HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 10/06/2009 - RESOLUTION 2009-093 ADOPTING THE AIRPORT BUSINESS ITEM NUMBER: 22
AGENDA ITEM SUMMARY DATE: October 6, 2009
FORT COLLINS CITY COUNCIL
STAFF: Mike Freeman
Dave Gordon
SUBJECT
Resolution 2009-093 Adopting the Airport Business Plan for the Fort Collins-Loveland Municipal
Airport.
RECOMMENDATION
Staff recommends adoption of the Resolution.
FINANCIAL IMPACT
The approval of the Airport Business Plan does not require the expenditure of any City funds.
EXECUTIVE SUMMARY
The goal of the Fort Collins-Loveland Airport Business Plan is to provide a strategic plan for the
successful development of the Airport that meets the existing and future needs of the aviation
community, the residents of the surrounding communities and the local business community.
Adoption of the Airport Business Plan will provide the necessary guidance and direction for moving
the Airport forward into the future.
BACKGROUND
The Cities of Fort Collins and Loveland officially adopted the Airport's Updated Master Plan in July
of 2006. The FAA-funded Master Plan determined the existing and future physical aviation needs
to accommodate the anticipated development within the next 20-year time frame. The Business Plan
goes beyond where the Master Plan stops. The Business Plan establishes the strategies necessary
for the Cities to achieve the Goals and Objectives of the Airport over the long-term.
The Business Plan identifies the vision and goals of the Airport, evaluates governance options to
operate the Airport,maximize Federal and State funding to make improvements identified,identifies
methods to maximize the development and revenue potential of the Airport property, and develops
strategies to implement the plans necessary to accomplish the goals and objectives.
The Business Plan establishes the vision of the Airport as follows. "The Fort Collins-Loveland
Municipal Airport will be Colorado's premier regional airport supporting general aviation,regional
air carrier services, and business opportunities for both aviation and non-aviation uses."
October 6, 2009 -2- Item No. 22
The development of the Business Plan was accomplished through input received from meetings with
Stakeholder groups that represent pilots and aircraft owners,Airport businesses,and the surrounding
business community. Input was used to develop several working drafts of the Business Plan which
were discussed periodically with the Airport Steering Committee over the last 18 months and at the
joint meeting of the two City Councils and the County Commissioners on June 30th. A separate
document has been prepared that summarizes the process and comments received during the
development of the Business Plan. The final Airport Business Plan document represents the
culmination of these combined efforts and input.
Major elements of the Business Plan document include the following:
• Executive Summary
• Introduction and Background
• Changes at the Airport and Aviation Statistics
• Fixed Base Operations Needs
• Land Use and Economic Development Opportunities
• Governance
• Ten Year Airport Finance Plan
The formal adoption of the Airport Business Plan does not obligate the City to spend any funds at
the Airport. r-
It is recommended that the Airport Business Plan be adopted and implemented to maximize the
economic benefits of this public transportation facility.
ATTACHMENTS
1. PowerPoint presentation
ATTACHMENT 1
9/8/20v9
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Aims-Man
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GOAL OF FORT COLLINS-LOVELAND
AIRPORT BUSINESS PLAN
Provide a strategic plan for the successful
development of the airport that meets the e)dsting
and ftiture needs of - the
residents of the surrounding communities and the
local • - community-
'I
9/8/2009
Master Plan v. Business Plan
�,Airport Master Plan Business Plan
Formation of the long term Establish strategies to
physical needs. achieve goals objectives
• 'a year time frame • Mission of the airport
• Determine aviation needs • Governance
• Address concerns of a • Funding
development plan
• Maximize development and
revenue potential
j
BUSINESS PLAN
PROCESS BEGAN IN EARLY 2008
MEETINGS WITH STAKEHOLDERS - PILOTS/PLANE
OWNERS, AIRPORT BUSINESSES, CORPORATE
COMMUNITY. COMMENTS HAVE BEEN CATALOGUED.
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PRESENTED DRAFTS TO AIRPORT
• AND AT JOINTOF
• AND COUNTY
2
9/8/2009
BUSINESS PLAN - KEY ELEMENTS
CREATED VISION AND GOALS OF THE AIRPORT
• THE FORT COLLINS-LOVELAND AIRPORT WILL BE COLORADO'S PERNIIER REGIONAL
AIRPORT SUPPORTING GENE,RALAVIATION,REGIONALAIR CARRIER SERVICES,AND
BUSINESS OPPORTUNITIES FOR BOTH AVIATION AND NON-AVIATION USES.
