Chattanooga Metropolitan Airport on Monday received competitive proposals for a key 12.5-acre site that airport officials hope will generate much-needed revenues to offset a drop in commercial flights at Lovell Field.
Fixed-base operator Million Air proposed spending $6 million initially on a tract on the west side of the main runway to build 92,000-square-feet of hangar, storage and maintenance space. The Cincinnati-based group would construct more than 8,000 square feet of executive terminal, office and shop space and eventually add more individual and corporate hangars, according to the company's proposal.
But Tac Air, the airport's existing fixed-base operator, sought to block the entry of another fixed-base operator to the airport by making its own offer for the property without any immediate development plans. Texas-based Tac Air President Greg Arnold said in his proposal that more hangar space at the airport will be needed in the next three to five years.
He said Tac Air's lease offer provides more money to the airport immediately while not saturating the market with more facilities that may not be needed.
Airport President Mike Landguth said he and others will evaluate the two proposals.
Mr. Landguth didn't know how long the evaluation process would take, but he said the Airport Authority will need to sign off on any project.
Airport officials sought proposals earlier this year to help turn the vacant site into a money generator.
"Developing other sources of revenue is critical to us," Mr. Landguth said.
Cincinnati businessman Ken Allison, who has Million Air facilities in five other cities, has said that a hangar and terminal complex could reach an investment of $15 million to $20 million on the airport's west side.
In addition to revenues from fuel sales, the airport would receive 25 cents per square foot per year as part of the Million Air proposal to build a new fixed base operation.
In its proposal, TAC Air offered to lease the land at 29 cents per square foot.
Mr. Arnold said TAC Air is satisfying the needs of the market, and he said the company already feels the competition from fixed-based operators at nearby airports.
On Monday, airport officials presented a spending plan for the budget year starting July 1 that projects revenues to fall 2 percent to $5.7 million due a drop in the total amount paid by the airlines to use the airport. The number of flights into the airport has been cut as airlines revamp their schedules. Airport officials are proposing to raise a fee on fuel sold at Lovell Field from 7 to 10 cents per gallon. The airport is planning to cut expenses by nearly 7 percent.
Airport Authority member Bill Kilbride said there's no planned increase in landing fees for the airlines for the fifth consecutive year.
"A key goal was to keep the costs of the airlines flat," he said.
Dan Jacobson, Airport Authority chairman, said the airline environment is a tough one.
"Hopefully, this too shall pass," he said.
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Suitor Million Air's plan call for new hangars; but Tac Air would pay more rent for its existing space.
The chief executive for Tac Air, which supplies fuel and hangar space at Chattanooga Metropolitan Airport, Monday sharply criticized the idea of adding another, similar business at Lovell Field.
Due to unsolicited proposals, Chattanooga's airport formally seeks second FBO. Tac Air doesn't have exclusive contract.
Airport Authority members approved spending $385,000 for an engineering firm to design a taxiway connector, entrance roads, parking and fencing for the vacant tract just west of the main runway.