APPENDIX F
MARTHA'S VINEYARD AIRPORT AND BUSINESS PARK
Ted Stanley, a member of the Charter Commission, former member of
the Airport Commission, former member of the Airport Advisory
Committee, a pilot, aircraft mechanic, and operator of a Vineyard
based air taxi service has had a close association with the Airport
for 10 years. He has, with the help of his wife Karin, researched
the history of the Airport from its earliest years.
Ted has prepared a 21 page report outlining the history of the
Airport, and made comments and suggestions for improvement in its
operation. While the report is too long to incorporate in the
Appendix, we propose to make sufficient copies available so that it
can be distributed at the same time as the report.
Mr. Stanley's report will help set the background for an informed
discussion of new directions for the Airport and Business Park.
With the long
treatment now
the State ban
1985, will be
delayed improvements in water supply and sewage
funded and the work underway, it can be expected that
on further development at the Airport, imposed in
lifted in the near future.
It is time to begin anew a capital budget as well
development process which will improve conditions
This will lead to sound growth and development of
the Business Park. Mr. Stanley's report consists
including:
as a planning and
at the Airport.
the Airport and of
of various topics,
1. Airport history
2. Airport Commission and the Dukes County Commissioners
3. The airlines
4. The terminal building
5. The airfield
6. General aviation
7. The Business Park
8. Excerpts from the Sponsor's Assurance Agreement
9. Body of the text from a Lease Fee Evaluation by the Airport
Advisory Committee
April 11, 1992
REPORT TO DCCC
THE MARTHA'S VINEYARD AIRPORT AS AN AGENCY OF THE COUNTY
Ted Stanley - Chairman
The present condition of the Airport may be best understood by a
review of the history which follows.
NAVY PERIOD
In 1942 the United States Navy acquired one square mile of the State
Forest and began construction of an Auxiliary Air Facility, one of
several in New England. The base was a subsidiary of the larger
Naval Air Station at Quonset Point, Rhode Island.
The air facility grounds consisted of a "vast wood-beamed olive drab
hangar" (1), an administrative building, fire station, BOQ (bachelor
officer quarters, married officers rented in town), dispensary, mess
hall and barracks and post exchange. Numerous Quonset huts were
erected for classrooms, ammunition, the "brig" (2),etc. Major
buildings had steam heat.
The base's main role was that of training, however patrolling
flights were also carried out. It continued to operate until the
end of the war.
EARLY COUNTY YEARS
During the construction and operation of the air facility, the
County Commissioners began making plans for future development of
the Airport in the post-war period. In April of 1945 a petition for
legislation authorizing the County to acquire the facility for use
as a public airport was enacted. In late June of 1946 the
Commissioners assumed control and management of the Airport, under a
revocable permit issued by the United States Government. This is
the first and only instance of a County airport in the Commonwealth.
Steps were made to utilize several of the old Navy buildings.
Concessions for hangar storage, fuel and oil sales, and repair work
were leased out. Several of the Quonset huts were removed and the
olive drab buildings repainted white. Instead of Navy offices, the
administration building now houses a waiting room, restrooms, and
airline offices.
Early on it was recognized that in order to obtain federal funding
for airport development, a master plan must be implemented. The firm
of Fay, Spofford and Thorndike was hired for this purpose. Martha's
Vineyard Airport was one of the first to apply, and be considered
1
April 11, 1992
for, Federal funds when the 1947 Federal Aid Act was passed. The
Act provided that the Federal Government pay 50% of the cost of
approved projects, while the State pay 25%, and the airport
governing entity pay the remaining 25%. The 1948 annual County
report noted:
"...resolutions were unanimously voted adopting and
approving the execution of the Sponsors' Assurance Agreement
to be submitted to the Administrator of Civil Aeronautics,
United States Department of Commerce, to obtain Federal aid
in the development of the airport."
NOTE: The Sponsors' Assurance Agreement contains some very
important items relative to economic operation of the Airport. It
is a lengthy document. Some of its important features are contained
in Appendix A at the end of this report.
The first project completed in 1949 was seal coating taxiways,
enlargement of the apron area, and addition of auto parking
facilities. Other projects included installation of a new runway
lighting system and an underground water system, replacing the
original Navy aerial water tank.
An important step in the County and Island's interest in the Airport
took place in 1949 when the revocable permit originally issued by
the Navy was replaced with a 20 year lease with an option for
renewal.
By 1953 all facilities at the Airport showed a substantial annual
growth. Air traffic continued to increase, and most major buildings
were leased. Continued leasing of these buildings not only added
rental income to the Airport, but also provided employment to Island
residents.
During this time, Burnham (Bud) Litchfield was the Manager. He had
20 years of experience in aviation and airport operations, having
once held positions with Pan Am and Fairchild Aviation. He also
operated his own air taxi company, Old Colony Aviation, which also
acted as the fueling service for aircraft. Air traffic continued to
increase and "gives additional evidence the Airport is a necessity
if Martha's Vineyard is to develop along with other high-grade
communities." (3) With this increase in activity came the need for a
runway extension. By 1953 the main runway was lengthened to 4000
ft, enabling larger aircraft access to the field.
In 1955 procedures to acquire title to the Airport property were
begun. This proved to be a lengthy project. By 1957 the United
States Government General Services Administration accepted the
Page 2 of 21
April 11, 1992
proposal to dispose of surplus property and began negotiations with
the County for title transfer. In 1958 the CAB (Civil Aeronautic
Board), after careful study of Navy inventory, recommended the title
transfer. The transfer was finally completed by August of 1959.
Continued upgrading of the old Navy facilities took place during
this period, with attention being given to building maintenance,
painting and shingling. A rustic rail fence was erected in 1958 to
replace the old pickets around the administration building.
