[Type text]
CONSTRUCTION
PROJECT UPDATES
AIRPORT STAFF
MILESTONES
FUEL FARM PAINTING
AND IMPROVEMENTS
A view inside the landing gear well of a Boeing Business Jet (BBJ)
OCTOBER 2015
ADDISON AIRPORT | OCTOBER 2015
0
439,924
REVENUE IN DOLLARS
8,932
TOTAL AIRCRAFT OPERATIONS
614,944
TOTAL FUEL FLOWAGE IN GALLONS
44
INTERNATIONAL FLIGHTS
CLEARANCES
1%
1%
FROM LAST MONTH
F R O M L A S T Y E AR
4%
5%
FROM LAST MONTH
F R O M L A S T Y E AR
2%
10%
FROM LAST MONTH
F R O M L A S T Y E AR
38%
26%
FROM LAST MONTH
F R O M L A S T Y E AR
Preventive Maintenance: Addison Airport has 14 airport-owned automated gates providing vehicle access to the Air Operations Areas (airport tenants own several more).
While one or two of these gates are used only by airport personnel, most of the gates see heavy use from airport tenants and Airport and Town staff. In spite of the heavy use, it is
unusual for any of these gates to fail because they receive regular preventive maintenance. Shown above is Airport Maintenance Technician Andre Richardson checking the function of
Gate A5 (at the west end of Airport Parkway) in the course of performing routine maintenance on the gate and the gate operator.
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ADDISON AIRPORT | OCTOBER 2015
REVENUE
FY16 is off to a good start, with
October 2015 revenue totaling
$439,924. The FY16 budget projects
revenue of $5,158,200 … slightly
higher than last year’s actual result of
$5,140,662 total collected revenue.
Actual revenue for October was 1%
(about $4,000) higher than the FY16
budget projection for the month.
FUEL
October 2015 fuel flowage was strong
at 614,944 gallons, but not quite as
strong as in the previous October
(which was exceptional). However,
September-October was the first time
fuel flowage exceeded 600,000 gallons
in two consecutive months since
October-November of 2007.
OPERATIONS
Airport operations totaled 8,932 in
October, down slightly from the prior
month and the same month in the
prior year. However, instrument (IFR
itinerant) operations totaled a very
healthy 3,228 and international
operations a respectable 44 for the
month. Over the past six years (FY10FY15) total annual operations have
averaged just over 95,000 with 35,900
IFR itinerant operations (38% of the
total) and there are no indications that
FY16 will see much (if any) change
from these levels. At the same time,
fuel flowage volumes have continued
to increase; as has been repeatedly
noted here, this indicates a continuing
trend of larger aircraft taking larger fuel
loads.
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ADDISON AIRPORT | OCTOBER 2015
Below: Airport Maintenance Technician Tom Walsh,
CONSTRUCTION
PROJECT UPDATES
The two ongoing construction projects
– Taxilane Victor and the asphalt ramps
and parking lots – are proceeding on
schedule but are expected to encounter
rain delays in the near future. Phase 3 of
the Victor project was completed near
the end of October, with Phase 4 – the
critical “bottleneck” phase – scheduled
to begin on November 9, with a hopedfor completion date of November 19
(weather permitting). While Phase 4 is in
progress, there will be no access to six
large hangars at the east end of Taxilane
Victor. The asphalt ramps project is
currently focused on reconstruction of
the S4 T-hangar ramps. The north side
was completed on October 20; work on
the south side is now in progress, with
completion expected in mid-November.
10 years of service at Addison Airport! (2009 photo)
Above: Deputy Director Darci Neuzil, 15 years of
service at Addison Airport! (undated photo)
STAFF MILESTONES
Three airport staff members reached (or
will soon reach) employment milestones
this year. Darryl Shand joined the team
in November 2010 and will reach the
five-year service milestone next month.
Tom Walsh came aboard in June 2005
and has passed the ten-year service
mark. Darci Neuzil, the first member of
the current management team, began
working here in August 2000 and has
contributed fifteen years of excellent
service. Congratulations, and thank you!
Above: plastic sheeting shrouds the south end of the
bulk fuel storage facility (better known as the “fuel
farm”) as the tanks, equipment, and piping are cleaned
and repainted. Below: the freshly painted tanks, minus
the decals which will be applied after the paint has cured.
