Bidding for hangar lease???

There’s T hangars available at KSSF for $450/mo, no wait. A 50x50 box hangar runs $1100/mo.
 
If you could buy a T hangar already built instead of lease, what would that number be?
 
midwestpa24 said:
If there are aircraft owners on a waiting list, the answer to that should be zero. Otherwise, if it is an airport that receives federal funding, they are in violation of their Grant Assurances.
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What should be isn't what is.
 
TCABM said:
There’s T hangars available at KSSF for $450/mo, no wait. A 50x50 box hangar runs $1100/mo.
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$1100 a month is pretty serious in these parts. Maybe a group should get together and consider buying a few acres of flatland and put some inexpensive T-hangers on it ...
 
Daleandee said:
$1100 a month is pretty serious in these parts. Maybe a group should get together and consider buying a few acres of flatland and put some inexpensive T-hangers on it ...
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Problem is - you can’t “buy” land on an airport. Just lease.
 
cowtowner said:
Supply and demand, the basis of capitalism.
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If taxpayers paid for the hangars and the taxes were progressive (EDIT: "regressive", meaning everyone paid a flat % rate), I'll say the price point should be considered reasonable for the most people. Opening land up for hangar construction, OTOH, should be to the highest bidder and the land lease finite, say 20 or 30 years, IMO.
 
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How would this be any different than just raising hanger rental rates until it was so high that there were only a few people on the waiting list still willing to pay the rate each month? That is essentially what you will end up with in a bidding scenario. Only those willing to pay high rates will actually get a hanger. Maybe that’s fair, maybe it isn’t.

I would also worry about fraud with a bidding system. How much of a kickback would someone be willing to pay to find out what the highest bid is so they can bid just a little more and get the hanger without over bidding?
 
The challenge with bids and auctions is they don’t reflect the market, the reflect momentary demand between as few as two entities and are only limited by the pocketbooks of the participants.

If there’s only one participant, there’s no competition and lots can go for well under market prices.
 
Raising the rates until demand equals supply sounds ok at first. But let’s dig deeper.

Is the role of a government run organization to make money, like a Chi Com? If so, they can’t be a monopoly, or it won’t really work to benefit the consumer. But an airport is a monopoly. Also, a government official/ airport manager has no incentive to make a profit - he’s not getting equity or bonuses. No incentive to build more. Think old style Soviet factories.

And the role of a government service is to enable others to have access to things such as public roads, law enforcement, etc. These don’t make a profit but are essential infrastructure for businesses to prosper.
 
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WDD said:
Raising the rates until demand equals supply sounds ok at first. But let’s dig deeper.

Is the role of a government run organization to make money, like a Chi Com? If so, they can’t be a monopoly, or it won’t really work to benefit the consumer. But an airport is a monopoly. Also, a government official/ airport manager has no incentive to make a profit - he’s not getting equity or bonuses. No incentive to build more. Think old style Soviet factories.

And the role of a government service is to enable others to have access to things such as public roads, law enforcement, etc. These don’t make a profit but are essential infrastructure for businesses to prosper.
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I am an airport manager, and you are right, I receive no bonus or personal incentive for the airport to make more revenue.

However the airport does make every effort to generate as much revenue as possible. Operating and maintaining an airport isn't cheap. Someone has to pay the light bills, pay the maintenance staff, etc. Most small airports operate at a loss, requiring local tax dollars to make up the difference. That difference can become a political hot-topic, especially as airports are often (and incorrectly) regarded as a playground for the wealthy like a country club. Also additional revenue (or profit if you prefer) gives the airport the ability to grow and improve its facility. A profitable airport is not a bad thing.

One other point I'd like to make, airports aren't exactly a monopoly. Yes there may only be one in your town, but the next airport over probably isn't that far away. Airports are probably one of the few government services that do have to compete for customers. You don't get a choice for who supplies water or power to your home, but the airport you do to an extent. Granted it may be less convenient, but there is a choice.
 
dans2992 said:
Problem is - you can’t “buy” land on an airport. Just lease.
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I wasn't talking about airport land. Buy a field and transform it. A group of people that have $1100 a month to spend might find a place to build a small private airport. We have a number of those around these parts ...
 