Maintenance of entrance roads, auto parking and landscaping
continued. Additional tie-down areas were now needed for transient
aircraft and another runway extension was proposed.
It was in June of 1957 that Trueman Place succeeded Burnham
Litchfield as Airport Manager. Mr. Place was Manager until December
of 1980 having served for over 23 years. As Mr. Place recalls, it
was the County Commissioners who decided to appoint themselves as
Airport Commissioners in spite of concerns voiced by the
Massachusetts Aeronautics Commission.
By the late 50's Northeast Airlines became the dominant carrier.
their business increased so did their desire to operate larger
aircraft, thereby insuring runway extensions and technological
developments at the Airport.
As
Much of the growth in general aviation during this late 50's can be
attributed to a County advertising campaign. A poster promoting the
Island as a resort, and the facilities at the Airport, was
distributed throughout the region.
The 1959 County report notes that the Airport was capable "of
accommodating all but the largest of aircraft, but still retaining
its quaint attractiveness" while "strangers to the Island
continually comment upon the unique New England charm of the landing
and terminal areas."
In 1960 the VOR (a ground based electronic air navigation aid) was
constructed allowing instrument approaches at the Airport. In the
mid 60s improvements were made in airport lighting thereby
increasing the number of successful approaches to landing during
poor weather.
The 1964 County report states:
"In a further effort to balance the airport budget, other
income producing proposals have been investigated. At the
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April 11, 1992
end of the year, an agreement with our tenant concessionaire
was negotiated resulting in his relinquishing the hangar and
gassing facilities to the County, effective upon the
approval of the 1965 budget by the State legislature. This
proposal is in keeping with the primary revenue source of
most other airports and your Commissioners are encouraged
with its likely potential. By the seasonal utilization of
personnel, no budget increase will be required to
effectively operate these newly acquired County facilities."
The 1966 County report states:
"In May the County ventured into the sale of aviation fuel
as an additional source of revenue. Although ill equipped
and without the additional personnel to provide acceptable
service to our air carrier, the results were encouraging.
The net profit approached three thousand dollars in the
eight month period. With the experience garnered and the
promises of better equipment and more personnel for 1967, it
is believed the potential from this business enterprise has
been neglected too long."
"For the first time since the Navy abandoned the air station
and left it in County hands, all buildings, offices and
spaces were tenanted or in use for County purposes. With
maintenance of buildings, with two exceptions, reduced to
roof and sash repairs and trim painting, the ultimate in
good business practice has been accomplished. The
structures are, as they appear, sound and tight, the grounds
well kept and the tenants well established. Major
improvements are under way in the Administration Building.
More restaurant, lobby and office space will provide
additional convenience as well as income."
The 1967 County report clearly emphasizes the importance of the
Airport:
"... the thirty-odd thousand paying passengers who commuted
to and from the Island in 1967 and the great number of
private planes bringing people to the Island during the
year, cannot be ignored. The impact of this business in the
overall economy of the Island, while it cannot be measured,
is substantial and is a business that must be promoted by an
up-to-date and efficient airport operation."
In the late 60s and early 70s a strong controversy arose over the
proposed use of jet aircraft by air carriers, indeed the 1970 County
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April 11, 1992
report mentions:
"The County, to date, has expended over seventeen thousand
dollars in legal fees alone, to protect the rights of
citizens to continue to have service between the New York
area and Martha's Vineyard, at fair and reasonable rates.
Were it possible to have obtained the customary federal and
state shares toward an airport project instead of the
extravagance of attorneys' fees, the County could have
benefitted with new taxiways, aprons, landing aids or even a
new administration building."
It was in February of 1972 that the enormous wooden hangar built by
the Navy burned to the ground.
On May 2, 1973, the ILS (instrument landing system) was
commissioned, permitting even more precise approaches than the ones
offered by use of the VOR.
During 1975 most of the paved areas of Airport were resurfaced at a
total cost of just over 1 million dollars, the County share being
just 5%. Also Delta was released from its obligation to serve the
Vineyard as an agreement was reached for Air New England to fill
that void.
In 1977 the old Navy air traffic control tower was renovated and
manned by FAA air traffic controllers.
In the late 70s mention was first made of the Airport Industrial
Park and its non-aviation business potential, and again talk of a
new terminal building. The 1977 County report also mentioned that:
"...one of the most important functions of this department
[the airport] is to offset the County operating budget with
the highest possible return of monies to the general fund."
NOTE: This would appear to conflict with the requirement of item
#25 of the The Sponsors' Assurance Agreement (see appendix A).
Violation of this agreement could have dire consequences.
In the early 80s the Airport Commission was expanded to five
members, the three County Commissioners plus two others. According
to Robert Morgan, former County/Airport commissioner, this was this
was done to bring some aviation experience to the Airport
Commission.
In 1980 one of the most important revenue sources to the Airport was
Page 5 of 21
April 11, 1992
approved. In years prior to 1980 the State Bureau of Accounts on
Counties would only allow the Airport to act as an agent (for R.M.
Packer Company) for the sale of aviation fuel and thus collect only
a small commission on fuel sales. After 1980 the State allowed the
Airport to purchase and resell fuel resulting considerably greater
revenue.
Albert S. (Stan) Mercer became Airport Manager on January 1, 1981
and continued in that position until his resignation two years later
in March of 1983. In an interview (February 22, 1992) he stated
that during his term the major problem at the Airport was lack of
attention to revenue sources on the part of the Airport Commission,
(led by the County Commissioners) and that Airport revenues should
not be used to support other County functions. He felt strongly
that the Airport Commission be an autonomous body and that County
Commissioners not be members of the Airport Commission.
