"Fair Market Value: FAA says Venice resort optional"

["Stephen Irwin" <stepheni@xxxxxxxxxxxxxxxxxxxxxx>]

Sunday, April 29, 2007

FAA says Venice resort optional
By PAUL QUINLAN
The Sarasota (FL) Herald Tribune


VENICE -- Asked why a developer should be allowed to build a large resort on
one of the largest undeveloped waterfront tracts in Sarasota County, city
leaders have increasingly pointed their fingers at the Federal Aviation
Administration.

In pamphlets, e-mails and interviews, they note that the agency requires the
city's airport to charge a "fair market rate" for land leases and to be
"financially self-sustainable."

Indeed, city officials often describe commissioning the development of a
luxury marine, golf and aviation resort at the airport as a necessary
product of those FAA directives. Developing the land is necessary to pay for
expensive airport upgrades, city officials have said.

But in interviews this week, FAA officials painted a far different picture
of the agency's influence over the city's choice to build a resort on 451
prime waterfront acres bounded by the Intracoastal Waterway and Caspersen
Beach.

FAA officials say they leave it to local authorities to decide how an
airport should grow and whether it should develop unused land. And while
airports are expected to sustain themselves, falling short of that is "very
rare," officials said.

Essentially, airports are expected to pay their own operating costs, though
not necessarily to pay for "major repairs" and "future development," for
which the FAA said they encourage small airports to apply for
multimillion-dollar federal grants.

"We are not necessarily expecting Venice and other airports to go out and
develop business parks and resorts," said Rusty Chapman, manager of the
Southern Region of the Federal Aviation Administration. "We're not telling
them to do that."

To be sure, city leaders have offered other reasons why developing the
airport property might be worthwhile. A marine, aviation and golf resort
would add docking facilities and hotel rooms to a region drastically short
of both.

Moreover, it would likely boost tourism, while pumping millions into the
city's economic engine. By one developer's estimate: $439,000 annually to
the city, 1,589 jobs and $32 million in wages.

Since the early 1980s, the city has sought to develop unused portions of its
airport property. The last attempt, made three years ago, failed when each
developer came forward with plans for condominiums, all of which city
officials rejected. Officials feared that the jet noise would be a bad mix
with residential space.

But as plans now turn to a multimillion-dollar resort, opposition to airport
development has only grown more vocal. Addressing the growing volume of
complaints, City Councilman John Simmonds clarified the role of the FAA at
Tuesday's City Council meeting.

"The FAA is not saying that we have to generate funds at the airport,"
Simmonds said. "The FAA has said that we have to generate funds at the
airport to maintain a financially stable operation."

But just what does "financially stable" mean? The airport's commerce park
development plan estimates that a $6.4 million investment in pavement,
sewage and water lines could yield a $14.6 million return that would "allow
the airport to profit significantly," the report states.

That would make the airport far less reliant on federal grants for support.
This year, for example, the city is waiting to hear whether it will win more
than $5 million to perform extensive runway maintenance.

If the grant goes through, the money will have paid more than 90 percent of
the cost -- something the city could not afford under its current budget,
said Marty Black, city manager.

"If it doesn't, there is no money in the airport fund to do that," Black
said.

But Black said the airport is not operating in the red. "Is there money to
keep the lawn mowed and the lights on? Yes," Black said.

The airport could protect itself against federal cuts to general aviation
grants by seeking to generate the cash to pay for major repairs and
upgrades.

But going that far is not required, FAA officials said.

In fact, small airports such as Venice's are encouraged to apply for grants
for major repairs, Chapman said. Those applicants will not be judged on how
effectively they squeeze profit out of their acreage, Chapman said, provided
that any land that is leased is rented at fair market value.

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