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Old Posted Mar 9, 2007, 6:11 PM
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Council aims for runway solution
Kevin Werner, Special to the Review
Published on Mar 09, 2007
International Airport President and Chief Executive Officer Richard Koroscil hopes a compromise solution can be worked out with councillors over extending the airport's runway.
"We will try to move forward," said Koroscil. "(Council's decision) did not send a positive message to the airport. There are lots of things happening (at the airport). We want to keep that momentum."
After nearly two hours behind closed doors last week, councillors narrowly voted to reject an offer by two developers to sell vital land needed to extend the airport's runway.
"What signal did that decision send to the business community?" said Stoney Creek councillor Dave Mitchell, who voted to purchase the land. "This is embarrassing for the city. It's a shame. How can Hamilton go forward if these types of decisions take place?"
Proponents of the land purchase lament that if the city doesn't purchase the land, the property is only expected to increase in value, making it even more expensive for the city to buy the land in the future. But Hamilton councillor Chad Collins, who voted against the deal, said the estimated cost of about $4.7 million for the land was "prohibitive" for an already cash-strapped municipality.
"We would pay a higher amount (for the land) than what it is appraised," he said. "I'm all for the runway expansion. But not in an 'all or nothing' scenario."
City staff have been working on this land deal for the past six months. It involves developers Anthony De Santis Jr. and Vince Molinaro, who bought the 31-hectare plot on Airport Road in 2002 for over $600,000.
City officials and some councillors were stunned at the vote on Feb. 28. But the land deal, say city officials, remains on the table until the end of the month for the city to consider.
City staff and Koroscil are planning to meet with politicians before they hold their March 28 council meeting. Koroscil says there are some councillors who oppose the land deal because of a lack of information on what the airport needs for its future growth.
"It's about not understanding and the constraints we are in today," he said. "It's about what the overall commercial and operating needs are."
Over the last few years, councillors have become uneasy over the 40-year lease arrangement with Tradeport signed in 1996. Under the contract, the city is obligated to purchase land and help to develop the airport's runways. By 2036, the property, including the buildings, will be turned over to the municipality.
Koroscil has advocated that, for Hamilton International Airport to financially survive, it needs to grow. The idea is to purchase an undetermined amount of property over the next few years at a cost of almost $15 million. The land would be used to extend the south runway, expand the taxi area and construct new hangers.
The city had budgeted about $2.5 million to purchase land to extend the runway. The runway project wouldn't begin until 2011, after an environmental assessment takes place.
Collins, a critic of the lease agreement, doesn't believe Hamilton is getting value for the money it is investing. He says Hamilton is only receiving about $50,000 in revenues from Tradeport under the lease arrangement. For instance, part of the land acquisition would be used to expand the airport's parking area, which according to airport officials, the city is obligated to do because it is part of airport operations.
Yet, says Collins, the city would receive only a portion of the parking revenue. Parking, said Collins, shouldn't be associated with airport operations.
"It doesn't make sense," he said. Koroscil responds that you can't operate an airport without a parking area.
The land purchase would also allow the airport to expand its fuel depot area, which contains only a half-day of fuel for planes. The depot, he said, would be relocated so a hanger can be expanded, said Koroscil. The (fuel depot) is not in a good location, he said. "It's next to an existing hanger."
The airport, said Koroscil, has grown into a economic juggernaut, providing up to 600 good-paying jobs compared to about 200 jobs a few years ago.
Tradeport, which manages the airport for the city, has also injected about $150 million to improve the facility, he said. "This is a great opportunity," Koroscil said. "The city is our partner in this deal."
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