Following a projected win for Pitkin County’s airport-related ballot question 1C, several key airport topics were up for discussion during a Wednesday meeting.
Fixed-base operator lease
The Aspen-Pitkin County Airport’s proposed fixed-base operator lease, which has been discussed for almost two years, was unanimously approved on Wednesday by the Pitkin County Board of Commissioners during a first reading.
Per the terms of the 30-year lease, Atlantic Aviation has already given financial commitments of $136.5 million in one-time capital investments and contributions, as well as an estimated $879 million in total estimated payments of rents, fees, and charges over the course of the lease.
The lease includes four ongoing revenue sources. The first is a yearly ground rent that starts off at $3 million. It will be adjusted annually by 4% or the Denver-Aurora-Lakewood Consumer Price Index (CPI), whichever is greater. The ground rent will never be less than the year prior.
There is a supplemental operating fee of $2 million. This is adjusted under the same terms as the ground rent.
At year 10 of the lease, and every five years after, there can be a reappraisal of the lease at market value. This ensures that rent will not decrease and provides an opportunity for prices to remain current, which was not possible during the previous 30-year lease agreement.
And the gross receipts fee requires Atlantic Aviation to pay 26% of gross receipts on all charges except for patio shelters. Patio shelters will be 85% after Atlantic builds these for the airport.
The base minimum annual guarantee (MAG) will begin at $14 million. MAG is meant to ensure a minimum revenue is coming into Pitkin County.
This amount will increase to $16 million following either the fourth year or after substantial completion of all the required improvements in the lease are completed. In addition to this step up, there is a 1.5% adjustment beginning on the first anniversary after the MAG adjustment date and on the anniversary every lease year thereafter.
There are also capital and community investments included in the lease, which include $105 million minimum investment for FBO redevelopment and eastside and westside development, $10 million for airfield redevelopment, which can be matched for Federal Aviation Administration grants for the portion that is not covered, up to $1.5 million for uncovered costs for Taxiway B on the westside, and $20 million in donor funds from Atlantic Aviation’s non-profit.
These investments are meant to target initiatives impacting decarbonization, aviation and airport support (including the Aspen Flight Academy), water conservation, affordable housing, and other community priorities.
Commissioner Patti Clapper noted that a really key point for the commissioners in their lease negotiations was continuing to service local pilots.
“That was really important,” she said. “So, I think that we really appreciate being completely incorporated into this.”
There are also requirements around sustainable aviation fuel and efforts to source that locally. The county and its partners are in the middle of completing a feasibility study, and once completed, Atlantic Aviation will have the chance to be a part of this process.
In October, the county received an award letter for a $200,000 match grant to do a regional sustainable aviation fuel study on the Western Slope. With the grant, Pitkin County’s other $200,000 match, and Mesa County’s $50,000 contribution, this brings the total to $450,000 for the study.
Other financial terms of the lease include a security deposit equal to three months of the MAG payments, which is $3.5 million and a construction bonding requirement for projects over $500,000.
The MAG is estimated to escalate between $14 million and $23 million over the course of the lease. The ground rent and supplemental operating fee will go from $5 million to just over $15 million over the course of the lease, which puts revenues between $19 million and $38 million.
“These are the secure revenue sources in the lease,” Pitkin County Manager Jon Peacock said. “Our interests are well protected.”
This puts the total commitments within this lease agreement at just over $1 billion over the 30 years of the lease. The percent of total revenues that are in ground lease use fee and minimum and annual guarantee makeup just under 96% of those ongoing revenues.
Airport layout plan
The airport layout plan, returned from the Federal Aviation Administration in October, also received unanimous support from the Pitkin County Board of Commissioners.
The Federal Aviation Administration (FAA) returned the Airport Layout Plan (ALP) to Pitkin County with no material changes.
If the ALP is signed by the county commissioners following a second reading and public comment scheduled for Nov. 20, it will be sent to the secretary of the FAA. After the secretary signs the new ALP, it will officially be approved for the Aspen-Pitkin County Airport.
For the runway and terminal update, Airport Director Dan Bartholomew said the approval of the updated ALP is just the first step before any action can be taken and approved by the FAA.
“As you all see, this is just the beginning. Maybe we’re just in the middle of the beginning. We got all the way to the two-yard line. Now all you got to do is punch it the other 98 yards,” said Brad Jacobsen, co-founder of Jacobsen|Daniels, the aviation consultant working on the ALP.
National Environmental Policy Act (NEPA) evaluations on certain projects still need to be completed focusing specifically on air quality, noise, climate, and traffic.
“I think it’s a good reminder for the community and for us, especially as we come out of what was a contentious election season, as we’ve gotten direction to move forward with this project,” Peacock said. “We also remain committed. Staff is still working under direction from this board to honor the vision committee recommendations, including the environmental goals.”
Clapper also noted that community involvement and discussion will be incorporated throughout the NEPA process.The ALP is available for the public to review on the third floor administrative offices of the Pitkin County government building.
Rates and charges
Airport rates and charges were also unanimously approved by the county commissioners.
Next year’s rates and charges show increases in rent rates and decreases in landing fees.
Pitkin County sets rates and charges through a “compensatory” methodology that focuses on the airfield and the terminal, meaning airport users pay for what they use — like occupying space and landing on the runway.
The signatory landing fee will decrease 10%, from $7.75 in 2024 to $6.98 in 2025. Seasonal landing fees will decrease from $10.85 to $9.77. The general (private) aviation landing fee will decrease from $9.18 to $8.41. Locally-based general aviation will not see a change. Fuel flowage fee per gallon will remain the same at $0.14. Airline terminal shared space rent per square foot for all airlines will increase from $115.60 to $129.36.
The FBO lease, ALP, and rates and charges will all undergo a second reading and public hearing on Nov. 20.
Regan Mertz can be reached at 970-429-9153 or rmertz@aspentimes.com.