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DATE: |
December 10, 2025 |
05 |
SUBJECT
Title
MCCLELLAN-PALOMAR AIRPORT - APPROVE LEASE WITH UNITED AIRLINES AND RELATED CEQA FINDING (DISTRICTS: 3 AND 5)
Body
OVERVIEW
This item is a proposed lease with United Airlines for limited commercial aviation service at McClellan-Palomar Airport (Palomar Airport) beginning in late March 2026. Palomar Airport, owned by the County of San Diego and operated by the Department of Public Works-- (DPW)− Airports Division (Airports), serves as a critical link in the region’s transportation network and economic infrastructure. The airport is one of seven airports operated by DPW, using funding from the Airport’s self-sustaining maintenance and operations fund (Airport Enterprise Fund/AEF), at no cost to the General Fund. County Airports are home to flight schools, repair and maintenance shops, aircraft storage, aircraft sales and rental services, fuel providers, and instrument and avionics shops, and function as an essential base for regional emergency first responders such as law enforcement, fire, and medical. Palomar Airport supports corporate aviation, flight training, air charter, and limited scheduled commercial service. The airport provides convenient access for businesses and residents in North County and plays a key role in regional economic development, tourism, and emergency response.
Palomar Airport has been in operation in Carlsbad since 1959 and is designated by the Federal Aviation Administration (FAA) as a Commercial Service Airport. As a certified commercial service airport, Palomar undergoes annual inspections from the FAA and State, requiring the County to meet federal requirements in operational infrastructure, aircraft rescue and firefighting, staff training, security plans, and associated documentation. The County accepts federal grant funding from the FAA Airport Improvement Program (AIP) and, as a condition of receiving funding from the FAA, the County must comply with a list of Airport Sponsor Assurances. Grant Sponsor Assurance 22 (Grant Assurance 22) prohibits the County from discriminating against any type, kind, or class of aeronautical user.
United Airlines (United) is proposing scheduled commercial air service at Palomar Airport beginning operations in late March 2026 (lease would begin March 1, 2026) with up to four departures and four arrivals per day: two flights to and from San Francisco International Airport (SFO) and two flights to and from Denver International Airport (DEN) on an Embraer 175 (EMB 175) aircraft. These destinations serve as United hubs, offering passengers from North County convenient, one-stop connections to national and international markets. All proposed flight operations are scheduled within the hours of Palomar’s Voluntary Noise Abatement Program (VNAP), which provides guidance and recommendations to pilots to help minimize noise levels over residential areas and encourages aviation activity by jet aircraft between 7:00 am to 10:00 pm to support nighttime quiet hours. The County is prohibited by federal law and grant assurances from discriminating against United and is obligated to negotiate in good faith with the airline for the use of available space.
United intends to use existing County Airport terminal facilities, parking areas, and other facilities. No changes to any existing facilities have been requested by United or will be provided by the County to support the proposed operations. The County will coordinate with United, the Transportation Security Administration (TSA), and the Federal Aviation Administration (FAA) to ensure all operational and lease terms are consistent with applicable federal requirements, federal grant assurances, and the McClellan-Palomar Airport Master Plan Update.
The proposed actions today include the approval of a new three-year lease between United and County Airports with two one-year options to extend, and a partial fee waiver for United Airlines (United) offering commercial service at Palomar Airport. As a result of the proposed lease, County Airports anticipate receiving $1,056,322 in total fees and other revenue to the Airport Enterprise Fund (AEF) annually. Consistent with industry standards, staff recommend a partial fee waiver for United during the first year of its operations. Fee waivers are a common practice across the industry for an airport to attract new services, bringing economic and transportation benefits to the region. The total fees proposed to be waived for the first year are $517,600, reducing year one revenue to $538,722.
This is a request for the Board of Supervisors to authorize the Director of Airports to execute a three-year lease agreement with two one-year options to extend and partially waive fees for year one in compliance with FAA regulations. The lease will generate revenue for the AEF to support maintaining the airport’s self-sustaining financial structure and advance the County’s strategic goals of improving regional transportation connectivity, supporting economic vitality, and maintaining responsible environmental stewardship. United’s service will provide new travel options for residents, visitors, and businesses in northern San Diego County while adhering to the County’s high standards for operational safety, environmental compliance, and public transparency.
