Bob Malkas, former Manager of the Lansing Municipal Airport
The Federal Aviation Administration is relegated by the United States to oversee and coordinate all aspects of the national system. As part of their management policies all airports are first separated into categories so that the FAA can better serve their specific aviation purposes and needs.
Because the FAA understands the costs involved in administrating any one airport, as a benefit for the country’s future programs they have put in place a number of federal assistance vehicles to help an airport maintain itself in an efficient way. The Lansing Municipal Airport once understood this concept and was willing to play by FAA rules.
The Village went along as the official sponsor of the Lansing Municipal Airport and was rewarded with $35 million in grants to finance its development plans.
Lansing Municipal is listed as a reliever airport and vested with the purpose of diverting general aviation aircraft from primary airports like O’Hare and Midway. One project that would illustrate this FAA objective was when LMA was able to use federal and state funds to help finance the cost involved in opening property south of its east-west runway to fulfill its plans for erecting new T-hangars.
Infrastructure structure requirements are in place for constructing five new T-hangar buildings that would provide 50 separate units to house the aircraft of tenants interested in storing their aircraft. All units were claimed before the construction was started. A new source of revenues for the airport had been created at the lowest possible cost. The direction was set to continue utilizing all available grants to make the airport attractive and encourage new businesses and future revenue-earning opportunities.
It would be fair to ask if this goal has been reached. Have new revenues been created? Has the airport sponsor used its management practices to maximize the airport earning potentials?
Each Village budget addresses an annual projection of revenue expected from airport activities. In reviewing any one budget its revenue expectations could be analyzed.
One of the main sources of revenues is the business activities generated for the Village-owned 3259 building. At the March 21, 2017, Board meeting, the Village Board approved Resolution 996 that authorized the creation of a concession agreement between the Village and Midwest Aerospace LTD. The airport’s website explains Midwest as partnered with CAPSO International their MRO facility in Tucson, AZ. which supplies overseas military and civilian customers with US-made aircraft parts, avionics, and engines from its location at 3259 Airport Drive.
Midwest Business Center is also located in the same building and is advertised as being able to provide FBO support to visiting aircraft, passengers, flight crews, and corporate flight operations. The airport’s website establishes Windy City Aero as a separate business that offers aircraft repairs, maintenance, and marshaling, also operating from the 3259 Building. Records also show that other FBOs function from offices in the same hangar building — for example, Region Flyers has an office in the 3259 building. They opened their business in June 2017 and were given a Commercial Operator agreement. Regional Flyers lists its services as flight and ground instructions, aircraft rental, and sales of charts, books, and other related materials.
Summer Skyz is a helicopter training school and claims to be open seven days a week to provide all training needs — and yes, it is located at 3259 Airport Drive.
The Midwest Commercial agreement with the Village includes a provision that the concessionaire shall not sublease, assign, or contract any of the rights and privileges under the agreement with any third party without the consent of the Village and expressed written approval of the airport.
The airport’s annual budget projection establishes that their rent provides the airport with a payment of $3000 a month.
Until just recently Sun Aero operated a third helicopter services FBO. Their business activities were conducted from a hangar they had built on airport land in 2004 at no construction cost to the Village. Sun Aero found an additional revenue source by subleasing an office and hangar space to Enterprise Rent-a-Car at a monthly fee paid directly to them. Entering 2020 their rental charge was $1,162 dollars a month and could be listed as potential revenue. All other subtenants pay the airport $100 a month under individual commercial operator agreements.
Another airport source of revenue comes from hangar rentals. The Village owns and operates seven T-hangar banks with a total of 90 individual units. Each is occupied and providing the airport its main source of revenue. A close second is Lynnie Ques, the airport’s on-field restaurant.
At the May 18, 2015, Board meeting a new revenue opportunity was discussed and later approved. That resulted in the Village assuming control of the onsite aviation fuel concession as a way to provide a new stream of revenue. The Village recorded sales of 13,287 gallons of AV fuel and 1,903 gallons of jet fuel in the first six months of operations. The figures did not change much in the coming months.
Other revenues are generated but not significant enough to make positive moves that would make the airport self-sufficient.
Would the FAA agree that the use of space was enforcing their guidelines of using standards of fair market value?
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