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STOCKTON, CA-Development of the 550-acre Airport East Business Park here took a step forward recently when San Joaquin County finalized its master developer agreement with ProLogis subsidiary Catellus Development Group. The agreement envisions the development of some 5.5 million sf of office and industrial uses on the site, which is near the Stockton Metropolitan Airport.

Airport East Business Park would be developed along Highway 99. Upon build out, the site would include up to 2.5 million sf of office space, 1.5 million sf of air cargo space, 1.4 million sf of distribution facilities, 91,000 sf of new retail development and 500,000 sf of open space and parks. The pre-building site work, alone, is expected to cost approximately $47 million. The project includes significant public financing, including the issuance of up to $150 million in public bonds.

The project has a 15 to 20 year build-out timeframe. Catellus says the project is currently being marketed to leading global companies with warehousing, office and retail needs. Upon completion, the site is expected to bring up to 14,000 new jobs to the region and to generate approximately $1.3 million in annual property taxes.

Per the agreement, Catellus would find a user, master long-term ground lease the property from the county, transfer the master lease to the user, and then pass through to the county 80% of the revenue generated from the ground lease, which would be paid in full over the course of the first three years of the lease. Catellus will also receive a development management fee, has a guaranteed return on investment and a piece of any extra profits.

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