RECOMMENDATION(S)
CHIEF ADMINISTRATIVE OFFICER
1. Find that the Final Program Environmental Impact Report (PEIR) for the McClellan- Palomar Airport Master Plan Update, certified by the Board of Supervisors on December 8, 2021 (06), State Clearinghouse #2016021105 on file with the Department of Public Works, was completed in compliance with the California Environmental Quality Act (CEQA) and state CEQA Guidelines, that the decision-making body has reviewed and considered the information contained therein and the Findings there dated November 24, 2025 (Attachment B) before approving the lease agreement with United Airlines, that the PEIR reflects the independent judgment and analysis of the Board of Supervisors; and
Find that there are no substantial changes in the project or in the circumstances under which it is undertaken which involve significant new environmental impacts that were not considered in the previously certified PEIR, that there is no substantial increase in the severity of previously identified significant effects, and that no new information of substantial importance has become available since said PEIR was prepared in accordance with CEQA Guidelines Section 15168.
2. Authorize the County entering into a three-year lease with two- one-year options to extend with United Airlines, in compliance with FAA regulations, and authorize the Director of Airports to execute, upon receipt, three copies of the lease. (4 VOTES)
3. Authorize the Director, Airports, to waive approximately $517,600 of partial fees and charges the County Airports is anticipated to receive from United Airlines in the first year of operations.
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 businesses including those with traditionally less working capital and business owners and managers who may be socially and economically underserved
SUSTAINABILITY IMPACT STATEMENT
The base monthly rent from this lease helps to support economic sustainability by providing services for the region. The revenue that County Airports will receive from commercial aviation services and continues to receive from other charter and general aviation activities will help operate, maintain, and improve the County Airport System consistent with the County sustainability goal of providing just and equitable access to County services and resources in support of sustainable communities.
FISCAL IMPACT
Funds for this request are included in the Fiscal Year 2025-26 Operational Plan in the Airport Enterprise Fund. If approved, today’s recommendation will authorize a lease agreement with United Airlines and County Airports. The County Airports anticipates receiving total annual fees and other revenue from United Airlines in the first year of operations in the amount of $1,056,322. County Airports recommends a partial fee waiver for the first year of operations beginning on March 1, 2026. Fee waivers are a common practice across the industry for an airport to incentivize new services. The total fees proposed to be waived for the first year is $517,600, reducing the year one total revenue to $538,722. For the current fiscal year, this will result in lease revenue of $134,681, including fee waiver, for the period of March through June 2026. The remaining $404,041 of first year revenue will be received in Fiscal Year 2026-27. Beginning in the second year of United Airlines operations, County Airports total revenue anticipated is approximately $1,056,322. The funding source is revenue from the commercial aviation lease with United Airlines. There will be no change in net General Fund costs and no additional staff years. Revenue derived from this lease supports the Airport Enterprise Fund allowing the Department of Public Works to operate all airports safely, efficiently, and cost-effectively without the use of General Fund dollars.
BUSINESS IMPACT STATEMENT
Leases at airports benefit the local business community by creating jobs, increasing economic activity, providing business opportunities, and supporting infrastructure development. Commercial airline services attract visitors, generate revenue, support regional economic growth, and improve the quality of life for residents. San Diego County Airports connect individuals to jobs and links local communities to the world. Revenue derived from airport leases allows the Department of Public Works to operate and maintain the seven County airports safely, efficiently, and cost-effectively without the use of general fund dollars. Today’s action authorizes the Director of Airports to execute a lease agreement with United Airlines supporting the self-sufficiency and economic viability of the County airport system.
Details
ADVISORY BOARD STATEMENT
On November 20, 2025, the Palomar Airport Advisory Committee (Committee) deliberated the approval of the United Airlines lease and fee waiver. A motion was made to table the item until the January PAAC meeting. County staff informed the Committee that the United Lease will be heard by the Board on December 10, 2025. The Committee Chair reminded members that if the Board of Supervisor takes action on the lease at the December 10th meeting, that the item would not be brought back to the Committee for its reconsideration. The Committee voted on the motion to table the item and, by a vote of 5 in favor, 3 against, and 1 vacant seat, to reconsider this item at the January 15, 2026 PAAC meeting, resulting in no action being recommended by the Committee on the lease.
