WESTFIELD – The City Council unanimously approved a 50-year-lease and a financial package as part of an agreement with investors who plan to make a substantial investment at Barnes Regional Airport.
Whip City Aviation LLC is leasing existing hangars, which need extensive repairs, and plans to build new hangar facilities for general or corporate aviation clients in the future.
The City Council is required to approve all leases longer than 20 years in duration. Most of the airport leases are for terms longer than the 20 year limit.
The lease is part of a package which also includes creation of an economic opportunity area and a special tax assessment to allow Whip City Aviation to recoup funding immediately used to rehabilitate five existing “T” hangars, a cost estimated at more than $300,000.
City Advancement Officer Jeff Daley said the repairs and maintenance made by Whip City Aviation to the T hangars is substantial cost avoidance for the city which has owned, but not maintained, the deteriorating facilities. Daley said the estimated hangar repair cost, at a minimum, is $313,000.
“If we did (the repair) ourselves, the cost would be much higher because the city would have to use prevailing wages for that work,” Daley said. “They are taking assets off our hands that we can’t maintain.
“And there will be an investment of $800,000 over the next 10 years to build two new hangars,” Daley said. “Over $1.1 million will be invested to make Barnes a better airport.”
“Both of the principals are pilots. Both have a passion for aviation. Both are successful business owners who have the capital needed for this kind of investment,” Daley said. “They want to bring a sense of community back to the general aviation population at Barnes.”
The two principles of Whip City are Dwight Klepacki and John Burke. Klepacki, of South Hadley, has been a pilot for more than 30 years with strong ties to the Barnes aviation community and is the owner of a metal fabrication business. Burke, a city resident, is a building contractor and developer, who has held a pilot license for the past six years.
Airport Manager Brian Barnes, in response to a question about airport hangar occupancy, said there is a waiting list of 30 people seeking hangar space at the airport.
Daley said that an appraiser who specializes in aviation-related property was brought into assess the value of the five existing structures which the city has been taxing based on a value of $285,000. The rehabilitation of those facilities will increase the assessed value, and with the addition of the new hangars, bring the total value to about $1.3 million at the end of the 10-year investment phase.
The estimated property tax on the five existing hangars for the 2015 fiscal year is $18,519.82
The economic opportunity area (EOA), a state program to foster economic development and job creation, was approved by the City Council to position the city to enter into a five-year special tax assessment (STA) under the state program.
The STA provides front loaded tax relief while Whip City makes the initial investment to rehabilitate the existing hangars. Whip City Aviation, under the terms of the STA, will receive a 100 percent tax abatement for the 2015 fiscal year. That abatement will decline by 25 percent for FY 2016 (75 percent) and 2017 (50 percent) and be set at a 25 percent abatement for fiscal years 2018 and 2019.
Whip City will pay $17,581.57 over the term of the five-year STA, in addition to the annual lease payment to the Barnes Airport Commission.
Klepacki said that there will be several indirect financial benefits to the airport as tenants are added to the existing and proposed hangars; including fuel tax revenue and landing fees.
“We’re trying to increase activity at the airport,” Klepacki said. “We’re trying to build a sense of community among pilots, encouraging hangar talk.”
Burke said that he and his family are active in Westfield outside his connection to the airport.
“I enjoy giving back to the community,” Burke said. “We’re trying to make Barnes a better airport.”
To see last night’s city council meeting, click here.
