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History and Summary of DevelopmentKALISPELL CITY AIRPORT In 1928 the City of Kalispell purchased 135 acres southeast of town to establish a municipal airport. The primary use of this airport throughout its history has been as a general aviation airport comprised of small single engine and light twin engine aircraft. Other uses over the years have been; glider towing, banner towing, skydiving, hang-gliders, agriculture spraying, fire fighting base, flight training, back country charters, military operations, medical evacuations, and corporate charters. The based aircraft inventory has increased steadily, over the decades, to 73 in 2009. In 1979 a TAP "Mini -Master Plan" was completed for the airport with nine recommendations for improvements. Due to a lack of commitment and financing by the public and private sector, only one of these recommendations was implemented. That one recommendation was to place a 2" asphalt overlay on the main runway, which was completed in 1986. It is important to note that of the original 135 acres, only approximately 75 acres remains in City ownership in the form usable as an airport. The rest has been sold to finance other City projects throughout the years. It is also important to note that the Kalispell City Airport has been developed, to date, without any participation from the Federal Aviation Administration (FAA). A second study was completed in 1993 called the Airport Neighborhood Plan. This study was an amendment to the Kalispell City -County Master Plan and was prepared by Montana Planning Consultants, of Kalispell, Montana. This study repeated the recommendations from the 1979 Mini -Master Plan. Up until the late 1990's the airport property was also being used as an athletic complex for the Parks and Recreation Department. There were baseball diamonds along US 93 South and soccer fields on the west side of the airport and at the same time there were airplanes taking off and landing at the airport. On April 15, 1996 the Kalispell City Council passed Resolution 44256, adopting the need for a Kalispell City Airport/Athletic Complex Redevelopment Plan Analysis and that redevelopment or rehabilitation or a combination of both was needed in the vicinity of the airport. The City Economic Development Department and the City Planning Department were tasked with doing the Study and Analysis. In July 1996 the City Council, after conducting the necessary public hearings, passed Ordinance #1242 approving the Kalispell City Airport/Athletic Complex Redevelopment Plan Analysis as an Urban Renewal Plan and authorized the City Manager to implement the plan. The redevelopment plan called for moving the athletic complex off the airport and relocating it in an area known as Section 36 on the north side of the City of Kalispell. The redevelopment plan also called for the redevelopment of the airport to meet FAA standards. The funding mechanism recommended by the redevelopment plan was a combination of land sales along Highway 93 and the implementation of a Tax Increment District (TIF) around the proposed airport site. On March 17, 1997 the City Council passed Ordinance #1260 creating a Tax Increment District with January 1, 1996 as the base year for calculating the tax increment. The TIF would last for 15 years with a beginning effective date of April 17, 1997. The #1 issue facing the City was the financial commitment to improve the Kalispell City Airport. At a special session of the Kalispell City Council on March 28, 1998, a commitment was made to limit the City's participation in the airport upgrade to $1,000,000. If the City could convince the FAA to designate Kalispell City Airport as a NPIAS airport, the FAA would fund 95% of the development and the $1,000,000 would be sufficient to meet the City's obligation to the airport upgrade. At about the same time the #2 issue the City was faced with was that the Kalispell City Airport did not meet the minimum FAA safety requirements for even a B-I airport. So, in 1996, the City hired Robert Peccia and Associates to draw up an Airport Layout Plan (ALP) to assist the city with future planning. As a minimum, the ALP needed to show the standard improvements needed to bring the airport up to FAA standards so the City could request FAA funding assistance. The new ALP showed the following needs: 1. Relocate the threshold of RWY 13 to the south to establish a runway protection zone (RPZ). 2. Widen the runway from 60' to 75'. 3. Lengthen the runway to 4,300'. 4. Acquire the necessary land to protect the lateral dimensions of the airport to B-II. 5. Do hangar development in the vicinity of the existing soccer fields. 