:IESTALISHEID STRENGTH AND WEAKNESSES
a
• ! •� J'
.9URAGE PRIVATE
DEVELOPMENT-
FOR LONGAND SHORTITERM GOALS
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BUSINESS PLAN - NEAR-TERM GOALS
P - GOII.ATE FIXED •ENCOURAGE PRIVATE DEVELOPMENT
E7 'D Im t`:=. I'DR LEASE LONG-TERM INCREASE IN REVENUES
RE-NEGOTIATE TRIAD IMPLEMENT ACCESS FEES
AGREEMENT .ENCOURAGE COMPLIANT E DEVELOPMENT
I� twi`'' •RETAIN BROKERTO LIST AIRPORT PROPERTY
•MARKETING MATERIALS FORAIRPORT OPPORTUNITIES
1 L Ii1 ,,, yt3a •ENHANCE AIRPORT WEB SITE FOR DEVELOPMENT
•ADOPT GOAL OF FINANCIAL SE-F-S.UFFICIENCY BY 2010
FINANCIAL PLANNING •ADOPT 10-YEAR FINANCIAL PLAN SY JANUARY 2011
•CITIES CONTINUE MAKING APPROPRIATE FINANCIAL
CONTRIBUTIONS TO SUPPORT COMMUNITY GOALS
•INSTALL INFRASTRUCTURE
ENCOURAGE PRIVATE •MARKE,PROPERTY
DEVELOPMENT •RETAIN BROKER SERVICES
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AIRPORT
BUSINESS
PLAN
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6
RESOLUTION 2009-093
OF THE COUNCIL OF THE CITY OF FORT COLLINS
ADOPTING THE AIRPORT BUSINESS PLAN FOR THE
FORT COLLINS-LOVELAND MUNICIPAL AIRPORT
WHEREAS,the City of Fort Collins and the City of Loveland(the"Cities")jointly own and
operate the Fort Collins-Loveland Municipal Airport (the "Airport"); and
WHEREAS, in July 2006, the Cities adopted the Airport's Updated Master Plan which
determined the existing and future physical aviation needs to accommodate the anticipated
development of the Airport for the next 20 years; and
WHEREAS,after receiving considerable public input from stakeholder groups that represent
pilots, aircraft owners, Airport businesses and the surrounding business community, the Airport.
Business Plan was developed; and
WHEREAS, the Airport Steering Committee has recommended adoption of the Airport
Business Plan; and
WHEREAS, the Airport Business Plan provides a strategy for the successful development
of the Airport and identifies the vision and goals of the Airport,evaluates governance options for the
Airport,maximizes federal and state funding for improvements,identifies methods to maximize the
development and revenue potential of Airport property, and develops strategies to implement the
plans necessary to accomplish the goals and objectives of the Airport; and
WHEREAS, the City Council has determined that it is in the best interests of the City that
the Airport Business Plan be adopted.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that the Airport Business Plan for the Fort Collins-Loveland Municipal Airport, a copy
of which is attached hereto as Exhibit "A" and incorporated herein by this reference, is hereby
adopted.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 6th
day of October A.D. 2009.
Mayor
ATTEST:
City Clerk
EXHIBIT A
Fort Collins • Loveland Airport
Business Plan
September 15, 2009
�, 6rrrt Collins
City of Loveland
FORT COLLINS • LOVELAND
AIRPORT
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Table of Contents
1 - Executive Summary
2 - Introduction and Background
3 - Changes at the Airport and Aviation Statistics
4 - Fixed Base Operations Needs
5 - Land Use and Economic Development Opportunities
6 - Governance
7 - Ten Year Airport Finance Plan
Fort Collins-Loveland Airport SWOT Analysis
Sytrengths
• Full service FBO -
• Land available for development of aviation businesses
• 8,500 foot runway meets most general aviation needs
• Excellent road access
• Located in strong growth area
• Good weather
• High quality of life
Weaknesses
• Length of runway does not meet all corporate craft and commercial service needs
• Age and appearance of facilitiesTT
• Inadequate infrastructure for expansion
• Two city governance '- _ ,',
Qpportunities
• Funding from State and Federal Government
• Through the Fence agreements to encourage strong public/private partnerships
• On airport economic opportunities are available and encouraged
Threats -
• Economy
• Competition from nearby surrounding airports
1 _
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y
Why prepare a business plan?
r Every outstanding business needs a road map to success
and the Fort Collins-Loveland Airport (FNL) is no
exception. The goal of the business planning effort is
to map current and future conditions and then apply
strategic plans to accomplish the critical goals of the
airport and the community owners.
The Fort Collins-Loveland Airport has not previously
developed or implemented a Business Plan. In 1993 and
again in 2006/2007, the Federal Aviation Administration
(FAA) and the two municipal owners completed an
FAA Master Planning Project.The goal of the Master
Planning Projects was "...prepared to assess and
direct improvements that will likely be necessary to
`- accommodate future aviation needs... a long-term plan
for ...potential future facilities." The Master Plan does
not identify critical components of a Business Plan,
— notably:
• Business vision and goals;
• Funding plans,revenue and expenditure goals;
• Economic development principals;
• Encourage private investment;
• Operational success strategies;and
• Opportunities, both short and long-term,
oil for improvement.
