment to the Recreational Ground Lease with the Fallbrook Sports Association at the Fallbrook Community Airpark.
RECOMMENDATION(S)
CHIEF ADMINISTRATIVE OFFICER
1. Find, in accordance with Section 15301 of the California Environmental Quality Act (CEQA) Guidelines, that the proposed lease amendments are categorically exempt from CEQA review as they involve leasing of existing facilities, with negligible or no expansion of existing or former use.
2. Approve and authorize the Director of Airports, Department of Public Works, upon receipt, to execute the proposed Sixth Amendment to Aviation Lease with John S. Watkins. (County Lease No. 75727R) (4 VOTES)
3. Approve and authorize the Director of Airports, Department of Public Works, upon receipt, to execute the proposed Fifth Amendment to Aviation Lease with John S. Watkins. (County Lease No. 503253) (4 VOTES)
4. Approve and authorize the Director of Airports, Department of Public Works, upon receipt, to execute the proposed Fifth Amendment to Aviation Lease with Larry H. Strasbaugh 1999 Revocable Trust. (County Lease No. 503252) (4 VOTES)
5. Approve and authorize the Director of Airports, upon receipt, to execute three copies of each of the proposed First Amendment to the Recreational Ground Lease with Fallbrook Sports Association. (County Lease No. 315014) (4 VOTES)
EQUITY IMPACT STATEMENT
The County of San Diego (County) owns and operates seven airports that serve as essential air transportation hubs, emergency response facilities, and regional economic engines. The County strives to deliver services in a fair and equitable manner, actively removing barriers by providing general airport information in the County’s threshold languages, encouraging public participation, and creating competitive opportunities for small local businesses - those with traditionally less working capital - and business owners and managers who may be socially and economically underserved. With the County’s adoption of the Working Families Ordinance (WFO) in 2022, lessees’ qualifying construction projects will require lessees to pay prevailing wages, use a skilled-and-trained workforce, and provide their employees with paid sick leave.
SUSTAINABILITY IMPACT STATEMENT
The proposed amendments to increase the monthly base rent to all four of the aviation ground and recreational ground leases support both economic and social sustainability. At Borrego Valley, both lessees manage hangar rentals for aircraft storage. The Fallbrook Sports Association manages and maintains Ingold Sports Park, a community asset that promotes healthy lifestyles and enriches lives by providing sports, recreational activities, and sports fields to a community with a need for more park land. The revenue from these leases will support the operation, maintenance, and improvement of the County airport system, in alignment with the County’s sustainability goal of ensuring just and equitable access to services and resources that help build sustainable communities.
FISCAL IMPACT
Funds for this request are included in the Fiscal Year (FY) 2025-26 Operational Plan in the Department of Public Works, Airport Enterprise Fund. If approved, this request will result in total rent revenue of $12,134.30 in FY 2025-26 from the Borrego Valley leases and total rent revenue of $32,901.99 in Fiscal Year 2025-26 from the Fallbrook lease. The funding source is revenue from the Borrego Valley aviation ground leases under the terms of the new amendments and from the recreational ground lease with Fallbrook Sports Association. There will be no change in net General Fund cost and no additional staff years.
BUSINESS IMPACT STATEMENT
Leases at County airports benefit the local business community by creating jobs, increasing economic activity, providing business opportunities, and supporting infrastructure development. Leasing Airport property attracts visitors, generates revenue, and helps small businesses grow, thereby stimulating the local economy and improving the quality of life for residents. San Diego County Airports connects individuals to jobs and links local communities to the world. Revenue from airport leases enables the Department of Public Works to operate and maintain the seven County airports safely, efficiently, and cost-effectively. Today’s action of implementing rent renegotiations to aviation and recreation leases supports the economic self-sufficiency and economic viability of the County airport system.
Details
ADVISORY BOARD STATEMENT
On September 8, 2025, the Fallbrook Airpark Advisory Committee recommended, by a vote of 5 in favor, 0 against, 0 abstained, with 0 members absent and 0 vacant seats, that the Board approve the proposed amendment to the recreational ground lease with the Fallbrook Sports Association. There is no advisory board for the Borrego Valley Airport.
BACKGROUND
The County of San Diego (County) operates both Borrego Valley Airport, a general aviation airport located in Borrego Springs, and Fallbrook Community Airpark (Airpark), a general aviation airport two miles south of downtown Fallbrook. These airports are part of the seven-airport system, owned by the County and operated by the Department of Public Works (DPW), using funding from the Airports’ self-sustaining maintenance and operations fund, known as the Airport Enterprise Fund (AEF), at no cost to the General Fund. These airports serve the Borrego Springs and North San Diego County communities, respectively, by providing facilities for general and non-aviation uses. Varying by airport, uses include search and rescue, fire emergency services, parks management, and law enforcement for various government agencies, as well as agriculture and recreational uses, including the operation and maintenance of ball fields and tennis courts.
