Airport rent lowest in region
With cracked pavement and hangars in various states of
disrepair, Hollister Municipal Airport is a World War II relic. It
is a hobbyist airport that supports a handful of small
businesses.
Airport rent lowest in region
With cracked pavement and hangars in various states of disrepair, Hollister Municipal Airport is a World War II relic. It is a hobbyist airport that supports a handful of small businesses.
Airport users, Hollister officials and developers all agree that it could be more.
“It’s a big piece of what we’ll be looking at next year to bring Hollister out of this economic slump we’re in,” said Doug Emerson, Hollister’s mayor.
Hollister has the only airport south of the Mineta San Jose International Airport that has so much land around it available for development, he said.
Airport users say they are not against development, if it is handled properly.
There is active opposition among airport users against Bill Gere, the airport manager. Gere is the man charged with transitioning the airport from its financial slumber to an economic powerhouse.
Recreational users at the airport are important, but the airport does not exist solely for the benefit of its users, Emerson said.
“The airport belongs to Hollister,” he said. “It should serve the citizens of Hollister.”
Some of the buildings at the airport date back to World War II, Gere said.
Those buildings are in obvious need of repair.
Building 19 looks more like an old barn than a hangar. It is a tan wooden structure with gaps in the wood panels.
In large patches, blue and red paint from old paint jobs is seeping through. The tin roof is rusted.
Buildings 20 and 21 are much the same.
The Weatherly building is a large hangar with 15 tenants, according to documents from the airport manager.
“There’s mold and rot inside the rooms,” Gere said. “It’s in need of a lot of maintenance.”
It also in need of work on the roof, the plumbing and the electricity, Gere said.
The airport’s budget is independent of the city’s general fund, said Robert Galvan, the administrative services director for Hollister. The airport is an enterprise, he said.
“An enterprise is a city owned entity that functions as a business,” he said. “That means that the revenue from the airport should cover the day-to-day cost of maintenance, plus long-term costs, including any repairs.”
The airport does not have enough money for long-term maintenance and repairs, Gere said.
Clint Quilter, Hollister’s city manager, agreed.
“It just barely covers expenses,” he said. “It just barely gets by.”
The airport should be able to pay for long-term expenses, Galvan said.
“That’s how everything needs to operate,” he said.
The total budget for 2005-2006 was a little less than $545,000, according to documents from the finance department. Expenses totaled a little less than $515,000, according to the documents
Revenues at the airport did not always exceed expenses.
The deficit goes back to the 2002-2003 financial year, Galvan said. The airport lost $200,000.
In 2004-2005, expenses exceeded revenues by a little more than $140,000, according to documents from the finance department. In 2005-2006, expenses exceeded revenues by a little less than $216,000, according to the documents. In 2006-2007, the deficit was a little less than $71,000, according to the documents.
When the airport is over-budget, there are several options, Quilter said.
Officials can borrow money from other funds, carry the debt over and hope to make more next year, or borrow money from the city’s general fund, he said.
“It has never been paid for out of the general fund,” Galvan said.
The airport has a subsidiary fund, he said. The subsidiary fund consists mostly of grant money from the FAA, he said.
Money from the subsidiary fund was used to cover the airport’s deficit, he said.
That money might need to be paid back, Galvan said.
Whether the airport’s fund owes money to the subsidiary fund, “still has to be resolved,” Galvan said.
The airport makes money on the sale of fuel, but most of the airport budget comes from renting hangars, according to documents from the finance department.
“The rents have not been increased in several years,” Quilter said.
In 2006-2007, rents from hangars totaled a little more than $507,000, according to the documents. In the same year, the airport budget only included a little more than $14,500 for repairs and maintenance, according to the documents.
Airport projects can cost hundreds of thousands of dollars.
In 2005, airport officials received a grant from the Federal Aviation Administration (FAA) to install a security fence around the airport, said Ian Gregor, spokesman for the FAA.
The grant was for the security fence was for $450,000, he said.
There are two types of leases at the airport, a ground lease and a building lease, Gere said. A tenant who holds a ground lease pays money to rent land at the airport on which he constructs a building.
When the lease expires, ownership of the building reverts to the city, Gere said. Tenants pay less for a ground lease than a building lease, he said.
At Hollister’s airport, tenants who hold a ground lease pay between 1 cent and 6 cents per square foot, based on computations by the airport manager.
Those users include Gavilan College, the Hollister Elks Lodge and P.L Enterprises, according to documents from the airport.
P.L. Enterprises is a business whose lease is held by Jerry Gabe. Gabe is a critic of the airport manager.
A tenant who holds a building lease pays to rent a building, much like any other renter, Gere said.
At the South County Airport in San Martin, hangars rent for between 44 and 59 cents per square foot, said Larry Feldman, business manager for the South County airport.
At Hollister’s airport, hangars rent for between 16 cents and 29 cents per square foot, according to computations by the Gere.
The only building that costs more than 29 cents per square foot is the Ding-A-Ling Cafe, a restaurant at the airport. The owners pay 80 cents per square foot, based on computation by the airport manager.
Most hangars cost between $103 per month and $407 per month, according to documents from the airport manager.
Excluding business owners, the majority of the tenants at the airport are from outside San Benito County, according to the documents.
“Most of the people we’re giving breaks to, they own mansions in Saratoga,” Gere said.
There are a little more than 50 tenants who rent hangars for non-business purposes, according to documents from the airport.
Thirty of those tenants are from outside San Benito County, mostly San Jose and Santa Clara County, according to documents from the airport.
Renters from Hollister and unincorporated San Benito County were split evenly.
“That’s pretty revealing,” Emerson said.
Emerson seemed surprised that so many tenants were from outside the County.
“I would look at the tenants outside of Hollister and San Benito County a little differently,” he said. “I think the question that has to be asked is, ‘what are they providing the city of Hollister other than the small rent that they provide?'”
Critics of Gere say that he has not applied for any grants since he became airport manager.
Hollister officials have received two grants since Gere became airport manager three years ago, said Gregor, a spokesman for the FAA.
In 2005, the airport received the fencing grant for $450,000. In 2007, the airport received a grant for $427,500 for various projects, Gregor said.
The airport manager intends to apply for another grant in 2008, Gregor said.
