Steamboat Springs As presales for hangars at the Steamboat Springs Airport remain stagnant, changes are being proposed for Dunn Properties' 40-year leasing agreement with the city.
The change would mean six more hangars, but would drop the city's revenue in required fuel purchases by more than $8,700 per year.
Tonight, the City Council will vote on the first reading of an ordinance amending the lease agreement.
"It is either no revenue or revising the plan, because the hangars are not going to happen under the existing plan. We have to make it realistic," airport manager Matt Grow said.
Since receiving the development permit in January, Dunn Properties has pre sold just three of the 10 available hangar spaces at the airport. In order to get a loan from banks, Dunn was required to presell six of those.
The city had expected construction to begin on the hangars this summer, but a lack of sales pushed the development back a year.
Airport staff and the developer had originally designed the hangar project for high-end users, who fly turbo-prop aircraft.
They also saw those who owned smaller- to medium-sized aircrafts partnering up and buying one hangar.
Those projections were factored into the hangars' size and the city's requirement on how much fuel each hangar had to buy annually from the airport.
But Grow said the airport staff overestimated the demand for large- and medium-sized hangars, and they did not expect smaller airplane owners' unwillingness to share a single hangar or buy the required fuel amount.
"There is a premium for (individual) hangar space to ensure privacy and the safety for that aircraft," Grow said.
Thus, the planned changed to build smaller hangars and see a sharp decrease in the amount of fuel the hangar owners are required to buy.
The proposed plan shows for four to six medium- to large-size hangars, with the rest being smaller.
In the original layout, the largest hangar was to measure 65 feet by 60 feet, and the smallest hangar to measure 40 feet by 45 feet.
The new proposal has the largest hangar at 60 feet by 50 feet, and six or seven hangars at the smallest size -- 35 feet by 40 feet.
"This is actually a better plan," Grow said. "(The old plan) really wasn't meeting the whole demand. This amount is a good mixture of hangars. Everyone should benefit instead of just the high end and corporate user."
The new proposal would add 1,500 square feet to the 31,443 square feet already leased to Dunn Properties.
With the additional land that is leased, the city's lease revenue would increase by $760 a year.
However, overall revenue for the hangar project would actually be less than expected because of a drop in fuel requirements.
In the current agreement, depending on size, hangers have to pay between $2,000 and $3,000.
Those requirements have been dropped to an average of $400 under the new plan, Grow said. That would change the annual required fuel revenue from $26,075 to $17,200.
Grow said the city could bring in a little more cash from the 3 percent transfer put on the sale of the hangars.
Because the city gets 3 percent of the price when Dunn sells the hangars, more hangars should translate into more revenue.