The 1981-1982 annual report of the County mentions reduced fuel
sales as a result of the air traffic controllers' strike but that it
was partially offset by an "aggressive landing and tie down fee
program". The need for replacement and/or maintenance of Airport
assets is mentioned:
"Most airport buildings are in need of replacement. The
Terminal is inadequate for summer months and it is "old"
(1942). It was designed as an operations/administration
building for the Navy with a seven to ten year life
expectancy. Now hundreds of people pass through it daily. It
should be replaced as indicated on the Airport Master Plan."
"All Taxiway lighting is inoperative and the wiring needs
replacement. One runway (North-South) is showing the lack of
maintenance funds over the years; the pavement has several
cracks. Other runways are generally good but they need
professional programed maintenance to prevent unchecked
deterioration."
"During the Summer of 1981, it was realized that the 1942
sewer system would be inadequate for summer demands after a
few years. The two laundries tax its capacity and more light
industry will come which may use large quantities of water.
An engineering study and design project will be conducted in
FY83."
Page 6 of 21
April 11, 1992
James (Jim) Mitchell became the Airport Manager on May 2, 1983,
succeeding Ralph Condlin who served for only 30 days after the
resignation of Albert S. Mercer.
The 1984 report notes:
"Airport expenses were $447,686.54 with an income of
$496,912.07, a profit of $49,225.53 for the year. This is
the first year in which a profit was realized at our airport
but should be viewed cautiously."
"The Airport Commission was expanded to seven members, one
representative from each island town, and this body is fully
supportive and has instituted improved operations policies,
the results of which are apparent. Much more is required
however, the airport remains understaffed, and our buildings
and facilities need rehabilitation or replacement. Showing a
profit does demonstrate the viability and potential of the
airport and properly done can continue profitably, following
some capital investments to create a facility which will
truly reflect the beauty and desirability of Martha's
Vineyard to both resident and tourist visitor alike, our
Commissioners have caused progress to begin and through
continued effort, the Martha's Vineyard Airport will become
the focal point for many island businesses, residents users,
and the traveling public at large."
The expansion of the Airport Commission to seven members (three
County Commissioners and four non-County commissioners) was made to
eliminate the majority number of County Commissioners on the Airport
Commission.
In 1984 the Airport Advisory Committee was formed by Doug Ewing and
Jim Mitchell with the purpose of improved airport planning,
particularly in the Business Park. The AAC was composed mostly of
volunteers; interested airport tenants and other Islanders, each one
offering expertise and experience in different areas.
In 1985 various improvements were made; a new vehicle purchased,
security fencing upgraded, terminal building repaired, a new taxiway
light system and pilot controlled lighting system installed,
taxiways upgraded, pavement repaired, a new ninety vehicle parking
lot built along with a new turf aircraft parking area, and new
aircraft navigational aids. Most of these projects would have been
impossible without having 97.5% of the funds required available from
the State and Federal governments. The County report states the
airport showed a profit of $13,549.34.
Page 7 of 21
April 11, 1992
In the 1986 annual report John Alley states, "We closed the books of
FY86 with a net profit to the County of $108,000.00. We have not
made anywhere near as much progress in the Business Park as we would
have liked" and that a Business Park Manager, Douglas Ewing, was
hired through a contractual agreement with the Martha's Vineyard
Commission.
It was in 1986 that problems with the Department of Environmental
Quality Engineering (DEQE, later renamed the DEP, Department of
Environmental Protection) with respect to the airport water supply
and waste water treatment were first mentioned.
The DEQE via an administrative order, dated December 13, 1985,
prohibited any new connections or extension of the airport's sewer
system until upgrade of wastewater treatment facilities was
accomplished. The order further stated that this drastic step was
being taken, at least in part, because "The Martha's Vineyard
Airport Commission has not stated a willingness to comply...[with
advice provided to them from DEQE in letters dated November 23, 1984
and April 9, 1985]." This problem would plague the airport and the
Airport Commission until 1992.
In 1988 the airport portion of the annual County report cites income
of $760,195.09 and expenditures of $678,571.99 and that:
"Using airport revenues, additional improvements were made
at the airport, a new building to house the sheriff's
emergency communications center was purchased, a new van, a
photo identification system and a radio intercom system were
purchased, which enhances the airport operations."
The 1989 report discusses the airport terminal refinement study
started in 1988 and the proposal of the State to build a County
Jail/House of Corrections on the airport.
On September 12, 1989, James Mitchell, Airport Manager since May 2,
1983, having served more than 6 years, resigned largely due to
disagreements with the County Commissioners, in particular, their
budgetary practices.
W. Philip Reynolds was appointed as acting, and in 1990 as
permanent, Airport Manager. Also in the fall of 1989 the airport
began year-round operation of its air traffic control tower.
Page 8 of 21
April 11, 1992
SPECIFICS AND COMMENTARY
While a history provides an overview of where the airport has been
and gives insight as to how it arrived at it current condition,
further examination of various aspects of specific history of
airport management and airport functions will help to understand
prospects for the future.
THE AIRPORT COMMISSION AND THE DUKES COUNTY COMMISSIONERS
It should be noted at the outset that the comments below do not
necessarily reflect on any particular individual but rather on the
named governmental bodies.
Under Massachusetts General Law Chapter 90 section 51E. an Airport
Commission must be established "which shall have the custody, care,
and management" of the airport and that the Airport Commission "may
appoint an airport manager who shall be qualified by general
management experience and aeronautical knowledge and shall be the
executive officer of said commission". The Airport Commission must
consist of an odd number of members with each member serving a three
year term. Since the Martha's Vineyard Airport is the only County
airport in the Commonwealth, the members to the Airport Commission
are appointed by the Dukes County Commissioners.
At the outset, the three County Commissioners appointed themselves
and served as the Airport Commission. This was perhaps not a poor
practice in the beginning. In later years the practice continued,
but was modified by the addition of two, then four other members who
were not County Commissioners. Presently the Airport Commission
consists of five members, two County Commissioners and three others.
