Smartwool may lease terminal from city

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— The Steamboat Springs Airport may have found a financially viable way to utilize its 16,000-square-foot terminal, which has gone largely unused since commercial air service left the airport seven years ago.
Smartwool is in negotiations with the city to lease about 70 percent of the terminal, Assistant City Manager Wendy DuBord said this week. If the lease is finalized, the sock manufacturing company would move its headquarters from its current location along U.S. Highway 40 west of Steamboat to the airport.
"It's a win-win situation. A local company uses a local facility. It's an incredible, positive use for the airport terminal building," DuBord said.
Smartwool Executive Vice President Chip Coe was out of town last week and no one else with the company would discuss the potential lease. But airport Manager Matt Grow said Smartwool came to the city six months ago with the idea of relocating its headquarters to the terminal. The company that markets fine outdoor socks, long underwear and gloves has been in Steamboat since the company began in 1995.
With annual sales of more than $10 million, Smartwool, whose products combines Australian Merino wool and the company's itch-proof and shrink-proof process, is a rapidly growing company.
The prospect of a tenant could end the city's seven-year quest to fill the terminal after commercial service providers stopped flying into the Steamboat airport in 1995, shortly after construction of the terminal was completed.
Leasing the property could ease the $2.8 million debt the city took out in 1992 to build the terminal and the $100,000 subsidy the city pays every year to fund airport operations.
After not having any success finding commercial flights or other aviation uses to come into the airport, the city put out a request for proposal and advertised locally in 2000 for alternative uses for the unused terminal.
Even without the request for proposals, Grow said it was well known that the terminal sat empty and the city was looking for tenants. DuBord said the city received proposals from a restaurant, business consultants, and hangar developers, but Smartwool was the first business with a feasible proposition to lease the space.
"There were no business developments really trying to find a use around the unused space," DuBord said. "No one had a use for it that would not conflict with the general aviation until Smartwool."
Because Smartwool is planning to use the terminal as an office headquarters only, Grow said the company would not be using the runways or hangers. With Smartwool's warehouse in Tennessee and manufacturing plant in a southeastern U.S. state, no shipping or retail would be done at the terminal, Grow said.
With leasing negotiations under way, Grow said he sought the authorization of the Federal Aviation Administration.
"Once Smartwool made the proposition to come in and rent a large portion of (the terminal), I went to the FAA and said Steamboat has been looking for aviation uses for eight years and couldn't get any into the terminal." Grow said. "I'm glad to have the FFA support in converting the terminal into office space."
Bringing a commercial use into the terminal would not stop the use of the general aviation airport, DuBord said.
Under current negations, Grow said, Smartwool is looking to use around 11,500 square feet of space, which would leave 4,500 square feet to house the city-owned fixed based operator fuel center, the airport manager and the air patrol. The lease rate, Grow said, is comparable to current lease rates throughout the area.
Before Smartwool can move into the terminal, the airport will have to go before the planning commission for a zoning change from industrial to commercial. That request is scheduled for the May 9 meeting.
The use change request will come just months after the City Council approved a plan that allowed Dunn Properties to build 11 hangars on 30 city-owned acres at the airport. City officials predict the new hangars would bring in $60,000 a year more in revenue through lease agreements and fuel sales from the city-owned fuel center.
Before Smartwool could move into the terminal, the City Council would also have to approve a lease agreement, which would decide if the city or lessee would remodel the interior of the terminal for the conversion into business offices.

To reach Christine Metz call 871-4229
or e-mail cmetz@steamboatpilot.com

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