This Business Plan document seeks to provide a
strategic plan for the success of FNL.The Plan will be
updated on a regular basis to support changes in the
airport, community, and business environment seeking
--- to be a living document guiding airport management
® AMIL 0 and leadership.
ai -'- -- - - FORT COLLINS • LOVELAND
- � � AIRPORT
Vision Statement
The Fort Collins-Loveland (FNL) Airport will be Colorado's premier
regional airport supporting general aviation, regional air carrier
services, and business opportunities for both aviation and
non-aviation uses.
The Goals of the Fort Collins-Loveland Airport
FNL will be a regional leader in providing competitive general
aviation services to the public,including corporate flight activities,
pilot traiiung, and personal aviation.
FNL will provide outstanding opportunities as an investment engine
for aeronautical related business, including FBO services,vertical
facility investment,hangar operations, aeronautical operations, and
aircraft manufacturing and sales. ` r
FNL will provide economic development opportunities,both on and
off airport, through support of investment zones and appropriate
corporate incentives that support the mission of the airport and
community owners.The airport will seek to attract forward thinking
investors with sound business models who will be industry leaders
and attract investment and employment opportunities to the region.
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FNL will seek to work with existing businesses to retain, expand, s,and attract opportunities for economic growth and vitality.
FNL will strive to provide commercial airline services based on Fort cocoas lace:=:o
appropriate regional market models and embrace new air carrier
market opportunities as the industry develops.
FNL will seek to be a good neighbor with the surrounding
community by working actively with regional jurisdictions to secure
appropriate adjoining land uses and support public disclosure of
aircraft activities in nearby residential development. The airport a `
will seek to operate within all industry standard and FAA noise
abatement procedures and expect all operators to safely and
responsibly operate within thoseparameters;including following
AOPA Noise Awareness Steps and manufacturer's abatement
procedures whenever consistent with safety.
FNL will invest all federal,state, and local monies in support of
a long-term capital and financial plan to maintain the highest
standards of airport infrastructure and in accordance with FAA
Regulations and to grow the airport to a self-sustaining enterprise
fund jointly owned by the City of Fort Collins and Loveland.
FNL will work within FAA, the Department of Agriculture, and EPA regarding air and water quality
to promote an environmentally conscientious airport in support of greater community goals and to
improve the safety of air travel.
Fort Collins - Loveland Airport Business Plan Proposed Actions
Fixed Base Operator
1.Renegotiate FBO lease to encourage investments and improve viability
2. Pursue significantly upgraded FBO facilities
3. Negotiate responsibility for new fuel farm(either Cities or FBO project)
4. Evaluate existing fuel surcharge-update if needed
5.Negotiate with FBO to manage all on-airport leasing that the cities are currently performing
Re-negotiate the Triad Agreement
1.Apply new Through the Fence(TTF)policies
2. Clarify appropriate aeronautical uses/businesses
3.Address appropriate fees for airport services
Economic Development
1.Retain commercial broker to list on-airport properties
2. Develop marketing material on airport opportunities
3.Develop economic development focused web site for the airport
4. Implement a capital improvement plan(different than the Master Plan)to facilitate on-airport aviation
related businesses/uses
FNL Finances
1.Adopt a goal of airport financial self-sufficiency by 2013
- 2.Adopt an enterprise fund model for the airport at a future time
3.Adopt 10-year financial plan for the airport by January 2011
4.Cities to continue to make appropriate financial contributions to support community goals
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2 'tion and Background
`rtrod�
How Does the Business Plan Compare to the Master Plan?
The approved 2006/2007 Airport
Master Plan is an update to the 1993 Airport
Plan.The FAA funded the Master Plan
study to determine the existing and Formation of the long Establish strategies to
future aviation needs to accommodate
the anticipated development within term physical needs. achieve goals objectives
the next 20-year time frame. The • 20 year time frame • Mission of the airport
Master Plan addresses the long-
range physical needs of the airport. Determine aviation • Governance
The primary goal is the continued needs • Funding
improvement of the airport in a • Address concerns of a . Maximize development
manner that is financially realistic and development plan and revenue potential
appropriate in the consideration of
its surroundings. The Business Plan
goes beyond where the Master Plan stops.The Business Plan establishes the strategies necessary for the Cities
to achieve the goals and objectives of the airport over the long-term.The Business Plan identifies the Vision and
Goals of the Airport, evaluates governance options to operate the airport, maximize Federal and State funding
to make improvements identified, identify methods to maximize the development and revenue potential of the
airport property, and develop strategies to implement the plans necessary to accomplish the goals and objectives.