In 1986 the County Commissioners faced the problem of charges of
conflict of interest from Mass General Law c.268A, s.15A. That
statute provides:
"No member of a county commission or board shall be eligible
for appointment or election by the members of such
commission or board to any office or position under the
supervision of such commission or board. No former member of
such commission or board shall be so eligible until the
expiration of thirty days from the termination of his
service as a member of such commission or board."
Page 9 of 21
April 26, 1992
The County Commissioners, with the help of County attorneys, dealt
with the problem in 1987 by having special legislation passed
exempting them from the requirements of the law.
On January 2, 1991 two members of the Airport Commission were
reappointed for one year terms (somewhat surprising in light of the
law requiring three year terms). Further, upon review of copies of
the Annual Reports for the County going back to 1984, it was found
that all of the Dukes County Commissioners had appointed themselves
to the Airport Commission to four years terms while members of the
Airport Commission who were not County Commissioners had been
appointed to terms varying from one to three years.
MGL Chapter 90 section 51I. states that "The airport commission
...shall be authorized to expend any funds granted to, or received
from any source...for airport purposes...". In spite of this,
County
Commissioners in attendance at Airport Commission meetings have
almost always assumed control over the expenditure of airport funds.
It should also be noted that the airport budget is prepared by the
Airport Manager and presented directly to the County Commissioners
for approval. The Airport Commission does not review, nor do they,
as a body, present it to the County Commissioners for consideration.
At least that was the practice when the author served as a member of
the Airport Commission.
It was also the author's experience, while serving on the Airport
Commission, that the Airport Commission in general, and County
Commission in particular has consistently tried to "micro-manage"
the activities of the airport by attempting to decide on even the
smallest of issues without the benefit of detailed inquiry or study
of the problems at hand.
Vast improvement in the current situation is possible by having the
members of the Airport Commission carry out their tasks of setting
overall policy, evaluating the performance of the Airport Manager,
settling unresolved disputes between the Manager and tenants, etc.
and then allowing an Airport Manager, whose close familiarity with
daily operations combined with professional training and experience,
to perform the job for which he/she was hired, managing.
The Airport would be best served, in the author's opinion, by the
County Commissioners carefully interviewing and then appointing the
most knowledgeable, competent, interested, and experienced people
they can find to head the airport AND act solely in its interests.
Page 10 of 21
April 26, 1992
THE AIRLINES
Since the end of World War II there have been more than twenty
different scheduled airlines that have come and gone (and a few who
are still here) at the airport. A partial listing includes:
Air New England
Bar Harbor
Business Express
Catskill Airways
Delta
Edgartown Air
Express Air
Holiday Airlines
New Haven Airlines
NorEast
Northern Airlines
Spectrum Airlines
Atlantic Airlines
Brockway
Cape Air
Continental Express
Eastern Express
Executive Airlines
Gull Air
Island Airlines
New York Air
Northeast
Provincetown-Boston Airlines (PBA)
Trans East
The aircraft used by these carriers have been as small as six
passenger, piston powered, twin engine planes up to jet aircraft
carrying more than a hundred passengers.
Passengers, the public, and the Airport Commission
impossible. They would like inexpensive, frequent
New York, Boston, Hyannis, New Bedford, Nantucket,
using large, modern, turbine powered aircraft. To
unrealistic.
have demanded the
service to
and elsewhere
expect this is
Airlines are businesses. In this day of deregulation and fewer
subsidies they must operate at a profit in order to continue in
business. Their costs can be enormous. As an example, a new
Beechcraft 1900D (a relatively small turboprop with 18 passenger
seats) costs $3.95 million, and airlines normally need more than
one. It doesn't take complicated arithmetic to realize that a
tremendous amount of revenue must be generated just to pay the debt
service on such an aircraft, to say nothing of the maintenance,
fuel, insurance, personnel, airport terminal, and landing fee costs.
Like most everything else on Martha's Vineyard, the airline business
is seasonal. Here on the Vineyard, airlines are faced with either
tremendous under-capacity in the summer, or over-capacity in the
winter. The only airline that was really able to deal with this
problem was PBA. They had a fleet of aircraft of mixed size
Page 11 of 21
April 26, 1992
allowing them to control costs by dispatching small or large
aircraft as conditions warranted. The aircraft were older and
mostly paid for, permitting them to be parked in the off season
without worrying about huge debt payments. PBA had two peak
seasons, one here, and one in Florida, allowing higher utilization
of their aircraft and personnel throughout the year. They
effectively dealt with the problem of the seasonal nature of the
airline business on the Cape and Islands.
Robert Morgan suggested that the failure of the airport to live up
to expectations was not from the failure of airport management but
rather the failure of the airlines to provide stable service,
particularly to New York. Neither the Airport Manager, the Airport
Commission, nor the County Commissioners can force an airline to
provide quality service to Martha's Vineyard. They can however,
take steps to create an environment which is conducive to airline
growth. The most important of these would be to construct a new
terminal building and even more importantly, to encourage air
travel. Earlier in this report you may have noticed that in the
late 50's something as simple as a poster campaign was used to
promote the airport, and according to the County reports of that
time, it was a success.
To be sure, improved airline service will not happen overnight. It
will take a concerted, carefully planned, long term, effort. It
will
require an investment of time, ideas, and yes, money. Public
service
and profit must be the motives for both the airport and the
airlines. Each must work with, and for each other. As the airlines
grow, so too will airport revenues; through fuel sales, enplanement
fees, and the rental of terminal building space.
