Palmer opens up leases at airport

PALMER -- Palmer is adding lease lots to its municipal airport, but with the space in demand it could become a little tougher, and a little more expensive, to get a deal with the city.

A dozen new parcels, ranging in size from about a half of an acre to more than an acre, will soon be up for lease at the airport. The additional lots are located near the intersection of East Evergreen and South Airport Road and will increase the city's lease space at the airport by about a third.

The new leases will be available later this summer, but it could be a year or more before the city's sewer and water are extended to the lots and service roads are in place. Many of the new lots don't yet have access to the runway, and won't until the city puts in a large, paved apron next summer.

Even still, City Manager Tom Healy already has people knocking at his door in hopes of getting a lease.

"There has been a lot of interest," Healy said.

With the property in demand, Healy told the council earlier this month, perhaps the leases no longer have to be awarded on a first-come, first-serve basis.

"I think the city can afford to set some criteria based on what's best for the airport," Healy said.

At one time, council members pointed out, city officials were just happy to have someone willing to pay to park their plane there.

"Now we have an asset that is in great demand," Councilman Tony Pippel said.

With the council's support, Healy said he would develop criteria similar to that used at Merrill Field in Anchorage that looks at an applicant's capital investment ability and the number of people it will be able to employ, as well as adding performance requirements to the lease agreement.

At the same time, Healy said, he would like to raise the rent. Most of the current lease agreements are for 5 cents a square foot, and the city manager said increasing it by a penny would bring it more in line with Wasilla's airport rates.

"Although I think our airport has more to offer than that," Healy said.

The council members agreed, and recommended upping the rate by more than just a penny. At 6 cents a square foot, a business or individual could lease an acre at the airport for a year for about $2,500.

"That's cheap," Pippel said. "That's low, low." He said he felt 8 or 9 cents would be a better rate. Councilman John Combs upped the ante, suggesting 10 cents a square foot.

"We have improved that airport so that I'd stacked it against any small-town airport," Combs said.

The council did not come to a consensus at the meeting, but last week Healy told the Frontiersman he was in the process of calculating a new rate. Whatever the final number, most likely between 7 and 10 cents, the square-footage price will apply to new leases as well as current leases when their five-year terms expire.

Healy said he will base the rate largely on trying to keep the airport self-sufficient. The city recently made the airport an enterprise fund -- a sort of a business within a city. As an enterprise fund, it is not supposed to rely on any general city funds.

Council members indicated this would be a priority as the city sets its rates and opens up more lease lots.

"It's on its own two feet now, and it needs to survive on its own," Councilman Brad Hanson said at the meeting. "The airport needs to generate and pave its own way."

In addition to a higher rent rate, those who lease the new airport lots should also expect an assessment bill to pay for the water, sewer and road extensions to the property.