Facilities Airport Statistics
The airport is a general aviation and commercial service
airport. The main airport facilities include a primary runway
with high intensity runway lights, full length taxiway with
medium intensity lighting system, an Instrument Landing
System, and a cross wind runway. The airport also has an
Automated Weather Observation System (AWOS);one Size 1 100 Acres
Fixed Base Operator;passenger Terminal Building;Fuel '
Storage facility;Aircraft Rescue and Eire Fighting Fire house Runway:
and fire equipment;and 10 businesses offering aviation Main 8,500' X 100'
related services from flight instruction to fuel sales,aircraft
maintenance, food services, and scheduled commercial Runway:
air service. Crosswind 2,273' X 40'
Based Aircraft 245
Hangars 210
• Fixed Based Operations o,
• Fuel Sales
• Flight Instructions
(Fixed Wing and Helicopters)
• Aircraft Maintenance/Modifications/Upgrades
• Aircraft Engine Overhaul
• Avionics Sales/Installation/Service/Training
• Aviation Weather/Camera Systems Sales and Maintenance
• Commercial Air Carrier Service
• Hangar Rentals
are " tal Review
Environrnen
�. — �• The recently completed Airport Master Plan
` was- funded through the FAA.Because these
he Airport Master Plan was
are Federal funds, t
abide by
required to Federal environmental
d review and the Wildlife Management Plan in
preparing, Master Plan.A draft wildlife
reparing, t plan will be submitted March 20ern09.
---�.
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Airport Master Plan Proposed Improvements
The Airport Master Plan identified approximately$140 million of airport
improvements by 2026. Significant airport improvements identified in the Master
Plan include: a 1,000 foot extension of the existing runway, construction of a air
traffic control tower, construction of a parallel runwav, development of additional
hangars for aircraft storage and expansion of aviation related businesses, aircraft
ramp repair and expansions, storm water drainage improvements, access road
improvements,security fencing and access control gates, construct new terminal
building for passenger facilities,replace the aviation fuel storage facility, construct a
new fire house, and construct an equipment storage facility for snow removal equipment.
Ca acity Levels and O erational Histor
10'000
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2003 2007 2023 2003 ?007 201; 2003 2007 2023 \
Passenger Emplanements Airport Landings and Take Offs Total Based Aircraft J
•Forecasts prof^,red by fort Collins-Loveland Airport Master Plan
re Cap
ital
Y Projects
and fuel kirr
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Reconstruct Parkift,Loy" Gt
'Building Facilityund
Storm W,,W
New Parallel Runway,5133
and Taxiways and Lig�h
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Aviation and Air 3
Dort Tre
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Based on FAA's 2008 to 2025 Aviation Forecasts, the increasing high fuel prices and concerns about the economy
are dampening the near-term prospects for the general aviation industry,but the long-term outlook remains
favorable.There continues to be a strong growth in business aviation demand driven by a growing U.S. and
world economy.
The number of general aviation hours flown is projected to increase an average of 3.0 percent a year through
2025.The FAA continues to be optimistic about the future.Since 2000, U.S. airlines have dealt with the impacts
of 9/11, heightened concerns about pandemics, the bankruptcy of four network carriers, and record high fuel
prices. In spite of these challenges, the number of passengers traveling has grown, demonstrating the value of air
transportation to the public. Last year, that number was a record 765 million and is on track to carry one billion
passengers by 2016. In addition, international traffic is growing at much faster rates than domestic traffic.
These national and international trends will also impact operations at FNL.The following highlights some of the
major trends:
• Growth in Airport Building Square Footage and Uses:The airport currently has a waiting list of
approximately 40 aircraft owners who want to lease one of the airport's 41 aircraft hangars.In addition,approximately
15 people are on a waiting list to lease ground to construct aircraft storage hangars for personal use.In 2007,the airport
constructed a new taxiway that will provide access to a 20-acre parcel of land reserved for hangar development and
the Cities will select a land developer to construct these improvements.Once the economy improves and the cost of oil
stabilizes,business and personal investment in the airport will gain momentum.
• New Pilots:The number of people starting to learn to fly has been on the decline.However,most new pilots are
entering the field for career opportunities and not for personal enjoyment as in the past.This trend is being addressed
by the pilot organizations and flight training businesses.
• Very Light Jets:The Very Light Jet,VLJ, is a new category of business jet that some feel will provide less
expensive and more convenient air travel for the business person. However,recent economic conditions are creating
obstacles for implementation.The VLJ is a much smaller corporate jet capable of carrying up to 4 passengers at
economical costs for flights generally less than 1,000 miles.The ability of the jet to land at small airports will increase
the convenience and savings in cost compared to commercial flights.The high costs of fuel will, for the airline industry,
reduce the frequency of flights to smaller communities and increase fares.This will improve the VLJ market.As traffic
and congestion getting to DIA increases on the I-25,and with the flexibility VLJ has to serve smaller market airports,
there is an opportunity to capitalize on this growing trend.
• Commercial Air Service:Commercial air service to Las Vegas and other niche markets will continue to be an
important service to our communities and a significant revenue stream for the airport.The addition of one or two other
airlines serving similar destinations in the future will improve service to the business/
private communities and further enhance revenues to the airport.
