Well, from the above page from the city's budget, you might think not much. The precipitous drop from FY 2008 results from the airport authority suddenly becoming capable of paying more of the operating costs when voters (well, the brighter, logical ones, anyway) began to realize the true "lost opportunity cost" of the airport.
Forget a new airport. We don't have a pressing need for one. But, if we sell the present airport property to a deep pocketed developer capable of developing the nearly 400 acres to their highest and best use - a combination residential / commercial / professional development - the combined annual tax revenues on such modern construction would likely be over $1 million. If you pooh pooh that number, insert whatever number you feel comfortable with. Would that positive number not be better than a cost of $7,000 annually? For the other 99.999% of us who do not own those 24, for fun, small private planes, and are not Greg Bird, how does maintaining a non-commercial airport at a lost tax-revenue cost of at least hundreds of thousands - not to mention the new jobs - benefit us?
It doesn't. If you still want to keep it at all costs, please just admit that it makes no economic sense at all and that you are just submitting to the local tribal loyalty litmus test rather than making a rational decision.
Oh, and please don't trot out that bogus, pseudo-rationale that it would not be a good move because we would have to give the sales price of the airport back to the FAA. Our original cost basis in the airport property was $1.00. So we cough up the sales price. We get it from the buyer and hand it over to the FAA: a wash. BUT, we get hundreds of thousands and eventually millions in annual tax revenue in perpetuity and both contruction and permanent jobs! Where's the problem?
23 comments:
Jay, I know this doesn't pertain to the subject but..did you remove Rick's link from your blog?
Yes, but by accident when I accidentally removed them all the other day. Thanks for pointing out that I missed Rick's when I restored them over the weekend.
It will be on there about one minute from now.
A slight correction in your scenario. We have to give back the fair market value of the property to the FAA even if we do not sell it. In today's market it may not sell for years and we may not get the full fair market value. By referendum vote and by the stipulation of the motion passed by city council, the move MUST be done at no cost. I'm sure that the problem is evident.
OK, the referendum vote was non-binding and the city council can rescind it and make another motion to relocate the airport at the expense of the tax payers. If this is their will, then they should do it. That would end this whole argument and we could proceed with the project.
i agree with you on airport as long as we dont have to pay for another.but before city sales it should look at what inpact would if any have on finishing cumberland harbor and the mill site. not a study on it but just think of that.
sp
There is a very simple solution. Given that the city owns the airport, there is nothing to prevent the city from putting the porperty on the market before closing the airport. The sales contract would stipulate that the buyer agrees that the airport will not actually close, nor wil the buyer take possession, until the buyer remits 100% of the purchase price to the city.
As regards the new airport - don't build one.
Next objection?
Now the logic of this argument has really taken a twist.
If the city decides to just close the airport and not build a new one, there is no need to worry about complex sales agreements. Just close it, sell it, and keep the money. The FAA requirement for repay of the fair market value only applies if they fund a replacement airport.
If this approach is the will of the council, then they should step up and say so and make it happen.
The whole airport problem, at its core, is a problem with our city council. They have been floundering around with this for approximately 8 years. First they vote to relocate and then they vote to not relocate. Then they vote again to relocate. They assign astonishingly incompetent people to oversee the project. They rely on input from private interest groups casting suspicion of favoritism on themselves. They argue endlessly among themselves.
Maybe this council just can't do it. Maybe we do need some new blood.
Well, if true, that would be great. However, every time I've mentioned the idea of selling it without building another one, I've been told by multiple people - all anonymous, of course - that the city WOULD have to turn over the sales price to the FAA. Let me check on that.
I see the airport problem as the rope in a tug of war between the local tribals and the "damned outsiders." I don't believe for a minute that he locals can't see the logic in selling it. It is just a case of obstinate rear guard action against the growing political clout of "damned outsiders" and the inevitable encroachment of "change" upon their xenophobic, nostalgic, parochialism.
Jay,
Actually, the only 2 people who have come out in support of just selling the airport are you and Mr. Ed Marx.
Of course, according to your logic, why not close the city boat ramps? That will save money and end a lot of disagreements between the xenophobic, nostalgic, parochial local fishermen and the damned outsiders in the Yacht Club.
Cute polemic, but an utterly failed analogy. Could a developer build several hundred median priced and up house and a large retail and professional space, generating millions in tax revenues ove rthe coming years - not to mention hundreds of job? Of course not.
By the way, I think you will be quite surpised at how both the local tribe and the "damned outsiders" fare in the end on this bait shop issue. I believe that the yachtsmen will be happy and the locals will be both happy and unhappy.
Every one seems to forget that the FAA has its hand out if the airport property is sold. Also, there are developements all over this county that are belly up and no market for housing. Also, the no costs to the tax payers is not possible. The damn government may print the money but we pay for every thing. We need a new airport like we needed a change. None of this would be an issue except for the Sea Island crowd wanting a plum in their failing swamp.
Don't forget the Camden Partnership and Charlie Smith.
Yeah, yaeh, I've heard all of that xenophobic, class-envious, dog-in-the-manger crap before. Did you notice that I specifically said that we don't need a new airport but would be crazy not to sel the one we've got. I've got an e-mail in now to find out exactly what happens, vis-a-vis the FAA, if we sell it and DO build a new one: they get the money. However, there are two different stories floating around about what happens if we sell it but do NOT build a new one: A, we have to give the FAA the money; B, we don't. I hope to have an answer, complete with a copy of the governing letter, by tomorrow.
i have no other objective with airport but before closing it. all im saying.is would it help to get mill site and cumberland harbor finished being built. just food for thought no objective
sp
"I hope to have an answer, complete with a copy of the governing letter, by tomorrow."
