Airport Land For Sale
Source: The Spectrum, by Katie Oliveri
February 11, 2008
ST. GEORGE — The current St. George Airport property is up for sale, a critical step in financing the replacement airport.
Officials said they’ve received five proposals regarding the site, two of which interest the city.
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Larry Bulloch, St. George’s public works director, said the city received five submissions prior to the 1 p.m. deadline on Feb. 4.
“We are going to pursue two of them further,” he said. “We’re going to be spending the next few weeks getting better acquainted with the firms and the details of their proposals. There are a lot of conditions that we need to investigate in order to get to the bottom line.”
The new airport, approved for regional jet service, will cost about $177 million, Bulloch said. The airport, which will sit on 1,300 acres, is expected to open in 2011.
The current airport will continue operating until the new one opens.
Marc Mortensen, assistant to the city manager, said the submissions included a dollar amount — how much the party would pay for the land — as well as a proposal for redevelopment of the site or the conceptual design of what the firm plans to do with the property.
Mortensen didn’t release further details about the two proposals.
“The two were very close in the dollar amounts,” he said.
Mortensen didn’t disclose the names of the two development/investment firms — one is a Utah firm and the other is a Texas firm.
“We need to do some research to determine whether or not what they submitted is realistic and that it would meet current city ordinances,” he said. “We’re examining those right now.”
Of the redevelopment proposals, Mortensen would only say that they entail “residential and commercial.”
As far as next steps, which would include the signing of a contract, Mortensen said, “We hope to have a clear decision at the very latest by May 1, but it may come sooner.”
The sale of the current site, Mortensen said, “represents one-quarter of the financial plan for the new airport.”
“It’s a significant issue that needs to be resolved in order for us to finalize the financial plan for the replacement airport,” he said. “The sale will help to cover the city’s percentage of the replacement airport costs.”
No construction will begin at the existing airport site until the new airport opens.
The importance of the sale
The sale of the property is a critical step because the budget is $177 million for the new airport, Bulloch said.
“If we don’t get close to the appraised value out of the existing airport, which is one of our major revenue sources for funding the project, the project is not financially feasible,” Bulloch said.
The current airport property, which is 274 acres, has been appraised at $46 million.
“We have to capitalize that land at or near the appraised value (of $46 million) in order to have a viable financial plan,” Bulloch said.
For the new airport, the city has received about $107 million from the Federal Aviation Administration. The existing airport land is appraised at $46 million and local miscellaneous resources such as issuing bonds and available city funds will make up the balance.
Washington County is working with the city to contribute monetarily to the new airport project as well, Bulloch said.
Within the next month, “we would hope to be able to make a final selection,” Bulloch said as far as the two submissions regarding the current airport site.
Then, negotiations would begin for a formal purchase agreement. The St. George City Council would have to approve the agreement, Bulloch said.
Mike LaPier, airport manager, said the proceeds from the sale of the land are a large portion of the city’s contribution to the development of the new airport.
“It would be difficult for any city to raise the type of capital that would need to be raised to build an airport,” he said. “This city is blessed with an asset that’s quite valuable.”
On selling it as an entire parcel
Although the city has explored the option of subdividing the current airport property for the sale, officials have decided to sell the whole parcel.
“If we subdivide it and we’re only able to sell a portion of it, than the net gain would be less than selling the entire parcel,” Bulloch said. “Then you would have a fragment that would be less marketable.”
Bulloch said the city has a “more reliable source of funding by selling it as an entire parcel,” adding that it’s more developable that way by a private purchaser.
“We feel that we can get what we need by selling it all as a whole parcel,” he said. “We’re also interested in having a viable development community out there that contributes to the downtown center of our community. That’s probably the last prime parcel in the community (in the downtown area).”
The city would like to have something there that’s a complement to the community, Bulloch said, and “that’s why we’re trying to carefully select the developer.”
Potential state legislative involvement?
Mortensen said the city has visited with members of the state Senate and House of Representatives to discuss the issue of potential funding to bridge the gap “between the time we sell the existing airport space and the money needed to fund the replacement airport.”
He added that the city is going to be visiting again “very shortly with members of both legislative bodies to discuss funding options for the sale of the existing airport.”
He explained that “(the city) needs the dollars committed to us in order to secure our financial plan for the construction of the new airport.”
Bulloch said any potential legislative involvement would be “to facilitate the bridge financing because we’ll be selling the airport today, but the developer can’t occupy it until we relocate several years from now.”
Redevelopment of the current airport site
The city’s airport redevelopment plan, Bulloch said, recommends developing the site primarily for residential uses of various densities as well as some commercial, office and possibly even government uses.
The two proposals that the city will pursue further were similar to what the city had developed with help from consultants for the current airport site, Bulloch said.
