SF Gate: Room to expand/Oakland Airport exploring options for abandoned United maintenance center

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Wednesday, June 25, 2003 (SF Chronicle)
Room to expand/Oakland Airport exploring options for abandoned United maint=
enance center
George Raine, Chronicle Staff Writer


   Oakland International Airport is pondering the future of the maintenance
facility on its property that United Airlines occupied for 15 years but
abandoned in May to save money in bankruptcy reorganization.
   Six hundred union mechanics either accepted transfers to the United
maintenance shop at San Francisco International Airport or retired. They
left vacant a 300,000-square-foot building on a 40-acre parcel that
includes a 182, 000-square-foot hangar area, 47,000 square feet of office
space and a 75,000- square-foot shop area.
   There are several possibilities for the space, said Steve Grossman,
director of aviation at Oakland International Airport, where business grew
significantly during 2002, despite the national downturn in the aviation
industry. The airport, with a business plan that embraces low-cost
carriers, enjoyed an 11.5 percent increase in passenger traffic in 2002,
second only to the Cincinnati-Northern Kentucky International Airport, a
Delta hub.
   Indeed, Oakland International now has 25 percent of the Bay Area airline
passenger market share, the airport said.
   By contrast, passenger traffic in 2002 fell 15 percent at Mineta San Jose
International Airport and 9.2 percent at San Francisco International
Airport.
   "We view this as a long-term opportunity," Grossman said of the new lease
on life for what is now known at the airport as the Oakland Maintenance
Center -- although one option is demolition and building a public or
tenant parking lot to accommodate the airport's growth.
   Even now, since the departure of United, an additional 800 parking spaces
have been set aside on nine acres adjacent to the center. Parking, a major
revenue source at the airport, generated $35 million of the fiscal 2003
revenue of $107.2 million, Grossman said.
   At noon Monday at Port of Oakland offices, the aviation subcommittee of
the Board of Port Commissioners is scheduled to hear a briefing from port
staff members on options for the center. The board is expected to decide
the facility's future in the autumn.
   Grossman said the staff could recommend keeping the facility a maintenan=
ce
base or transforming it into a passenger terminal or cargo base, among
other options.
   UPS officials examined the property but are not interested, a company
spokesman said. A spokeswoman for FedEx said her company has not expressed
interest in the maintenance center.
   World Airways, primarily a charter airline best remembered for
transporting U.S. troops during the Vietnam War, began operating the jet
aircraft maintenance facility in the early 1970s. It was dedicated in 1973
and used for contract maintenance services for 14 airlines.
   World Airways vacated Oakland in 1987 and United assumed the lease in
1988. The airline agreed to a 10-year pact with two 10-year options. It
exercised the first option in 1998. United, having sought Bankruptcy Court
protection, on May 2 filed motions to reject the lease on the facility and
adjacent parking area. United cleared out after the lease rejection went
into effect on May 31.
   Grossman said United left the center in good condition, having made $30
million in upgrades during the past six or seven years.
   But the airport is losing the $3.4 million in annual rent revenue from t=
he
shutdown of the facility. That represents 2.9 percent of the airport's
fiscal year 2004 budgeted revenue of $118.8 million.
   United also recently abandoned its maintenance facility in Indianapolis,
where 1,100 mechanics were employed. It, too, might be revived. The
International Association of Machinists and Aerospace Workers is meeting
with employers and elected officials in Indiana to explore possible new
uses of the center.

   E-mail George Raine at graine@xxxxxxxxxxxxxxxx=20
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Copyright 2003 SF Chronicle

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