And the check is in the mail. We're still waiting.
Thanks for the reminder, I sent an e-mail to Bill Shahanahn that day requesting a copy of a letter from the FAA stating what would happen if the the airport was sold. No reply yet. I'll check back with him later today.
Okay, having not heard back from Mr. Shanahan, I sent an e-mail to all of city council. So far, Councilwoman Hase has responded.
Here are the facts.
1. If we sell the airport in the course of building a new one (which, incidentally, would be done AFTER the new one is built - a five year project), then 100% of the proceeds of the sale will go back to the FAA UNLESS the city can convince (as they are now trying to do) the FAA to take the value of the donated land at "Site 1" in lieu of the sale proceeds.
2. If we decide to sell the airport property and NOT build a new airprort, the city must pay back all of the money that the FAA has spent on airport improvements for the last 20 years. That is currently estimated at $500,000.
However, the estimated sales price of the property is $10,000,000. If those numbers were to turn out to be accurate, we would keep $9,500,000 AND get the tax revenues from the developed property in perptuity.
Jay,
Thanks for passing on the answer. Please pass on any others you receive.
A couple of quick comments--I'm on the run to an appointment.
1. Why would the FAA accept the value of the new airport property in lieu of payment? The FAA is not getting the property, we are. The FAA is getting no value.
2. This sounds like the way to go but I have to play devil's advocate and ask; if we just the only airport in Camden County aren't we hampering future industrial and residential growth?
1. If memory serves me, the deal wa sthatr if the FAA were to agrre to foot the lion'sa share of the cost of a new airport, the city would have to agree to pay a certain percentage if it. I don't remember what that came to in dollars, but my understanding is that he value of the donated "site 1" is considerably higher than that original number? Why would they NOT acept it, if it can be deducted from the cost they would have incurred if they had to BUY a site?
2. I assume you meant to say if we "just closed the airport."
We've got JIA just 25 minutes down the road. There are plenty of businesses in Atlanta that have to drive like hell through Atlanta.
traffic to go half that distance in the same time to Hartsfield.
No, I don't see that as a problem.
By the way, can a G-6 or 7 or whatever Gulfstream is up to now land at our current airport?
Jay,
1. It is my understanding that the FAA will pay 95% of the cost and the GADOT will pay 50% of the remainder. This would leave the cost to the city at $750,000, assuming the airport costs $30 million. If land is donated, the value of that land may be used to offset the city's share as long as the valuation of the land equals or exceeds that share. So far, so good. But, the FAA further requires that the city pay back to them an amount equal to the fair market value of the old airport. The city can, of course, get this from the sale of the property.
If the land on which the airport is to be constructed is is over valued, than the total cost of the project will go up but the net result to the city will be the same--no out of pocket construction cost. But none of this effects the FAA requirement for repay of the value of the old airport.
Uncle Sam just isn't going to build us a new airport and keep the old one too.
2. The fact that JIA is 25 minutes down the road begs the question of the necessity of a new airport 35 minutes up the road.
The biggest Gulfstreams cannot land at the present airport but they will not be able to land at the proposed airport in Billyville either. They need a runway greater than 5000'. That's not really a problem to anyone but some of Sea Island's visitors, but they can land in Brunswick.
Correction:
I wrote:
Cute polemic, but an utterly failed analogy. Could a developer build several hundred median priced and up house and a large retail and professional space, generating millions in tax revenues ove rthe coming years - not to mention hundreds of job? Of course not.
It should have read:
Cute polemic, but an utterly failed analogy. Could a developer build several hundred median priced and up house and a large retail and professional space, generating millions in tax revenues over the coming years - not to mention hundreds of jobs - on the land currently occupied by the boat ramps? Of course not.
Jay,
1. It is my understanding that the FAA will pay 95% of the cost and the GADOT will pay 50% of the remainder.......
Everything in your Item 1 appears to be accurate and consistwent with my iunderstanding of the facts. However, did I not mention that he coty is, in fact, currently negotiating with the FAA to get tehm to accept the excess value (i.e., the cited $750,000 cost to the city)in lieu of the value of the airport?
If say we did have to remit the entire sales proceeds to the FAA anyway, we would still end up with huge new tax revenues, temporary contruction jobs, and permanent retail and professional jobs in perpetuity. Where is the downside?
By the way, St. Marys now has impact fees in place and unused water sewer capacity costing us debt service while generating no revenue.
Jay,
"he coty is, in fact, currently negotiating with the FAA to get tehm to accept the excess value (i.e., the cited $750,000 cost to the city)in lieu of the value of the airport?"
I assume that you meant to say that the city is negotiating to get the FAA to accept the excess value OVER the $750,000 city share in lieu of the value of the airport.
This is the part of the city's reasoning that escapes me. How does any of the excess value get transferred to the FAA? The city gets the excess value by owning the property. The FAA does not own the property, therefore they do not see any increased payback.
The Federal Government, despite their reputation for excess spending, is supposed to accomplish a project like airport construction at the lowest cost. In this particular situation, that involves the so called "trade-in" repayment to offset some of the costs. Political double talk about trading the value of one piece of property against the other just isn't going to prove out when we come to the bottom line.
"Where is the downside" of just paying the FAA about $10,000,000? The immediately apparent downside is that this a counter to the condition of the referendum and the council resolution to relocate at no cost.
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