"Florida airport leases aim to fatten bottom line"

Tuesday, May 18, 2004

Airport leases aim to fatten bottom line
BY KEVIN MCQUAID
The Sarasota (FL) Herald-Tribune


The board of directors for Sarasota-Bradenton International Airport
unanimously approved a series of ground leases that will boost the
struggling airport's bottom line.

The leases, for 15.3 acres of vacant land, will generate $263,000 in new
annual revenue at a time when the 1,100-acre airport is seeking a large
federal grant to augment air service.

The commitments will allow Rectrix Aerodrome Center Inc., Dolphin Aviation
and Coastal Atlantic Inc., a Boar's Head Provisions Co. affiliate, to
develop airplane hangars.

The leases will run between 25 and 35 years, and rent will be adjusted based
on the Consumer Price Index. The companies also will pay charges for fuel
and motor oil.

"These are significant upgrades for our airfield and give us new sources of
revenue that we've been seeking," Fredrick Piccolo, the airport president
and chief executive, told the board.

The leases come as the airport is seeking a $1.5 million Federal Aviation
Administration grant to attract a discount carrier.

In its application, submitted to the FAA late last week, airport executives
said a low-cost carrier would provide an additional $700,000 a year in
federal money, reverse passenger losses and force other airlines to be more
competitive.

"Passenger traffic has declined by nearly 50 percent over the past decade
and the financial viability of the airport is in question unless new air
service is secured," airport officials said in the application.

Sarasota-Bradenton said it had received a "letter of interest" from an
unnamed airline to begin air service in exchange for the grant money and $1
million in marketing incentives. The past two years, the airport secured a
"letter of intent" from AirTran Airways for one of its unsuccessful
applications.

Even before the grant is decided in August, airport officials are bracing
for larger crowds. On Monday, the board agreed to spend $304,411 to design
an expanded security checkpoint area.

Constructing a larger security area, with two additional checkpoint lanes,
is expected to cost $2.25 million, Piccolo said. That project may be paid
for with FAA and state transportation money.

"Certainly this will speed things up, and it would be so much better than
what we have there now," said board Chairman Jack Rynerson.

Already, the airport is experiencing short-term passenger gains, the result
of a successful winter tourist season and the mid-April Easter holiday.

Last month, Sarasota-Bradenton International's passenger count rose 14
percent, to 123,664 compared with the same period a year ago. Passenger
traffic was up 1.4 percent January through April, when compared with the
same period in 2003.

Massachusetts-based Rectrix intends to build a $6 million,
70,000-square-foot operation at the airport, where it will house up to 14
airplanes, officials said.

In Dolphin's case, the 2.9 acres it is leasing will be added to its existing
operations, bringing its total land lease to 25.77 acres.

Dolphin's lease, which will cost $107,764 annually, requires that the
company spend $1 million in the next three years for improvements. The
company, which has been a tenant at the airport since August 1969, also
wants an option to lease an additional 4.77 acres for $5,000. The airport
board will consider that proposal next month.

The unanimous five-member vote -- board member Susan M. Kelly was absent --
came only after discussion about the terms of the deal, however.

"This is good for him, but I don't see where this is good for us," board
member Paul Sharff said of the Dolphin option. Its cost would be roughly
half the market rate rent.

Piccolo said the deal would benefit the airport because it wouldn't require
any taxiway or other infrastructure work.


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