6. Install a perimeter fence for security. On August 6, 1996 the City sent a letter to the FAA Airport District Office in Helena, Montana announcing the completion of the new ALP that would bring the Kalispell City Airport up to FAA minimum standards. The City also announced the formation of the Tax Increment District around the neighborhood and the commitment of the City of Kalispell to the future of their airport. In its letter the City asked the ADO Manager to come to Kalispell to discuss what further actions were necessary to pursue FAA funding for the improvements to Kalispell City Airport. Not only did the ADO Manager from Helena, Mr. David Gabbert, come to Kalispell to meet with the City staff, the Northwest Regional Manager Lowell Johnson from Seattle, Washington also came to Kalispell December, 1996 to look at the possibilities for upgrading the Kalispell City Airport. The result of that meeting was that the City of Kalispell needed to do a two phase Feasibility/Master Plan Study. In 1997, the City of Kalispell retained the services of Morrison-Maierle, Inc. to conduct the two-phase airport master plan study. Phase I was to address issues surrounding the KGEZ radio towers, an airspace analysis, forecasts of future aviation demand, land acquisition costs, cost estimates to bring the airport to B-II standards, and finally an environmental overview. Phase I would end with a public meeting to obtain input from interested parties and to present findings. Phase II was to be a "classic' master plan report as outlined in FAA Advisory Circular 150/5060- 6A Airport Master Plans. In February 1997 Mr. Gabbert, Manager of the ADO in Helena wrote to the City Manager for the City of Kalispell stating that the FAA presumed the "ball" was rolling since their visit in December 1996 and nothing else was needed to get it rolling again. Again Mr. Gabbert emphasized that there was much that had to be accomplished but the pending Master Plan Study would answer most of the questions. In October 1998 the City of Kalispell wrote a letter to Mr. David Gabbert at the Helena ADO with a copy to Mr. Lowell Johnson, Manager, Airports Division of the FAA in Renton, CIA stating that the City of Kalispell is prepared to assure the long term management, protection and operation of the Kalispell City Airport. Mr. Gabbert wrote back to the City of Kalispell stating several understandings, one of which is that the runway length needed to accommodate at least 75% of the fleet using the airport presently. That would be a length of 3,750 feet. However, the FAA prefers accommodating at least 95% of the fleet at 4,300 feet. The airport must be planned to accommodate 100% of the fleet and the necessary lands purchased to protect for that ultimate need, which is 4,700 feet. The FAA would assist in the purchase of the needed lands, but the actual runway construction length would be a decision the City would make, based on the rest of the study documents. The Phase I portion of the Feasibility/Master Plan was completed in January 1999 and the results showed that all elements of the new ALP completed by Robert Peccia & Associates had merit, indicating the Study proved the viability of the proposed airport upgrade. In the eyes of the FAA the information presented in Phase I of the Feasibility/Master Plan Study justified a full Master Plan Study. The full Feasibility/Master Plan Study was funded by the FAA and completed in August 1999. In 2000 discussions were held with the FAA to find out what was needed next in the developmental process. The FAA stated that an Airport Site Selection Study was needed even though the City of Kalispell passed Resolution #4518 on November 1, 1999 that adopted the Airport Master Plan Study and selected Alternative 2 as their preferred option. The Site Selection Study was started in January 2001 and completed in July 2001. In March 2001 the Kalispell City Council passed Resolution #4604 accepting an FAA Grant for the funding of the Airport Site Selection Study and the Airport Environmental Assessment. In August 2001 the City Manager and airport representatives presented the Site Selection Study to the FAA in Helena. The Site Selection Study identified a five degree re -alignment of the current runway as the #1 alternative. The FAA agreed with the Site Selection Study and authorized the funding of the Environmental Assessment and the Land Acquisition Plan. The Environmental Assessment was completed in December 2002. A public hearing was held before the City Council on October 7, 2002. The environmental assessment became a Federal document when it was evaluated and signed by the responsible FAA official. The document was accepted and signed on December 17, 2002 with a Finding of No Significant Impact (FONSI). With the last study out of the way, the City Council turned its attention towards taking positive steps to upgrade the City Airport to meet minimum FAA standards. The two AM radio towers located 1.8 miles southeast of the main airport runway remained a problem because they are located within protected airspace around the airport. Communications had been started within months after the radio station was purchased by its current owner. The asking price for the radio station remained in the $4 Million to $6 Million dollar range up until the owner filed for bankruptcy. The asking price was out of the question since the radio station had an appraised value of $670,000 in 2003 and that was based on the assumption that the station had 30% of the radio market in the valley when ratings showed the station had less than 5% of the market. In 2003 the City Council decided to begin the process of upgrading and redeveloping the City Airport based on an email message from Gary Gates of the FAA Airports District Office in Helena, Montana. Mr. Gates stated: Based on the airport environmental assessment dated December 2002, we concluded that the planned airport expansion would not result in significant environmental impacts. Following this finding, we