Council hires firm to evaluate airport lease policy and rate structure
At last week’s Paso Robles City Council meeting, the council voted unanimously to enter into a contract with Airport Business Solutions to conduct an assessment of the airport’s current lease policy and rate structure.
According to a report compiled by Assistant City Manager Meg Williamson, the city’s current lease policy has been in place since the 1990’s. The application of these policies in relation to business development goals at the airport have come into question in recent years.
Williamson said that the reason for the assessment is to see if the airport is maximizing its opportunities. The airport has some spaces available for aviation use, and some land around the airport available for other, more general use purposes, such as businesses. They will be able to lease the ground, and the businesses would be responsible for building their own buildings. For businesses that already operate on the airport’s land, such as Applied Technologies and Scientific Drilling, the rates will not be effected, as those businesses are already in long term contracts. The city is not sure where the rates stand relative to market standards. The assessment is a way to assure that the airport land is not “a missed opportunity.”
“We don’t know if they are too high or too low,” said Williamson. “That’s why we are entering into this contract.”
The City’s Airport Business Improvement Plan included the short-term objective to: “Engage third party assistance to conduct an evaluation of the City’s current ‘Lease Policy for Standard and Special Leases’ and rental rate structure to determine feasibility of implementation.”
The improvement plan stated that he evaluation should include methods to maximize profitability for the airport enterprise while considering the lessee’s ability to secure financing and the return on investment for both parties. Lease policies should be updated as appropriate.
The fee for Airport Business Solutions’ services is $28,000. The funds for these services would come from the Airport Operation Fund reserves, which currently hold a balance of $600,000.