Port gets loan for airport

Commissioner expresses reluctance for first time

At least one Port of Coupeville commissioner may be getting cold feet regarding the agency’s pending purchase of the A.J. Eisenberg Airport, even as the port moves toward securing a funding source for the purchase and its deadline to execute a sale agreement looms closer.

Port Commissioner David Day said during a public meeting Wednesday that he has a number of reservations about closing on the property without a written agreement from Island County to provide purchase funds or form any other kind of formal partnership with the port.

He even made a motion, for the purpose of discussion, to cease and desist efforts to purchase the airport. The motion failed without a second, but the port commissioners still spent several minutes at the end of the meeting discussing their concerns around funding the airport purchase and operations.

Port Executive Director Chris Michalopoulos told port commissioners during the May 24 public meeting that Heritage Bank approved a $1.1 million six-month bond, with the option of rolling over into a 15-year bond. As of Wednesday’s meeting, the exact terms of the bond were not finalized, and the port had not signed the bond agreement.

It is the port’s intention to pay for the bond with Rural County Economic Development Funds, for which it has submitted a grant application to Island County. Port Commissioner John Mishasek gave a presentation to the county commissioners on the port’s intentions for the airport during a county meeting Tuesday, drawing a handful of public commenters who came to voice their support for the port’s plan.

“Having that transportation available at any time, but especially in an emergency, is an extra insurance policy that we have as the community,” said Coupeville resident Bonnie Abney, who shared her thoughts on how public ownership of the airport would promote public health and safety at the county meeting.

Whether the county comes through with the funds, however, is still up in the air. County Commissioner Melanie Bacon said in an interview that the county commissioners will discuss how to award Rural County Economic Development Fund grants in two weeks and did not yet know whether the Port of Coupeville’s application would be granted.

This uncertainty was a cause of consternation for Day.

“Suppose that that money doesn’t come through, and we end up on the hook for a 15-year bond at 7%,” he said, referring to the interest rate on the bond. “How is that going to be financed?”

County Commissioner Jill Johnson told the Whidbey News Group that she is not interested in putting her support behind the port while there is litigation pending.

North Whidbey resident Robert DeLaurentis filed a lawsuit against the port last month, claiming the entity does not have the right to purchase the airport. DeLaurentis had made an offer of his own on the property and was preparing to close when the port received an assignment of the first right of refusal held by adjacent property owner Geri Morgan, who is also a defendant in the lawsuit. DeLaurentis disputes the validity of the right.

“Until the port has clarity from the courts on if they can pursue the purchase, I don’t see any benefit to the county inserting itself into the process,” Johnson said. “Once they know if they are in a legal position to buy, I will decide if I believe the value of the investment makes sense. Not before.”

Day was also put off by reports from managers of other regional airports that they typically operate at a loss. Though the port now has a tentative plan in place to buy the airport, Michalopoulos said during Wednesday’s meeting that the source of operating funds is, as of yet, uncertain.

“I personally don’t know where funds will come from for all these future needs. I haven’t gotten that far yet,” he said.

Revenue generated by the airport is expected to cover at least some of the expenses; Commissioner John Callahan reiterated a point previously made by community advocates for the port’s purchase of the airport that the airport currently has a positive cash flow. Mishasek said hangar rentals will bring an estimated $100,000 annually, while fuel sales will produce another $100,000 in revenue.

But the expenses incurred by the port will be significant, as well. Michalopoulos shared that liability insurance for the airport is estimated to cost between $4,500 and $5,000 annually. Maintenance of the dilapidated infrastructure will be costly, too; the port identified nearly $5 million worth of construction and development projects it would need to undertake over the next five years, including $2 million to reconstruct and widen the runway and another $2 million to install new hangars.

Creating a master plan for the airport would be another major expense at around $500,000, while employing an airport manager would cost around $74,000 annually.

Day said that he “can’t figure out where the money’s going to come from,” despite “thinking about it for over a year and a half.”

He added that he doesn’t see the project working out without a stronger partnership between the port, Island County and the city of Oak Harbor. Day expressed his appreciation for the $200,000 Oak Harbor has already committed in an interlocal agreement to give the port after closing on the airport.

“I want to be very clear: I believe that that property should be public,” he said. “I just want to know how it is that the Port of Coupeville — 8,000 voters — is supposed to support that without help from Island County and the city of Oak Harbor, who stand to benefit from it considerably more than the Port of Coupeville itself actually does.”