CAA: GA News, "Officials may make decision on lease increases at Arizona airport"

["Stephen Irwin" <stepheni@xxxxxxxxx>]

Friday, October 18, 2002

CG council may make decision on lease increases at airport
By HAROLD KITCHING
The Casa Grande (AZ) Dispatch 

 
Opposition from the Casa Grande Airport Advisory Board will probably
send a proposal for airport rental and lease rate increases to the City
Council for a final decision. 

The recommendation is for an overall 36 percent increase in rental rates
and an increase to 20 cents a square foot a year for leasing of
property.

A report from Airport Manager A.J. Blaha also recommends that the city
stop the long-term leasing of land, contending that it brings little
financial return.

"Staff feels that the preferred use of the airport land would be for the
airport to construct all structures, such as hangars and offices, on the
airport for long-term leases," Blaha said in a memo to the board.

"As an example, one structure lease currently provides as much annual
revenue as all five existing land leases combined."

The adjacent airport industrial park has ample space, with airport
access, that can be bought for development, Blaha said.

Because money from sales of land in the industrial park goes to the
airport, he said, that provides more funds for airport projects.

"Also, leasing airport land competes with the sale of airport industrial
park land and provides less revenue than industrial park land sales,"
Blaha said in recommending that airport land not be leased for private
development.

A $14,000 study by Kirkham Michael recommends this monthly rate
schedule:

   Small T-hangars (those under 1,100 square feet) at $180, up from
$125.

   Large T-hangars at $205, up from $150.

   Box hangars at $550, up from $500.

   Covered tie-downs at $90, up from $55.

There is now no charge for uncovered tie-downs.

The survey recommends a charge of $35 monthly for small aircraft and $55
for large ones.

It recommends that the lease rates be increased to 20 cents per square
foot per year, up from 16 cents.

The report, compiled after surveys of other airports around Arizona,
suggests setting up leasing tracts, which would include the facilities
around a building.

Blaha asked board members to draw up their own suggestions for rates,
including increase increments, and bring them to the November meeting
for discussion.

He said that if board recommendations differ radically from those in the
survey recommendations, two proposals would be sent to the City Council
for final decision.

Board member Brett Eisele questioned the inclusion of metropolitan
airports such as Glendale, Chandler and Scottsdale in the survey of
rental and lease rates.

Blaha said the intent of the survey was to compare Casa Grande rates
with rates at other airports, not just same-size operations.

Blaha also noted that persons from those cities are on the waiting list
of 135 for hangar and shade area space, probably because Casa Grande's
rates are below those in Phoenix Valley areas.

Of the 102 persons waiting for hangar space, he said, 58 are from
Maricopa County.

The airport now has 46 tenants, of which 31 are from Pinal County, 12
from Maricopa County and three from other states.

Eisele asked if the proposed rates would be immediate or spread out over
a period of months. Blaha said that if approved by the City Council, the
increases would be immediate.

Board member William Thomas, asking when the last rate increase was
imposed, said he believed the biggest issue of debate would be how the
fair market value was determined.

"If we appraise a house here we don't use Scottsdale value," he said,
adding that "there are probably other factors we should be including,
not just comparing other airports.

"It seems like some sort of graduated rate might be a little more
equitable or fair way of doing it."

Blaha said general rates were last increased in 1992.

Board member Terry Emig said he was not sure that fair market value had
been established.

"I really don't think it's a great idea for a 36 percent or whatever
increase in one fell swoop," given that the city has "a kind of captive
audience" in that there is no competing airport to move to.

"I don't think it's fair," he said.

Blaha said that even though rates haven't been increased in 10 years,
inflation has continued to drive up operating costs, including the
utilities, which are paid by the city.

Emig said he agreed that the airport has been improved over the past few
years and that costs have probably increased, but again questioned a
large rate increase.


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