THE TERMINAL BUILDING
The County reports have discussed the need for a new terminal
building as far back as the late 70's. Indeed, in the late 80's the
Airport Commission decided to install signs around the terminal
stating "THIS BUILDING IS SCHEDULED TO BE DEMOLISHED AS A PART OF
OUR TERMINAL MODERNIZATION PROGRAM". Those signs are still there.
A few years ago a terminal building refinement study was undertaken
by the engineering firm of Dufresne & Henry. Their recommendation
was for a huge new terminal building with more floor space than any
other terminal building in the State with the exception of Boston
Page 12 of 21
April 26, 1992
Logan.
Due to the seasonal nature of the island it is hard to believe that
this is necessary. Everything is crowded, yet usually tolerable, on
the Island in the summer. The airport terminal should not be any
different. The problem is that the current building is inadequate
and barely viable. We need a modern, efficient terminal building of
a size that is adequate, yet not so large as to impose an undue
financial burden on the airport in the form of either the costs of
maintenance, heating, lighting, staffing, or debt service.
THE AIRFIELD
In an interview on February 23, 1992 Robert Morgan indicated that
probably the greatest success at the airport relates to the airfield
itself. Over the years much improvement has taken place relative to
the runways, taxiways, electronic navigation equipment, and other
items that facilitate the safe arrival and departure of aircraft.
These items are at the core of the airport.
no airport.
Without them there is
A serious problem is that while 97.5% of the funds from the State
and Federal governments may be available for capital improvements,
little money is available to maintain these improvements. Sometimes
it is even difficult for the Airport to come up with the 2.5%
portion of matching funds necessary to take advantage of State and
Federal funding.
GENERAL AVIATION
General aviation is considered to include all aircraft with the
exception of military and scheduled airline operations.
General aviation is very important to the airport. Users of general
aviation aircraft pay landing fees, parking fees (sometimes of both
aircraft and automobile), and lease land for hangars. Many own
homes here, and spend time and money here.
They are counted every time they land or take off, which is
considered an "operation". These operations are important in that
they help to determine the amount of funding available from the FAA
Page 13 of 21
April 11, 1992
(Federal Aviation Administration). The greater the number of
operations the more Federal money the Airport is entitled to.
From the smallest Piper Cub, to the largest corporate jets capable
of intercontinental travel, they buy fuel here. The 1990 County
report shows fuel receipts at $425,952.61, more than the County tax
from all the towns put together ($337,912.63), and more than any
other single receipt item.
Fuel sales are mostly a function of the volume of air traffic, but
they are also a function of service. Everyone knows that planes
don't fly without fuel, however to assume that fuel sales are a sure
thing as the result of a captive audience is false logic. Many
airlines "tanker" fuel due to the pricing and service differentials
found between airports and general aviation pilots are no different.
Service includes: a nice airport restaurant (ours is recently under
new ownership), clean restrooms, available ground transportation,
and
airport personnel who are eager and motivated to serve.
Providing service, value, and a pleasant environment are all keys to
attaining repeat business and increased revenue for any business.
THE BUSINESS PARK
Since the late 70s there has been talk of the tremendous potential
of
the Airport Business Park. The Park consists of about 46 acres of
land located on the east side of the airport along Airport Road.
The
biggest obstacle to its development has been the lack of funds to
develop the basic infrastructure (roads, electric power, telephone,
water, and sewage) of the area.
Many studies of the Business Park have taken place over the years.
In February 1988 the Martha's Vineyard Airport Advisory Committee
(MVAAC) released a Lease Fee Evaluation Preliminary Report. A
concise yet comprehensive and detailed report including 5 appendices
of supporting documentation.
It suggests that if all of the 44 lots were leased the revenue
generated could range from about $190,000 per year @ $.10 per sq.
ft. per year to as much as $958,000 per year @ $.50 per sq. ft. per
year.
Page 14 of 21
April 11, 1992
The report details specific actions to be taken to make the Airport
Business park a reality. While some of the report's recommendations
are perhaps not as valid in 1992 as they were in 1988, most still
deserve consideration and implementation.
A copy of the report is contained in Appendix B. The appendices to
the report, however, are not included for the sake of brevity.
CONCLUSION
The Airport's primary function is that of an air transportation
facility which provides a valuable link between the Island and the
mainland. Secondarily it is a valuable site for non-aviation
businesses which are either not suitable for, or cannot afford the
luxury of, a more town centered location.
Times have changed. The Airport is a business which has grown over
the years in complexity. For the Airport to function properly as a
business its methods of conducting business must also grow. Airport
revenues should first serve the needs of the Airport and then the
needs of the County. It is time for an autonomous Airport
Commission to work with the Airport Manager to nurture growth. The
Airport should not be looked upon as just another revenue source for
the County but rather as an entity which serves the public.
It is time for a careful review by the Airport Commission of the
Airport budget. Former County and Airport Commissioner Robert
Morgan stated in an interview that in spite of what may be shown in
County
reports, the Airport has never shown a true profit because the Airport budget has never
shown all of the expenses attributable to it. It is vital that the Airport's budgetary practices
change so that an accurate reflection of revenue sources and expenditures are available as a
working tools.
Recently progress has been made by the construction of a new waste water treatment facility
and improvement to the water supply system via the connection to the Town of Oak Bluff
water supply. This marks the potential beginning of quality growth for the Airport.
Much has been made of the "miracle" that provided funding for these projects. It is time to
depend more on careful planning and management to attain goals than to depend on
miracles. The appointment of a professional County Manager is in keeping with this line of
reasoning.
ACKNOWLEDGMENTS
Page 15 of 21
April 26, 1992
This Report was written with the invaluable help of Jim Mitchell, George King, Trueman
Place, Stan Mercer, Bob Morgan, Colin Ewing, Steve Voluckas, Anglejean Chiaramida, BettyAnn Bryant, David Dunham,
Bob Stutz, and Ed Logue.