have indicated that we will support federal grant funds (under the Airport Improvement Program — AIP) subject to available funds, for approved lands and related costs acquired subject to the provisions of the Uniform Act and the FAA Land Acquisition policy (AC 5100-17- attached). Section 3-20 generally discusses condemnation. Although we would support acquisition, including condemnation, the authority to condemn rests with the City of Kalispell (owner of the airport). Please let me know if we need to discuss further. the City Airport. On August 16, 2004 the City Council, by Resolution #4930 agreed to purchase two parcels of land that needed to be acquired to meet the new Airport Layout Plans for upgrading the airport to meet FAA minimum standards. OnOctober 4, 2004the City Council passed Resolution #4941changing theternnsfmrnevV(and leases atthe airport. This would allow for a longer initial term so that construction financing could occur for new hangars atthe airport. OnNovember 1, 2004 the City Council passed Resolution #4945 authorizing the use of Airport l0Ffunds to pay for the installation of certain new infrastructure atthe airport. The installation of underground utilities, additional security fencing, an internal access road and a security gate atthe Airport Road entrance tothe airport would all beengineered tomatch the new Airport Layout Plan. On December 20, 2004 the City Council, by Ordinance #1520, annexed the two parcels mfland purchased inAugust 2004for the airport upgrade. The purchase price for the parcels would be eligible for FAA reimbursement when the airport is upgraded to meet minimum standards. |n3OU5the City Council would take major stepointheupgradingof1heKa|ispeUCitv/Urport. [}nFebruary 7, 2O05the City Council passed Resolution #4976iaresolution mfintent to bond certain projects endacti*7iiesattheaYrportandtocaUfmra public hearing nnthe proposed bond issue. OnFebruary 22L20QGthe City Council passed Resolution #4978calling for apublic hearing mm the airport redevelopment and the financing mfthe project through the issuance of Tax Increment Urban Renewal Bonds. This project vvasreferredtoasPhase|oftheeirport redevelopment and upgrade. The bond revenue would beused topurchase lands and improvements known asRed Eagle Aviation. This would eliminate amajor through'th8-fence operation. After the purchase ofthe Red Eagle Aviation improvements and land, the improvements would now be on airport property and owned by the airport. The improvements would then be leased to Red Eagle Aviation and would become a revenue source for the airport until the time the upgrade occurs. The rest ofthe revenue bond would beused tobuild abadly needed parking ramp and the series of taxiways to predetermined hangar building sites as laid out inthe ALP. Also, onFebruary 22,2005 the City Council passed Resolution #4979,a resolution relating to financing of certain proposed projects; estmbUshing compliance with Reimbursement Bond Regulations under the Internal Revenue Code. On March 21, 2005 the City Council passed Resolution #4989, a resolution designating and approving Phase I of the airport upgrade and finding it to be consistent with the Kalispell Airport/Athletic Complex Redevelopment Plan approved in 1996. On April 4, 2005 the City Council passed Resolution #4990 relating to the issuance and subsequent sale thereof of $2,000,000 in Urban Renewal Airport Tax Increment Revenue Bonds. The ratification and approval by the City Council would delegate certain duties thereto to the Mayor, City Manager, and the Finance Director. On June 26, 2005 the City Council passed Resolution #5022 calling for a public hearing on the proposed issuance of the Tax Increment Urban Renewal Revenue Bonds to finance Phase I of the airport redevelopment costs. The interest and principle payments for the bond issue would be paid from Tax Increment Funds until such time as the FAA would reimburse the City for the project and then the bonds would be paid off entirely. However, the bond council advised that payoff could not occur until after seven and one-half years had elapsed. All of the above ground construction on the ramps and taxiways would be eligible for FAA reimbursement at the time the airport is upgraded to meet minimum FAA standards. The purchase of Red Eagle Aviation would be eligible for FAA reimbursement as part of the airport upgraded to minimum standards. In July 2005 pursuant to continued FAA recommendations, and City assurances, the Kalispell City Manager advertised for and hired the first -ever Airport Manager to manage the existing airport and oversee its future development. The number one task, outside of managing the current facility, was for the new Airport Manager to qualify the City Airport for federal funding under the Airport Improvement Program. To do this meant the airport must qualify for listing on the National Program of Integrated Airport Systems (NPIAS), thus qualifying it for federal funding. Not only would the airport be qualified for federal funding, it would also qualify for Non -Primary Entitlements (NPE) of $150,000 per year to maintain these upgrades. The Kalispell City Airport — S27 was placed on the NPIAS list in November 2005. One of the other first official acts of the new Airport Manger was to ask the City Council to change the airport funding from governmental