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Real estate deals help brighten balance sheet at St. Petersburg-Clearwater airport

ST. PETERSBURG — His title is director of St. Petersburg-Clearwater International Airport. But Noah Lagos might as well be a real estate developer.

A quarter of the airport's operating budget comes from 39 real estate leases — including many taxpayer-subsidized deals — that have nothing to do with aviation.

Without real estate business, the 2,000-acre airport with a weak history of maintaining commercial service, would run a deficit.

For much of the decade, the airport has run an operating loss, according to financial and audit reports. But money it brings in from leases for nonaviation business — such as investment companies, county government services and a Cracker Barrel restaurant — will help offset that deficit with nearly $2.9 million in 2010.

So it's not surprising the airport wants more real estate deals.

"We are in the real estate business," said Lagos, who estimates his real estate manager spends half his time managing and developing leases for nonaviation properties on land it owns.

This fall, the airport is taking the next step to develop more of its land, the Airco Golf Course off Ulmerton Road, by trying to change how the land can be used.

Over a decade or more, the airport wants approval to turn the 129-acre site into industrial and commercial buildings and add two hotels — projects worth millions.

But the question has long been whether it's in the county's long-term interest to run an airport with volatile passenger demand. Not only is it only 11 miles from a major airport, Tampa International, it has faced struggles keeping the smaller regional airlines coming.

With travel down, former County Commissioner Bob Stewart — an airport fan — floated the idea of shutting it down to become a baseball stadium site in 2008.

But that would cost millions and require FAA approval, and was never seriously considered. The airport provides other benefits, too, county officials said.

"We're in between a rock and a hard place. At least it's overall in the black," County Commissioner Karen Seel said.

Under federal regulations, airports are supposed to be financially self-sufficient. They also must take advantage of the best use of the land they own to generate money, Lagos said.

"The bottom line is, we lease quite a bit of our dirt, and it has a fair-market value," said Lagos, director since 2004.

The airport had an operating loss — based on aviation-related activities — of $3.2 million in 2008, the most recent year an audited report is available. That includes depreciations — a "paper" loss, Lagos and financial chief Jeff Noa said. But the money from leases helps the airport break even overall, internal auditors for the clerk's office found in December.

The airport has $10 million in reserves and no debt — other signs it's financially well, Lagos said.

"We are entirely self-sufficient," Lagos said.

Although Lagos maintains property taxes don't subsidize the airport, a big part of its budget comes from land it leases back to the government.

Of those leases, most, $1.4 million, are with the county. Payment comes from the same money that's used to pay for other services — parks, social service and other departments that faced steep cuts this summer with tax revenue fallen.

But the airport didn't. There wasn't public debate on its budget this summer. Its operating costs will stay essentially flat at $10.2 million.

Because its budget is flat, and it doesn't rely directly on property taxes, commissioners said they didn't dissect its spending. They also maintain it has done a fair job of trying to seek passenger business and keep fees low. They noted that Allegiant Air's service between non-major airports helps bring tourists to town.

"I'm not uncomfortable with what the airport is and what it does," said Commissioner Susan Latvala.

Seel and Commissioner Ken Welch said the value of having a regional airport that also supports operations by the Coast Guard and Army Reserve makes it worthwhile, even if it can't break even running commercial passenger planes.

"The questions of long-term viability are still there … but I also know that the FAA looks at our airport certainly as important for regional aviation," Welch said.

Thanks to $5.3 million in federal stimulus funds, the airport is upgrading terminals, baggage claim and passenger loading areas. That money arrived despite passenger levels well off the 1.3 million-person high of 2004.

And a federally backed, $20 million extension of the runway in 2007 to attract long-haul travel from Europe and Mexico has yet to land those planes. Lagos said the end of the recession will revive interest — and the airport has room to grow.

David DeCamp can be reached at ddecamp@sptimes.com or (727) 893-8779.

Real estate deals help brighten balance sheet at St. Petersburg-Clearwater airport 11/03/09 [Last modified: Tuesday, November 3, 2009 4:36pm]
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