COUNTY OF SACRAMENTO
CALIFORNIA
For the Agenda of:
August 22, 2017

To:

Board of Supervisors

From:

Department of Airports

Subject:

Authorize The Director Of Airports To Negotiate And Execute A Ground Lease
For Development Between The County Of Sacramento And Amazon
Fulfillment Services, Incorporated At Sacramento International Airport

Supervisorial
District(s):

Serna

Contact:

Donna Scranton, Manager, Properties & Business Development (916) 874-0910

Overview
Amazon Fulfillment Services, Inc., its affiliates, or vendors, as reasonably approved by the
Department of Airports, (Amazon) is interested in negotiating a ground lease to conduct their
contracted air cargo flight operations at Sacramento International Airport (SMF). Amazon’s
flight operations are expected to begin with one (1) daily flight in September 2017. The daily
frequency may increase during the 2017 holiday season. These air cargo flight operations will be
conducted pursuant to Chapter 11.32 of Sacramento County Code.
To support their air cargo flight operations, Amazon expects to construct a 40,000 square foot
Sprung structure facility for cargo handling at SMF. The anticipated date for commencing
operations from this facility is Fall 2017. The Director of Airports will negotiate and execute a
Ground Lease for Development of Amazon’s cargo handling facility at SMF.
Recommendations
1. Authorize the Director of Airports to negotiate a Ground Lease for Development with
Amazon Fulfillment Services, Inc. at Sacramento International Airport.
2. Approve the attached Resolution authorizing the Director of Airports to execute the
Ground Lease for Development with Amazon Fulfillment Services, Inc.
3. Determine that the prior Environmental Impact Report for the Sacramento International
Airport Master Plan (Control Number 04-DAE-0018) is adequate and appropriate for the
Project.
Measures/Evaluation
Approval of the recommendation will allow the Department to generate revenues through ground
rent from the Ground Lease for Development. Also, the associated flight activity from this
operation will generate increased landing fees.
Fiscal Impact
Minor site improvements, funded from the Airport Enterprise Fund, will be needed to support the
construction of Amazon’s Sprung structure. Upon finalizing the negotiations, the amount of
ground lease revenues to be paid to the Airport Enterprise Fund will be determined.

 Authorize The Director Of Airports To Negotiate And Execute A Ground Lease For
Development Between The County Of Sacramento And Amazon Fulfillment Services,
Incorporated At Sacramento International Airport
Page 2

BACKGROUND
Amazon approached the Department to begin discussions about conducting their air cargo flight
operations and developing a new cargo handling facility at SMF. The facility is expected to
support Amazon’s package delivery business in Northern California.
DISCUSSION
Amazon expects to begin air cargo flight operations at SMF in September 2017, with one (1)
daily flight. The daily frequency may increase during the 2017 holiday season. The air cargo
flight operations will be conducted pursuant to Chapter 11.32 of Sacramento County Code. A
Ground Lease for Development will be negotiated to accommodate the construction of
Amazon’s sprung structure facility.
Amazon expects to construct a 40,000 square foot Sprung structure facility for cargo handling at
SMF. A Sprung structure is made from aluminum arches that are integrally connected to an
all-weather architectural membrane. It can be easily expanded or reduced. Amazon
anticipates commencing operations from this facility in Fall 2017. The Director will negotiate
and execute a Ground Lease for Development for Amazon’s facility at SMF in a form similar to
the attached Draft Ground Lease for Development.
As the project has been evaluated as part of the prior Environmental Impact Report for the
Sacramento International Airport Master Plan, Recommendation 3 affirms that that the project
has been environmentally evaluated at the appropriate level.
MEASURES/EVALUATION
Approval of the recommendation will allow the Department to generate revenues through ground
rent and parking position fees. The increase in flight activity will allow the Department to
reduce landing fees to all airlines thereby increasing our competitive position in the industry.
71-J ANALYSIS
The requirements of the Sacramento County Charter, Section 71-J do not apply.
FINANCIAL ANALYSIS
Minor site improvements will be needed to be completed by the Department in order to
accommodate the construction of Amazon’s Sprung structure facility. These site improvements
will be funded from the Airport Enterprise Fund. Upon finalizing the negotiations of the Ground
Lease, the amount of ground lease revenues to be paid to the Airport Enterprise Fund will be
determined.

 Authorize The Director Of Airports To Negotiate And Execute A Ground Lease For
Development Between The County Of Sacramento And Amazon Fulfillment Services,
Incorporated At Sacramento International Airport
Page 3
LEGAL ISSUES
County Counsel will review and approve the negotiated Ground Lease for Development with
Amazon.

Respectfully submitted,

APPROVAL RECOMMENDED:

_____________________________
JOHN WHEAT, Director
Department Of Airports

___________________________
NAVDEEP S. GILL
County Executive

Attachments: Resolution
ATT - Draft Ground Lease for Development