City applies for hangar grant
Launching A Dream
A new business that would add 30 jobs at the Madras Airport has city officials energized and enthusiastic.
If the city of Madras and the Redmond-based Butler Aircraft Co., can reach agreement on construction of a new, 30,000-square-foot hangar, the company has agreed to move part of its operation to Madras.
"I know it's a long shot, but it would be great if we could get it," said Mayor Jason Hale.
In order to build the hangar, however, the city needs nearly $2.7 million -- substantially more than the city can put together without funding assistance.
This week, city officials will try to convince the Oregon Department of Transportation of the importance of their request for $2,157,748.80 for construction of a heavy aircraft and engine maintenance facility, which would be leased to Butler Aircraft.
"We need the grant to make the lease rate competitive, because we still have to borrow money," explained City Administrator Mike Morgan, adding that with grant money, "We not only buy down the risk for the business, we buy down the risk for the city."
The city would provide $539,437.20 in matching funds to construct the hangar on a one-acre site, north of the general aviation building.
The city's application is among 78 received by ODOT for $100 million in funds set aside by the 2005 and 2007 Legislatures for transportation projects.
The funding program, called ConnectOregon II, was established to fund transportation projects that improve connections between the highway system and other forms of transportation.
"ConnectOregon II grant assistance is critical to making this project work," Morgan wrote in the grant application. "The cost risk associated with debt financing the entire project is simply too great for the city of Madras, and the debt finance cost prohibitive for Butler, especially when coupled with their cost of moving and expanding their current operation."
Though long associated with the company, Nan and Travis Garnick, of Redmond, have owned the company for a little more than a year.
Founded by the late Cal Butler in 1946, Butler Aircraft was a subsidiary of TBM Inc., of Tulare, Calif., until recently. Butler died in 2004, and two years later, the operator of TBM died and the Garnicks purchased the business.
Nan Garnick, who began doing accounting for the company in 1975, gradually worked her way into management, and was general manager when Butler died.
Travis Garnick started working at the company in 1990 as an airtanker pilot. In 1995, he left the company to fly 737s for Western Pacific Airline in Alaska until 1998. He also hauled firefighters for Sierra Pacific for two years before going to work for the state of Alaska as a lead plane pilot, leading airtankers into fires.
"He worked for the state of Alaska up until we purchased the company in 2006," Nan Garnick noted.
Located at the Redmond Airport, Butler Aircraft runs a fixed base operation, which sells fuel, repairs small aircraft, and offers flight instruction.
"In the mid- to late-50s, they got into the aerial firefighting business," she said. "That is the portion of the company that would move to Madras."
Butler contracts with the Oregon Department of Forestry and other government agencies to provide multi-engine aerial fire suppression with Douglas DC-7s and DC-6s out of the Redmond airport.
Although the company repairs its own aircraft, the DC-7, which is nearly 109 feet long, with a wingspan of 117 feet, 6 inches, doesn't fit into its hangar, and there is no room for expansion at the Redmond airport.
"Basically, (in) the facility we have here in Redmond, a whole airplane will not fit into the hangar," Garnick explained. "We're looking for a place with a hangar large enough to put the complete airplane in."
If the Garnicks could move the operation to a larger facility, they could apply for a Federal Aviation Administration 145 Repair Station License, which would enable them to repair larger aircraft.
"They can't work on other companies' aircraft until they have a hangar large enough that they can completely fit in the aircraft," Madras Airport manager Rob Berg said.
Currently, the closest facility for repair and maintenance of heavy aircraft is in Alaska, according to Garnick.
"They run these types of airplanes all over the world," she said. "We've never gone out to that market because we've never had the building to do it. We're getting our ducks in a row in case this opportunity is given to us."
The Garnicks, who have been looking to expand the operation for several years, have considered numerous locations -- even out of state. Since they would prefer a Central Oregon site, they began discussing the Madras location more seriously in 2006, she said.
"Our airport is pretty ideally located for their business model," said Morgan.
"This gives them closer access to everything. It's right on the Highway 97/26 shipping corridor," added Berg.
"There's no downside to it," he continued. "It's good for the airport both traffic-wise and economically. It would be the largest employer at the airport."
If Madras gets the grant, which will be awarded in June, Butler would move 12 maintenance jobs to Madras, and create 18 more jobs with a median salary of $49,000.
Over time, the company would expand its service to include heavy-lift helicopters and air cargo carriers, and another six jobs, Morgan said.
"Cities are in the development business, and any time you can bring a diversified business base, it's good for the economy of the community," he said. "We've always hoped to bring in more aviation-oriented businesses. This is the first major one that I'm aware of that fits in that category."
The Madras Airport has been owned by the city since 1948, when the U.S. Government transferred ownership of about 2,000 acres, which had been used as a B-17 bomber training base during World War II.
The original runways, which measured 7,200 feet, 7,270 feet, and 8,500 feet, were built in a triangular configuration, Morgan said.
Currently, the main paved runway at the airport is 5,100 feet long, "so we don't have to modify our runway (to accommodate the large aircraft)," Berg said.
If the city gets the grant and is able to build the hangar, "Butler projects over $20 million will be infused into the local economy in the first 10 years of operation," Morgan noted.
Madras will be competing against 14 other applicants in ODOT's region 4, which extends from Klamath Falls north to The Dalles. The 15 applications from the region are asking for a total of about $38.5 million, but only a portion of those requests will be awarded.
Other requests from Central Oregon include: Prineville, $3.52 million for a railroad/freight depot; Bend, $2.8 million for an intermodal transit center; and Redmond, $1.5 million for a north side cargo ramp and development.