The additional revenue city staff’s recommendation could have produced is roughly half the $100,000 budget shortfall that is currently filled out of Steamboat’s general fund.
Correction: This story has been updated to correct the spelling of Les Limon's name.
Steamboat Springs City Council extended leases for two aircraft hangar owners on Tuesday, dismissing a recommendation from city staff that would have generated roughly half of the current budget shortfall at Steamboat Springs Bob Adams Airport.
That $100,000 per year shortfall is currently filled by Steamboat’s general fund.
The city owns the land at the airport, but many of the hangars are privately built. To build a hangar, an owner or developer needed to execute a ground lease with the city. Ground leases for hangars at the airport contain a reversion clause that transfers ownership to the city when the deal expires, a provision that is recommended by the Federal Aviation Administration.
In this case, deals on two hangars closest to the airport’s fixed base operator expired at the end of October, and were extended through the end of the year so City Council could weigh in. On Tuesday, Council directed staff to extend those deals another year in a 5-2 thumbs-up vote, rather than letting them expire and triggering the ownership change.
“The majority would entertain some sort of extension in order to basically go back and try to move forward on figuring out how we can honor the local commitment and address the potential subsidy issue that’s on the table,” said Council President Gail Garey, suggesting that council “punt” on the issue for now.
Garey joined Council members Joella West, Amy Dickson, Dakotah McGinlay and Steve Muntean, who each expressed their support for delaying the issue, though it took a while to coalesce around a one-year extension. Council members Michael Buccino and Bryan Swintek objected, each saying the city had the right to exercise the reversion in the contract and that they struggled to understand how the situation would be any different in a year.
(After public comment was taken, West said she has a personal relationship with one of the aircraft hangar owners Les Limon, including flying on his plane. Council did not discuss the relationship further and the city’s ethics code does not specifically address personal relationships, rather it is up to Council’s discretion. “Whatever I say you can take with a grain of salt, I am trying not to play favorites here but to really be objective,” West said.)
The Steamboat Springs Airport has about 12,000 operations in a year, with one operation being a take-off or landing. About half of those operations involve aircraft based locally. According to Steamboat's 2022 community survey, 82% or residents said they had never used the airport, while just 3% have used it more than once a month. The airport charges fees for various services and fuel, in addition to several ground leases, but that is not enough for it to pay for itself. When looking at operations alone, Steamboat Public Works Director Jon Snyder said the city uses about $100,000 in general fund revenues to be able to keep the airport open.
The shortfall was a concern for council, but some said that shouldn’t be considered as part of this decision. Muntean questioned whether they would even be considering allowing the ground leases to expire if the airport broke even. Garey said this decision really was connected to a larger policy decision about the future of the Steamboat Springs Airport that council has yet to make.
Staff recommended taking ownership of the hangars as outlined in the land leases and then renting them back to the current tenants, which would make additional revenue for the airport. Had council gone with staff’s recommendation, these two hangars could have generated nearly $55,000 in 2024, according to staff projections. Instead, another year of land leases will generate about $7,000, a difference of about $48,000.
City Manager Gary Suiter, who has previous experience managing airports, said what staff presented was a business decision, and council wasn’t being asked to fill the airport funding gap right now. Suiter said in his past experience, this would be an administrative decision, but Steamboat’s City Charter requires Council to approve all leases.
“There’s some spin going on here, because the 30-year leases and the reversion is really common in airports,” Suiter said. “It’s a contract, it’s the terms of the contract. Kind of a no-brainer to us.”
Swintek said he was struggling to understand why council was considering going against the staff recommendation, saying that he feels some are viewing the situation differently because the city is acting as the landlord in this case.
“This is a contract like [Suiter] said and we have the right to exercise it,” Swintek said. “What is another year going to change? … I would love to hear specifically what exactly needs to be learned and known to change the decision, because I feel like all it is, is a discomfort rather than making a decision.”
Staff proposed one of the four hangar bays could be used for “transient aircraft,” which is a plane that may be in town for a handful of days. Staff projected this bay could generate $40,000 a year.
There is just one other bay for transient aircraft, but there is also a long waitlist to house additional aircraft at the airport long-term. Garey and Dickson each said they wanted to prioritize local pilots before offering hangar space to transient aircraft, while West said she wanted to understand these transient aircraft better.
In public comment, hangar owners lobbied for council to extend the ground leases, saying they have invested in their hangars. Limon owns his hangar and the other hangar is used by Mountain Aircraft Maintenance, which rents from the owner. Staff proposed that the city lease the hangars back to the current tenants.
“The hangar is being taken, that is my view of what is going on here,” Liman said, who owns TwinEnviro Services and ACZ Laboratories locally. “My airplane in the air does support about 200 jobs in the county. … I would like to renew my lease.”
Top Photo Caption: Mountain Aircraft Maintenance is one of the tenants in the two hangars subject to a revision clause in the ground leases. (City of Steamboat Springs/Courtesy)