WDD said:
Raising the rates until demand equals supply sounds ok at first. But let’s dig deeper.

Is the role of a government run organization to make money, like a Chi Com? If so, they can’t be a monopoly, or it won’t really work to benefit the consumer. But an airport is a monopoly. Also, a government official/ airport manager has no incentive to make a profit - he’s not getting equity or bonuses. No incentive to build more. Think old style Soviet factories.

And the role of a government service is to enable others to have access to things such as public roads, law enforcement, etc. These don’t make a profit but are essential infrastructure for businesses to prosper.
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How is an airport a monopoly?
 
WDD said:
There are not multiple providers that can offer hangers. You have to rent or land lease from only one provider
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Only a monopoly on their own property. That would be like saying a hotel is a monopoly, because you can only rent rooms from them.

You obviously have the choice to use a different airport, albeit you may sacrifice convenience depending on the distance between airports. Still not a monopoly.
 
midwestpa24 said:
You don't get a choice for who supplies water or power to your home, but the airport you do to an extent. Granted it may be less convenient, but there is a choice.
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Actually - I do have several options for power. Not for water.

But - be great to hear your POV more. You know far more in how this works than I do. In your opinion why aren’t more hangers and facilities being built?
 
midwestpa24 said:
Only a monopoly on their own property. That would be like saying a hotel is a monopoly, because you can only rent rooms from them.

You obviously have the choice to use a different airport, albeit you may sacrifice convenience depending on the distance between airports. Still not a monopoly.
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Ok. Oligopoly. There are hundreds of hotels to choose from. Maybe two airports to realistically choose from.
 
WDD said:
Actually - I do have several options for power. Not for water.

But - be great to hear your POV more. You know far more in how this works than I do. In your opinion why aren’t more hangers and facilities being built?
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Money to be blunt. As I said earlier in this post.

midwestpa24 said:
IF I were ever to do a bidding process for hangar rental, the way I would do it is for available hangars. I would not do it for occupied hangars. The rate would be bid, then that rate would continue with annual CPI increases, which is what we already do.

T-Hangars have always been an oddity in the pricing game. In the state of Iowa, T-hangars usually range between $100-200 per month, with a handful of outliers on either end. But if you were going to try to make a business case to fund and build the hangars, and assume a 15 year amortization, that rate would need to be $800 per month. A bank of 10 T-Hangars is currently estimated at $1.5 million to build.

$1.5 million / 15 years is $100,000 per year
$100,000 / 12 months is $8,333.33 per month
$8,333.33 / 10 hangars is $833 per hangar per month

All assuming no interest, no maintenance, no utilities.

The only way it works is grant funding and subsidization. Of course the airport receives the fringe benefit of fuel sales, etc., from based aircraft, but lets face it, Avgas sales are not supporting the operation of most airports.
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What it cost to build a hangar can't be offset by the revenue it would generate from a business standpoint.
 
What’s the cost to build a 4000x75 ft runway?
 
dans2992 said:
What’s the cost to build a 4000x75 ft runway?
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You'd have to be more specific, a lot of variables in that question. Concrete, asphalt, grass? Thickness? Existing or greenfield site needing massive grading and fill?

Years ago I once knew a ball park figure for a 10 inch thick, 150 foot wide, asphalt runway runs about $10,000 per foot of length. Basically a 1,000 foot addition to our runway would be $10M, not including environmental studies and land acquisition.

And that is the problem for airports, there is a lot of investment in infrastructure, that requires continued investment to maintain, with no direct connection to revenue normally. Aside from the largest commercial airports, most airports would do well to break even in their operating expenses, not counting capital investments. That is where grants come in from the FAA and states, to fund the infrastructure, but those dollars can barely keep up if that. Add to the fact that most funding from those grant programs has not been tied to inflation or adjusted in 20 years, we are falling behind in re-investing in our infrastructure. Same with highways and bridges.
 
WDD said:
Actually - I do have several options for power.
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I'm curious about this statement. Are you saying there is more than one power company in your area? Or are you referring to alternative energy such as solar or wind? Either way, most jurisdictions still require you to be "on the grid" and pay for a connection to the local power provider.
 
