Much of the Kenai City Council's marathon meeting Wednesday evening was spent hashing out the details of a complicated lease deal between the city and Bellair Inc., the airline company owned by Mike Spisak.
Spisak wants to move his Anchorage-based company, which operates eight aircraft around the state, to Kenai. His plan is to build a hangar at the Kenai airport, where he would relocate his maintenance and business operations.
Spisak recently proposed leasing two separate pieces of land at the airport and that's where the complications began.
The city currently has land available for sale and has been actively seeking new tenants at the airport. The problem is, Spisak wants to build his hangar this summer. That means his first choice of land is unsuitable because the city would first have to get permission from the Federal Aviation Administration to lease the land which would likely involve changing the airport's master plan, a time-consuming process.
Spisak's second choice of land could likely be built on this summer but only after an estimated $100,000 of work is done to bring the lot up to building grade. And therein lies the rub.
Since Spisak wants to build this summer, he can't wait for the first tract. And if he leases the second tract, he can't build until it's brought up to grade.
The council debated for more than an hour Wednesday trying to come up with a solution. After deciding the first tract of land would be unsuitable, council members indicated that they'd be willing to spend the $100,000 to improve the lot if it means Spisak will be moving his business here.
"I think we need to do whatever we can to accommodate him," said council member Pat Porter. "... Sometimes you have to spend money to make money."
Council member Rick Ross pointed out that the city has improved its lands in the past in order to lease or sell them.
"We have enhanced property this very same way in order to sell property," Ross said.
Mayor John Williams said he is fully in favor of getting Spisak's operation to the airport. However, he said he's seen other businesses come and go in Kenai over the years.
"I need a little bit of comfort with your organization," Williams told Spisak.
Spisak told the council that he fully intends to stay in Kenai and that, in contrast to other operations that have come to town, his business is not based on the commuter flight operation he plans to run between Kenai and Anchorage.
"We're already an operation and have been for 20 years," he said.
Although he does plan to fly a commuter airline Kenai Express in and out of town, Spisak said that's separate from what he plans to do with the proposed hangar.
"We're still going to be here," he said.
The council eventually decided to allow the city administration to begin preliminary engineering work at the site in order to get it prepared for lease. Although the plan could cost the city $100,000, city Finance Director Larry Semmens pointed out that if that money goes toward leasing the property, it actually will be making more money than if it were sitting in the bank.
That argument seemed to sway council members, who said the investment potential of new revenue at the airport outweighed any potential risk on the city's part.
"One of the issues here is our airport is losing money," council member Blaine Gilman said, adding that the gap between the airport's revenue and expenditures continues to grow each year.
"This is a $100,000 investment for our airport which can maybe help us bridge that gap down."
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