issue of airport ownership sparks turbulence in Rochester

A couple of months ago, it appeared that Skyhaven Airport was about to land in the hands of the Pease Development Authority. The Rochester City Council had deadlocked on a vote in February to take over ownership of the small airport on Route 108, failing to reach a consensus by its March 1 deadline. With the idea of city ownership apparently sunk, the state was poised to hand over Skyhaven operations to the PDA on July 1. But then the Council changed its mind.

On April 15, the Council voted to undo its February vote and reconsider ownership of the airport. State Sen. Jackie Cilley (D-Barrington) quickly amended a bill before the N.H. House to extend the deadline for a city decision on Skyhaven. If approved, House Bill 1168 would give the Council until May 30 to commit to owning the airport. If the Council fails to make that commitment, the N.H. Department of Transportation will negotiate a lease for the PDA to take over airport operations on July 1.

issue of airport ownership sparks turbulence in Rochester

A couple of months ago, it appeared that Skyhaven Airport was about to land in the hands of the Pease Development Authority. The Rochester City Council had deadlocked on a vote in February to take over ownership of the small airport on Route 108, failing to reach a consensus by its March 1 deadline. With the idea of city ownership apparently sunk, the state was poised to hand over Skyhaven operations to the PDA on July 1. But then the Council changed its mind.

On April 15, the Council voted to undo its February vote and reconsider ownership of the airport. State Sen. Jackie Cilley (D-Barrington) quickly amended a bill before the N.H. House to extend the deadline for a city decision on Skyhaven. If approved, House Bill 1168 would give the Council until May 30 to commit to owning the airport. If the Council fails to make that commitment, the N.H. Department of Transportation will negotiate a lease for the PDA to take over airport operations on July 1.

So … what caused the Council to reconsider?

“I’ve always supported the city taking over ownership of Skyhaven,” said Ward 6 City Councilor Doug Lachance. It was Lachance, a former mayor, who called for the vote on April 15. He was not on the Council when the initial vote occurred in February, but he adopted a seat when another councilor resigned. Noting that the first vote ended in a tie, he thought a new vote was appropriate. “I thought it was worthwhile to have a vote on the issue again and make it very clear that we either want it or we don’t,” he said. The Council voted 9-4 to undo the February vote.

Located on Rochester Hill Road in the city’s south end, Skyhaven Airport is currently owned by the state and operated by the Skyhaven Airport Operations Commission, with Ossipee Valley Aviation serving as base operator. With 140 acres and a 4,000-foot runway, the airport property is dappled with small, multi-colored planes, like the two-seat Cessna 150 or the four-seat Piper Cherokee.

A City Council Committee met with SAOC and OVA representatives on the morning of April 28 to discuss a possible management structure for Skyhaven if the city takes over ownership. Lachance said the meeting looked mainly at operational expenses and revenue. Although the projections for revenue are not huge, Lachance feels that owning the airport will work to the city’s advantage as long as it doesn’t lose money. And, if the city makes improvements to the 200-acre airport, future revenue could be considerable.

“I saw it as an opportunity to provide the city of Rochester with a long-term asset that could potentially provide a benefit for the city,” he said. “I think it’s shortsighted to look at the airport and say we don’t want it because we think it might possibly cost us money in the future.”

The airport property abuts the Granite State Business Park, which has a number of vacant spaces. Although not directly connected to Skyhaven, GSBP includes land that the city might also be interested in acquiring. The city’s proposed capital improvements budget for fiscal year 2009 includes $500,000 to fund a railroad crossing and road at the back end of the business park. A separate capital improvements item calls for $750,000 to “fund the purchase of land for expansion of the industrial park that will provide opportunities for economic development.”

According to Karen Pollard, Rochester’s economic development manager, there are six lots for sale at GSBP. Those lots are owned by Howard Katz, who owns a realty company in New York. Some councilors feel that, if the city owned both the lots and Skyhaven, it could showcase the airport as a nearby asset as it markets the lots to potential buyers. Those buyers would then be taxed for additional city revenue.

But the risks of owning the airport or lots at GSBP are multi-faceted. Opponents of city ownership of Skyhaven question whether the city has the necessary resources and know-how to operate an airport. “I think Pease has the resources to do a much better job than the city of Rochester,” said Ward 4 Councilor Ray Lundborn.

Appropriating a combined $1.25 million toward property at GSBP might be a bit much in a proposed budget that already threatens to increase Rochester’s tax rate by $3.99, especially at a time when housing foreclosures have reached a crisis state. And, with the national economy pointing toward recession, there is no guarantee that the city would be able to sell lots at the business park quickly. “We should be helping developers sell their property. We should not be in the real estate business,” Lundborn said.

Pollard could not confirm that the proposed $750,000 in the capital improvements budget would go toward property at GSBP. But she does feel that there is potential for significant economic growth in the park. She believes the long-term benefits of reselling property at the park would justify the initial investment.

“Over time, it would prove to be a tremendous benefit to the people of Rochester, because an investment like that would, I would hope, pay back through not only tax generation but through employment,” Pollard said. “But, again, there is risk involved. Economic development is not a guarantee.”

Pollard insists that purchasing property at the business park does not hinge upon the city taking ownership of Skyhaven. She said she does not have an opinion about whether the city should take control of the airport. But Ward 3 Councilor Rick Healey thinks that letting the PDA take over the airport would be a mistake. Although he voted against the city taking ownership of Skyhaven in February, he switched his vote on April 15. He said he changed his mind when he learned that the PDA would not be required to abide by city ordinances at Skyhaven.

“The PDA, which is a state agency, can do as they please without permission from the city,” Healey said. “That in itself scared me, that they could go ahead and hire and control an asset to the city at their will without ever checking in with the city itself.”
Healey admits that the Council does not currently have the resources to run Skyhaven, but he said the city could lease the airport to a private entity with the proper personnel and equipment. The city could then tax that company for extra revenue.
“The idea is to get a business in there so we can tax the property,” Healey said. “If the PDA got in, we can’t tax them, and if they buy any property in the vicinity, that can’t be taxed either.”

Although Healey supports the idea of purchasing property at GSBP, he said that now might not be the best time to spend such a hefty chunk of change. The total budget proposal currently before the Council is $117 million, up $11 million from fiscal year 2008. Without cuts, that amount would mean a 21 percent increase in the tax rate.

“I’m in favor of (purchasing industrial property), but due to the fact that we have a very large proposed increase in the tax rate, that may have to go by the wayside,” Healy said. “A $4 tax increase is absolutely absurd.”

Lachance said he doubts that the CIP items pertaining to the business park will pass the Council. Although he feels that the budget picture might look better once the city’s increased valuation is taken into account, he recognizes that the Council will have to make cuts, and there is “a real possibility of laying off some people this year,” he said.

Lundborn sees the business park properties and Skyhaven as two entirely separate issues, but he thinks both ideas pose considerable risks for taxpayers.

“We shouldn’t put it on the shoulders of the citizens of Rochester to be taking that chance,” he said. “We’re not ready for that. I’m not ready to cut programs and people in order for us to run an airport.”

Another public meeting on Skyhaven will occur at the airport on Monday, May 5 at 8 a.m. Pollard and others will offer presentations about the proposed budget during a public meeting in City Hall at 7 p.m. on Tuesday, May 13.