Los Angeles Business Journal

L.A. Airport Board Recommends Palmdale Lease

By Business Journal Staff Originally published April 21, 2014 at 3:15 p.m., updated April 21, 2014 at 3:40 p.m.

The Los Angeles Board of Airport Commissioners recommended approval on Monday of a five-year lease with Japanese railcar manufacturer Kinkisharyo International LCC for space in Palmdale.

The lease covers 250,000 square feet in two buildings owned by the airport that would be used to manufacture railcars for the Los Angeles County Metropolitan Transit Authority. Kinkisharyo, the U.S. arm of Kinki Sharyo Co. Ltd. of Osaka, will pay $4.6 million in rent for the initial five years, with an option for an additional five years.

The lease agreement now goes before the Los Angeles City Council for final approval. The two buildings Kinkisharyo will lease are part of Site 9, a former aircraft manufacturing center used in assembling the B-1 bomber and later for aircraft repairs.

The Metro job includes an initial contract for 78 light rail vehicles and four options to buy another 157 light railcars. The total contract value for 235 new railcars would be $890 million.

The cars would operate on the Blue, Gold and Expo lines and a planned extension of the Expo line down Crenshaw Boulevard to Los Angeles International Airport.

The light rail contract is the first the Japanese company has had with Metro. It has previously supplied railcars for public transportation projects in Dallas, Phoenix and other U.S. cities.