# EXHIBIT 

# IrlWs;f

To: Airport Commission 

## ITEM 7(a)i offers experienced pilots access to a Cirrus aircraft who can't justify the cost of sole ownership, Customer parking will be provided atthe Krueger Aviation parking lot. Limrted access tothe airside iscontemplated (l.e, the Krueger Aviation tiedown area), The program istechnically a commercial operation and requires crtyapproval. From: Airport Staff

Commercial Operations Permit: July 23, 2007 AlrShares Elite West SUbject: Date: Introduction Perthe direction ofthe Airport Commission, this report iscontinued tromthe June 25. 2007 meeting tor turther review and consideration, The staff report has been revised to reflect and address comments made bythe publiCand the Commission during the consideration ofthe nem.

Discussion Airport Commission Review During the June 25. 2007 Airport Commission meeting, the Commission considered and discussed the COP Application for the AirShares ElrteWest and expressed numerous issues and concerns regarding rtsproposed operation and prior actions, The following seeks to address these concems: 1) Willtheapproval oftheAirShares Elite West Commerciel Operations Permitset

### aprecedent for the approval ofotherfractional share ownership companies? Ans: No, The recommended approval ofAirShares ElrteWest COP will not set precedent torthe approval of other similar commercial operations, On September 25, 2006. the Airport Commission recommended approval ota COP tor Flight Partners inc, dba iFly - a similar single engine aircraft ownership program using Columbia 350 single engine aircraft, Any potential future commercial operations ofthis type would berequired to gothrough the COP process. 2) Willtheepprovel oftheAirSheres Elite WestCommercial Operetions Permitplace an undue operational burden and impact on the operations of the Santa Monica Airport and the surrounding community? Ans: No. AirShares Elrte west proposes to sell partnership Interesting in single-engine piston powered Cirrus SR20s and SR22s aircraft - one ofthe most modem, compatible and safest aircraft inthe world. Cirrus currently operates an approved aircraft sales operation located at the Krueger Aviation and approximately 40 Cirrus aircraft are based at the Airport.

# ) Attached toryour further review and consideration, is an Application torCommercial Operations Perrnrt (COP) for AirShares ElrteWest. AirShares ElrteWest atractional ownership company that sells partnership interest in single-engine piston powered Cirrus SR20s and SR22s aircraft. AirShares Elite West is based in Fairfield New Jersey and desires to open rtswest-coast operation at Krueger Aviation located at 2701 Airport Avenue, Santa Monica, Calffomia 90405 contingent upon the approval ofthe COP. The leasehold space is located inadesignated aviation use area on the south-side of the Airport.

AirShares Elite west is a professionally managed shared ownership program which provides a simplified experience by managing all aspects of aircraft ownership such as schedUling, maintenance. insurance. servicing - anfor afixed predictable tee. The company currently operates Cirrus aircraft in seventeen metropolitan locations throughout the United States. They anticipate bUildingthe business at Santa Monica Airport tothree aircraft overthe nex1two years. The number of 'customers' associated wrththose three aircraft will be lessthen twenty-tour, AirShares Elrtewest
2AirShares EI~e West would act as an adjunct to the Cirrus sales operation. Additionally, overall aircraft operations atthe Airport have generally declined from ahigh ofover 230,000 operations in 1999 to less then 137,000 operations in 2006. The addition of three Cirrus aircraft and approximately 24 new owner/operators will not have a noticeable impact onthe Airport's operation or on the surrounding community. 3) DidAirShares Elite West violate the Santa Monica Municipal Code forstaging two special events on May

### 2d

h & June 9'h prior to the issuance of

### a Commercial Operations Permit? Ans: No. AirShares Elite West (through Krueger Aviation) applied for and were issued a special event permit byAirport staff. The event permit stipulated that commercial actlv~y (i.e. saleof partnership Interest In aircraft) was prohlblted during the event(s). To Airport staffS knowledge through representations made bythe applicant, Air Shares Elite West complied wtth this provision ofthe event permit. 4) Did AirShares Elite West violate the Santa Monica Municipal Code by conducting commercial operations on the Airport prior to the issuance of a Commercia/ Operations Permit? Ans: No. ToAirport staff's knowledge through representations made bythe applicant, Air Shares Elite west has not conducted commercial actlvlty at Santa Monica Airport. 5) WasAirSharas Elite West operating at the Airport under another pseudonym prior to the submittal ofits COPAppl/cation? Ans: No. Air Shares EI~eWest has not operated under anyother name at Santa Monica Airport. 6) IsAirShaf8s Elite Westproposed commercial operation compatible with the operation of theAirport (parking, airtraffic, maintenance, etc.)? Ans: Yes. AirShares EmeWest's proposed operation Iscompatible with the Airport's operation. The types of aircraft used bythe applicant have been expressed bythe Airport Commission and the community as the most desirable type of aircraft operations for the airport. Again, the single-engine piston powered Cirrus SR20s and SR22s aircraft used byAir Share EI~e West are one ofthe most modem, compatible and safest aircraft Inthe world. The Krueger Aviation faciltty has more then adequate space to parkAIrShares related vehicles and will not impact other facilities. Aircraft maintenance/service activities will generally be performed by Kim Davidson Aviation an eXisting aviation service provider based atthe site.

Staff has reviewed AirShares Emewest Application for Commercial Operations Perm~and find that

~meets the C~y's requirements. Priorto commencing business activttyAIrShares EltteWest will be required to procure a C~y of Santa Monica Business Licanse and appropriate insurance for the proposed use consistent w~h established City policy.

Recommendation After further consideration and analysis ofthe proposed operation, staff reaffirms Itbelief that the overall impact associated w~h the proposed AirShares Elite West operation will not affect other
uses associated w~htypical airport operations. Staff requests thatthe Airport Commission support the Commercial Operations Permit forAirShares EI~ewest and recommend thatthe C~yManager conditionally approve the COP on behalf ofthe C~y; subject to the following restrictions: 1. The term of the COP shall coincide with the term of the sublease agreement; month-tomonth term, unless otherwise terminated bythe Airport Director but shall not extend past June 30, 2015. 2. The Commercial Operations Permit Issite specific to the proposed subleased premises. 3. Parking of AirShares EI~e West member vehicle(s) shall be accommodated at the Krueger Aviation leasehold.
3 44. The COP is specincally issued to AirShares Elite West for the proposed fractional share ownership use of single-engine Cirrus SR20 and SR22 aircraft, no other purpose is herein granted. 5. AirShares Elite west shall cooperate fully with the City inthe enforcement ofthe provisions ofthe Airport Code and regulations ofthe Noise Abatement Program implemented bythe City. 6. AlrShares Elite West agrees tofully brief and give each fractional owner acopy ofthe City's aircraft noise abatement regulations and procedures and will not~ the Airport Director with
name and contact information regarding participating members. 7. The COP is not transferable or assignable to other individuals, employees or companies. 8. AirShares Elite West Is required conduct its business activities in accordance with all other applicable City Ordinances, laws, and rules and regulations. 8. The Airport Director must approve any signage. 9. Failure to adhere to the above listed restrictions and conditions shall be considered a material breach ofthe COP and subject to termination ofthe COP.
Prepared by: Robert Trimborn

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