4
Real EstateFixed gash the
Holdings, Throvg
Operations, and
Pence Lease Agreements
The Cities hired an aviation consultant,Airport Business Solutions, to evaluate the airport's real estate holdings,
the FBO lease agreement, and the "Through the Fence" agreements.The data and recommendations from the
report will assist the Cities in establishing policy to maximize development of airport property and encourage
private investment on the airport and on adjacent properties that have access to the airport's facilities.
Fixed Base Operation (FBO) Facility
A Fixed Base Operation or
FBO facility is the primary
business on an airport that
provides the basic services to
the flying community, such
as fuel sales,aircraft tie-
down, hangar storage, aircraft
maintenance,and flight
instruction.The primary FBO
revenue source is fuel sales.
In 2007,542,000 gallons of aviation fuel was sold;of this, 135,000 was 100LL/Avgas and 407,000 gallons of jet
fuel.Of the 407,000 gallons of jet fuel, 88%or 358,000 gallons are sold to transient turbine aircraft flying through
the area and making fuel stops.It is estimated that approximately 286,000 gallons of jet fuel is sold at true retail
prices.At this level of fuel sales and volumes, the economic return is marginal at best.This situation is further
exacerbated from the loss of fuel sales from self-fueling fuel farms that have been built on "Through the Fence"
property.
Recent record high prices of oil and retail aviation fuel prices have stifled the growth and sustainability of the
general aviation and commercial aviation.This is undercutting the primary revenue source of the FBO industry,
as well and further aggravates the financial viability of the airport's single FBO business. Furthermore, the
existing FBO facilities at the airport are old, outdated, and present a poor visual image to the general public and
air travelers.
The airport consultant,Airport Business Solutions, recommends that improvements to the FBO facility be made
to adequately compete within the regional marketplace. In order to create a viable investment opportunity
for improvements,new lease terms and conditions will be required. The consultant further recommends that
the new lease agreement with the FBO should be typical for the industry, and be structured in a manner that
encourages capital investment in facility upgrades, which are commensurate with projected fuel sales and
business activity.
c
Existing Lease Terms, Conditions, and Rental Rates
The airport's existing lease terms, conditions, and rental rates are consistent with industry standards. Discussions
with airport tenants regarding the reversion of tenant improvements are ongoing.
"Through the Fence" Agreements
The report provided analysis of"Through
the Fence" agreements and what terms
and fees that should be included in
Access Agreements. Generally, the Access
Agreements should contain provisions for
compliance with FAA Grant Assurances, i
Airport Rules and Regulations, Airport
Minimum Standards, Transportation Security
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Administration rules for access control,and :..
payment of access fees that are at parity with
similar developments located on the airport
property.The cities utilized data from the
Airport Business Solutions report and input
from stakeholders,including the FAA to
negotiate new through the fence agreements,
and will continue to pursue appropriate fee
structures for through the fence access.
Other Revenue Options
The airport consultant also suggested ideas where other revenues could be generated, some of which are
non-aviation.Suggestions include appropriate revenue leases,owning and operating the aviation fuel storage
facility, operating the FBO facility, and utilization of a real estate broker to market the airport property more
aggressively.
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ort Economic
Development Opportunities
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Fort Collins—Loveland Airport(FNL) is one of only fourteen commercial
airports in the State of Colorado. A recent study completed by the State of
Colorado, which looked broadly at the economic impact of all airports in Sales Tax
the state identified that FNL is accountable for creating and maintaining Excise Tax
750 jobs, with an annual 2008 payroll of$22 million. Total direct and
indirect regional economic benefits created by the airport is$56 million ,�,rporate Tax
per year. FNL is already producing significant economic benefit to the
region,but it can do a lot more in the future with a focused effort on
promoting aviation related businesses on and off-airport.
Recent Development History 0 /f
Development over the past five years around FNLRetail Sales CO Income
has principally been focused off-airport, with the vast .
U.S. Income Tax
majority of developments not having an aviation related Rental Cars
use. The commercial brokers that market off-airport
properties note that there is a strong industrial market
in Northern Colorado and that most inquiries for property
adjacent to FNL are focused on businesses that need warehouse/storage needs as well as access to I-25.
There has been little on-airport development in recent years. In 2008,FNL began working with private
developers to construct two new on-airport hangar projects that will add over 50 individual aircraft
storage units.
PrDirectl rindi�It Market Needs
Impacts Impacts The cities recently approved a second "Through the Fence' agreement. FNL
L_ _J L: is in a unique position for a smaller commercial airport in that there are
J L is
on-airport and off-airport properties that can be developed for aviation
and non-aviation uses.
The State of Colorado's Economic Impact of Airports indicates that there has been
significant growth in aviation related businesses around the state. FNL has not
significantly benefited from tlus growth in aviation related economic development,
but is poised to do so in the future with some changes in how FNL is marketed to the
aviation related development community.
