Signature Hopes to Give San Jose Wings

San Jose Airport development The Registry real estate

By Sharon Simonson

The Florida company proposing an $82 million private terminal and seven new hangars at the San Jose airport is so eager to begin that it has issued a request for qualifications to general contractors to undertake construction of the facility.

Signature Flight Support has known for nearly four years that it wanted a San Jose terminal. It ranks the airport as one of the top three most desirable locations worldwide for expansion of its private-aviation infrastructure. San Jose City Council is slated to take up the Signature proposal April 9. If Signature is successful, it plans to begin construction as soon as is feasible.

Besides the new hangars, the Orlando-based company and Google Inc. executives are proposing a 17,000-square-foot private terminal and an 18.5-acre aircraft ramp at the Norman Y. Mineta San Jose International Airport. The 29-acre operation would store, fuel and maintain private aircraft on land leased from the city for a 50-year term.

Since the city issued its request for proposals last year, Signature has expanded its proposed physical footprint from 180,000 square feet of hangar space in five buildings to 240,000 square feet in seven buildings. Signature also intends to build the entire facility in one swoop, rather than in phases as originally thought.

So significant is the proposed revenue to the airport from Signature’s operation—$165 million at minimum over the lease period—that it was cited as a factor by Moody’s Investors Service in February when Moody’s reaffirmed its A2 rating on Mineta airport bonds and upgraded their status from negative to stable.

Curtis Leigh, director of development for Hunter Properties Inc., said the developer welcomes the new terminal. Hunter has entitlements to build the 1.7-million-square-foot Coleman Highline offices, also on the airport’s west side. “Any development around us and near us is going to help,” Leigh said. “We would love to have Google as a tenant,” he added.

The new Signature terminal would also be across Coleman Avenue from the 18,000-seat Earthquakes soccer stadium being developed by Lew Wolff. The stadium is between the Coleman Highline development and an already built 275,000-square-foot shopping center, also a Hunter Properties’ development.

The recession has whacked private aviation as hard as any other industry, but Signature belives recovery is nigh—an expectation echoed by the General Aviation Manufacturers Association in Washington, D.C. While sales of private aircraft were flat in 2012, aviation companies including Bell Helicopter, Bombardier, Cessna Aircraft Co. and Embraer SA are in development on more than 20 new fixed-wing aircraft and helicopters, according to GAMA. That new slate of offerings should drive sales, the association leadership said.

That appears the case with U.S.-based Gulfstream Aerospace Corp.’s new G650, which went into customer service at the end of last year. The company has approximately 200 orders in place, creating a backlog that extends to 2017. The aircraft, which has a 2013 list price of $64.5 million, can fly nonstop to Europe and Asia from the United States and is the fastest airplane in its class traveling close to the speed of sound, a Gulfstream spokesman said.

The majority of Gulfstream’s customers are corporations and 50 percent of the buyers are international. Indeed, sales of general aviation aircraft in the U.S. have fallen from 62 percent of the world total in 2008 to 50 percent last year, GAMA said, with more sales into Asia Pacific, Latin America and the Middle East.

Also driving expansion is the increasing accessibility of private aviation to a larger group of customers. “There is a competitiveness in the industry post-recession that has brought the flying-hour price down,” said Maria A. Sastre, Signature’s president and chief operating officer.

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