AUBURN — A plan to buy out the 14 years remaining on a hangar lease at the Twin Cities' airport narrowly failed Monday night.
With City Councilors Tizz
Crowley and David Young absent from Monday's meeting, councilors needed
a four-vote majority to approve Auburn's loan up to $1.1 million to the
Auburn Lewiston Municipal Airport.
With councilors Leroy Walker and Belinda Gerry opposing the idea, the loan failed by a vote of three in support and two against.
The airport planned to
use the money to purchase the hangar from Nobility, LLC. It's currently
home to Lufthansa Technik's efforts to rebuild a historic WWII
Constellation aircraft.
Lewiston councilors unanimously agreed to the new plan in June.
Airport backers said the idea is designed to save the airport and the cities $48,000 per year.
Both cities are being
asked to loan the airport the money out of their cash reserves. The
airport would pay a 2.58 percent interest rate on the money, a much
lower rate then the airport could qualify for on its own.
It's also nearly double the rate the cities would get purchasing a certificate of deposit for that amount.
The Auburn Lewiston
Municipal Airport currently leases the hangar housing Lufthansa's
project from Nobility, LLC., paying $249,750 per year through 2028. The
airport then turns around and subleases the hangar to the Lufthansa
Technik group for about $240,000 annually.
The airport has the right
to purchase hangar for $2 million when the lease ends, but buying the
hangar and the remaining lease now would save the airport about $48,000
per year.
Gerry said Monday she feels city finances are too uncertain to spend $1.1 million now.
"We've had hard times and they are just starting to get better, but I just think we are overdoing it," Gerry said.
Walker said he wanted to
see a longer-term plan for how the hangar would be used. Lufthansa
Technik has a contract though next year, but airport officials expect
them to stay longer.
"I wish the plan would be
in front of us 100 percent," Walker said. "If we are going to buy it
out, what are we going to do with it when (Lufthansa is) no longer using
it? I don't think we should be saying 'Maybe they're going to move out
in two years, but we'll worry about it then.' I want to worry about it
right now."
City Manager Clinton Deschene said he expects the matter will come back before councilors when all seven members are present.
Source: http://www.sunjournal.com
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