Marketing Strategy
Aviation Business Tax Credit Historically, the cities have not marketed
development opportunities in and around
The Fort Collins-Loveland Municipal Airport could see the airport. One of the key changes that
increased business activity after receiving a shot in FNL has to make to become financially
the arm from the state. Qualified employers on the self-sufficient is to improve its overall
revenue through increased on-airport
airport now are eligible for a $1,200-per-employee leases, TTF revenues, and maximizing
tax credit. Aviation businesses that locate at the other incomes streams like fuel sales and
airport or expand must employ at least 10 people to parking.
be eligible. The tax credits are good for five years,
per employee. The businesses are eligible for the There are several significant strategies
that need to be implemented to realize
tax credit each additional year in which full-time new potential revenue to FNL and to
employees are added. enhance aviation related businesses
Fort Collins Colomdoan-SaWrdax January 20,2007 around the airport.
These strategies include:
1. Develop marketing materials for on-airport properties
2. Engage a commercial broker to market on-airport properties
3. Aggressively pursue additional on-airport hangars
C4. Develop a marketing section on the FNL web site
5. Partner with off-airport developers to recruit aviation related businesses
6. Attend aviation related economic development trade shows to market FNL
7. Benchmark aviation related development trends with regional commercial airports
8. Encourage retention and expansion of existing businesses and new development
Future Hangar Expansion.Projects
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6 Governance
The Fort Collins-Loveland Municipal Airport is jointly owned and operated by
the cities of Loveland and Fort Collins. Full control and decision-making authority
is placed with the City Councils of both cities. Under the current governance
structure, an Airport Steering Committee is charged with facilitating communication
between the cities and advising the Councils concerning Airport issues such as
general policies,land use, budget, capital improvements and strategic planning.
Since beginning with the 1963 agreement to construct an airport and commencing 0
operations in 1965,the airport has tried a range of governance structures, including
an Airport Board,Ad Hoc Committee,Airport Authority and Joint Steering
Committee. As one might expect,each governance model served its purpose at the
time it was implemented.
Over time, changes in the growing cities and the airport facility itself haveamok
necessitated reassessments and updates to the governance structure.
Refinements in the governance structure is ongoing. Several alternative 1
structures were examined. However,both cities recognize the important
asset of the airport and the opportunity for the airport to become an economic
engine which will contribute to the vitality of the community.
Alternative structures that were examined and subsequently dismissed include:
Airport Authority: The Fort Collins-Loveland Airport
was governed by an Airport Authority from
1983-1990, when it disbanded of its own volition.
The Authority had a very serious and ultimately
fatal flaw. It had the responsibility for operating One City Assumes Full Operational,Management
the Airport but not the authority. and Financial Responsibility: This governance
structure would have one of the two Cities assuming
full responsibility for the Airport. For this to
Privatization: In the United States, happen, the Cities would need to agree upon which
General Aviation airports the size of City is best suited to manage the Airport and one
Fort Collins-Loveland are generally City Council would need to turn over the majority
either owned by a municipality or of decision-making responsibilities for the Airport to
County. Privatization of airports may its peer City.
preclude funding from the FAA and
state.
Airport District: State legislation does not exist,
2; thus the Airport District concept is not an option.
�1
Governance Recommendations
Regardless as to which governance model is the best alternative, the current Joint Ownership/Steering
Committee governance model will remain for the future and both cities desire to see the Fort Collins
- Loveland Airport become a premier facility. Change is needed in order for the Airport to operate
effectively into the future. The following are basic recommendations.
• It is essential that the Cities engage in a straightforward review of the mission and vision of the
Airport.A serious discussion about the purpose of this facility today and the vision for its future
use is needed. This will provide a foundation for subsequent business plans and guide how the
Airport can continue to best serve the Fort Collins and Loveland communities and
surrounding region.
• The Steering Committee has no voting authority; all decisions go to two sets of elected officials.
Streamline the process by giving administrative and leasing authority to the Steering Committee.
• Continue to support the FNL Pilots Association, which includes representatives of the FBO,
businesses, and pilots and continue to provide the opportunity for the FNL Pilots Association to
report at each Steering Committee's meeting.
• Steering Committee and staff to continue to work pro-actively to mitigate redundancies in
oversight such as attorney review, selection of a preferred staff, or alternating staff.
r
r Airport Finance P/qn 7
ten Yea
The Fort Collins-Loveland Airport's (FNL) revenue picture did not change much over time until the
airport secured commercial air services through Allegiant Air. This new commercial service boosted
operating airport revenues and more importantly allowed the airport to access more Federal
Aviation Administration Funding for capital improvement projects. FNL has a detailed capital
improvement plan or Master Plan, but it does not have an
accompanying longer-term operating financial plan. Potential Revenue Sources:
• New Fixed Base Operator Lease
Part of the rationale for developing this business plan • Triad Through the Fence Agreement
is the need to develop a longer-term financial plan • Rocky Mountain Through the Fence Agreement
that projects revenue and expenditures for operating, • New Lease Revenue(South Hangars)
combined with the capital plan. This section of the
business plan outlines this financial plan, paying most attention to the options for enhancing
revenue for FNL. These include leasing more ground, implementing through the fence access fees,
and increasing commercial service while providing the services, facilities, and investment climate
that satisfies the expectations of all users and customers of the airport, while meeting the needs of
the airport owners.