Special thanks to Karin Stanley for her help and support.
FOOTNOTES
1) Vineyard Gazette, December 24, 1943
2) Dukes County Intelligencer, February 1984
3) Dukes County Annual Report, 1955
Page 16 of 21
April 26, 1992
APPENDIX A - Excerpts from The Sponsors' Assurance Agreement
13. Accounting System, Audit, and Record Keeping Requirements.
a. It shall keep all project accounts and records which fully disclose the amount and
disposition by the recipient of the proceeds of the grant, the total cost of the project in
connection with which the grant is given or used, and the amount and nature of that portion of
the cost of the project supplied by other sources, and such other financial records pertinent to
the project. The accounts and records shall be kept in accordance with an accounting system
that will facilitate an effective audit in accordance with the Single Audit Act of 1984.
b. It shall make available to the Secretary and the Comptroller General of the United States,
or any of their duly authorized representatives, for the purpose of audit and examination, any
books, documents, papers, and records of the recipient that are pertinent to the grant. The
Secretary may require that an appropriate audit be conducted by a recipient. In any case in
which an independent audit is made of the accounts of a sponsor relating to the disposition of
the proceeds of a grant or relating to the project in connection with which the grant was given
or used, it shall file a certified copy of such audit with the Comptroller General of the United
States not later than 6 months following the close of the fiscal year for which he audit was
made.
22. Economic Nondiscriminationa. It will make its airport available as an airport for public use on fair and reasonable terms
and without unjust discrimination to all types, kinds, and classes of aeronautical uses.
b. In any agreement, contract, lease or other arrangement under which a right or privilege at
the airport is granted to any person, firm, or corporation to conduct or engage in any
aeronautical activity for furnishing services to the public at the airport, the sponsor will insert
and enforce provisions requiring the contractor to -(1) furnish said services on a fair, equal, and not unjustly
users thereof, and
discriminatory basis to all
(2) charge fair, reasonable, and not unjustly discriminatory
prices for each unit or
service, provided, that the contractor
may be allowed to make reasonable and
nondiscriminatory
discounts, rebates, or other similar types of price reductions
to
volume purchasers.
c. Each fixed-based operator at any airport owned by the sponsor shall be subject to the
same rates, fees, rentals, and other charges as are uniformly applicable to all other fixedbased operators making the same or similar uses of such airport and utilizing the same or
similar facilities.
Page 17 of 21
April 11, 1992
d. Each air carrier using such airport shall have the right to service itself or to use any fixedbased operator that is authorized or permitted by the airport to serve any air carrier at such
airport.
e. Each air carrier using such airport (whether as a tenant, nontenant, or subtenant of another
air carrier tenant) shall be subject to such nondiscriminatory and substantially comparable
rules, regulations, conditions, rates, fees, rentals. and other charges with respect to facilities
directly and substantially related to providing air transportation as are applicable to all such
air carriers which make similar use of such airport and which utilize similar facilities, subject
to reasonable classifications such as tenants or nontenants and signatory carriers and
nonsignatory carriers. Classification or status as tenant or signatory shall not be
unreasonably withheld by any airport provided an air carrier assumes obligations
substantially similar to those already imposed on air carriers in such classifications or status.
f. It will not exercise or grant any right or privilege which operates to prevent any person, firm,
or corporation operating aircraft on the airport from performing any services its own aircraft
with its own employees (including, but not limited to maintenance, repair, and fueling) that it
may choose to perform.
g. In the event the sponsor itself exercises any of the rights and privileges referred to in this
assurance, the service involved will be provided on the same conditions as would apply to the
furnishing of such services by contractors or concessionaires of the sponsor under these
provisions.
h. The sponsor may establish such fair, equal, and not unjustly discriminatory conditions to
be met by all users of the airport as may be necessary for the safe and efficient operation of
the airport.
i. The sponsor may prohibit or limit any given type, kind, or class of aeronautical use of the
airport if such action is necessary for the safe operation of the airport or necessary to serve
the civil aviation needs of the public.
23. Exclusive Rights. It will permit no exclusive right for the use of the airport by any persons
providing, or intending to provide, aeronautical services to the public. For purposes of this
paragraph, the providing of services at an airport by a single fixed-based operator shall not
be construed as an exclusive right if both of the following apply:
a. It would be unreasonably costly, burdensome, or impractical for more than one fixed-based
operator to provide such services, and
b. If allowing more than one fixed-based operator to provide such services would require the
reduction of space leased pursuant to an existing agreement between such single fixedbased operator and such airport.
Page 18 of 21
April 11, 1992
It further agrees that it will not, either directly or indirectly, grant or permit any person, firm or
corporation the exclusion right at the airport, or at any other airport now owned or controlled
by it, to conduct any aeronautical activities, including, but not limited to charter flights, pilot
training, aircraft rental and sightseeing, aerial photography, crop dusting, aerial advertising
and surveying, air carrier operations, aircraft sales and services, sale of aviation petroleum
products whether or not conducted in conjunction with other aeronautical activity, repair and
maintenance of aircraft, sale of aircraft parts, and any other activities which because of their
direct relationship to the operation of aircraft can be regarded as an aeronautical activity, and
that it will terminate any exclusive right to conduct an aeronautical activity now existing at
such an airport before the grant of any assistance under the Airport and Airway Improvement
Act of 1982.
24. Fee and Rental Structure. It will maintain a fee and rental structure consistent with
Assurance 22 and 23, for the facilities and services being provided the airport users which
will make the airport as self-sustaining as possible under the circumstances existing at the
particular airport, taking into account such factors as the volume of traffic and economy of
collection. No part of the Federal share of an airport development, airport planning or noise
compatibility project for which a grant is made under the Airport and Airway Improvement Act
of 1982, the Federal Airport Act or the Airport and Airway Development Act of 1970 shall be
included in the rate base in establishing fees, rates, and charges for users of that airport.
