ITEM TITLE:
#21-52 Establishing Sublease Rates at Valdez Pioneer Field Airport
SUBMITTED BY: Jeremy Talbott, Ports & Harbors Director
FISCAL NOTES:
Expenditure Required: N/A
Unencumbered Balance: N/A
Funding Source: N/A
RECOMMENDATION:
Recommendation to approve Resolution 21-52 Establishing Rates at the Valdez Pioneer Field Airport
SUMMARY STATEMENT:
In 2010 the Valdez City Council voted to increase the rates for the Valdez Pioneer Airfield through resolution 10-60. The rate increase would be 5% annually over the course of the next 3 years. (2011,2012, & 2013)
During 2014 & 2015 there was a significant amount of construction upgrades at the airport, with frequent disruptions. Understandably the Ports & Harbors Commission recommended a hold on rate increases.
In 2016 & 2017 the Ports & Harbor Commission made a recommendation to the Valdez City Council to increase the rates 5% annually over the next three years. The City Council decided to hold the rates at the 2010 rate schedule both times they were brought forward.
Additional factors supporting a rate increase;
• New HVAC system
• New LED lights inside the terminal
• New roof
• New ADA restrooms
• Waterline upgrades
• Parking lot improvements
• New automatic doors
• Shared conference areas
• Increased utility rates
• Increased janitorial rates
• Increased annual State of Alaska Lease
• Waitlist for space
• Utilities and snow removal provided at no additional cost
The City Council with support from the ports & Harbors Commission has always tried to establish rates that did not compete with private property lease rates. Since 2010 Ports & Harbors staff has conducted two rate comparison inquiries with other private Valdez commercial lease vendors.
During both rate comparisons of the private vendors, (who were willing to share their rates with staff) we have found that we have now fallen well below the market lease rates with similar commercial lease spaces. The only exception was the vacant building across the street from the airport that would require significant remodeling and infrastructure to occupy commercially.
Private lease rates ranged from $2-$2.50/Sqft.
We are recommending the same rate increase to council as was previously brought forward in 2016 & 2017. A non-compounded 5% annually for the next three years, with a 2% annual increase moving forward in 2025.
• • 2022 $1.90/Sqft
• • 2023 $1.99/Sqft
• • 2024 $2.08/Sqft
• • 2025 2% annual increases.
The Ports & Harbors Commission reviewed the rates at a work session and adopted a formal recommendation to the Valdez City Council in support of Resolution 21-52 Establishing Sublease Rates at Valdez Pioneer Field Airport at their November 15th regular meeting.
The Ports & Harbors Commission will continue to monitor and review the rates annually. While making recommendations to the Valdez City Council as needed for adjustment as obligated by Valdez City Charter.