Thursday, August 22, 2013
Longmont airport says longer leases will encourage business
City Council asked to amend charter
By Scott Rochat
The Longmont (CO) Times-Call
Aerial view of Vance Brand Municipal Airport photo taken June 6, 2012
LONGMONT -- Vance Brand Municipal Airport wants longer leases, but it'll need a city charter amendment to get them.
Airport manager Tim Barth asked the City Council to consider that option Tuesday, saying 20-year leases didn't gave lenders enough security, which in turn helped discourage people and companies from locating at the airport.
"In 1998 or 1999, we had an opportunity to have a company called Sky Fun 1 ... they built amusement park rides," Barth said. "They wanted a lease at the airport. They wanted a lease in excess of 20 years. They could not get it here. And they ended up going to Florida."
About 83 percent of the airport's income comes from leases, a revenue stream that came to about $244,000 last year.
Longmont's charter sets a 20-year maximum on all city leases, a duration that could only be changed by the voters.
Councilwoman Bonnie Finley said she understood the need.
"I used to be in the mortgage business," she said. "You need at least 30 years to lend enough to make it worth your while."
Council members Sarah Levison and Alex Sammoury were less sure of the need, with Sammoury asking whether the city could work within its existing limits, perhaps by offering an automatic 20-year renewal.
Barth said he'd checked with the city attorney's office and it wouldn't fly.
"If we have an automatic renewal, it constitutes a lease longer than 20 years," he said.
His preference, he said, would be for a 30-year lease with an "accelerator" built in every five years to adjust rates as needed.
If the council later decides to go ahead with it, the soonest a charter amendment would be offered to voters would be 2014.
The city's airport advisory board also wants to see Vance Brand's lease rates increased, from about 26 cents per square foot to about 34 cents, which Barth said was the market rate. That drew more unified support from council.
"We want the airport to be self-sustaining and we can't do that if we're not charging the going square footage rate," Councilwoman Katie Witt said.
Out of six Front Range airports -- all the ones in the immediate area except for Denver International Airport and Centennial Airport -- Vance Brand ranked fifth in revenue.
The proposals were offered as part of the airport's business plan, which also included its top five priorities for capital projects. Heading the list was expansion of the main runway, an item that proved controversial when included in the 2012 master plan. Supporters said it would let Vance Brand serve more of its aircraft more of the time, while opponents said it would increase air traffic, and with it, noise.
Airport officials hope they can begin construction in 2017, but that depends on the availability of federal funds. In 2011, the Federal Aviation Administration estimated it would be at least 10 years before the money would be available, an estimate made before "sequestration" tightened many federal grant programs.