AUSTIN, TX — Last September, Ascend Development of Hayward, CA signed a 30-year lease with Austin-Bergstrom International Airport to construct a private development that when built out will encompass some 230,000-square feet of prime hangar and office space. Ascend is operated by father/son partners Gary W. and Scott S. Briggs, who are taking their lessons learned from a similar development at the Hayward Executive Airport and recreating the concept here.
The development will be officially called PARKAVION.AUS; the complex in California is PARKAVION.HWD and a similar project at Stewart International Airport in New York is called PARKAVION.SWF. Scott Briggs explains that Ascend Development finances the initial start-up, along with getting financing via buy-in from initial customers.
“We pre-sell a number of the hangars,” says Briggs. “If you came to me today and wanted a hangar, you’d put down a deposit and then once construction breaks ground, you pay a percentage of your remaining balance based on the percentage of completion of construction, up until it’s done.
“What I’m offering is an alternative to the traditional FBO model, where you’re in a community storage facility and are buying fuel at retail with a discount if you’re a based customer. What I’m selling is a private hangar that is a real estate asset that you can sell in the future; you can lease out space to offset your monthly operating costs; you’ve got a preferred wholesale fuel program.” He puts the price tag on the initial largest hangars at $2.3 million.
While Ascend will not have rights to be a fixed base operator for transients at Austin, the company will have its own fuel farm — a key selling point to prospective tenants, along with the need for more corporate hangar storage in the Austin region.
Comments Briggs, “It’s an opportunity to reduce costs. If you’ve got customers who are used to paying $4-5 a gallon right now and they can cut their fuel price down by $1.50 a gallon … that’s a savings that offsets your operating costs.”
Ascend Development doesn’t retain ownership in any of the hangars, according to Griggs. He says that customers typically fall into one of three categories:
- the person or company that wants a hangar for their own aircraft;
- someone who buys it strictly as a real estate play, with whom Ascend can work to find lease tenants; and
- the customers who buy a larger hangar than needed for their aircraft, who have aspirations of moving into larger aircraft in the future or want lease tenants to offset operating costs.
Briggs says that the company has a number of Part 135 tenants in Hayward, and are open to such tenants at Austin as well. The only contingent is Austin’s restriction on transient traffic, which are served by current FBOs Signature Flight Support and Atlantic Aviation.
Under the agreement at AUS, Ascend development will pay a ground lease of 23 cents per square foot, along with a fuel flowage fee of ten cents. “The airport has been very open and understands what we’re trying to do, and realizes its value,” says Briggs.
“One of the downsides to all the boom in the industry is folks doing hangar developments and not understanding the industry and how it works. Our biggest asset is my Dad’s 35 years in the FBO business.
“We’re not real estate developers who saw this niche in aviation; we’re aviation guys who got into real estate development. We have to be very selective regarding the markets we go into. Obviously, are there enough aircraft to support it? But also, a lot of it is the terms, the ground lease, the fees.”