25. Airport Revenue. If the airport is under the control of a public agency, all revenues
generated by the airport and any local taxes on aviation fuel established after December 30,
1987, will be expended by it for the capital or operating costs of the airport; the local airport
system; or other local facilities which are owned or operated by the owner or operator of the
airport and directly and substantially related to the actual air transportation of passengers or
property; or for noise mitigation purposes on or off the airport. Provided, however, that if
covenants or assurances in debt obligations issued before September 3, 1982, by the owner
or operator of the airport, or provisions enacted before September 3, 1982, in governing
statutes controlling the owner or operator's financing, provide for the use of the revenues
from any of the airport owner or operator's facilities, including the airport, to support not only
the airport but also the airport owner or operator's general debt obligations or other facilities,
then this limitation on the use of all revenues generated by the airport (and, in the case of a
public airport, local taxes on aviation fuel) shall not apply.
Page 19 of 21
April 11, 1992
APPENDIX B
Martha's Vineyard Airport Advisory Committee
Lease Fee Evaluation
Preliminary Report
February 1988
Non-aviation-related future lease rates should be raised to reflect not only the
value of the land being rented but also the privilege of conducting
a private business for profit on public land. Reasons for raising
the rents of Airport (and Business Park) tenants are:
- to increase revenues to County
- to lessen the burden on taxpayers
- to assist in funding the salary of the Airport Business Park
Manager as well as salaries for all Airport personnel in general
- to assist in the maintenance and increasing costs of operation on
the one square mile of land and
- by increasing County revenues, the County improves its
bondability. Ultimately, the County should be examining its future
development plans as terminal, sewer and water and Business Park
infrastructure development- A 3.0 million dollar figure is more
realistically and pragmatically a 5.0 million dollar figure
- present non-aviation-related, outside of terminal leases range
from $0.021 to $0.145 per square foot per year (average per square
foot charge is $0.099).
Leased land presently ranges from 0.23 acres to 4.0 acres and
averages 1.17 acres(1). At present, there are 44 lots available for
use in the Business Park which total 46.0 acres. The Business Park
lots range in size from 0.4 acres to 1.8 acres. Average Business
Park lot size is 1.04 acres. The length of the roadway System in
the Park (as shown on Smith & Dowling subdivision plan) is
approximately 1.75 miles.
Assuming 44 lots leased(2):
@ $0.099/sq. ft per year = $189,747.00 revenue per year
@ $0.35/sq. ft per year = $670,824.00 revenue per year
@ $0.50/sq. ft per year = $958,320.00 revenue per year
- a report prepared in June, 1986 divided the Park into 5 zones (as
Page 20 of 21
April 11, 1992
they related to the U. Mass study) stated that rented land should
receive a 50% return of market value from Island commercial property
and recommended a 4% per year rent increase based on the Consumer
Price Index. The zones were:
Zone 1 - Wholesale Trade
2 - Manufacturing
3 - Dry Storage & Freight Forwarding
4 - Retail Trade and Services
5 - Aviation Related(2)
Zone
Lots
Lease/sq.ft
$ Generated
1
2-10
$0.97
$394,220.00
2
11-26
0.62
489,370.00
3
27-32
0.18
67,352.00
4
33-38
1.71/0.51
272,625.00/81,309.00
5
A-S
0.14
125,871.00
$1,349,440/$1,158,124 per year (2)
This rate is still incredibly low and should be revised (3)
- the County/Airport Commissioners should contract with an
accounting firm to perform a bond level assessment. 3.0 million
dollar bondability may, in fact, increase to a higher level with
additional parcels rented within the Business Park (i.e. non-water
users or non-waste generators).
- if the County can (or desires to) sign leases of greater length
than 20 years, the potential might exist to assess tenants at
variable rates. For example, a tenant with a 15 year lease might be
charged $0.35 per square foot with a 5 to 10% annual rate increase
while a tenant with a 25 year lease might be charged $0.20 per
square foot with a 5% annual increase. This may promote higher
quality investments and better quality development. A loss in County
revenues, however, would occur.
- the County should begin to utilize standard lease agreement forms
that have allowances for special conditions or needs (e.g. M.V.
Storage or Petrolane lease forms). These standard lease forms should
be adopted for all new tenants and phased in as existing leases
expire.
- the M.V. Airport should continue to serve primarily as an airport.
Therefore any aviation related use(s) should be assessed a lower
rate. Specifically uses in the "SW quadrant" and lots "M" through
"S" or "A" through "S" would qualify for this designation.
Page 21 of 21
April 11, 1992
- towards serving aviation related businesses at a favorable rate,
the Committee recommends that the M.V. Airport Commissioners
seriously consider any requests for a Fixed Base Operator (FBO) at
the M.V. Airport (or begin a promotional search for one). Presently,
the closest FBO-type arrangements are in Hyannis and Nantucket. A
successful FBO on Martha's Vineyard would need the gas sales as a
component of their operation. While a successful venture for the
County at present, the County could lease the pumps, tanks and
trucks to the FBO to recover some revenue. Clearly, the growing
aviation needs and demands on Martha's Vineyard and in the Northeast
of the United States suggest an FBO could be established on-Island.
- any short-term gains in selling the Business Park lot or lots
would be outweighed by the long-term leasing of the same property by
the County with respect to revenues and maintaining control over
development siting.
Martha's Vineyard Airport Advisory Committee
Thoughts on Airport and Adjoining Business Park
February 1988
1. The days of Federal grant monies for Industrial Business Park
development are over!(4)
2. Farmers Home Administration (FmHA) does have a Community
Facilities Loan program which the County is eligible for.(4) The
water, roads and sewer projects that need to be undertaken would be
covered by this general obligation bond packaging. The current
interest rate is 6.5% and, once all the paperwork is completed, the
County would be "locked" into that rate. Interim financing is
available. There is no need for the County to submit a prospectus.
