In the Black, Moving Ahead

In The Black Moving Ahead

By John F. Infanger, Editorial Director

January/February 2001

Having direction proves a catalyst for Riverside Municipal Airport



"The situation was kind of bleak," recalls Sabatello. "They looked at selling the airport but decided they couldn't because they would have had to repay $20 million or so to FAA because of its investment."
The city hired Sabatello to bring a new market-driven approach to the airport while charging him with eliminating the annual subsidy the airport required from the city sponsor. It coincided with a citywide economic development initiative that sought to incorporate the airport into its efforts. As a result, the airport's redevelopment zone is being coordinated hand-in-hand with the city's redevelopment territory.
"When I got here," says Sabatello, "the operations deficit was a couple of hundred thousand dollars. The capital budget was $1.1 million in the red. Today, we're netting about $100,000 a year on the operations side, and the capital budget debt ratio has gone from 30 percent to 12 percent."
From the outset, Sabatello saw his initial challenge as two-fold: 1) eliminate the deficit by finding new sources of revenue; and 2) rebuild the infrastructure into one that would be attractive to corporate aircraft users.
Sabatello initiated a 4 percent hangar rental increase, which he says was still below market potential but helped calm concerns from the general aviation populace on the airfield. "We didn't want to put the recovery on the backs of the based users," he explains.
Turning around the city's attitude toward the value of the airport and giving it a market-oriented approach was well underway when Sabatello arrived. However, he soon realized that another barrier existed that stood in the way of creating an updated master plan for the airport.
"The airport commission was used to doing things a certain way," he says, "and was acting very much like an airport authority. In fact, it was only an advisory group." It took considerable time to clearly define who had what role, he says, but in time a direct channel from his office to the city was created.

GENERATING REVENUES
The agreed upon direction for Riverside Municipal was to turn it into a 21st century business airport that could help attract corporations (and users) to the community. That first required sprucing up the terminal building, which once served commuter carriers.
Without any commercial airlines to help pay the way, Sabatello began to look for creative ways to generate revenue. "We realized that aviation never pays for itself at a non-commercial airport," says Sabatello, "so we had to develop our niches for revenues, which is (non-aviation) leaseholds."
Sabatello is a retired Army Major who had experience with airport development as airfield commander of Biggs Army Air Base, which lies adjacent to El Paso (TX) International Airport. There, he worked with El Paso officials on determining how the two airfields could be jointly planned so that economic development opportunities could be capitalized on by the public airport.
Some of the initiatives to generate income by Sabatello's office:
• A detailed audit revealed that the airport was owed $700,000 by FAA, which it subsequently paid.
• Airport property being used as a driving range was turned into an 18-hole golf course by an outside developer. "As a driving range the airport was getting $1,200 a year," says Sabatello. "The golf course brings us $50,000 a year."
• The Harvest Christian Fellow-ship Church, which sits adjacent to airport property, was parking constrained. Sabatello leased the church property which it developed for parking and then leased it gate access. Revenues: $23,000/year for the property; $1,000/month for gate access.
• A marketing offer for three months free hangar rental quickly helped fill 25 empty spaces.
• Attracting Embry-Riddle Aero-nautical University's West Coast office from San Diego as a tenant.

NEXT UP: A MARKETING PUSH
The updated master plan completed by Coffman Associates, Inc., was approved by the city in 1997. It calls for some $27 million in improvements, most of which are eligible for Airport Improvement Program funds (see graphic). One key component is extending the main runway (9/27) to just over 6,000 feet, with overruns creating a safety zone to 8,000 feet, according to Sabatello.
Top on the agenda for 2001 is getting the word out. "This is our marketing year," he says.
The primary target: corporate flight departments and an increased number of based aircraft. In particular, Sabatello says there is potential in the Los Angeles market some 60 miles to the west due to congestion and increasing difficulties with neighbors at various airports. Ideal prospects, says Sabatello, are the corporation looking to relocate or expand, particularly as a based customer, and aviation service businesses. Property is available for development.
An Executive Summary of the new master plan has been created, as have various other brochures related to airport benefits. A coordinated economic development program has the airport, local development agency, and the Chamber of Commerce working jointly to attract business.
By 2005, Sabatello expects the runway extension and a $2.8 million (funding pending) parallel taxiway to be completed, along with a corporate hangar complex which should break ground this year.

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