When the Sitka Assembly met on Tuesday (12-13-23) it greenlit a draft airport lease with the state.
The state owns Sitka’s airport, while the city owns the terminal building. The 55-year lease agreement is up for renewal this spring, so the state and the city have been negotiating new terms this fall. It’s tricky timing, since the city is preparing to kick off a federally funded multi-million dollar airport expansion project this winter.
Some of the state’s lease terms were controversial, like charging airport vendors additional concession fees, which is required by the Federal Aviation Administration. Until recently, it wasn’t clear who would get to keep the additional revenue. Municipal Administrator John Leach said he’d finally confirmed that the concessions could be collected by the city and be reinvested in the terminal.
“The state did check with the FAA, we got the we got the thumbs up from the FAA on that. However, we will still need to follow the same reporting and audit requirements as if we were still remitting the funds to the state, so we didn’t really reduce any of the administrative burden,” Leach said. “If anything, we probably brought a little more risk back on ourselves, but the the revenue comes with it now.”
The state initially proposed fees for Sitka’s airport parking lot as a way to offset increased maintenance and operations costs, but they were left out of the draft lease. While Sitka’s airport parking lot will remain free for now, assembly member JJ Carlson said they’d have to revisit the parking lot conversation in the future.
“Parking will become a thing,” Carlson said. “Not now, but eventually, we’re going to, probably in my three years, need to get back to it.”
The assembly reviewed the lease in November, but postponed a vote in order to give Sitkans extra time to look over the contract. Mayor Steven Eisenbeisz said he’d heard from Sitkans who are preparing themselves for changes that come with updating an airport.
“And I don’t think anybody was necessarily in favor of keeping the airport that we have now and in keeping the status quo,” he said. “I know people weren’t necessarily in favor of a new fee structure, but I think there was the understanding of the modern airport comes with a modern fee structure.”
The assembly unanimously voted to direct the city administrator to accept the lease –a final document will be returned to the assembly for approval at a future meeting.
