Addison - An Isle in North Dallas

ADDISON, TX — In 1957, Henry Stuart and other local aviation enthusiasts developed Addison Airport, later selling it to the Town of Addison in 1986. It is an airport of some 371 acres in the midst of a north Dallas suburb that measures only four and a half square miles — most of which consists of offices and restaurants, swelling the population of some 14,000 to more than 100,000 during the daytime. The question for Addison Airport director Lisa Pyles, A.A.E., is, how does one lead an airport that represents all aspects of general aviation — old and new — toward what appears to be a pre-ordained future as a business aviation center? And, how does one come to terms with that history, most evident with through-the-fence operations that stifle the drive to push forward?

The airport has always been managed by private interests, first by the Stuart group and, as of January 1, 2001, by the Washington Group International, which employs Pyles.

For most airport managers, development is the word at the top of the ‘to do’ list. At Addison Airport, it’s redevelopment. “It’s a little different than some airports,” explains Pyles. “We are almost 100 percent developed. Here, we’re redeveloping the airport.

“You’re dealing with an airport in which you can’t come in and make wholesale changes; you have to kind of work within the infrastructure and the parameters that are here. That’s not a bad thing.”

It can, however, prove to be a challenging thing. When Pyles and the Washington Group took over management of the airport, she relates, the first order of business became determining what was what in terms of leaseholds and rates and charges. Prior records were, at best, incomplete, says Pyles. The airport that was once privately owned and operated still held an air of secret handshakes, lacking well-defined rates and charges — most evident today in a legal dispute over charges for through-the-fence operations.

Says Pyles, “What we have done in four and a half years is, all of the leases have been put into the proper files and all the holes have been plugged. They’re all now on what’s called Facility Wizard — you can go in and click on a particular parcel and you’ll know what the history is; when it was built; if there’s a hangar or whatever; whether or not the town owns it or the tenant still has ownership; what revenue it’s bringing in; how many square feet; the office space; what’s the period of obsolescence.

“The town really knows now what they own. In the past, it was kind of a guess. It’s taken a few years to get all the information in order.”

First and Foremost: Self-Sustaining

In all, Pyles estimates that Addison Airport is host to more than 150 businesses, from self-employed individuals who operate one aircraft to large corporate tenants such as Frito-Lay, to two fixed base operations. In fact, it could be argued that it was the Million Air FBO, long the franchise’s headquarters [since relocated to Houston Hobby], that put Addison on the business aviation map in the mid-1980s. The other FBO is First Air, which recently merged with the former Mercury Air Center.

“The makeup of the airport is turning more and more to business/corporate use,” explains Pyles.

Estimates put the economic impact of Addison Airport at some $612 million annually, according to Pyles, creating more than 2,300 jobs.

The array of business activity puts airport administration officials in an enviable position for a non-airline airport: it operates with an annual surplus. Pyles puts annual airport revenues at $4.4 million; the airport operating budget runs about $1.5 million annually. After expenses to cover the capital budget, Pyles estimates the airport is able to put aside some $1 million annually for reserves.

“It is a self-sustaining airport,” says Pyles. “It’s a good position to be in. We’ve got some substantial capital needs, but it does help, rather than having to go to the airport sponsor every year to beg for money.”

Pyles’ staff oversees some 400 leaseholds on the airfield, few of which will come to term in the near future. She anticipates that any significant redevelopment will begin when larger parcels come to term during the next decade. As that evolves, it is expected that the focus at Addison will be more and more on business aviation, in line with much of general aviation.

“We still have private owners who are using it for recreational purposes,” explains Pyles, “but it’s a lesser amount all the time.

“Some of the comments we’ve gotten is that we don’t care about the little guy, which is typical of an airport undergoing change. This year, we did our first rate increase in five years. We have done a lot of improvements where the T-hangars are located; we’ve built new doors, repaired roofs, put in new pavement. No one can say we’re only doing improvements where the big guys are.”

Business-Friendly Philosophy

The Washington Group Interna-tional is coming up on its first five-year review of its performance in September. The airport management contract it has with the Town of Addison has the potential to run another 35 years, according to Pyles.

Prior to arriving at Addison in 2001, Pyles was the aviation director for the City of Ft. Worth, overseeing three general aviation facilities. She says she sees little difference between private and public sector management, with the possible exception of taking a more hands-off approach with based businesses.

“To me, it’s just a different way of managing the airport,” says Pyles. “I’m not one of those airport managers who thinks that if you’re going to privatize it means I’m losing my job. I’m not afraid of privatization.” Since her arrival, minimum standards have been put in place. Facilities on the airport revert to ownership of the sponsor at the end of term, and Pyles estimates Addison has some 15 corporate hangars which it now owns. “We lease those on a shorter term basis than the 30 or 40 years you would get if you built your own hangar,” she says.

Pyles describes the philosophy of WGI and the Town of Addison as business-friendly. “We don’t do a lot of telling people what they have to do,” she relates. “We believe that they can run their businesses better than we can. We just make sure they don’t do anything that make us violate the grant assurances. Other than that, an FBO decides what his hours of operation are; how many employees he has; what services he provides.”

An Ongoing Challenge: Through-the-Fence

With the history of Addison Airport comes the legacy of through-the-fence operations on the airfield’s west side. In theory, aircraft operators who use the airfield must pay for that access, as directed by the Federal Aviation Administration, which has a history of discouraging through-the-fence operations.

Pyles relates that when WGI took over the management it became evident there was no clear accounting of who was paying what for that access. As a result, WGI implemented a new system of rates to guarantee each company using the airfield was paying its fair share. That led to a lawsuit which is currently in appeal.

Explains Pyles, “We used fair market value [to calculate the fees]; the plaintiffs objected to that. Interestingly, the state district court ruled in their favor. It’s under appeal because we still believe that our fee is fair.”

WGI’s formula calls for a minimal annual fee of $1,000 for through-the-fence operators, and is based on how much square footage of a business is dedicated to aviation usage. Users were asked to submit their own numbers to calculate the fee. Pyles estimates that the formula breaks down to about 22 cents per square foot, or half of what on-airport tenants pay.

“We didn’t contest whatever they thought their aviation use was,” says Pyles. “What they contended was that we should have based it on the cost of running the airport and not on their fair market value. The FAA’s opinion, which we have in letters from FAA, is they don’t care how we calculate it as long as it’s fair.

“Currently, there are some who are not paying the fees at all, and there’s not much we can do. Over the years there was either an understanding — or a misunderstanding — that they have a perpetual right to use the airport for free. FAA is very clear that if you’re going to have through-the-fence operations, they have to pay their fair share. It can’t be free. When the town took over ownership, that became an issue that has never been resolved.”