Airport May Use Revenue from Gas Wells to Grow
September 13, 2013
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  • Some of Denton Enterprise Airport’s gas well revenue may soon be sunk into two major projects there: a new $5 million hangar and a restaurant.

    The airport’s aviation director, Quentin Hix, met with a City Council committee this week to discuss the development of both projects, some facets of which won’t come before the full council for a while.

    Airport officials have been tracking demand for facilities at the airport and believe it is sufficient for another hangar, Hix said.

    The city had issued a request for proposals for the project in the hope that someone would submit a complete proposal to both build and operate a new hangar. But none of the respondents — construction companies in Houston, Lampasas and Addison — proposed to do more than simply build the facility, Hix said.

    On the advice of the city’s purchasing department, the City Council will be asked to reject all the proposals so that the airport can move ahead on another track — developing the project itself, Hix told the committee.

    The committee, council members James Engelbrecht and Joey Hawkins, agreed in principle Wednesday that the airport could contract with another firm, Aguirre Roden of Dallas, to draw up plans comprised of two phases of construction work.

    In an interview Friday, Hix said he also briefed the Airport Advisory Board on the matter when it met later that day. While the four members in attendance didn’t vote on the matter, they generally agreed with the plans to develop another hangar, he said.

    That professional services agreement should cost less than $40,000, an amount already in the airport budget and, therefore, does not require council approval at this stage, Hix said.

    However, once the project is fully conceived and it also shows a return on investment within the city’s guidelines, the matter could go before the committee again, and then the council for a workshop discussion and vote.

    “If we’re off on the fringe, we won’t even bring the project to you,” Hix said.

    Airport officials know they have to make the airport sustainable without the gas well revenue, he said.

    A recent pro forma for the airport obtained by the Denton Record-Chronicle showed gas well royalties had eclipsed other airport revenue for several years, bringing in $8.6 million from 2007 to 2012, compared to about $2.4 million for the airport’s leases and other income.

    Last year, $2 million in certificates of obligation were issued so that the airport could buy additional land. The annual debt payment of $175,000 is scheduled to begin next year.

    The pro forma also showed the city anticipates those royalties dropping markedly after a peak of $4.1 million in 2008. By 2017, the city projects $765,000 in royalties.

    In addition to the hangar project, Engelbrecht and Hawkins agreed the airport could pursue another professional services agreement with Nelson Morgan Architects that could add a restaurant to the airport terminal.

    Recently, the aviation division of the Texas Department of Transportation awarded the airport a grant to cover half of the $400,000 estimated cost to build a community meeting room at the terminal. The airport received a proposal for a restaurant next to the room, but the vendor later realized the business couldn’t make a profit with its concept, Hix said.

    However, in the proposal, he saw projections that showed a restaurant focused on breakfast and lunch could be successful, drawing not just from businesses at the airport but also the industrial park around it.

    The architecture firm would help plan the restaurant project in tandem with the community room construction, all the way down to how much the city could charge for the restaurant lease, Hix said.

    “We would build a shell, but lease out to someone who wants to finish it out for a breakfast and lunch place,” he said.

    The architect’s services were expected to cost about $25,000 and will provide detailed plans for the city to issue a request for proposals in a few months, Hix said.