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 at the Krueger Aviation parking lot. Limrted access to the airside

is contemplated (l.e, the Krueger Aviation tiedown area), The program is technically a commercial

operation and requires crty approval.

From: Airport Staff

Commercial Operations Permit:

July 23, 2007

SUbject: AlrShares Elite West

Date:

Introduction

Per the direction ofthe Airport Commission, this report is continued trom the June 25. 2007 meeting

tor turther review and consideration, The staff report has been revised to reflect and address

comments made by the publiC and the Commission during the consideration of the nem.

Discussion

Airport Commission Review

During the June 25. 2007 Airport Commission meeting, the Commission considered and discussed

the COP Application for the AirShares Elrte West and expressed numerous issues and concerns

regarding rts proposed operation and prior actions, The following seeks to address these concems:

1) Will the approval of the AirShares Elite West Commerciel Operations Permit set a precedent

for the approval of other fractional share ownership companies?

Ans: No, The recommended approval of AirShares Elrte West COP will not set precedent tor the

approval of other similar commercial operations, On September 25, 2006. the Airport

Commission recommended approval ot a 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 of this type would be required to go through the COP

process.

2) Will the epprovel of the AirSheres Elite West Commercial Operetions Permit place 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 in the 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 tor your further review and consideration, is an Application tor Commercial Operations

Perrnrt (COP) for AirShares Elrte West. AirShares Elrte West a tractional 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 of the COP. The leasehold space is located in a designated 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

bUilding the business at Santa Monica Airport to three aircraft over the nex1two years. The number

of 'customers' associated wrth those three aircraft will be less then twenty-tour, AirShares Elrtewest

2
AirShares EI~e West would act as an adjunct to the Cirrus sales operation. Additionally,

overall aircraft operations at the Airport have generally declined from a high of over 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 on the

Airport's operation or on the surrounding community.

3) Did AirShares Elite West violate the Santa Monica Municipal Code for staging two special

events on May 2dh & 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 by Airport staff. The event permit stipulated that commercial actlv~y (i.e. sale of

partnership Interest In aircraft) was prohlblted during the event(s). To Airport staffS

knowledge through representations made by the applicant, Air Shares Elite West complied

wtth this provision of the 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. To Airport staff's knowledge through representations made by the applicant, Air Shares

Elite west has not conducted commercial actlvlty at Santa Monica Airport.

5) Was AirSharas Elite West operating at the Airport under another pseudonym prior to the

submittal of its COP Appl/cation?

Ans: No. Air Shares EI~e West has not operated under any other name at Santa Monica Airport.

6) Is AirShaf8s Elite West proposed commercial operation compatible with the operation of

the Airport (parking, air traffic, maintenance, etc.)?

Ans: Yes. AirShares Eme West's proposed operation Is compatible with the Airport's operation.

The types of aircraft used by the applicant have been expressed by the 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 by Air Share EI~e

West are one of the most modem, compatible and safest aircraft In the world. The Krueger

Aviation faciltty has more then adequate space to park AIrShares 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 at the site.

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

~meets the C~y's requirements. Prior to commencing business activtty AIrShares Eltte West 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 of the proposed operation, staff reaffirms It belief that the

overall impact associated w~h the proposed AirShares Elite West operation will not affect other

uses associated w~h typical airport operations. Staff requests that the Airport Commission support

the Commercial Operations Permit for AirShares EI~e west and recommend that the C~y Manager

conditionally approve the COP on behalf of the 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 by the Airport Director but shall not extend past

June 30, 2015.

2. The Commercial Operations Permit Is site 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 4
4. 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 in the enforcement of the provisions

of the Airport Code and regulations of the Noise Abatement Program implemented by the

City.

6. AlrShares Elite West agrees to fully brief and give each fractional owner a copy of the 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 sign age.

9. Failure to adhere to the above listed restrictions and conditions shall be considered a

material breach of the COP and subject to termination of the COP.

Prepared by: Robert Trimborn

attachment

5