[JYO] Demolition Project Is First Step In Hangar Project

 
Demolition Project Is First Step In Hangar Project
By Molly Novotny(Created: Thursday, March 22, 2007 8:58 AM  EDT) 

    
Knowing that the town has not yet budgeted to build replacement  airplane 
hangars, the Leesburg Airport Commission voted Monday to advance the  
demolition 
plans of 10 outdated hangars.

"You can't just leave those  hangars as they are," said Steve Axeman, vice 
chairman of the airport  commission, recognizing the building's age and 
condition. Airport Director Tim  Deike said the hangars are more than 40 years 
old.

Although the  demolition of the hangars will mean lost revenue in the short 
term and 10 fewer  interior airplane storage units, the airport commission 
didn't want to forego  outside funding that has been programmed for FY 2007 and 
FY 
2008.

The  Federal Aviation Administration will pay for 95 percent of the 
demolition and  land preparation project and the state will pay for 3 percent, 
leaving 
the town  to cover only 2 percent of the $1.4 million estimated project. That 
$32,000 has  been budgeted. The demolition and land preparation will also fix 
a longstanding  drainage problem that has cost the airport substantial man 
hours in grass mowing  time, Deike said.

The entire cost of the more than $2 million needed to  build new hangars on 
the to-be-cleared land however falls to the town. And that  money is not in the 
town's budget.

The town expects airport expansion  projects to generate revenue, or be 
revenue-neutral at a minimum, Deike  confirmed. As estimated, the new hangars 
would 
miss that mark.

"It would  have not generated enough revenue to pay for itself," said Nagi 
Elsewaissi,  director of capital projects for the town. The hangars are not 
funded in the  proposed FY 2008 budget, and are rather being listed as an 
unfunded 
project in  the appendix in this year's Capital Improvements Program.

The South Apron  Expansion Project hit a roadblock earlier this year when 
construction costs  estimate increased. The town's consultants, CH2MHill, had 
estimated it would  cost $1.3 million to build 10 T-hangars and five smaller 
corporate hangars,  Deike said.

But when Elsewaissi reviewed the estimate, he said higher  cost of steel and 
concrete would shift that number upward and, after reviewing  hangar 
construction projects at Manassas Regional Airport, CH2MHill submitted a  $2.4 
million 
revised estimate.

The estimated rental revenue from the  hangars would not cover the town's 
annual bond payments, Elsewaissi  said.

"If the town cannot make the numbers work," then the private  industry isn't 
going to be able to, said Tom Toth, the commission's numbers  guru.

Recognizing that construction costs are not likely to decrease and  that the 
airport needs new hangars to generate revenue and improve the airport's  
financial performance, commissioners voted to advance the demolition plans to  
move 
the project forward, even if only partway. This decision is economically  
harmful in the short-term. 

"[We] have to do this in order to progress  forward," Axeman said about 
allowing the demolition to occur before the town has  secured money to build 
the 
new hangars.

T-hangars generate $220 a month  in rental fees, Deike said, while tie downs, 
which will be reconfigured and  increased by six once the land is cleared, 
only bring in $100 a month. The  demolition and land preparation will take 
about 
100 days, Deike said, which  means there will be three or four months without 
any revenue from the 10  displaced hangars.

The corporate and T-hangars the commission wants to  build would improve the 
Airport Fund, which as an enterprise fund is supposed to  be self-sufficient. 
In recent years, the Airport Fund has required a transfer  from the town's 
general fund when the overall budget is considered. The  airport's operating 
revenue has been covering operating expenses in recent  years, but when 
depreciation for capital is included, the fund falls short,  according to town 
budget 
documents.

In 2006, the town transferred nearly  $400,000 from the general fund to the 
airport fund; $245,000 is expected to be  transferred this fiscal year and 
$236,000 is called for in FY 2008.

Deike  repeatedly has said additional corporate hangars will reduce the 
deficit. The  money comes from the town building and owning the hangars and 
leasing 
out the  space, Deike said, land leases for a private company to build the 
hangars and  then lease the space are not nearly as profitable, he said.

Toth agreed,  saying Monday, "The money is going to be made for us in doing 
capital  projects."

_http://www.leesburg2day.com/articles/2007/03/23/news/fp9938hangar032107.txt_ 
(http://www.leesburg2day.com/articles/2007/03/23/news/fp9938hangar032107.txt) 





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