City seeks operator to develop airport and pay $1.2 million debt - with tough restrictions

The master plan says the airport can accommodate 250 aircraft, butCity Manager Peter Weiss said the likelihood of more than 190 aircraft is remote.

The final number of planes would depend on the layout proposed by the bidder and accepted by the City Council, Weiss said.

For example, more maintenance hangars means fewer hangars for aircraft. The shape of the hangars, as well as the space between them also influences the number of planes, he said.

The city's request for proposals says the operator must ensure there is a maintenance hangar, at least 50 hangars and 40 tie-down spaces on the south side of the field.

The airfield now has 34 hangars, some new and some decrepit, and 55 tie-downs.

The city's request for proposals says the vacant land north of the runway should be developed in accordance with the master plan, which lacks specifics on that subject.

The airport operator also is expected to pay back $486,000 the airport owes the city's general fund for subsidies throughout the years and to assume a $740,000 loan that was used to build 11 hangars.

If the master plan improvements are made within eight years, city consultants say the airport could realize about $733,000 in annual net revenue.

The airport operator can look at the fiscal 2006-07 budget for guidance. Operating costs for the airport ran about $473,000.

"We ended up in the black this year," said Gary Gurley, city general services manager, even though an $80,000 deficit was predicted.

Hangar rents have been raised significantly to bring in more revenue.

Worth the chance?

Rene de Lathauwer, a private pilot and chairman of the Oceanside Airport Association's political action committee, said he doesn't see any private operator willing to do all that the city is asking without income from a flight school or aircraft rental.

That doesn't mean no one will bid on the package, de Lathauwer said.

"You always bait your hook with the biggest worm," he said of the city's stance. "It's part of negotiations."

Association President Ben Meyers said, "My sense is folks will bid, but they will propose some options that might exclude or modify" the city's stated restrictions.

With no revenue other than hangar fees, fuel sales and the restaurant, there is no way an operator can stay in business, Meyers said.

"We see these restrictions as egregious," he said.

Meyers said he estimates the proposed improvements will cost $6 million to $10 million. Gurley predicted the cost of the total buildout at $13 million to $15 million.

The city's demands are "kind of over the top," said Pete Sandhu of Union City, an airport operator who made a presentation to the council more than a year ago about taking over the field.

Sandhu and his partners operate David Wayne Hooks Airport north of Houston.

"It's the kind of deal that cannot be won. It's an excuse not to support an airport," he said of the city's plan.

"It's just too onerous a lease" to ask a private operator to sink so much capital into the airport and only have 20 years in which to earn it back, he said.

City Councilman Rocky Chavez, a longtime supporter of keeping the airport open, voted with the council's unanimous approval of the stringent conditions. Chavez agreed with de Lathauwer and Meyers that there is always room for negotiation.

"The council is committed to building the airport," Chavez said. "If we have to negotiate to build the airport, we will negotiate."