St. Cloud City Council Approves Moving Airport Operations from City to New Entity

ST. CLOUD — St. Cloud Regional Airport has been underperforming for years. But officials hope a new operating structure will help the airport take flight.

St. Cloud City Council on Monday unanimously approved authorizing the creation of an airport authority, which will move airport operations from the city to a new independent entity.

"It's sign certainly says it's regional — but the reality of it is it was municipal," Mayor Dave Kleis said at the meeting, where the council approved the resolution on a 6-0 vote; Council member Dave Masters was absent.

Sherburne, Benton and Stearns counties recently approved a joint resolution to create the airport authority, paving the way for St. Cloud to take action Monday.

Sherburne County commissioners unanimously approved the joint resolution Dec. 17. Benton and Stearns county boards passed the motion with slimmer margins.

Benton County commissioners approved the joint resolution Jan. 21, with commissioners Warren Peschl and Spencer Buerkle voting against the motion.

Stearns County commissioners approved the joint resolution Feb. 11, with commissioners Steve Notch and Jeff Mergen voting against the motion.

Some of the nay-voters cited concerns with property taxpayers on the fringes of the counties who might not benefit from the airport as much as businesses or residents closer to the airport — and some were uncomfortable handing off taxing authority to non-elected officials.

Once established, the new governance model will have authority as a special taxing district, with full authority to manage and operate the airport. It will own the airport and all assets associated with it.

The governing board will consist of nine commissioners, who will serve without compensation. Each jurisdiction will appoint two commissioners — who are not elected county or city officials — and those commissioners will together appoint a ninth commissioner.

Kleis said there are no specific eligibility requirements for candidates but said officials are looking for the commission to have a balance of expertise in aviation, airport operations and business development.

Before the airport authority is officially established, the Federal Aviation Administration needs to approve the arrangement; the review process could take anywhere from one year to 18 months, according to city officials.

City officials expect the jurisdictions to appoint the board of commissioners soon to "expedite a smooth transition," agenda documents state.

Leaders in the St. Cloud area have worked for years to move airport oversight away from the city to a regional authority. The goal was for the airport to be self-sustaining and require no property taxes, as well as better serve businesses and travelers.

"I'm very excited about the opportunity for this to grow," said Council member Mike Conway. "This is going to give us a wider base to attract commercial ... traffic."

Three years ago, the Legislature provided $250,000 for a study on how to optimize the airport. The city and Greater St. Cloud Development Corp. acted as administrators for the study, which was completed in January 2019.

The study showed the airport could increase its economic impact if managed with a "enterprise-wide business mindset."

The airport was built in 1970 and served mostly general aviation or charter aircraft flights until 1993, when the airport started serving commercial flights.

Allegiant Air began providing service to Phoenix in 2012 and to Punta Gorda, Florida, in 2017. Sun Country started offering charter service to Laughlin, Nevada, in 2015. United Airlines also provided a short-lived service to Chicago from May 2014 to February 2015.

The airport is the sixth-largest airport in Minnesota, following Minneapolis-St. Paul International, Rochester International, Duluth International, Bemidji Regional and Brainerd Lakes Regional.

Despite its size and services, St. Cloud Regional Airport has struggled to compete with the larger hub at Minneapolis-St. Paul, which is only about 80 miles away by car.

The airport has been operating at a loss — subsidized by the city — which was estimated at $875,000 in 2018.

The study found the airport is an important regional asset — with an annual economic impact of $44.2 million in three counties — but has multiple opportunities to improve business operations and increase revenues.

Suggestions to reduce the deficit include instituting rates for parking, enhancing fixed-base operator operations, focusing on new corporate tenants, re-establishing aviation programs in conjunction with area colleges and increasing the frequency of existing flights or adding new destinations.

Once the regional authority is established, St. Cloud will still pay $620,200 annually for operating expenses for 10 years to support the airport through the transition. The city has also committed to invest in the airport's capital needs through an allocation of local option sales tax of $200,000 annually, which amounts to $4 million through 2038.

The city will also continue to provide staff support and fire and police services for 10 years up to the current levels.

After 10 years, the city will be removed as a member of the airport authority; the board will then be reduced to seven commissioners.

Jenny Berg is the cities and schools reporter for the St. Cloud Times. Reach her at 320-259-3680 or [email protected]. Follow her on Twitter @bergjenny.

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