JetSource President Frank Milian just finished $9 million of improvements to his aviation center at Palomar Airport. (photo/alandeckerphoto.com)

In 1957, as the old Del Mar Airport was about to be bulldozed for Interstate 5, county planners displayed an incredible bit of foresight by selecting what is now McClellan-Palomar Airport as its replacement. Today that airport, which opened a scant two years later atop a landfill, is helping fuel North County’s boom. Between personal aircraft, regularly scheduled flights by commuter aircraft and corporate aviation, operations at the 4,900-foot-long runway neared 190,000 last year.

The biggest boom at the 485-acre airport is in luxury aircraft. To meet demand, three of McClellan-Palomar’s fixed base operators are investing $60 million to beef up luxury terminals and build larger state-of-the-art hangars. Meanwhile, the expected January opening of a U.S. Customs operation and plans for a 1,000-foot extension of the runway are expected to further boost services at the airport, which also benefited from the 1977 installation of an instrument landing system.

JetSource was the first fixed base operator to complete its upgrade, a nearly $9 million effort that opened last month. It includes a new 40,000-square-foot hangar with 15,000 square feet of offices. Among the amenities are a comfortable pilots room with a 100-inch projection television and a 400-disk DVD player. “It is a place for the pilots to hang out,” says Frank Milian, president and COO of JetSource. “A lot of times they fly in, hang out five or six hours and then fly out in a day.”

With its expansion, JetSource now offers more than 120,000 square feet of hangar space and 35,000 square feet of office.

Milian, who has 32 years of aviation experience and moved here 2 1/2 years ago from New Jersey to run JetSource, says there was good reason for the investment. “Last year our business grew more than 40 percent,” he says. “This year, for the first quarter, we were up 102 percent over the first quarter 2004.”

The expansion, which Milian says spent a few months in the approval process, has a number of unique features, including its power system. “We installed solar power. We are one of the only ones, and probably the only one at this airport. We are fully solar powered. When you look at energy costs today and look at an assessment of where it will be in the future, I don’t think it has historically gone down.”

Richard Lee Sax outlines the vision at the groundbreaking for the Premier Jet Business Aviation Center.

As Milian was finishing his expansion last month, Richard Lee Sax was presiding over the groundbreaking for Premier Jet Aviation Center’s $33 million expansion. Slated to open in the first quarter of 2006, the upgraded site will add 62,000 square feet of office space and about 142,000 square feet of new hangars.

The project includes many features, including hangar doors as large as 110 feet across and 30 feet high. “Doors are a big deal,” Sax says. “They can stick, rust, be noisy and let in air and weather. We are using a foldable fabric that pulls up like a curtain. It is much quieter inside and has better reliability.”

For a variety of reasons — a change in partners, questions about the project’s viability and ensuring room for general aviation operations — the project took 14 years to get started.

Sax also is offering hangar users a new twist: a prepaid lease for 30 years that matches his lease with the county for the property. “It is going to sweep the industry,” he says. “People like to buy a home rather than rent an apartment. You build equity that way. When you buy a prepaid lease the rent does not go up. The only thing that goes up is the common area maintenance costs. So, instead of the rent going up radically, you would have almost a flat-line graph of operating the hangar. This way, people not only know they have a home for their aircraft or business, they can leave the premises and sell it at any time.”

Hangars are being rented for $1.25 per square foot per month, triple net. Sax says the raw cost of a prepaid lease is about 65 cents a square foot per month. “That is why so far, every single user except one has elected a prepaid lease instead of a regular lease,” says Sax, real estate developer and former practicing attorney. (At press time, only four hangars were left available.)

Sax says selling 75 percent of the hangars will fully cover the development costs, leaving the remaining 25 percent to provide cash flow. But those units may also be sold. “We think the demand five years from now is going to be enormous and they are going to go up in value tremendously,” he says. “You spend $30 million to $40 million on a jet, you don’t mind spending $3 million on a hangar to store it for 30 years.”

July is the target date for Magellan Aviation to start work on a $19 million renovation, says General Manger Robert Levine.

Looking to break ground in early July is Magellan Aviation, a subsidiary of Magellan Group Inc. of Century City run by Robert Levine, general manager. The company has been pondering its development plans since buying the two leaseholds that total 16.2 acres in November 1997. “We have watched the transformation of this airport into one that is more and more responsive to the growing needs of the business aviation community,” says Levine. “We are hoping to respond to that growing need while at the same time assiduously maintaining a mixed-use on our particular facility for the different businesses that are tenants here, which includes general aviation, aviation maintenance, flight schools, aviation brokers and of course charter operators and other related businesses.”

In the works for 2 1/2 years, Magellan’s $18 million project will add 105,000 square feet of new hangars and 15,000 square feet of office space. “We have a mixed use operation now and we are going to maintain a mixed use,” says Levine. “We have three sets of hangars. We will maintain a row of single-engine piston, a row of twin-engine piston and a row of T-hangars for corporate aircraft.”

While most of the 20 hangars will be private, Magellan also is building a community hangar about 18,620 square feet in size, large enough to house a significant charter operator. The first phase of the project should be completed in January. Phase two, which involves removing 43,000 square feet of hangar and office space, comes next.