The proposed actions today include the approval to amend four total leases. Three of these four leases are at Borrego Valley Airport: two aviation leases with John S. Watkins (Watkins) and an aviation lease with Larry H. Strasbaugh 1999 Revocable Trust (Strasbaugh). The fourth lease being amended is a recreational ground lease with the Fallbrook Sports Association (FSA) at Fallbrook Community Airpark. The amendments are as follows:
Watkins - County Lease #75727R (Borrego Valley Airport, aviation lease)
Overview of Lease: On January 7, 2004 (6), the County’s Board of Supervisors (Board) approved a 30-year aviation ground lease with John S. Watkins for the construction and operation of aircraft storage hangars. The lease commenced on January 7, 2004 and terminates on January 6, 2039. The lease has been amended five times: (i) on November 19, 2008 (12) to implement a renegotiated monthly rental rate and to modify construction requirements for new hangars; (ii) on November 6, 2013 (6) to adjust the premises size, adjust rent and update lease language; (iii) on December 10, 2019 (16) to remove language that required lessee to pay commercial sublease rents to County; (iv) on August 5, 2020 (6) to revise Article 4 (Rent) to adjust the rent and revise Section 6.3 (Compliance with Laws); and (v) on April 10, 2024 (6) to extend the termination date of the lease to January 6, 2039 (from January 6, 2034), subject to specified conditions, and to add the Working Families Ordinance (WFO) provision to bring the lease into compliance with the ordinance adopted in 2022. Under the lease’s terms, the monthly base rent must be renegotiated every five years, with the next renegotiation taking effect on September 1, 2025. The renegotiation may be determined by mutual agreement or through an appraisal process.
Overview of Proposed Amendment: County and John Watkins have negotiated a lease amendment that will increase the rent from $364.48 to $376.07 per month starting on September 1, 2025. The proposed rent represents a monthly increase of $11.59 compared to the current rate. The rate was established based on the change in the Consumer Price Index (CPI) as specified in the lease. This new rate will continue to be subject to annual cost of living increases as required by the lease. If the lease amendment is approved, John Watkins’ monthly rent will increase to $376.07, and the lessee will be responsible for retroactive payment of the rent difference beginning September 1, 2025. The new monthly rent complies with Policy F-51 County Real Property Asset Management as it reflects fair market value and follows the industry standard method for rate determination.
Watkins - County Lease Number 503253 (Borrego Valley Airport, aviation lease)
Overview of Lease:
On September 15, 2010 (9), the County’s Board of Supervisors (Board) approved a 30-year aviation ground lease with John S. Watkins for aircraft storage hangars. The lease commenced on September 16, 2010 and terminates on September 15, 2045. The lease has been amended four times: (i) on June 24, 2015 (3) to adjust rent and update lease language; (ii) on December 10, 2019 (16) to remove language that required lessee to pay commercial sublease rents to County; (iii) on August 5, 2020 (06) to revise Article 4 (Rent) to adjust the rent and revise Section 6.3 (Compliance with Laws); and (iv) on April 10, 2024 (6) to extend the termination date of the lease to September 15, 2045 (from September 15, 2040), subject to specified conditions, and to add the Working Families Ordinance (WFO) provision to bring the lease into compliance with the ordinance adopted in 2022. Under the lease’s terms, the monthly base rent must be renegotiated every five years, with the next renegotiation taking effect on September 1, 2025. The renegotiation may be determined by mutual agreement or, through an appraisal process.
Overview of Proposed Amendment:
County and John Watkins have negotiated a lease amendment that will increase the rent from $173.28 to $178.79 per month starting on September 1, 2025. The proposed rent represents a monthly increase of $5.51 compared to the current rate. The rate was established based on the change in the Consumer Price Index (CPI) as specified in the lease. This new rate will continue to be subject to annual cost of living increases as required by the lease. If the lease amendment is approved, John Watkins’ monthly rent will increase to $178.79, and the lessee will be responsible for retroactive payment of the rent difference beginning September 1, 2025. The new monthly rent complies with Policy F-51 County Real Property Asset Management as it reflects fair market value and follows the industry standard method for rate determination.
Strasbaugh - County Lease Number 503252 (Borrego Valley Airport, aviation lease)
Overview of Lease:
On September 15, 2010 (9), the County’s Board of Supervisors (Board) approved a 30-year aviation ground lease with Larry H. Strasbaugh 1999 Revocable Trust for aircraft storage hangars. The lease commenced on September 16, 2010 and terminates on September 15, 2045. The lease has been amended four times: (i) on June 24, 2015 (3) to adjust rent and update lease language; (ii) on December 10, 2019 (16) to remove language that required lessee to pay commercial sublease rents to County; (iii) on August 5, 2020 (06) to revise Article 4 (Rent) to adjust the rent and revise Section 6.3 (Compliance with Laws); and (iv) on April 10, 2024 (6) to extend the termination date of the lease to September 15, 2045 (from September 15, 2040), subject to specified conditions and to add the Working Families Ordinance (WFO) provision to bring the lease into compliance with the ordinance adopted in 2022. Under the lease’s terms, the monthly base rent must be renegotiated every five years, with the next renegotiation taking effect September 1, 2025. The renegotiation may be determined by mutual agreement or, through an appraisal process.
