Saturday, April 02, 2016

St. Clair Regional Airport (K39) Closure Talks Centering on Clarifications

The city is continuing its correspondence with the Federal Aviation Administration regarding the closure process for the St. Clair Regional Airport.

The Missourian was given a copy of a letter dated March 22 that was sent to Jim Johnson, the FAA’s Airports Division manager in Kansas City.

“We need to clarify a few issues we’re having regarding closure,” Mayor Ron Blum said.

The letter states that the city’s interpretation of the law “differs” from the FAA’s. The comment is targeted toward another appraisal that needs to be done on the 80-acre airport property located on the north side of the city.

“The city agrees that the fair market value of the airport land needs to be established by appraisal,” the letter signed by Blum reads. “However, the city understands that only a small percentage of the airport land was actually acquired with federal grants.”

Specifically, the letter states, the city believes that only about 10 percent of the property was purchased with grant dollars.

To that extent, the letter outlines how the city interprets how the gross sale proceeds from the airport will be distributed.

•Sell the airport land to the Industrial Development Authority for fair market value.

•Pay the closing costs, which are not to exceed 6 percent, out of the gross proceeds.

•Pay the actual cost of the environmental assessment, currently being conducted, out of the gross proceeds.

•Arrive at a net sale proceeds.

•Return 10.09 percent of the net sale proceeds to the Missouri Department of Transportation for aviation purposes.

•Place 89.91 percent of the net sale proceeds into the St. Clair Regional Airport Enterprise Fund.

•Pay from the enterprise fund the unamortized value of the remaining grants as of the date of the sale, estimated to be $286,284.53 as of Dec. 31, 2015, to MoDOT.

•Return all funds remaining in the enterprise fund, if any, to MoDOT for aviation purposes.

•No sale proceeds will be retained by the city of St. Clair.

“In essence, the Missouri Department of Transportation will receive all airport net sale proceeds, and if the net sale proceeds are insufficient to cover the unamortized grant funds, the city will have to make up the difference from the general fund,” the letter reads. “Based upon the city’s understanding, there cannot be a shortfall in the return of unamortized funds to the Missouri Department of Transportation.

“The city believes that the above reflects the true intent of Congress and President Obama in passing the law that allowed for closure of the airport and the city’s release from obligations. ... It is the city’s hope that the airport may progress toward closure upon these terms without further delay.”

Copies of the letter were sent to Obama, Missouri Gov. Jay Nixon, U.S. Sens. Claire McCaskill and Roy Blunt, U.S. Rep. Blaine Luetkemeyer and state Reps. Dave Schatz and Dave Hinson.

City Administrator Travis Dierker told The Missourian that the environmental assessment of the airport property is about halfway completed. The assessment is needed as part of the closure process through the bill signed by Obama in late 2014.

Earlier Letters

In January, Blum sent a letter to Johnson regarding the financial aspects of the airport closure and the city’s release from its federal grant obligations.

It was that letter that first stated the city’s opinion of how much money it would owe as well as the amount of actual land in question.

“We believe that repayment of the land value should be based on the government’s proportional share of the appraised or sale value, whichever is lower,” it reads. “The airport occupies 80 acres of land, and the FAA participated in the acquisition of 8.07 acres. This equates to 10.09 percent of the total land area of the airport.

“Therefore, the city’s repayment should be 10.09 percent of the sale price.”

However, Johnson sent a letter back to the city at the end of February stating that, “Federal obligations associated with the land grants ... obligate the entire airport property. The law requires the city to transfer the entire fair market value, minus approved closing costs, to MoDOT.”

Original article can be found here:

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