Terms of the loan are generally 40 years. A fully developed Park (44
lots) at the raised rent levels could generate between $1.3 and
$1.15 million per year (just from the Business Park!).
3. The State Division of Water Pollution Control has two programs(4)
that should be explored. For sewage treatment there is the "201
Program." For sewage collection there is the "Economic Benefit Sewer
Projects" program. To the best of my knowledge, the "201" program
has not been pursued by the County due to the planned tie-in with
Edgartown. With W. Filley's proposal being considered, Airport
sewage treatment is not under "201." Also, with W. Filley's
proposal, the Business Park sewage and wastewater is not being
considered. A recommendation would be to pursue sewage collection
monies for the Business Park to hook-up to the Airport Sewage
Page 22 of 21
April 11, 1992
Treatment Plant and to design the proposed sewage treatment facility
large enough to accommodate wastewater from the Airport, the
Business Park and the North Quadrant (i.e. Jail Facility Site).
4. The feasibility of the U. Mass Feasibility Study is in question:
a. there is no longer an unemployment problem on Martha's
Vineyard. As a result, if non-local, "light industry" could be
persuaded to move here, Island labor would not be plentiful or
inexpensive
b. furthermore, if labor came with the industry, affordable,
year-round rental housing is nearly non-existent, and present rents
could be driven up as the demand/supply ratio becomes increasingly
disproportionate. Again in the housing aspect, for these employees
to purchase housing on Martha's Vineyard comparable to what they are
leaving behind, the employer would have to increase wages to
duplicate buying power
c. our high cost of transportation, which causes our high cost of
living, would always be detrimental to locating a non-typical
industry here. In order to entice non-typical industry here, we
would have to "sweeten the pot." Off-Island communities are
aggressively involved in this "sweetening" right now, and as such
are offering enormous financing packages to industry both heavy and
light, large and small. The County would probably have to offer
very low leases for extended periods of time to even begin to
compete. The Park's earning power would be forever diminished as a
result.
d. we do not know about the ophthalmic and navigational equipment
industries, but the jewelry industry has historically had problems
with EPA and OSHA due to the industry's potential to pollute
surrounding environments and work areas
e. is the actual proposed layout of the Business Park really
maximizing land usage and County income potential in light of recent
rulings and funding needs?
5. In addition to this, there are many issues now that did not exist
then:
a. the County no longer has the demographics needed to apply for
Title I funding from the Federal Government(4)
b. presently our business districts are under enormous space and
demand related pressures in the three down-Island communities. Also,
Page 23 of 21
April 11, 1992
many "Cottage Industries" and "Home Offices" begun in West Tisbury's
residential districts are in desperate need of relocation
c. the Airport Business Park could help answer both of these
problems, while easing traffic congestion in the applicable
communities.
6. Also, the committee feels there is no problem concerning
"touristrelated down-town businesses" trying to relocate in the Business
Park that would create a "mall effect." These businesses would not
want to locate away from "foot traffic" or "quaint atmosphere;"
frankly, it is their bread and butter. For them the rule is
location, location, location. However, retailers such as Bonnar
Atwood, Vineyard Decorators, MacDonald Carpets or service industries
such as the dry cleaners do well here for they are destinationrelated. They will attract consumers as long as they have a
product/service that the consumer wants to buy at the right cost and
quality. These are also "resident-oriented" businesses and by
locating at the Business Park they could divert traffic from hot
spots.
There are other businesses presently on the Island that fall into
this category. The traffic advantage would be important as would the
parking. In addition, the lower rent structure could lead to these
businesses offering off-Island-competitive prices. Furthermore, by
taking the enormous demand off the present business district's real
estate, it is possible that rents could stabilize. This, of course,
could help reduce the ever-upward spiral of the Vineyard cost of
living.
7. It is because of all this and the rest of this report which
brings to light the phenomenal potential of the Business Park to the
County that we respectfully request that the Airport Commissioners
consider these prioritized suggestions:
a. immediately bring in an accounting firm to ascertain your
bondability, with a bond level analysis
b. hire an experienced, well-qualified, predevelopment
specialist/consultant(5) to:
* re-evaluate the U. Mass Study
* investigate and pursue all means of funding from interim funding
to sewer funding to infrastructure funding, etc.
Page 24 of 21
April 11, 1992
* follow up on present prospective list
* develop a more up-to-date lease and lease fee structure
* perform an assessment of Island business needs
* develop plans for the Airport & Business Park's own sewer system
to
increase the earning power of the park and eliminate the
uncertainty of sharing facilities
* research and evaluate all of your development options: ie.
develop
within the County structure, form a separate corporation,
farm the whole thing out to another private party, etc.
It is clear to us that the Business Park can bring in desperately
needed revenue within 20 to 24 months, if mobilization begins today.
We have already lost funding potential (Title I) by waiting this
long. We would be happy to help you in any way you desire, at our
present salary!
Our reasons are quite simple not only could the Business Park help
the County with its immediate financial crunch, but it could allow
this County to make historic in-roads in meeting current "crisissized" problems, such as housing and transportation. With an income
of at least $1.3M (and probably more) and a debt stretched out over
at least 40 years, the County could help fund the Regional Housing
Authority and the Regional Transit Authority.
(1)(2)(3)(4)(5)-
See
See
See
See
See
Appendix
Appendix
Appendix
Appendix
Appendix
A
B
C
D
E
NOTE:
NONE OF THESE APPENDICES HAVE
BEEN INCLUDED FOR THE SAKE OF
BREVITY.
Page 25 of 21