SAN JOSE -- Atlantic Aviation, the chief competitor to a proposed new $82 million facility at Mineta San Jose International Airport that will give Google's co-founders a place to park their growing fleet of aircraft next to other tech execs' jets, on Friday filed an appeal with the city, saying San Jose erred when it decided Atlantic's bid didn't fulfill requirements.
Atlantic also said its proposal could generate more revenue for San Jose than any other submitted, so the city must select Atlantic's proposal for recommendation to the City Council, according to the criteria established in the bid.
"Atlantic offered the airport up to $295 million over 25 years to ensure the airport's vacant land was put to its highest and best use," Atlantic CEO Louis T. Pepper said in an email."The city would have gained $10 million on the first day of a contract with us."
City Attorney Rick Doyle on Friday said Atlantic Aviation has the right to appeal and had met next Tuesday's deadline to do so. He would not comment further on the appeal.
San Jose Aviation Director Bill Sherry last week hailed what he and other city officials believe is the optimal proposal submitted from Signature Flight Support and Blue City Holdings -- the company representing the Google fleet -- that would result in a privately funded 29-acre facility on land that was formerly a parking lot on the west side of the airfield.
In addition to building five hangars for planes
According to a detailed memo Sherry released last week, Signature's operation would generate at least $3 million annually in rent and other fees to the struggling city-owned airport that has been working to attract more commercial and private planes, increasing revenue to repay the costs of a recent $1.3 billion airport renovation.
But Pepper said Signature's vision, which includes a total of 270,000 square feet of building space, isn't the best outcome.
"Unfortunately, the airport has chosen more buildings over long-term financial strength," Pepper said. "It is particularly disappointing that having built excess, unwarranted capacity at the commercial terminal, the airport is seeking to do the same for general aviation on the west side."
Pepper said Atlantic is hopeful that the City Council "sees this as a missed opportunity" and will seek a broader array of proposals that will "provide the airport with sensible alternatives for development of its vacant land."
For years, debate has been swirling over how best to develop the 44 acres of land.
Last April, the City Council asked staff to proceed with a plan to develop the area, and a request for proposals was issued in August. Proposals from Atlantic Aviation, which has been at the airport since 2006, Ross Aviation and Signature Aviation, were received by the Dec. 4 deadline. But according to Sherry's memo, the proposals from Atlantic and Ross were deemed "nonresponsive."
The memo said the Atlantic Aviation proposal did not include several documents requested in the bid and omitted other information, and the Ross Aviation proposal did not meet the minimum requirements for aviation fuel storage.
All along, Atlantic has been opposed to another large fixed based operator locating at the site, saying there is already plenty of capacity to handle private aviation growth. A company spokesman said only 60 percent of its hangar space at San Jose's airport is being used.
Of the three major bidders, Atlantic also was particularly frustrated with last week's news because it had built a new $60 million terminal with hangar space at the airport in 2008. Its proposal sought to create an alternative plan to attract different types of uses for the land, including retail, office space and even solar farms.
But Sherry's memo said Signature's proposal scored 991 points out of a possible 1,000. The highest priority selection criteria, the memo said, "should be total revenue generated to the airport followed by revenues generated to the city's general fund."
However, in his company's appeal, Pepper said Atlantic could guarantee 23 percent more revenue than the city requested.
The City Council's Airport Competitiveness Committee is expected to take up the matter at its meeting next Friday, and Sherry said it could go to a full council vote as early as April.
Contact Tracy Seipel at 408 275-0140.