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Jan 9, 2018 5:40 PMPublication: The Southampton Press

East Hampton Airport 'Set Up For Future' After Another Surplus And A Windfall

Higher landing fee revenues and declining legal costs left the East Hampton Airport with a more than $2 million surplus in 2017 and a $7.5 million surplus overall. Michael Wright
Jan 9, 2018 5:40 PM

With soaring legal costs grounded, for the time being, and a huge influx of cash coming, the result of the sale of industrial lots, the East Hampton Airport fund will post nearly $7.5 million in cash on hand once its books are settled for 2017.

Budget officer Len Bernard said the airport ended the 2017 fiscal year with a budget surplus of approximately $900,000 and is “pretty well set up for the future.”

Despite the huge cost of fighting lawsuits over flight curfews in 2015 and 2016, the airport’s climbing revenues from industrial lot leases and landing fees had already built up $1.8 million in surpluses. The sale of several industrial sites will bring in another $4.75 million in the first two months of this year.

“That’s a pretty healthy situation,” Mr. Bernard told the Town Board at a work sesssion last month.

Kathee Burke-Gonzalez, the airport’s liaison since 2014, noted that the surpluses had been grown without the airport taking any money from the FAA—a bugaboo for this Town Board because of the strings that come attached to federal grants.

Mr. Bernard attributed much of the 2017 surplus to the lawsuits having been dispensed with in late 2016, so the town spent only about half of what it had budgeted for attorneys fees.

Board members noted that much of the surge in revenues came thanks to the town’s push to ink new lease agreements on some of the dozens of industrial sites that ring the airport property. Some will bring in upwards of $150,000 a year to the airport fund for the next 30 years, while others have seen tenfold increases in annual rents thanks to old agreements that had been “starving the airport for revenue,” as former Supervisor Larry Cantwell put it.

The town has found itself obligated to sell some of the already developed properties, in accordance with their original leases, which date to the 1990s. While those deals, instead of renegotiated leases, will mean the loss of a giant new recurring revenue source, the sales will bring in millions in one-time revenue influxes that Mr. Bernard said can be saved for major capital improvements to the airport, like the construction of the planned new taxiway alongside the main runway.

Ms. Burke-Gonzalez noted that the $2 million that is expected to be spent on an application to the FAA to impose new curfews has already been budgeted for in the aiport’s operating expenses, so it will not diminish the surplus reserves.

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Not quite accurate about the taxiway. It’s just the completion of a small section connecting the two halves of the existing taxiway that already has existed for decades but had a small unfinished gap. Here’s a question - since the airport can clearly fund its own maintenance and projects with plenty leftover why did the town take out a bond to pay for the taxiway completion? Why has the town taken out a bond on every little maintenance issue, even for as little as $50k? Why are they ...more
By localEH (427), East Hampton on Jan 10, 18 9:06 AM
LocalEH is absolutely right. Why burden the EH taxpayer with the interest and principal cost when you have it in the bank already. EH faces steep tax increases from the designs of this Board - Montauk beaches; the $62 million Montauk sewer project; burying the electrical lines in Montauk; new senior center; new Town Hall; and paying for a building, which they will tear down, on the 555 property that they had tried to charge to CPF. Now add this charge???
Van Scoyac knows nothing about finance ...more
By pluff (60), East Hampton on Jan 10, 18 1:03 PM