After using two lengthy executive sessions to discuss the matter, city officials have decided to keep hangar rent at the St. Clair Regional Airport at $175 per month for at least the rest of this year.
Mayor Ron Blum and City Administrator Rick Childers told The Missourian about the decision earlier this month.
“Considerations by the board of aldermen centered primarily on considering the fair market value of hangar space and ultimately relied in part on lease documents from comparable surrounding facilities,” Childers said.
The executive sessions were conducted after the two board meetings in March. During an executive session, contracts, personnel and real estate can be discussed, but no votes can be taken.
When those open meetings resumed, the only business conducted both times was a motion to adjourn.
Prior to the March 4 meeting, Blum had given the aldermen information regarding lease contracts between the city and airport hangar tenants. The information included the current lease approved by the board earlier this year, a proposed lease from airport tenant Grenville Sutcliffe that lowers the rent amount, and the leases approved by the city in 2000 and 2005 with AirEvac Lifeteam to house its air ambulance service at the local facility.
On March 18, City Attorney Kurt Voss requested the second executive session to discuss the hangar leases.
“We’ve had some additional negotiations with the pilots,” he said. “We need to go into executive session to discuss them.”
The rental rate again became an issue in February when Sutcliffe sent the city a letter as well as a draft lease agreement that proposed to lower the monthly hangar rental rate to $125 per month after the city already had voted in January to reduce the fee from $300 to $175.
“We, too, are aware that it is going to take a lot of money that the city of St. Clair doesn’t have to bring the airport up to FAA (Federal Aviation Administration) standards before they will even consider allowing it to be closed for retail development,” Sutcliffe’s letter reads. “The only way for the city to relieve itself of that burden and let the airport to become more self-sustaining is to get more pilots. The fastest way to get more pilots is to set a market rate of rent of $125 per month per hangar.”
The letter and proposed lease rate led to the pair of executive sessions and the board’s decision.
“The city was pleased to engage in discussion with individual pilots regarding updates to the term and condition of hangar leases, and we are very satisfied with the results of those discussions,” Childers said. “As of April 1, all six of the current lessees have signed and returned executed leases with payment in full.”
Both Blum and Childers are hopeful that the issue now can be put to rest for the remainder of the year as the airport hangar rental fees have been a repeated topic for board members this year. When the aldermen worked on the city’s 2013 budget late last year, they decided to raise the hangar rates from the 2012 amount of $175 to $300 in an effort to help the facility operate in the black.
Audited figures from the city show the airport has lost money every year since at least 2007, when Blum moved revenue and expenses into their own line item in the general fund of the budget. The city has been trying to prevent having to annually subsidizing operation of the facility through general fund monies.
The only revenue for the facility comes through the hangar rental rates.
Recently, on advice from the FAA and the Missouri Department of Transportation’s Aviation Division, the city has opened a separate airport checking account.
In January, in response to both a formal and informal complaint filed by a tenant regarding the previously approved increased hangar rental rates at the airport, the city decided to roll back the amount it charges tenants to the 2012 fee of $175.
City officials said they had received no complaints last year about that monthly amount.
The city is attempting to close the airport on the north side of town between Interstate 44 and Highway 47 to make way for retail development. Permission must be granted by the FAA because the city obtained federal grants to make improvements at the facility.
Last month, the city received a copy of a letter sent from the Missouri Department of Transportation to the Federal Aviation Administration saying it will not oppose the city’s attempt to close the facility. The FAA had requested that MoDOT make a statement regarding the airport as the federal agency continues to consider closure.