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Airport deed restriction remains on the table

City will continue talks with Sportsman Airpark about a federal development rights purchase program

Newberg is a “great place to grow,” but what happens when that growth threatens local institutions with rising costs to remain in business?

Sportsman Airpark has been anticipating that situation for at least a decade and has identified a Federal Aviation Administration program as a possible solution.GARY ALLEN - The increase in land values around Sportsman Airpark make the large tract of property attractive for commercial development, so the longtime owners are looking into a federal program that could help the airport remain viable.

The program involves the FAA providing a grant to a municipality to purchase the development rights to a private airport. Its aim is to offset the development pressure that could force the airport out of business due to rising property values and taxes.

In Newberg, residential development has encroached closer to the west side of Sportsman Airpark, with the Newberg-Dundee bypass route passing by the runway directly to the south.

Transferring the development rights to the city via the FAA means the property can never be developed as anything other than an airport, essentially acting as a deed restriction. In return, the FAA provides the operators with the monetary difference between the airport-use property value and what it would be worth under its highest land use value.

To apply for the program Sportsman Airpark needs the city to agree to sign on as a “sponsor,” which carries a few caveats with it. Overall in the FAA program 10 airports are to allowed participate as it’s a pilot program, and the program has so far been used only once, by an airport in San Paula, Calif.

Sportsman Airpark recommended the idea to the city back in 2006 and has brought it up several times since, requesting the city act as a sponsor for the airport’s application. The city’s reaction has been mixed – in a visioning session last year the community development department listed one of its priorities as “staying out of ownership or operation of Sportsman Airpark” – but last week’s council meeting was the first time in at least several years it received official consideration.

There is one major roadblock that has given city staff pause in recommending the plan: the city would have to agree to keep the airport running for good, even if the owners decide to get out of the business.

“If, in a worst case scenario, if the operator was to walk away it would put the sponsor – in this case, the city – in a position to have to do the maintenance and operations…,” Community Development Director Doug Rux told councilors.

Some of that work is already done by city crews in other locations, such as pruning and mowing on city properties, so the city wouldn’t necessarily need to take on all new types of responsibilities. But there could be some new duties requiring more training or new staff.

Still, while the city would be opening itself up to some risk, the program is not without sacrifice on the airport owners’ part: transferring the development rights also limits their ability to capitalize on the land by turning it into a more profitable use, such as subdividing the land for housing.

“What the city is actually purchasing and giving to the rest of the community is certainty,” Sportsman Airpark representative Jason Dale told the council.

With the proceeds the airport would receive from the FAA it would revitalize its runway, lengthening it and performing some maintenance. Dale estimated the airport could receive some $5-6 million, as that’s been floated as the difference between the property value with an airport use versus industrial or other commercial use.

“We can easily resurface the runway and do an extension for far less than that,” Dale said.

Dale indicated that even if his family at some point wanted to stop running the airport — which he says is very unlikely — they wouldn’t simply “walk away.” Although the development rights would be restricted, the Dales would retain the ability to sell the facility to someone else who would operate it as an airport.

“It’s not going to be abandoned,” he said. “It doesn’t make sense to do that monetarily or any other way.”

Of course, as Mayor Bob Andrews noted, even if the airport were sold to another owner, that next owner could default and walk away from the operation, leaving the city liable.

There are also costs for appraising the airport as well as a requirement for a match of funds equal to 10 percent of the development rights purchase price. Rux said who provides that match was “unresolved.”

At one time it was unclear whether the city has the ability to purchase the development rights, since the airport is actually outside Newberg limits and is on Yamhill County land. City Attorney Truman Stone looked into the matter and found that the city could indeed purchase those rights.

Dale, representing Sportsman Airpark, spoke on the positives it provides for the city, particularly with the improvements that the federal money could allow.

“What the city gains is a transportation hub in the future, useful as a site for emergency services,” Dale said.

Councilor Stephen McKinney queried whether the airport’s runway was sufficiently large to handle emergency aircraft, and Dale said it could likely handle up to a C-130 military plane, as well as helicopters and small- to medium-size transport planes.

“The various values to the community are very many and it would be a shame to lose something like this,” Dale said.

Councilors spoke largely in support of the airport, agreeing that it provides community benefits.

The council was asked whether discussions should continue, which would hammer out logistics of how the arrangement would work, or whether to close the door altogether.

Andrews said he was supportive of the program, as he has been since it first came to the city’s attention under former city manager Jim Bennett, but that the city needs to do its due diligence before either entirely committing or rejecting the proposal.

“We can talk around the edges, but unless we actually pursue further discussions, do some negotiations, etc., we don’t know,” he said.

Councilors unanimously voted to continue the talks.