Above: this graphic shows Phase 4 of the Taxilane
Victor reconstruction project. Below: asphalt placement
at the east end of the S4 T-hangar row.
FUEL FARM PAINTING
AND IMPROVEMENTS
Above: Maintenance Technician Darryl Shand, 5
years of service to Addison Airport. (2010 photo)
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The airport fuel farm was completed in
2005 and is now ten years old. Tanks,
equipment, and piping were cleaned and
repainted. AvGas reclamation systems
(for sumped fuel) will be added soon.
ADDISON AIRPORT | OCTOBER 2015
OVERVIEW: THE AIRPORT REAL ESTATE PORTFOLIO
Addison Airport covers a total land area of approximately 386 acres. Of this total, slightly more than one third – about 140 acres – is
capable of generating revenue. The remaining two thirds is common-use area, including the runway, taxiways, taxilanes, safety areas,
and object-free areas. As can be seen from the chart at the top of page three of this report, the real estate portfolio generates by far
the largest share of the airport’s revenues. In FY15 (October 1, 2014 through September 30, 2015) the real estate portfolio accounted
for 82.5% of total revenue, while fuel flowage fees accounted for 16.1%. The remaining 1.4% was composed of miscellaneous
revenues including pass-through fees for after-hours U.S. Customs services and disposal of USDA regulated international garbage.
Addison is one of a relative handful of general aviation (GA) airports that is completely self-supporting, meaning that it generates
sufficient revenue to cover operating and capital expenses without any contribution from the Town of Addison’s general fund tax
revenues. The real estate portfolio is what makes this possible; consequently, careful management of the portfolio is an important
key to the continued success of the airport.
Above: this graphic shows the airport property boundary (red line) and the general categories of land uses in the real estate portfolio: green indicates city/airport-owned property,
including T-hangars, patio hangars, commercial buildings, and jet hangars; blue indicates areas subject to ground leases; and yellow indicates land that is currently vacant or unimproved.
In addition, some fee-simple properties immediately adjacent to the airport (not shown in the above graphic) that are used for aeronautical purposes have “through-the-fence” agreements
with the airport that allow access to the common-use areas of the airport for an annual fee. Many of the hangars on the south side of Taxilane Uniform fall in this category.
Income from ground leases accounted for 48.3% of all real estate revenue (39.8% of total revenue) in FY15. In terms of land area,
the ground leases total 76.8 acres, approximately 55% of the real estate portfolio. The statutory maximum term of a ground lease is
40 years. Many of the properties at Addison Airport were developed in the early 1980s; consequently, a relatively large proportion of
the ground leases will expire within the next 10 years. This is illustrated in the chart at the top of page six. There are six ground leases
expiring within the next five years, but 21 more ground leases expire in the six- to ten-year time frame. Managing the lease expirations
and subsequent uses of these properties – redevelopment, conversion to commercial/market rate rental, or extension of the ground
lease in exchange for capital improvements – will be key to enhancing revenues and the overall value of the real estate portfolio.
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ADDISON AIRPORT | OCTOBER 2015
ENHANCING VALUE
Management of the airport’s real estate is focused on
enhancing the overall value of the portfolio rather than
maintaining a simple fixation on revenue growth. For
example, when a ground lease expires, the airport could likely
realize a substantial increase in revenue by converting from
the ground lease to a new lease at commercial (market) rates
(which are typically on the order of 10 times ground lease
rates). However, the building may be nearing the end of its
useful life, resulting in greater maintenance expenses. The
better strategy may be to demolish the existing improvements
and redevelop the property for a higher and better use under
the terms of a new ground lease. The decisions will be made
on a case-by-case basis, with an eye on obtaining the best
value for the airport and the Town, consistent with the
airport’s 2013 Strategic Plan goal to “continue to enhance the
airport’s overall value for the benefit of stakeholders.”
Above: pie chart illustrating the relative areas of ground leases expiring within 0-5, 6-10, 11-20, and 21+ years. Below: graphic from the Airport Master Plan update showing
land use and lease expiration data for the northeast portion of the airport. In this graphic, properties with “through-the-fence” (“TTF”) access permits are also identified. Addison’s
Mater Plan update – which is still in draft form, pending review and consideration by City Council – is unusual in its property-level detailed financial analysis.
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