The financial plan outlines projected revenue and expenditures for the coming 10 year period. There
are four specific revenue sources that were identified by staff and consultants that are addressed in
the business plan. These projections were forecasted on the conservative side for planning purposes.
Commercial Services
Commercial service provides major financial benefits to the airport including airline landing fees,
terminal use fees, passenger facility charges, automobile parking charges, and funding from the
FAA Airport Improvement Program. In 2008, this equated to $1.3 million directly toward airport
operations.
" 'rrc
As we go forward the airport should continue efforts
to support commercial service to assist in sustaining
and developing revenue to support regional economic
development. The long term benefit of commercial ...•••••.••...
service is critical to the airports self sufficiency and
funding capital improvements.
New Fixed Base Operator (FBO) Lease
C Currently, the FBO lease produces $79,000 in revenue to the airport. The Airport anticipates negotiating
a new lease with the existing FBO for the construction of improvements to the existing facilities. The
final lease rates and terms should reflect the airports current and future business environment and the
FBO's revenue potential from fuel sales and other revenue sources.
:O Lease Areas
1
� . Hangar Leased Areas
Sk
Ph
0 ILA
NI :i W
Triad Through the Fence Agreement
A Through the Fence Agreement has been in place for many years which covers the "Triad"area. Many of these
developments are not airport related,and some of the lots have lost access to the taxiways due to the manner in
which the properties developed. Current Triad owners with fuel farms pay fuel flowage royalties. In 2008,Triad
owners paid$276,000 for cross-wind runway maintenance. Triad owners are not currently paying access fees. The
Airport seeks to re-negotiate the Triad Agreement for a win-win relationship between Triad and the airport, and
ensure parity for FAA grant compliance.
Rocky Mountain Airpark Through the Fence Agreement
In 2008, the Airport entered in an agreement with Water Valley for the development of the Airpark of the Rockies
development.This Through the Fence Agreement outlined the access fee charges and expectations.
Per the agreement with WaterValley for airport
access, the following revenue will be generated:
C • 2011—$50,000(first year the project contributes revenue)
•2020—$400,000
New Lease Revenue - South Hangar Development
The Airport has had a steady
backlog of demand for hangars The assumptions for this scenario are as follows:
that has gone unmet over time due
to the significant cost of providing a The gross for hangar development is 20 acres
infrastructure to undeveloped •The leasable area is 15 Acres
areas of the Airport for new • Begin leasing in 2014
hangar development. New •Assumption is 5 acres under lease at$.38/square foot=$83,000/annually
hangar development has to be a •Additional Leasing in 2017
higher priority in the future-to •Assumption is 5 additional acres under lease at$.41/square foot=$89,000/annually
facilitate the hangar development, •Additional Leasing in 2020
infrastructure has to be provided •Assumption is 5 additional acres under lease at$.45/square foot-$98,000/annually
by the Airport and it will have • Revenue assumed to begin in 2014
to be debt financed. Over time, •2014-$83,000
the infrastructure investment •2020-$172,000
will provide a return to the •Assumes debt issuance of$3.0 M in 2012 to 2013 for infrastructure development
•Debt service is$225,000/year
airport. A most likely scenario a 20 year issue at 5.25%
was development that outlines the
costs to provide infrastructure to Note:Actual infrastructure inoestinent and resulting revenues toill depend on market conditions.
the south of the existing hangar
development as well as the costs to
provide that infrastructure.
Summary
Through the implementation of the options to enhance revenues(leasing more ground, implementing through
the fence access fees, and increasing commercial service), it is projected that over the ten year period from 2010
through 2020, the Airport will receive$3.0 million in new revenue (after debt service for the South Hangars
has been accounted for, leasing more ground, implementing through the fence access fees, and increasing
commercial service).
The Airport has options for enhancing revenue and becoming more self-sufficient-there are short and longer-
term options that can be taken that will not only improve airport operations,but will also provide much needed
funding for making improvements to the airport in general.
