Sunday, April 3, 2005
Airfield action under fire
Some question ending of longtime lease of key aviation service
By Jeanette Steele
The San Diego (CA) Union-Tribune
Small-plane pilots fear the city wants to use the property that Gibbs leases to house more jets, squeezing out smaller planes. A similar shift is taking place at Carlsbad’s McClellan-Palomar Airport.
Some people – including two San Diego City Council members – are critical of the behind-doors’ way city officials handled the termination of Gibbs’ lease of the largest parcel at the airport.
Gibbs said he found out in early February that the city wouldn’t negotiate to renew his lease, which expires May 31. He is one of two full-service “fixed-base operators” at Montgomery who rent hangar space for planes, pump fuel, offer maintenance and sell other basic services to pilots.
Councilman Jim Madaffer has scheduled an April 13 public hearing before a council committee to discuss the issue.
“The problem is they (city officials) haven’t shared (their plan) with the public, and what I’m going to do is start that process,” Madaffer, a longtime private pilot, said recently. “I refuse to have them operate in the back room of secrecy and not let the people of San Diego, and especially the pilots, know what’s going on.”
City officials said the expiration of Gibbs’ lease after 35 years is an opportunity to study the best future aviation uses for the 24-acre parcel, but they won’t offer details.
“We’re studying our options,” Tracy Means, the city’s airports director, said Wednesday.
“This has created a business opportunity for the city, and so it’s in the city’s best interest to take the time that’s necessary to study it, and then present a well-thought-out plan to the mayor and council for adoption.”
Means said her office doesn’t have a timeline for when that will be done, saying “there’s really no urgency.” An update of Montgomery Field’s master plan is under way.
Means said she had briefed the council members about the plans for Montgomery Field, including the termination of Gibbs’ lease, starting in December.
In the short term, the city won’t change day-to-day business after Gibbs is gone, officials said. Under his lease agreement, the buildings that Gibbs constructed over the years will become city property.
Pilots who rent hangar space and the small aviation businesses that sublet from Gibbs can rent from the city after May 31.
City officials said they have invited Gibbs to provide a much smaller scope of services, including refueling and airplane-positioning, for a short time.
Some pilots fear that the city’s assessment of its business opportunities will mean major changes for users.
Montgomery Field is home to about 500 to 600 small planes that rent hangar space for as little as $300 a month and open-air tie-down slots for $150 a month from Gibbs and a handful of other landlords.
The trend in private aviation is toward jets and the luxury hangars that house them. However, only smaller jets can land at Montgomery because current city regulations on weight and noise prohibit large planes from using the field.
Jets are attractive to landlords because they require more fuel, which means more money paid at the airport pump, and because they need larger hangars that are either sold to users at six-figure prices or rented for thousands a month.
Small-plane pilots worry they will be priced out of the market if the city replaces Gibbs with an operator who will put jet hangars everywhere.
At least one other leaseholder at Montgomery already has built hangars for smaller jets. Gibbs’ proposal to renew his lease also included a plan to add jet facilities, but it would have been on land next to his existing hangars and tie-down spaces.
“A lot of people are afraid the Buzz Gibbs of the world will get run out and huge Corporate America take over. And then the days for general aviation will be gone,” said Dave Konstantin, a member of the city-appointed airports advisory committee.
Others think the city’s emphasis on making more money at the airport is misguided.
“I don’t think anyone at Montgomery Field would say I don’t expect my costs to go up,” Fred George, a small-plane pilot, said last week. “But it’s another thing to say let’s make Montgomery Field the fattest possible cash cow.”
City officials say they are required to maximize the city’s financial return on its assets.
All money made by the airport goes into an enterprise fund, which is separate from the city’s general fund, city officials said. Money in the enterprise fund has to be spent on city airports, such as for maintenance and future building projects.
The city also receives Federal Aviation Administration grants that place requirements on how it can run the airport, including getting market value for its leases, an FAA spokesman said.
After 35 years, the city isn’t getting the best financial return from the Gibbs lease, said Will Griffith, the city’s real estate assets director.
“Right now, Gibbs … is not maximizing our return on that asset,” Griffith said. “We’ve got to make sure we can do that, because otherwise the feds will say, ‘You missed an opportunity. Why should we give you grant funds?’ “
As for jets, though the city is willing to serve more jets, there are no plans to make Montgomery Field a jet center, Griffith said.
“There is no effort to squeeze out piston aircraft for jets,” he said. “If there is a demand for jet facilities, we have an obligation under the (FAA) grant assurances to meet that demand.”
Gibbs said he expected to pay more for a new lease, but he hadn’t expected to be prevented from negotiating to renew the lease.
Gibbs, whose father, Bill Gibbs, founded the airfield in 1937, said he sent at least three lease proposals to the city, starting in 2003.
Gibbs said the city was never willing to talk about them. One city letter, dated October 2003, told Gibbs: “We cannot commit to a full negotiation process at this time.”
Then, in February, he received a letter telling him the lease would not be renegotiated, he said.
“Upset? I think that’s probably an understatement,” Gibbs, 60, said in a recent interview.
Gibbs said he is willing to participate in open bidding for the leasehold, but city officials said they are not sure whether the city will issue a request for proposals on the Gibbs parcel or if they will combine it with other acreage.
Those answers will come after the airport department finishes studying its options, Means said.
About 150 people attended a March 15 meeting of the airports advisory committee on the Gibbs lease situation. The city-appointed citizens committee sent a letter to Mayor Dick Murphy asking for Gibbs’ lease to be extended for a year while the city plans the airfield’s future.
The committee called the city’s actions “poor planning,” and said city officials should have started negotiations with Gibbs and other potential leaseholders a year in advance.
“No management consultant or other operator can easily take over and run this operation,” the group’s letter said. “A smooth transition, without significant disruption, will take far more than the approximately 75 days before Gibbs has been told to vacate the premises.”
City officials, however, said they expect the transition to be seamless.
“We’ve got 680 leases to manage (citywide) and this is just one of them. So we think we are addressing the issues in a professional manner and there won’t be any impacts to users,” Griffith said.
Councilwoman Donna Frye said she hopes the public will raise some of these issues at the April 13 hearing by the City Council’s public safety and neighborhood services committee.
“You have a whole lot of issues coming up and what it appears to me is some of these decisions need to be better coordinated than to just have a decision made at a staff level,” Frye said.