Saturday, March 26, 2016

Better Government Association Public Eye: Lansing Municipal Airport (KIGQ) a financial drain

Lansing has been home to a small airport ever since automaker Henry Ford built it in the 1920s.

Owned for the past 40 years by its village government, the Lansing Municipal Airport has become a drag on the south suburb, racking up losses totaling about $988,000 from 2010 to 2015, records show.

The airport, which has two runways, has relied on subsidies from the village. But that financial support has taken a toll. Citing airport losses, the Moody’s bond-rating agency cut the village’s bond rating two levels in 2013, to A3, making it more expensive for Lansing to borrow money.

Its credit rating remains “investment grade,” but Mayor Norman Abbott says the airport’s financial woes might cost the village a “couple million dollars” in higher interest if it borrows $10 million for a planned road project next year.

And now village officials say they can afford to fund only 59 percent of Lansing’s firefighter pension obligations and 48 percent of its police pension obligations.

The same year Moody’s cut its credit rating, Lansing bought an abandoned single-engine 1967 Cessna 210G airplane at a sheriff’s sale. The plane had sat in a hangar at the airport since 2008 and still can’t be flown. But the village has spent $28,000 to refurbish and insure it.

Abbott says the plane could be sold for a profit some day.

He says Lansing is investing in the 607-acre airport by repairing and upgrading facilities to make the operation profitable.

“There’s no sense in having an airport if we can’t make it go,” the mayor says.

For more than three decades, airport operator Associated Air Activities occupied a 10,000-square-foot hangar at the airfield, selling gas, repairing planes and offering flight lessons. In 2014, Lansing sued to evict Associated Air, saying owner Wade Palmer’s business remained onsite for seven months after his lease expired without paying rent or fuel fees totaling $9,000. By last June, the debt had ballooned to $26,202.

“We just weren’t making enough money to make payments. It was hard times at the airport,” says Palmer, who agreed that month to leave, turn over his two fuel trucks and surrender a standalone building south of the hangar in exchange for the village dropping the suit and no longer trying to collect past rent.

The village is in litigation with another tenant, Steve Leaven, the owner of Chicago Business Air Centers, which stored airplanes, pumped fuel, did maintenance and managed jet charters. Lansing sued to evict Leaven in June 2014, saying he owed $18,825 in unpaid rent for a year.

A second lawsuit followed in December 2015, accusing Leaven of owing Lansing more than $30,000 in fuel-pumping fees.

Leaven subsequently filed for bankruptcy protection early last year.

In February 2010, the owner of Shannon’s Landing, a restaurant and bar at the airport, sued after being evicted a year earlier for failing to pay $57,400 in rent. The owner said Lansing officials changed the locks and he was unable to retrieve merchandise from his office.

Village officials say they agreed to let him remove his gear from the building in exchange for dismissing the lawsuit, but they never received the rent money.

The owner and his lawyer could not be reached for comment.

In July 2012, a father and son sued the airport, saying airport manager John DeLaurentiis had allowed someone to take their airplane — a small-scale replica of the Navy’s F-4 Wildcat that was being kept in a hangar there. The village settled the suit in June 2014 for $6,000.

DeLaurentiis, a former deputy executive director of the Regional Transportation Authority, says his goal since starting as airport manager in 2008 has been to “get the place functioning like a business,” without requiring village subsidies.

“Ever since the village acquired the airport in 1976, there had been expectations that the airport would be self-funding and successful,” DeLaurentiis says. “But that never happened in the eyes of reasonable people.”

Original article can be found here:

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