CAA: GA News, "Chesapeake, Va., Airport Asks for $75,000 to Restructure"

["Stephen Irwin" <stepheni@xxxxxxxxx>]

October 7, 2001

Chesapeake, Va., Airport Asks for $75,000 to Restructure
The Virginian-Pilot, Norfolk, VA


CHESAPEAKE--Chesapeake Regional Airport has arrived at a crossroads,
though airport officials might have hoped for better timing.

They say they need another $75,000 a year from the city to ease the
airfield's shift to a new management structure.

The problem: Chesapeake city officials are already scrambling to find
any extra money they can to increase the pay raises for general
employees.

"We are not in financial trouble right now," said Joseph E. Love, who
took over as airport manager last summer.

Love, however, says that if he can't get the $75,000 increase to hire
two more people -- a maintenance worker and an office manager -- getting
the airport back on track is going to be more difficult.

Last year, the airport's annual operating allocation from the city was
$138,000. In May, it was increased to $238,000.

The municipal airfield is moving out of a stormy year that has included,
among other things, a standoff with the Federal Aviation Administration.

If the FAA rules against the airport in a pending legal case alleging
monopolistic business practices, it could mean a cutoff of all federal
funding. In addition, the airport was the subject of a critical city
audit released in the spring.

In the months that followed, a new airport manager was named, as well as
a new board chairman and secretary-treasurer.

A couple of things are on the line for taxpayers:

--the future of a public facility in which about $13.5 million in
federal, state and local money has been invested since it opened in the
late 1970s.

--the possibility that the city of Chesapeake could end up on the hook
for the airport's payments on a $2.5 million revenue bond issue if the
airfield can't grow its business enough to bring in the money it needs.

Love says he is confident that the airport authority will be able to
meet its bond commitments without any assistance from the city.

Located in southern Chesapeake just east of U.S. 17, Chesapeake Regional
Airport has been a work-in-progress since opening in the late 1970s.

Conceived as an economic-development gem for the city, able to draw
Fortune 500-level companies to Chesapeake, the only companies operating
at the airfield today are owned by John Beaulieu, who was replaced by
Love as airport manager last summer.

There are no corporate jets based at the airfield, but the airport is
routinely used by aircraft belonging to companies such as Dollar Tree
and Wal-Mart, Love said.

While acknowledging that the airfield isn't out of financial trouble
yet, Love is planning a new course for Chesapeake Regional.

That course includes an aggressive marketing campaign to bring in new
tenants and, in the future, construction of hangars to accommodate
corporate jets.

Love says the airport is tantalizingly close to realizing its long-term
goal of financial self-sufficiency.

In addition to an array of other improvements, the airport now has 40
new hangars, built with the bond funds.

The hangars are three-quarters full. Rental income generates all but
about $1,900 of the $16,400 a month the airport needs to make its bond
payments, Love said.

While the airport has enough money in another account to cover the
bond-payment deficit for at least two years, it needs to fill the
remaining hangars and lure some corporate jets to the airfield, he said.

"We're not going to need help meeting the debt service -- as long as
we're receiving the support from the city that we need to meet daily
operating costs," he said.

At the airport board's October meeting, Love disclosed that the
authority had used $383,000 from its bond construction account to
service the debt on the bonds.

About $280,000 of the bond proceeds are left, Love said, which will be
used to build corporate jet hangars.

Last month, William J. Hearring Sr. gave up the chairmanship after
serving in that capacity for about 15 of the roughly 20 years he has sat
on the board.

Hearring, who still sits on the authority, was replaced as chairman by
Thomas Love, a board member for about four years. He is not related to
the airport manager.

In late April, the authority voted not to renew the management contract
of Beaulieu, who had overseen Chesapeake Regional Airport since May
1993.

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