At the beginning of Tuesday night’s joint Manhattan commission and Manhattan regional airport advisory board work session in city hall the fate of the Manhattan Regional Airport’s fixed base operations (FBO) unit was in flux, and by the end of the night’s efforts a clear answer seemed still out of sight. However, city staff now have direction from the commission to find specific answers towards resolution of the issue.
The city is juggling the need to properly fund the facility with government mandated guidelines which require the facility to continue operations at the airport. Those operations include maintenance, and other support programs necessary for the airport to function on a every day basis.
According to city staff this limits some options for facilitating the funding for the project as it is operated by the privately owned Kansas Air Center. This pairing of the public and private is proving problematic as the commission seeks to keep debt obligations down, and still continue to support the FBO. According to city staff there is a concern that a default by the private owner on a loan which would have to be guaranteed by the city, and would necessitate keeping funds tied up to cover the liability.
Mayor Wynn Butler raised the option of using the city economic development fund to cover the million dollar building using payments back into the fund from the private operator. This was met with concern from commissioner Karen McCulloh who had issue with how much money is flowing into the airport that could be used for other programs. McCulloh stated that the economic development was quickly becoming depleted, and perhaps more thought might be needed before using the money to purchase the building.
Commissioner Rich Jankovich posited the bank mentioned in the option who needed the city to guarantee the loan might be more amenable to other options if some sort of half-way consensus was reached where the city paid for part of the construction, and the other half was privately funded by the operator. Jankovich said the bottom line is the FBO must be moved, and the city has to work with Kansas Air Center to find a solution.
In the end the commission working alongside the airport advisory board decided to direct staff to look into three options. Option one would be to find a better deal with the bank that reduced city exposure during the financing process. The second option would be for the city to just construct the building out of pocket on a bond, and lease it back to the company. The third option is using economic development funds to build the building, and the operator would make payments back into the fund.
City manager Ron Fehr indicated the process would be a complicated one, and could not forecast when the city staff would put the issue before the commission for a final resolution.
