Steamboat Springs Bob Adams Airport will use $492,000 from the city’s general fund in 2024 to support operations, up from $174,000 in 2020.
Sidestepping a nearly half-million-dollar operating deficit at Steamboat Springs Bob Adams Airport in 2024, City Council signaled it would renew a ground lease for one of the oldest hangars on the field Tuesday — a move that mirrors a decision from a year ago that lost the city grant funding.
The city has the option to take ownership of the hangar, called Corp 1, through a reversionary clause included in the initial 30-year ground lease. City staff recommended they do just that, and spur additional revenue by renting the hangar back out to visiting pilots on a short-term basis. Planes that are not based in Steamboat represent about half the traffic at the airport currently.
But Council members indicated that they were not interested in supporting the needs of short-term or “transient pilots,” instead feeling the airport needs to focus on serving local pilots first, even if that is less profitable for the city. Additionally, Council indicated it wanted the city to waive its right to own the hangar and instead to renew the ground lease through 2029.
Mentioning the looming Stagecoach Mountain Ranch development planned in South Routt County — a private ski and golf community of mostly second homes appealing to the ultra-wealthy — Council member Joella West questioned whether making more space for transient pilots was “another step in turning our town into Aspen.”
“When I hear turning an airport hangar into a transient rental, the first thing I hear is not how much money is going back into the operating funds of the airport,” West said. “It’s well, that is the door cracked right open… Here we are, opening the door to the lifestyle of the Aspen-occasional residents.”
“We have 60 plus people who are on a waiting list, I assume some of them are residents or part time residents,” said Council President Gail Garey, referencing a list of people interested in a hangar on the field. “I would prioritize them over transient planes.”
Council member Steve Muntean suggested extending the lease five years, aligning its expiration date with a series of other hangars on the field. This allows the city to create a clear policy around how to deal with expiring hangar leases in the future. (This lease is the first to expire at the airport.) This was supported in a 5-1 thumbs up vote, with Council Member Michael Buccino the only one opposed.
“I think we need to sit down and come up with what is the renewal program for people whose leases are going to expire and put them in the lease,” Muntean said. “Once that’s in place, then we can work on trying to figure out ways to try to make this more financially stable.”
Council made a similar decision a year ago, opting to extend the ground lease from October 2023 when it originally expired to the end of this year. Council’s decision to not exercise the reversionary clause at that time resulted in grant funding from the Colorado Department of Transportation to be pulled back, Airport Director Stacy Fein told Council on Tuesday.
The grant funding was awarded in 2023 to sealcoat areas around the hangars, but pavement near the Corp 1 hangar was too deteriorated and needed more extensive repair. When Fein asked CDOT if the city could repurpose extra money from the grant to replace the pavement, the state agency said no.
“They said no, we’re not going to give it to you because the Council didn’t exercise the reversion of those hangars,” Fein said. “There are grant assurances, (Federal Aviation Administration) and CDOT grant assurances, that say we will make fiscal decisions that are best for the airport in order to receive those grants.”
“They judged that we didn’t make a decision that was best for the airport and therefor, did not fund,” City Manager Gary Suiter added.
In an interview on Thursday, City Public Works Director Jon Snyder said he was concerned Council’s decision could hinder the city’s efforts to get future grant funding for the airport.
“If we start veering away of what the FAA recommends as good standard practice, we could start losing out on grant revenue,” Snyder said. “We did lose out on grant revenue this last summer.”
Buccino, the only council member to support taking ownership of and renting the hangar out short-term, said he feels the airport needs to be managed like a business and needed the additional revenue.
“We have it within our right to get that hangar back and use it for our own purposes,” Buccino said. “City Council should not have gotten involved in this. This is just a purely operations deal.”
The airport, which operates as a separate enterprise fund, has long required additional subsidy from the city’s general fund to remain operational. In 2020, the airport needed nearly $174,000 from city. This year that subsidy is estimated at $492,000. Next year the deficit is projected to be $416,000.
The largest sources revenue at the airport comes from jet fuel sales and rent paid by Honey Stinger for offices in the old terminal space. That lease expires next year, and Honey Stinger has told the city they only wish to renew a fraction of the space.
The new ground lease will net the city almost $32,000 over five years. Staff’s recommendation would have produced an estimated $263,000 over the same five years. A third option council was presented would have seen the city take ownership of the hangar, but rent it back to its current owner long-term. This would have spurred an estimated $97,000 over five years, but West said Thursday that she didn’t see it as an option “with legs.”
City staff have explored other ways to increase revenues at the airport and included a list of 17 different ideas in Tuesday’s packet that were spurred with the help of committee of hangar owners at the airport. These include reducing staffing, plowing snow more efficiently and selling hangars the city does own for a one-time cash payout, to name a few. Snyder said Thursday none of those ideas are viable.
“They are all ideas we have already thought of that this group had presented to us and we did not find a viable idea amongst them,” Snyder said. “I don’t hold out any hope that there is a revenue stream out there that we have not already considered.”
Getting the airport to revenue neutral may no longer be the ultimate goal for the city, with several council members saying it may not be possible and that some level of subsidy is acceptable for the benefit it provides the community, such as Classic Air Medical being stationed in town.
“I think council could get behind subsidizing at some rate. What is that dollar amount?” Council member Amy Dickson said. “$400,000? No, I can’t. So, we need to find a way to bring in additional revenue not through transient pilots.”
Council will consider an ordinance about the ground lease on Dec. 3. While there was talk of negotiating some use the hangar for the city in a ground lease renewal, neither the city nor hangar owner Les Limon are interested in accepting liability in that situation.
Council discussed another hangar Tuesday as well. This one, called Corp. 2, houses Mountain Aircraft Maintenance, the only aircraft mechanic locally. Staff recommended renewing this ground lease for 10 years, with an option for 10 more, in an effort to keep the mechanic based at the airport. Council expressed support for this recommendation.
Last year's discussion included an exchange about Council member West having a personal relationship with Limon, but it did not come up on Tuesday. When asked Thursday, West said everyone on council knows about the relationship and that it does not pose a conflict.
"There is no real conflict of interest," said Council member Buccino when asked Thursday. "[West] is a well grounded individual and we trust her."
Top Photo Caption: A plane sits outside of Mountain Aircraft Maintenance, which is located in Corp. 2 at Steamboat Springs Bob Adams Airport. (City of Steamboat Springs/Courtesy)