Airport Master Plan October 1985

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The recommended development plan is simply too costly to achieve either as a state/local project or as a totally local funded project. Since AIP grant funds would poten- tially account for 87% (without hangars) of the total capital improvement costs, qualifications for these funds should be a top priority. State grant funds potentially will account for approximately 2% without hangars to 5% not including loan funds from the revolving hangar fund. The City's percentage of project costs is estimated at 11% without hangar development to 23% with hangar development. The most likely means of funding the local share is through the issuance of G.O. bonds or through creation of a tax increment district and issuance of tax increment G.O. bonds. The minimum local funds considered for a bond issue should include the local funding share for both Stages I and II without hangar development. This would allow ready access to funds for development of a building area essential to the success of the airport as well as airside development. It also would create a pool of funds which the City will need to begin land acquisition. This is necessary since the City must invest funds first and then is reimbursed by State and AIP funds. The minimum bond issue required for this development plan is $502,000. Issued at 8% for a 20 year term, the annual debt retirement would be approximately $51,130. This is approximately equivalent to a one (1) mill city-wide tax increase. From another perspective, this would add less than $11.00 in annual property tax to an average home with a market value of $80,000. This cost per home obviously wou decrease with a broader tax base through the City's future growth or through a joint sponsor agreement with another community. While many communities approve the use of G.O. bonds for capital improvements for airport improvements, the public generally is reluctant to finance private hangar storage. For this reason, development costs of hangars have been kept separate. Additionally, hangars should be developed only as a firm demand is evident and development is warranted. Several options to finance hangar construction are available to the City. However, in nearly all cases, the cost of debt retirement will require monthly hangar lease rates in excess of what the market will bear. Hangar construction costs including site preparation and paving would be in the $20,000 to $22,000 per unit range. This would require hangar rents of approximately $185 to $190 per month per unit to retire the debt on a 20 year bond at 8%. Typical hangar rents at Anoka and Crystal are in the range of $80 to $125.00 per month. 10-13