City may contribute $150,000
for corporate airport hangar
Monday, May 13, 2013 9:37 AM
Building a corporate hangar is the top priority for the Decorah Airport Commission.
At its meeting last week, the Decorah City Council authorized the submission of three grant applications to the Iowa Department of Transportation for airport improvement projects proposed by the Commission. If approved, the city would be required to provide a 15- percent match in funding.
"The Commission is excited to build a corporate hangar and bring larger aircraft to Decorah," City Manager Chad Bird told the Council.
The corporate hangar would require $150,00 in local funding. The city would issue bonds to provide the match, according to Bird. The loan would be paid off through a lease with the company that will base its corporate plane in the new hangar.
"In the event that the company would sell their plane or otherwise legally terminate their lease, there is a waiting list of approximately six planes that could fill the void and move into this corporate pace," said Bird. He said the city has a commitment from the owners of a corporate plane who want to move their plane from another airport to the Decorah Airport and is comfortable with a 10-year repayment schedule.
"This is significant because of the extra services and supplies which would be purchased in the community having such a plane based at our airport," Bird commented.
The other two applications the Council endorsed are for fuel tank improvements and "t" hangar development at the airport.
The fuel tank improvements call for removing the underground storage tanks and bringing them above ground, which is important for "safety and regulatory control issues." If the grant were approved, the city would be required to provide a $20,400 local match. Funds would come out of the city's ending fund balance.
The third grant application is for additional, smaller and traditional hangars due to the current waiting list for those spaces. The project would require a $26,400 local match and would come from the city's ending fund balance.
"It is unlikely Decorah will be awarded all three applications. That's why the Commission prioritized the corporate hangar as being the highest priority ... it is important, however, to establish the need for the vertical infrastructure improvements for future funding sources," Bird said.
Council member Rachel Vagts asked how the cost for services at the Decorah Airport compares to other airports.
"Have hangar rates changed? We need to pay for things ... it's an important service, but it's used by a relatively small portion (of city residents)," she said.
Brett Willie, a member of the Decorah Airport Commission, said the cost of Decorah hangars is what the market will bear. He said an airport within 50 miles of Decorah built new hangars and increased the price 50 percent higher than what Decorah charges and now their hangars are empty.
He said the Commission researches the prices of all the airports in the surrounding area. The Decorah Airport charges $65 per month per hangar.
"For their age -- our newest building was built in 1998 and others are original and not long for this world - we're still getting pretty healthy rates. They're substandard at best," Willie said.