SELLERSBURG — The Clark Regional Airport is positioning itself for increased revenue, leaders say.
At the Clark County Commissioners meeting Thursday, the commissioners voted to allow the Airport Authority to enter into a loan agreement to borrow $2.8 million from the United States Department of Agriculture through the office of Rural Development. The money would be paid back over 40 years, at a tax-exempt rate.
“The airport is by half a mile is considered rural for their lending purposes. And so we're at the 11th hour. They've got a few things left to dot the 'i's' and cross the 't's' before it can close, but it looks like this will happen,” airport attorney Greg Fifer said.
The airport is also in the process of renegotiating one of its largest leases, with fixed-base operator Air Specialists Incorporated, or ASI.
“As it is now, the airport owns the dirt and ASI owns their buildings,” Fifer said. “So we'll be buying ASI's buildings. Their lease right now lasts another 29 years, but the lease rate for the land is very cheap.
“They have agreed to sell the buildings to the Airport Authority so we'll own both the buildings and the land and they will lease it back for 40 years.”
The operator will pay approximately $15,000 per month in rent. Fifer said the airport is working on lease negotiations with another company, this one a corporate tenant of the airport.
The profit for the airport over 40 years is estimated at $1.4 million, but could be more than that if the interest rate goes down. Airport manager John Secor said it's already down about 1 percent.
“That will actually make it more profitable for the airport,” Fifer said. “It gets better as time goes along; I think initially we make maybe $40,000 a year, but towards the end it makes probably double that.”
The revenue bond is slated to be signed June 20, as well as the new lease with ASI.
“Everything will get signed all at the same time,” Fifer said. “They'll close the loan, they'll sign the deed to the buildings, everything will be done all at one time.”
Fifer said the very low lease rates were set with the airport in the early 1990s. Renegotiating them to reasonable rates will go a long way toward making the airport more self-sufficient, he said.
“Obviously that's the whole point, to try to build up revenue streams over time that will make the airport either self-sufficient or more self-sufficient,” he said. “They have some other projects, they have another pending lease deal for additional land that would be more at market rates than what the existing leases are at.
“So you start coupling those things together and it eliminates the airport's necessity of coming back to the commissioners or the council to ask them to help with funding from time to time. That's the game plan.”
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