Steamboat Springs A hangar project expected to generate about $55,000 per year in additional revenue at the Steamboat Springs Airport is on hold because not enough of the hangars have been sold.
Dunn Properties signed a 40-year lease agreement with the city in March to build 10 airport hangars. But the Denver company has not been able to secure the six presales banks are requiring before loaning Dunn the money for the project.
Thus far, Dunn Properties has sold four of the hangars.
Airport Manager Matt Grow had hoped airplanes would be moving into the hangars at this point. But with the lack of presales and the coming colder months, it could be another year before the project gets off the ground.
Before agreeing to lease 30 acres of hangar space, the city had a list of 45 names of people wanting hangars. Grow said the list was comprised primarily of small airplane owners who were not willing to pay $144,000 to $250,000 for a hangar, and fewer people than expected have shown interest in forming partnerships to share hangar costs.
"People are willing to pay a premium rate to ensure privacy and safety to the aircraft," he said. "They don't want to partner up."
George Krawzoff, the city's director of transportation services, said the city had estimated the hangars would attract about three airplane owners each.
So far, that hasn't been the case. Krawzoff said the problem is that one or two planes will have difficulty meeting the city's minimum fuel purchasing requirement for the hangars.
Depending on the size of the hangar, owners are expected to purchase 1,900 to 3,000 gallons of fuel per year.
"One of the complaints that pilots have expressed is the minimum fuel purchasing requirement amount," Krawzoff said. "That is a problem because we expected more planes in each hangar than people are willing to put in the hangar."
Krawzoff said the city could go back and change the agreement, but going through the City Council approval process and re-bidding the project would be more money than the changes are worth.
The minimum fuel-purchasing requirement is just a small price of the cost of the hangars, Krawzoff said.
The cost of the hangars, $65 per square foot, is higher than the industry standard, which is around $40 to $50 per square foot, Grow said. Those prices drop down to $20 to $30 per square foot in places like Eastern Colorado where T-shaped hangars are used.
The hangers that are planned for Steamboat are a high-end product with painted interiors and concrete. Those high-end features combined with the $300,000 overhead cost for infrastructure boost the price.
"I would say those really interested in the hangars are more of the high-end market, the aircraft that cost several million dollars," Grow said.
The majority of the city's profit from hangars was expected to come from fuel sales. Renting the land would bring in $15,000 a year and the remaining $40,000 would come from hangar owners paying an estimated average of $4,000 per year for fuel.
The hangar project was one way the city hoped to bring the airport out of the red. The airport was subsidized by the city to the tune of more than $100,000 per year. This spring, the city also agreed to rent the airport terminal out to Smartwool, which would bring in additional funding and help ease the $2.8 million debt the city took on in 1992 to build the terminal.