BACKGROUND
The County of San Diego (County) Department of Public Works (DPW) owns and operates seven airports: Borrego Valley Airport, Fallbrook Community Airpark, Gillespie Field, Jacumba Airport, McClellan-Palomar Airport, Ocotillo Airport, and Ramona Airport. The County Airport system (Airports) is operated, maintained, and improved using rents, fees, rates and charges, and federal and state grant funding without the use of County general fund dollars. County Airport infrastructure and facilities include runways, taxiways, air traffic control tower, navigational equipment, airfield lighting systems, parking lot facilities, and roadways. Services available to corporate and general aviation users include hangar and tie-down rentals, aviation fuel sales, aircraft repair, maintenance, parts, pilot supplies, flight training, and out-of-state flights. County airports serve the public by housing aviation facilities and equipment used by local law enforcement agencies, aerial firefighting, and other emergency services providers, and provide support for flights to the public. County airports include industrial-zoned land that allows for other airport-compatible uses such as manufacturing, storage, and other commercial uses such as those in Fallbrook Airpark, Gillespie Field, and McClellan-Palomar Airport (Palomar Airport) industrial/commercial parks. Leasing airport land generates revenue for the Airport Enterprise Fund (AEF), ensuring Airports remain financially self-sufficient without the use of County general fund dollars.
Palomar Airport has been operating in Carlsbad since 1959 and is designated as a Commercial Service Airport. The airport is categorized by the Federal Aviation Administration (FAA) as a non-hub primary airport and is certified as a Class I Part 139 facility to serve commercial service aboard scheduled small aircraft (10-30 seats), scheduled large aircraft (30+ seats), and unscheduled large aircraft. As a certified commercial service airport, Palomar Airport undergoes annual inspections from the FAA and State, requiring the County to meet federal requirements in operational infrastructure, aircraft rescue and firefighting, staff training, security plans, and associated documentation. The County accepts federal grant funding from the FAA Airport Improvement Program (AIP) and, as a condition of receiving funding from the FAA, the County must comply with a list of Airport Sponsor Assurances. Grant Sponsor Assurance 22 (Grant Assurance 22) prohibits the County from discriminating against any type, kind, or class of aeronautical user. The FAA in Order 5190.6B of the FAA Airport Compliance Manual, explains the reach of Grant Assurance 22:
“[Airport sponsors are required to] make [the] airport available as an airport for public use on reasonable terms, and without unjust discrimination, to all types, kinds, and classes of aeronautical activities including commercial aeronautical activities offering services to the public at the airport.”
Commercial service at Palomar Airport is supported in the Master Plan Update (Master Plan), which was initiated by County Airports upon direction from the County Board of Supervisors on December 16, 2015 (6). The Master Plan Update and associated Final Program Environmental Impact Report (PEIR) was adopted and certified by the Board on December 8, 2021 (6). The PEIR considers and discloses potential environmental impacts associated with the implementation of forecasted aviation services and associated infrastructure improvement projects at the airport. The Master Plan creates a new blueprint for the development of the facilities over the next 20-year planning cycle, including a potential increase in commercial air service over the long-term planning period. Long-term infrastructure planning, which includes facility upgrades primarily to the runaway and taxiways to enhance safety and efficiency for existing and forecasted users by installing facilities such as Emergency Materials Arresting Systems (EMAS), a runway shift, and a small runway extension was also forecasted in the Master Plan. These facilities changes are not needed to support the United Airlines proposal which has been approved by the FAA to operate using the existing B-II facilities at the Airport.
United Airlines (United) approached the County to request a lease for use of airport facilities to commence limited service to San Francisco, CA and Denver, CO. United Airlines is proposing scheduled commercial air service at Palomar Airport beginning operations in late March 2026 with up to four departures and four arrivals per day: two flights to and from San Francisco International Airport (SFO) and two flights to and from Denver International Airport (DEN) on an Embraer 175 (EMB 175) aircraft. These destinations serve as United hubs, offering passengers from North County convenient, one-stop connections to national and international markets. United Airlines proposal of 102,200 enplanements is well below (less than 20%) of the 575,000 annual enplanements contemplated in the Board approved Master Plan and PEIR for Palomar Airport and would not result in a significant environmental impact. United would accommodate commercial passengers using the existing passenger terminal, parking facilities, aircraft ramp space, and infrastructure and would occupy ticket counter space, a kiosk, and office space at the passenger terminal. No additional facilities would need to be constructed to support the lease as the proposed uses are within the scope of uses the existing facilities were designed and built to accommodate. The proposal is compatible with existing facilities, and within the forecasts analyzed in the Master Plan Update and PEIR approved by the Board.