as
Airport Financial Forecasts 2010 - 2020
C Projected Projected Projected P ojtated Projeced Projected Projected Projected Projected Projected Projected
'_010 2011 2013 2013 2014 3015 2016 2017 2018 2019 2020
OPERATING IrI rNDS
Reginnfng Balance 202.270 246350 111) 201920 92,770 311,700 4i3.250 643,500 663.210 I,W9.090 W7,930
REVENUES
Operating Revenue 128,100 131,900 135.9W 140,00u 144.200 148.500 153.000 157,600 162,300 167,200 172.200
Ose.Oil Commtaions 94,676 96.570 98.501 100.471 104490 108.670 113,017 117.537 122239 127.128 132.213
Suw.4aaall Ft.id 1. 41,010 42,448 43,'_97 +1.163 45,93U 47,767 49A78 51.665 53.731 55,881 59,116
'6Hanga Rental 101,500 104,500 107.635 110,864 114,190 117.616 121,144 124,778 128,522 128,522 128.52,
Land Leese 64,0W 64,OuO 64,000 5400 64,OUu 64.OW fiQWO 64,000 64,000 64,W0 64.000
Lari Fees 19,000 18.000 19,000 18,000 Ig.000 I&WO 18,000 18,000 19.000 18,WO S,WO
Parking 1810.000 270,0(i0 2]5,000 240000 248001, 256,1WI1 263.M0 271000 279,000 279,n00 2N"W
Interest I�,AO 73911 I;tlr 6,1M 27N,, 9.350 1 00 193In I I91)c 31.110 29,040
Nun G-Zia $0000 107,421 146,660 186.320 225,900 371,302 421979 550425 620,993,. 662.606 704,242
TOTAL OPERATING R EVFNUF. usal 492,219 $41,103 609,998 967.390 1,141,205 1,217,319 1,074515 1.468,685 I,Ob3,777 1,flllft 3
TOTAL REVENUES AND SOURCES 8's%t 738,579 W4,613 915,918 1,060,160 1,451-905 14670568 L718,115 2,131565 2,091.067 2.11M,263
OPERATING EXPENSES
Ai n crab fi5,141 675.070 698,697 723.152 748.46' 774.638 801,771 829,833 859.877 $88.938 920,051
TOTAL OPERATING EXPENSES 652,341 675,070 698.697 723.152 748,462 999.08 1,026.771 10 4.11M 1,093,877 1,113,938 1.145.051
ENDING BALANCE OPERATING 2"'351 63,509 205,916 91-767 311.698 453347 643,796 663,282 1.1148.088 %7,929 900r13
CAPITAL FUNDS
Beglnning balance 371,580 370,130 366.320 367.040 253,810 146.010 42,850 (53.&10) (144.710) (2-19,150) (308.380)
Poassuill Fncddy,Charges 126.000 152.000 156.000 161.5W 166.400 170.400 176.500 191.300 187.300 191.857 196.986
FAA Grants-Faudcmen 1.0W0110 1.0m,000 1.000,000 1.000.000 1.000,000 LWU,000 1.000,000 1.000.000 1.000,000 I,000,000 I.WQOW
FAA Grnnu.Dscneawnury 4000.OW - 3,00,000 3,000.000
Sues Grnnu 150,0W _50.000 250.000 2.50,000 250,W0 250,000 750.(= 250,000 250;000 250,000 250,000
Cnma Cnntnbumn 12t70W 120,0(10 124001)
Interest 17,170 17.690 18,220 18.770 19,330 19.910 20,510 21.130 2I760 22410 23,080
TOTAL REVENUES AND SOURCES 5,884,750 2,209520 4910540 2,097,310 1.699540 1.586350 1,489,860 1,698,,790 1,314330 4,73-4,117 1,66L686
CCapitol Funded by FAA and State Grans 5.250.000 1.250.000 4.250,000 130,OW 1,250,000 1.50.000 1.250,000 1.250,000 1.250.000 4,250,000 1,250,000
Paseenga Ftictuy Change Projects 144.616 173,500 173.500 173,500 173,500 173.500 173.500 173,500 173.500 173.500 173,500
Capitol Pr9jedu frum Airport funding 12cow 120,000 IM000 120,000 12U,000 120,000 120,000 120,000 120,000 130,0110 120,000
Cn iul Pm ec(s fundefl by Private Contrianinns
TOTAL CAPITAL 5,514,616 L843500 4,SZ,500 1,843500 1543,500 1,543,500 1.5a.500 LaLL500 1,543,500 5,043,500 20,0500
CAPITAL ENDING BALANCE 370,134 366.320 367,11M 153.810 146,040 42.850 (i3,640) (144,710) ('_29,150) (308,383) (381.814)
TOTAL FUNDS AVAILABLE 616,485 L9,829 5T,956 346577 157,738 496.M7 M156 S16572 818.938 659.546 526,398
•New m manes include new land lease and thmegh dne fence fees
Asxumpnom'Opmamg revmcus utt.d 3%cach year Operaung rspeasn at0ate i 55e pa yur tnteent is 3%ni beginnin8 balance in ends year
Now:Deprcelatlon Expense 6 noted here In order on maintain a real operating cash balance
Resources Used in the Development of the Fort Collins-Loveland Airport Business Plan
C I. Airport Master Plan Update Smdc
2. Airport Minimum Standards for Commercial Aeronautical Services
3. Capital Improvement Plan
4. Intem_overnmental Agreement between the Cities of Fort Collins and Loveland 7)
FORT COLLINS• LOVELAND
AIRPORT