Council wants to de-annex airport|Move would provideincentives to attractmore aircraft, says city

Published 6:55 am Tuesday, July 14, 2009

Contributing Editor

The Washington City Council approved a resolution asking state Rep. Arthur Williams to introduce legislation that will allow the city to remove Warren Field Airport from the city limits.
If approved by the N.C. General Assembly, the legislation would allow the city to offer tax-based incentives for airplane owners to base their aircraft at the airport, which is owned by the city.
The resolution was approved by the council during its meeting last week. A copy of the resolution was sent to Williams, who is expected to introduce the proposed legislation during the next session of the General Assembly.
The move, in part, was precipitated by the recent sale of an aircraft that had been kept at the airport. The sale resulted in the plane being moved, reducing the assessed value of aircraft at the airport from $2.2 million to $1.38 million. The aircraft, owned by Public Relations Transportation, was operated to benefit Fountain Powerboats, according to a city document.
“Tax revenues anticipated during the coming year declined from $13,200 to $8,300,” according to a memorandum from City Manager James C. Smith to the mayor and council members. “Operating expenses (at) Warren Field Airport during the next year net of grant-funded expenses are anticipated to be approximately $259,000 while operating expenses are estimated to be approximately $79,000, leaving a deficit of approximately $180,000.”
City and Beaufort County officials have discussed the potential of a tax-advantage incentive program for aircraft owners to base their planes at Warren Field Airport.
“Additional aircraft based at Warren Field would also provide the potential for increased fuel and other sales,” according to the memorandum. More aircraft based at the airport would mean more revenues from hangar rentals.
“It’s just one more tool in our economic development bag,” Mayor Judy Meier Jennette said Monday.
County Manager Paul Spruill said the county understands the city’s position and its desire to recruit more aircraft owners who will base their aircraft at the airport.
“It’s in the county’s interest that the airport be healthy from a business point of view,” Spruill said Monday.
The city’s proposal could result in the airport generating more income and improving its quality of service, which likely would be attractive to aircraft owners, Spruill added. He also said that more aircraft at the airport would result in more revenue from taxes the county levies on aircraft there.
“It’s worth a try,” Smith said Monday.
Discussions between the city and county indicate a potential willingness by the county to work with the city to base more aircraft at the airport, Smith said.
Currently, aircraft based at the airport are subject to personal property taxes levied by the city and county. While some airports in the area make incentive payments to aircraft owners who keep their aircraft at those airports, Washington does not have the money to provide such incentives.
If the airport was removed from the city limits, the city would lose $8,300 a year in tax revenues from aircraft based there, but the county would continue to receive revenues from the taxes it levies on aircraft at the airport.
“However, a significant increase in based aircraft could provide more revenue, even at the county rate only, and lead to construction of additional hangars and increased fuel sales which (have) the potential of more than offsetting the loss in personal property tax revenues,” reads the memorandum. If the airport were de-annexed, it would create a low cost … basing haven for aircraft owners.”
Beaufort County has agreed to pay to the city all of the increased tax revenue — up to $100,000 — it would receive from new based aircraft, except for the $8,300 it presently receives, Smith said. In the event the tax revenue, minus the $8,300 the county now gets, surpasses the $100,000 mark, the city and county would negotiate a new agreement on allocating the revenue, Smith said.
In a letter to Smith, one aircraft owner, Craig Goess, wrote that he is willing to base his Citation jet at Warren Field Airport for no less than three years (and probably much longer) and to buy the former Fountain Powerboats hangar if the city “agrees to de-list Warren Field for property tax purposes so that I will only be required to pay the Beaufort County property tax” on the aircraft.
The de-annexation could be reversed at a future date, at the discretion of the city, according to the memorandum.