Both the airline’s commercial service operating certificate and Grant Assurance 22 guide the review of United Airlines’ (United) lease proposal. The service proposed by United is consistent with their rights as a commercial service provider. The County is prohibited by federal law and grant assurances from discriminating against United and is obligated to negotiate in good faith with the airline for the use of available space. If the County were to deny an airline the right to use this commercial facility, the FAA may revoke, deny, or withhold grants to compel compliance. This action would negatively impact the entire County Airport System, making critical infrastructure improvements challenging and would risk depleting the AEF.
Airports anticipate $1,056,322 total fees and charges annually. Consistent with industry standards, Airports recommends a partial fee waiver for United during the first year of its operations. Fee waivers are a common practice across the industry for an airport to incentivize and attract new services, bringing economic and transportation benefits to the region. The proposed fee waiver is $517,600, reducing the year one revenue to $538,722. Full revenue would be collected in years two to five of this lease. The projected lease revenue and FAA grant funding are anticipated to substantially exceed the amounts waived and operational costs during the term of the proposed lease to facilitate the commencement of operations.
Palomar Airport was permitted, developed, and operated as one of only two commercial service airports in San Diego County. The City of Carlsbad issued Conditional Use Permit (CUP) 172 for Palomar Airport in 1980 which specifically authorized “Airlines, scheduled and unscheduled” (i.e., commercial airlines both currently scheduled and/or scheduled at a future date) by right. The City has acknowledged that the CUP does not restrict commercial service operations by weight, seat capacity or other aircraft features. The CUP does require approval from the City Planning Commission for any change in the designation of the Airport from its current B-II facilities standard to something else. No change in the designation of the Airport has been requested by United or will be provided by the County under the proposed lease. United will use the Airport facilities as permitted by the City in the CUP. The proposed lease is consistent with the terms of the CUP and the custom and practice of the City and County in implementing it.
Approving the lease with United is in line with the forecasted economic impact detailed in the 2021 Airport Economic Impact Analysis (Economic Analysis). Based on the 2021 Economic Analysis, Palomar Airport’s operational and capital expenditure, tenant activity, and passenger spending supported 2,590 jobs, drives approximately $82.6 million in industry activity, and generates $14.9 million in federal, State, and local tax revenue. The economic impact associated with the addition of future commercial services at Palomar Airport will continue to improve Palomar Airport’s regional economic impact with most of the airport’s economic impact benefiting North County; 69% of the total employment impact and 55% of the total industry activity.
This is a request for the Board of Supervisors to authorize the Director of Airports to execute a three-year lease agreement with two one-year options to extend, and partially waive fees with United, in compliance with FAA regulations. The lease will generate revenue for the AEF, help maintain the airport’s self-sustaining financial structure, and further the County’s strategic goals of improving regional transportation connectivity, supporting economic vitality, and maintaining responsible environmental stewardship. United’s service will provide new travel options for residents and businesses in northern San Diego County while adhering to the County’s high standards for operational safety, environmental compliance, and public transparency.
ENVIRONMENTAL STATEMENT
On December 8, 2021 (06), the Board of Supervisors certified the Program Environmental Impact Report (PEIR) for the McClellan-Palomar Airport Master Plan Update (Project), SCH #2016021105 on file with the Department of Public Works. The proposed action consists of the issuance of a commercial airline facilities lease to United Airlines to operate at McClellan-Palomar Airport.
In accordance with CEQA Guidelines Section 15168(c), an environmental review update checklist was completed on November 24, 2025 (Attachment B), and the analysis concluded that the project would result in no new impacts or mitigation measures, the activity is within the scope of the previously approved project covered by the PEIR, and no new environmental document would be required. Because commercial airline activity was analyzed and considered in the PEIR for the McClellan-Palomar Master Plan Update and the activities proposed by United, considered individually and cumulatively, are within the scope of what was reviewed in the PEIR, the proposed action is consistent with activities contemplated and analyzed in the PEIR.
The environmental review update checklist was prepared pursuant to CEQA Guidelines Section 15168 and concluded there is no new information of substantial importance, nor any substantial changes to the project analyzed in the PEIR or circumstances under which the project was undertaken since the PEIR was prepared. Therefore, no additional environmental review or findings are necessary under CEQA Guidelines Sections 15162 and 15168.
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 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 the local aviation customers and the public which they serve
Respectfully submitted,
DAHVIA LYNCH
Deputy Chief Administrative Officer
ATTACHMENT(S)
A: Vicinity Map
B: Environmental Findings