Business plan in the works for Steamboat Springs Airport
January 13, 2011
Steamboat Springs — Steamboat Springs Airport notched a couple of notable accomplishments in 2010 when the last $40,000 payment on the bonded indebtedness for the terminal construction was made, and again in December when the city reached agreement with a Denver developer to build six to nine aircraft hangars.
"It's a big milestone, and now it's time to ask, 'What do we do next?'" Steamboat Springs Public Works Director Philo Shelton said.
Two retired business executives are preparing to answer that question. Mike Forney, a private pilot, and Rich Lowe are getting ready to write a business plan for the airport beginning by surveying local business people and public officials on their attitudes about the airport.
Retiring the indebtedness on the terminal coupled with income from annual lease payments of about $220,000 from SmartWool helped the airport break even or better in 2010, Shelton said. The airport had $846,000 in revenues last year against about $786,000 in expenses: $517,000 for operations and $269,000 for staff. The net revenues could change as late bills arrive.
"That's significant when you consider fuels sales have dropped substantially and people are flying less," Forney said. Steamboat Springs Airport saw about $414,000 in fuel sales last year.
Interim City Manager Wendy DuBord said she thinks the airport hasn't been in the black "for a very long time."
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"Was the airport ever in the black? Sure, it was well into the black when we had commercial airline service," DuBord said. "But I do not believe we've run in the black since we lost airline service. I think we could have been in the black had we not had debt service."
One of the questions to be explored in a new business plan is whether there's sufficient demand to install an automated 24-hour fueling facility at a cost of as much as $200,000.
"Questions that need to be asked are, 'Who will own future hangars? Should we privatize the (fixed-based operator)? Should we create more room for SmartWool by building a separate FBO?' These are decisions City Council has to make," Forney said. "And without a business plan, every decision will be reactive."
The airport's fixed-base operator provides services such as fuel sales and general amenities. Discussions about future operators will be part of the airport's business plan.
For Steamboat Springs residents who didn't recall that the Steamboat airport has a terminal, it's necessary to go back to 1993, when the new facility was dedicated. At the time, Steamboat saw daily flights to and from Denver on Continental Express. Barely a year later, Continental pulled out. The airport was served briefly by Maverick Airlines, but ultimately the terminal was vacated until SmartWool based its business there.
DuBord said the city would have paid off the bonds sooner but went through several refinancings to reduce the overall interest payments.
The Steamboat airport has 43 hangars with a waiting list of 15, Shelton said. The city reached agreement in December with Michael E. Dunn, of Aviation Development Group in Denver, to build six to nine hangars during the next two years. ADG would sell the hangars, and the airport would profit from the ground leases. There's room to build 80 to 90 new hangars someday, Shelton said.
The city undertook a Federal Aviation Administration-mandated update to its master plan with Armstrong Consultants in 2008. That plan included recommendations on how the airport could become more financially independent, including the construction of hangars and a 600-foot runway expansion. The latter would help the high-elevation airport sell more fuel by allowing pilots to take off from its 4,400-foot runway with full loads. It would also make it a safer airport, Forney said.
The smaller nearby communities of Meeker and Kremmling have 6,400- and 7,000-foot runways. Adding 1,200 feet to the runway is estimated to cost $10 million Forney said, but the expectation is that the FAA would pay for 95 percent of it.
No decision to enlarge the runway has been made, Forney said, but he and Lowe want to give local leaders the information they need to make informed decisions about the future of the airport and how best to leverage the asset.
"The whole purpose of writing a business plan is to answer the question, 'Where do you want to be in five years?'" Forney said.