Yep. Therein lies the problem of finding vacant land at a reasonable price, building a runway and hangars. Probably cost prohibitive. (Really needs to be paved. Grass/gravel isn’t going to cut it).
 
dans2992 said:
Yep. Therein lies the problem of finding vacant land at a reasonable price, building a runway and hangars. Probably cost prohibitive. (Really needs to be paved. Grass/gravel isn’t going to cut it).
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There is a reason the majority of airports these days are government owned and built. The value of an airport to a community is not in direct revenue, but the intangible benefit of having aviation access.

There are some out there, mostly private airparks where the owners have the disposable income and desire to spend it on aviation. The only "big" public use/privately built airport is BBG in Branson, which still appears to have been largely funded through government bonds and subsidies.
 
midwestpa24 said:
I'm curious about this statement. Are you saying there is more than one power company in your area? Or are you referring to alternative energy such as solar or wind? Either way, most jurisdictions still require you to be "on the grid" and pay for a connection to the local power provider.
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In many locations in my state, once can choose who generates the power with a variety of rate planes to choose from.

https://www.choosetexaspower.org/electricity-rates/

ETA: the generator will also bill you on behalf of the transporter to get the energy to your house. That’s usually a fee for use scheme.
 
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TCABM said:
In many locations in my state, once can choose who generates the power with a variety of rate planes to choose from.

https://www.choosetexaspower.org/electricity-rates/
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Interesting, I'm curious how that all works. Obviously there is still only one set of wires running to each house, I can't see having duplication of power grids for each company.

I know we experimented with something similar for natural gas, having a third party supplier. Ultimately you still have to pay for delivery through the gas line to your house from the company that owns the line, and introducing a third party to the transaction didn't exactly equate to saving anything. The only advantage was keeping the gas company a little more honest in their pricing having competition.
 
midwestpa24 said:
Interesting, I'm curious how that all works...
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It worked fairly well for us when we lived in a service area. IIRC, we could choose from about a dozen generation companies. You could choose a fixed or variable rate per kwh and mix of sources that included alternative/renewable contributors.

During the 2021 deep freeze, some folks on variable rate plans saw some very high bills though.
 
midwestpa24 said:
You'd have to be more specific, a lot of variables in that question. Concrete, asphalt, grass? Thickness? Existing or greenfield site needing massive grading and fill?

Years ago I once knew a ball park figure for a 10 inch thick, 150 foot wide, asphalt runway runs about $10,000 per foot of length. Basically a 1,000 foot addition to our runway would be $10M, not including environmental studies and land acquisition.

And that is the problem for airports, there is a lot of investment in infrastructure, that requires continued investment to maintain, with no direct connection to revenue normally. Aside from the largest commercial airports, most airports would do well to break even in their operating expenses, not counting capital investments. That is where grants come in from the FAA and states, to fund the infrastructure, but those dollars can barely keep up if that. Add to the fact that most funding from those grant programs has not been tied to inflation or adjusted in 20 years, we are falling behind in re-investing in our infrastructure. Same with highways and bridges.
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Do roads cost that much to build too? I guess they’re not 150 ft wide, but I’m thinking you could probably get away with a 75’ runway without too many complaints.
 
FWIW, The owner of Potomac Airfield (VKX) has auctioned off hangars on EBay as they become available for the last 7 years or so. It's a private non federally funded airport, so hangar rent is a major source of operational income. You basically bid on a monthly rate.
 
dans2992 said:
Grass/gravel isn’t going to cut it).
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Guess that depends on the plane, pilot, and the mission. We have a bunch of folks that not only love flying from a grass field but many prefer it. Don't care too much for gravel but the tailwheel likes the grass ... although currently I hangar where there is pavement.
 
dans2992 said:
Do roads cost that much to build too? I guess they’re not 150 ft wide, but I’m thinking you could probably get away with a 75’ runway without too many complaints.
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Cost per sq foot is probably similar, but yes roads are obviously much narrower. One could do a 75' wide runway, but our existing runway is 150' wide, hence the easy napkin math I had on those numbers. If only 75' wide, probably could reduce the thickness as well depending on the anticipated traffic loads.
 