Overview of Proposed Amendment:
County and Larry Strasbaugh have negotiated a lease amendment that will increase the rent from $448.13 to $462.38 per month starting on September 1, 2025. The proposed rent represents a monthly increase of $14.25 compared to the current rate. The rate was established based on the change in the Consumer Price Index (CPI) as specified in the lease. This new rate will continue to be subject to annual cost of living increases as required by the lease. If the lease amendment is approved, Larry Strasbaugh’ monthly rent will increase to $462.38, and the lessee will be responsible for retroactive payment of the rent difference beginning September 1, 2025. The new monthly rent complies with Policy F-51 County Real Property Asset Management as it reflects fair market value and follows the industry’s standard method for rate determination.
Fallbrook Sports Association - County Lease Number 315014 (Fallbrook Community Airpark, recreational ground lease)
Overview of Lease:
On March 18, 2015 (04), the Board of Supervisors (Board) approved a 20-year recreational ground lease with the Fallbrook Sports Association, a California nonprofit corporation, replacing their 20-year ground lease that commenced in 1998. The current lease commenced on April 1, 2015, and it will terminate on March 31, 2035. Historically, the Fallbrook Sports Association partnered with the County’s Department of Parks and Recreation and community donors to fund the development of Ingold Sports Park, developing the unimproved 13.5-acre leasehold located at the Airpark into a state-of-the-art sports facility serving the community. Since 1998, the unimproved site has been significantly developed with two baseball/softball fields, an indoor artificial turf soccer field, and an outdoor artificial turf multi-purpose field that accommodates a range of sports, including baseball, softball, soccer, football, rugby, and lacrosse. The facility also includes a small building with a snack bar, office, and restrooms, and both the fields and parking areas are equipped with lighting to support evening use. These amenities support programs and services that promote community engagement and enhance residents’ well-being, consistent with the County's strategic goals.
Overview of Proposed Amendment:
The recreational ground lease with the Fallbrook Sports Association (FSA) requires a base monthly rent renegotiation on the tenth anniversary of the commencement date, with the new rent rate taking effect on April 1, 2025. County and FSA have negotiated a lease amendment that will increase the rent to $2,721.42 per month starting on April 1, 2025. The new rent was determined by mutual agreement between the County and Fallbrook Sports Association. The negotiated amendment to the lease provides for incremental rent increases of 3% annually for the remainder of the lease term.
If the lease amendment is approved, the Fallbrook Sports Association’s monthly rent will increase from $2,642.16 to $2,721.42, and the lessee will be responsible for retroactive payment of the rent difference beginning April 1, 2025. Thereafter, the rent will increase 3% annually. The lease amendment incorporates the Working Families Ordinance (WFO) provision. The Board adopted WFO requires lessees to pay prevailing wage on qualifying construction projects, use a skilled-and-trained workforce, and provide their employees with paid sick leave. All other terms and conditions of the lease will remain unchanged. The new monthly rent complies with Policy F-51 County Real Property Asset Management as it reflects fair market value and follows the industry’s standard method for rate determination.
This is a request to: (1) approve the Fifth and Sixth Amendments to aviation ground leases with John S. Watkins, the Fifth Amendment to the aviation ground lease with Larry H. Strasbaugh 1999 Revocable Trust at Borrego Valley Airport; and (2) approve the First Amendment to the Recreational Ground Lease with the Fallbrook Sports Association at the Fallbrook Community Airpark.
ENVIRONMENTAL STATEMENT
Section 15301 of the California Environmental Quality Act (CEQA) Guidelines exempts from CEQA review actions consisting of the “operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features involving negligible or no expansion of existing or former use.” The key consideration in applying this exemption is whether the proposed action involves expansion of an existing use. The proposed actions, approval of amendments to current aviation leases with John Watkins and Larry Strasbaugh and recreational ground lease with Fallbrook Sports Association, involve negligible or no change in use or operations from what currently exists, and is therefore, categorically exempt from CEQA review under Section 15301 of the CEQA Guidelines.
LINKAGE TO THE COUNTY OF SAN DIEGO STRATEGIC PLAN
Today’s proposed action supports the Economic Sustainability Strategic Initiative in the County of San Diego’s (County) 2025-2030 Strategic Plan. Revenue derived from airport leases is placed in the County’s Airport Enterprise Fund, which aligns services to available resources, maintaining fiscal stability, and ensuring long-term solvency by using lease revenue for ongoing maintenance and operation of County Airports. Airports in San Diego County are an important part of the County’s physical infrastructure and the federal transportation system and provide superior service delivery to local aviation customers and the public which they serve.
Respectfully submitted,
DAHVIA LYNCH
Deputy Chief Administrative Officer
ATTACHMENT(S)
A: Vicinity Map - Borrego Valley Leases
B: Vicinity Map - Fallbrook Lease
C: 72727R Watkins Lease Amendment
D: 503253 Watkins Lease Amendment
E: 503252 Strasbaugh Lease Amendment
F: 315014 FSA Lease Amendment