funding (General Fund) to self funding or fee based funding, thereby taking it off of the rolls as a tax supported entity of the City. The airport would use its Enterprise Fund money for operations and Airport Tax Increment Funds for development and upgrades. In the 2005/2006 budget cycle the airport was designated an Enterprise Fund when the budget was passed. An Enterprise Fund is used to operate any activity where fees are charged to users for goods or services. It removes that activity, for financial purposes, from governmental funding and it must survive on the funds it generates. On July 18, 2005 the City Council passed Ordinance #1541 authorizing the issuance of Tax Increment Renewal Revenue Bonds of the City in the maximum aggregate principal amount of $2,000,000 to finance costs associated with Phase I redevelopment of the Kalispell City Airport. A public hearing was conducted on July 5, 2005 on the approval of this Urban Renewal Project, at which public hearing all persons were given an opportunity to be heard. On September 6, 2005 the City Council passed Resolution #5051; ratifying the sale and prescribing the form and terms thereof and the security therefor for the Airport Urban Renewal Project Bonds. In January 2006 the City Council passed Ordinance #1573 an ordinance adopting and establishing an Airport Affected Area pursuant to the authority conferred on the City of Kalispell and Flathead County, Montana, consistent with Title 67, Montana Code Annotated. The City of Kalispell and Flathead County deemed it necessary to regulate uses of land located within or near the traffic patterns of the airport through regulation of height of structures and objects of natural growth, and through regulation of land uses within noise impacted areas and runway protection zones. On January 30, 2006 the Flathead County Commissioners approved the Interlocal Agreement dated January 17, 2006 that provided both airspace protection and • • f f • • • f Iy •. OCR f... ^ • • On September 17, 2007 the City Council passed Ordinance #1622 an ordinance approving the Kalispell City Airport Standard Operating Procedures, authorizing the City Manager to amend such procedures as required and authorizing the issuance of municipal civil penalties pursuant to Kalispell City Code Chapter 1, Article II, for violations of Chapter 3, Chapter 4, and Chapter 6 of the subject Standard Operating Procedures. On December 15, 2008 the City Council passed Resolution #5331 finding a public need for the mitigation of the air hazard created by the KGEZ radio towers and setting forth the direction of the Kalispell City Council to establish the value of relocating or removing the towers, to make a formal offer and to consider condemnation. On February 17, 2009 the City Council passed Resolution #5340 directing the City Department of Economic and Community Development and the City Planning Department to prepare and assist the Kalispell City Planning Board in the review of the updated South Kalispell/Airport Redevelopment Plan and provide a report with recommendations to the City Council. This revised plan seeks to expand the original redevelopment plan boundaries to allow for the physical development of the municipality as a whole, and identifies the U.S. 93 South corridor into the City of Kalispell as an area of interest. On March 4, 2009 the KGEZ radio station owner filed for Chapter 11 bankruptcy protection. The action was subsequently converted by the U.S. Bankruptcy Court into a Chapter 7 Liquidation. The status of that action is still pending in the courts. On May 7, 2009 the Montana Department of Transportation announced the completion of a Montana Airports Economic Impact Study. This study was a two-year collaborative effort between the Montana Department of Transportation (MDT) Aeronautics Division, the Federal Aviation Administration, Wilbur Smith and Associates and Morrison Maierle Inc. This study was an effort to break down aviation's significant contributions in Montana and show how these impacts affect economies on the statewide and local level. This study showed that the total output (including first round and second round impacts) stemming from all on -airport tenants and general aviation visitors to Kalispell City Airport was approximately $24.2 million. In addition to the economic benefits described in the report, Kalispell City Airport provides access and services that promote the well being of the local community. Hangar site Al T & L Properties Est. $ 300,000 Hangar site A2 T & L Properties Est. $ 300,000 Hangar site A3-1, 2, 3 Pierce, Anderson, McElroy Est. $ 450,000 Hangar site A4 ETA, Inc. Est. $ 200,000 Hangar site A5 Mount Cleveland Dev. Est. $ 200,000 Hangar site A7 HDD, LLC Est. $ 150,000 Hangar site A8 North Country Holdings, LLC Est. $ 150,000 FINANCIAL INVESTMENTS IN THE AIRPORT MADE BY THE CITY SINCE 2000 Toergerson (2D & 2F) Airport Redevelopment/upgrade $ 566,475** Phase I Infrastructure water, sewer, elec., gas, telephone $ 230,000 Red Eagle (11) & 1DA) Through -the -fence, RPZ, Safety $ 774,715** NW Taxiways & Apron Phase I development $1,454,530** Land Acquisition Future Runway Protection Zone (North) $ 117,566** Land Acquisition Future Runway Protection Zone (North) $ 112,566** gaff M-11MVEIMI to meet minimum standards. If the airport is not upgraded, no reimbursement will occur.