Memorandum
City of Lawrence
Public Works
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TO: |
David L. Corliss |
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FROM: |
Charles F. Soules |
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CC: |
Diane Stoddard, Cynthia Wagner, Mark Thiel, Steve Bennett, Roger Zalneraitis, Ed Mullins, Jonathan Douglass, Airport Advisory Board |
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DATE: |
February 8, 2011 |
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RE: |
Airport Advisory Board Request Qualification Statements for Engineering Design Construct New T-Hangars At Lawrence Municipal Airport |
Project Background: The Lawrence Municipal Airport offers T-hangars for lease to pilots to park/store their aircraft. Currently there are thirty (30) hangars which are and have been full since they were built. The newest units were constructed in 2003. The City maintains a list of people who have shown interest in leasing a T-hangar and there are currently forty-one (41) people on the “waiting list”. The City and Board Members regularly receive requests to lease a hangar but do not request to be added to the list as it is too long.
On January 11, 2011 the City Commission received a proposal from the Airport Advisory Board to construct new T-hangars at the airport. The Commission had questions about the financial analysis spreadsheet including: maintenance and utility costs/ insurance costs/ property tax and fuel flowage/ time frame of when other T-hangar bonds paid off; and how the proposed rental rates compared to other airports.
Project Description/Status: For the last year the Airport Advisory Board has been planning the construction of a new set of twenty (20) T-hangars. Twenty-five positive responses were received from people on the T-hangar waiting list who were ready to move into a hangar, if available, at the proposed/estimated rate of $255/month. The need for additional T-hangars has been consistent but construction costs and financing have not been favorable to keep leasing costs reasonable. With the turn in the economy we have seen construction and financing costs decrease and it is now feasible to proceed with this project.
Project Costs:
Estimated project costs include:
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Two 10-unit T-hangar buildings |
$ 870,000 |
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Site grading and taxiways (asphalt) |
409,075 |
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Engineering / Inspection / Administration |
99,000 |
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Total |
$1,378,075 |
Analysis: Roger Zalneraitis has reviewed the project proposal and discussed length of financing options with Ed Mullins. Attached is a memo and spreadsheet that has taken into account the revenues from existing T-hangars, fuel flowage fee, property taxes, estimated construction costs, bond terms and interest rates, insurance and maintenance costs and projected/recommended rental rate for the new T-hangars.
Through the development of the Airport Master Plan it has been identified that there are 109 airplanes registered in Douglas County and 860 registered in Johnson County. Attached is a survey of area hangar rental rates.
Recommendation: The Board and staff agree there is a need for more T-hangers and that they should be self sufficient, need to have full occupancy to be successful, and need to be affordable. Staff recommends this project with a 12 year bond and estimated $255/month rental rate, although the market will determine the appropriate rental rate. In addition the estimated rental rate may change if construction costs are more/less favorable than expected. If the costs are substantially higher the Board and Commission would need to review whether or not the projected rental rates are sufficient and if the project should proceed.
Action Requested: Pending City Commission discussion, if appropriate, authorize staff to request Qualification Statements for Engineering Design Services for 20 new T-hangars at the Lawrence Municipal Airport.
Respectfully submitted,
Charles F. Soules, P.E.
Director of Public Works
CFS/je
Attachments:
Airport Advisory Board Request
Economic Development Coordinator – Memo and Project Analysis