The City of Kenai has proposed a 58 percent price increase to the Municipal Airport’s apron lease rates in the draft 2017 budget.
Finance Director Terry Eubank says the proposal will increase the annual rental rate from $.36 per square foot to $.57 per square foot for aircraft owners who park their planes on airport land.
Eubank: “When we look at the actual construction costs of preparing that land and then the maintenance of plowing, sealing, and crack sealing it and all of these things, we were significantly undervalued in the rental rates on those. And we also believe it’s been a detriment to development on the airport, why would I go buy a lot with a bunch of trees on it, have to clear it, prep it, pave it, and do all this work myself when I could rent a lot for pennies on the dollar from the airport.”
That increase is included into a gradual increase over the next four years which would bring lease rates to what is deemed market value of $1.21 per square foot per year by 2020.
Council Member Henry Knackstedt is a pilot also. He says the city is required to pay for all repairs and improvements now as opposed to before when the Federal Aviation Administration paid 94 percent.
Knackstedt: “Before we had the near assurance anyway that the FAA would help us rebuild that asphalt but when replacement time came, that’s not the case any longer. Since the city is leasing property it will not be available through the FAA for that improvement. So the city bears that replacement cost for it’s leased properties so the increase in rental rates will be necessary.”
The budget will be introduced to the Kenai City Council at their May 18 meeting.