WDD said:
Ok. Oligopoly. There are hundreds of hotels to choose from. Maybe two airports to realistically choose from.
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None of the above. There might be places in America where there are only two airports to choose from. Maybe somewhere in the middle of Kansas. I don't know. But since here there's scores of them.
 
Racerx said:
How many airplane hangars are used to store non airplanes
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that answer is zero at my home base. Hangar s are inspected every year, and the airport manager also goes through the list of aircraft sold with freqency.

If you sell your aircraft, and you are in a hangar, you have 90 days to get something else, otherwise you give up your space.

if it’s discovered that you are using your hangar as a glorified self storage unit, you are given notice to clear it out.
 
I know of few hangars at our airport that have planes in them but don't fly. The AP gets them out every so often and ground runs them I noticed.

When I moved in in 2018 I had a choice of 3 hangars I was shown. For the last 2 years there is a waiting list to rent hangars. I know 2 people who are on the waitng list. My timing was good for a change, bought my 172 from a late friend right before the prices took off. He passed away right before prices started to take off, if he was still here I would have never heard the end of it. I was also lucky to get a hangar.
 
Gary Ward said:
I know of few hangars at our airport that have planes in them but don't fly. The AP gets them out every so often and ground runs them I noticed.
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Years ago when building my current plane we rented space from a hangar owner that rented to several people. One gentleman (he was a member of the aeronautics board) had a nice Grumman that got taken out of the hangar, washed, annualed, run up & down the runway, and put back in the hangar. In all the years I was there no one ever saw it fly ...
 
Lindberg said:
None of the above. There might be places in America where there are only two airports to choose from. Maybe somewhere in the middle of Kansas. I don't know. But since here there's scores of them.
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I’m not counting an airport that is over an hour away. That’s not really a viable option IMHO. Besides - around here even airports hours away don’t have hangers open.

But the bigger point is that airport managers aren’t just sitting around apathetically not building anything because they don’t want to. I seem to be getting the idea the bureaucracy is just in the way.
 
midwestpa24 said:
I'm curious about this statement. Are you saying there is more than one power company in your area? Or are you referring to alternative energy such as solar or wind? Either way, most jurisdictions still require you to be "on the grid" and pay for a connection to the local power provider.
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Each year we get a blizzard of e mails and hard copy mail on which company to use, who has what rates, fixed per therm or variable per therm, or even equal payments each month.

Similar to decades ago when you picked your long distance phone service.
 
bradg33 said:
Most of this can be avoided with active airport management that actually enforces a requirement that hangars contain airworthy aircraft or active projects. Too many hangars full of dust-covered airplanes and TONS of non-aviation storage. Several at my airport that couldn't even be worked on or removed from their hangar because there's so much misc. storage piled around them. Kick those guys out, get active airplanes in.
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+1
 
midwestpa24 said:
There is a reason the majority of airports these days are government owned and built. The value of an airport to a community is not in direct revenue, but the intangible benefit of having aviation access.

There are some out there, mostly private airparks where the owners have the disposable income and desire to spend it on aviation. The only "big" public use/privately built airport is BBG in Branson, which still appears to have been largely funded through government bonds and subsidies.
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C56 was private. 75x5,000' concrete runway. But he kind of forced the states hand and they bought it for a premium as it was right where Chicago's long proposed 3rd airport would be.
 
How about: price the hangar according to usage? e.g. housing a plane that actually flys, base (lowest) rent. An airplane building/restoration project, next step higher. A plane that never flys, next step higher. A plane plus jet ski, etc. next step higher. No airplane, just car, boat, etc. in the hangar, etc. highest rate.
 
40YearDream said:
How about: price the hangar according to usage? e.g. housing a plane that actually flys, base (lowest) rent. An airplane building/restoration project, next step higher. A plane that never flys, next step higher. A plane plus jet ski, etc. next step higher. No airplane, just car, boat, etc. in the hangar, etc. highest rate.
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that actually might be counterproductive, encouraging airports to improve the bottom line by using the hangars for non-aviation uses
 
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