Airport manager Bruce Loy: Penzel project depends on selling hangars

A $1.4 million project to construct new hangars at the Cape Girardeau Regional Airport has drawn some interest from airplane owners, but its feasibility remains in doubt.

Airport manager Bruce Loy said some members of the local pilots club have been critical of the project.

Much of the criticism, Loy said, has focused on a proposed long-term, land lease agreement between the city and private contractor Phil Penzel.

Penzel wants to set up a development company that would demolish a dilapidated, 18-hangar structure and replace it with a 26-hangar building without spending any tax dollars. The city council has embraced the idea.

Penzel would lease the land from the city for 40 years for a nominal fee, according to Loy.

Under the plan, airplane owners would buy their hangar spaces and have ownership for 40 years. As with condo units, owners could sell their spaces or rent their units to others, deputy city manager Molly Mehner told the council last month.

After 40 years, the hangars would revert to the city, a move that some plane owners have questioned, Loy said.

The plan calls for airplane owners to buy their hangars at a cost of $56,500 each, Loy told the airport board Tuesday.

At this point, three potential tenants have expressed interest in buying hangars, he said.

Those interested in the project are being asked to write $5,000 checks, which would be refundable if the project does not get off the ground, Loy said.

But even if the project proves feasible, Loy said after the board meeting, the Federal Aviation Administration would have to sign off on the plan before it could be implemented.

Penzel has said he wants to have at least 50 percent of the hangar spaces sold before proceeding with the project, according to Loy.

Hangar owners also would have to pay their share of the utility cost and insurance, Loy said.

The city has set a March 1 deadline for airplane owners to indicate whether they are interested in buying hangar spaces.

Loy said Penzel does not want to own the hangars and lease them to tenants.

Airport board member Joe Uzoaru said, “It is really prepaid rent.”

The hangar owners would only have ownership for 40 years under this plan, he added.

“It is a depreciating asset,” Uzoaru said.

He questioned whether such a plan would be able to force owners to do repairs on their hangars if needed.

But so far, he said the Penzel plan is “the best solution” to address a shortage of hangars,

City officials have said the city could become eligible for $1 million in federal grant funding if the airport reaches 10,000 boardings a year. But both Loy and Uzoaru said after Tuesday’s meeting federal regulations prohibit use of that money for aircraft hangars.

Loy said airplane owners are welcome to come together and build their own hangars instead of renting city hangars or buying Penzel hangars.

Uzoaru said he believes the council is “committed” to making capital improvements at the airport.

Council members have suggested airport projects possibly could be funded with future sales tax revenue if voters extend capital improvements and transportation sales taxes.

Several airport projects are listed in the city’s five-year capital improvements plan.

Airport board members listed terminal improvements, which could cost millions of dollars, as their top priority.

The first phase would include expanding the passenger holding area and adding bathrooms as well as repairing the leaky roof.

The second phase would include a new heating and cooling system, repairing or replacing cracked ceramic-tile flooring, and adding a computer lounge and possibly another ticket counter, Loy said.

mbliss@semissourian.com

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