Tuesday, September 04, 2012

Aspen-Pitkin County/Sardy Field (KASE), Colorado: Fuel sales could boost airport rent revenues

ASPEN—Pitkin County could receive at least $3 million in annual rent from a proposed new private jet center—a sum that is 16 times more than what the current fixed-base operator pays at Sardy Field.

Airport finance consultants explained the situation to the Pitkin County commissioners during a mid-August meeting on the airport master plan, which the county is expected to adopt this fall.

The current draft airport plan includes building a new fixed-base operations facility—a terminal and services for private planes (or general aviation, as it’s officially called)—on the west side of the airport. The current fixed-base operator, Atlantic Aviation, leases a facility on the east side, and is expected to pay the county $167,000 in rent this year.

The current lease was signed back in 1993 by Atlantic’s predecessor, and at that time was probably a fair deal for the county, airport director Jim Elwood told the commissioners.

The discrepancy in what Atlantic is paying now and what a new fixed-base operator would pay is based on market value, explained Stephen Horton of Leibowitz and Horton Airport Management Consultants of Greenwood, Colo.

“The market value of any FBO operating in Aspen has increased in the last 20 years and will continue to increase in the next 10 years,” Horton told the commissioners.

His “conservative calculation” of $3 million annual rent is based on comparable airports and a recent contract for a replacement FBO at San Diego International Airport. Fixed-base operator Landmark won a competitive bidding process to build and operate one new private facility at the San Diego airport, pledging $39 million toward a new terminal and $5.2 million in rent for 35 years.

Read more here:  http://www.aspenbusinessjournal.com

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