... ... .. .... .. -: : . : : : :-. : 11:11::11111i:11::11 .... .. .. .. ...·. .· ·.· .. rD 100: A2- :+-loo9o l LAKE HAVASU CITY AIRPORT STUDY Prepared by ARIZONA DEPARTMENT OF TRANSPORTATION TRANSPORTATION PLANNING DIVISION 206 South 17th Avenue Phoenix, Arizona 85007 September, 1976 Arizona Transportation Research Center Li brary 206 South 17th Avenue, #075R Phoenix, AZ 85007 TABLE OF CONTENTS PAGE Study Purpose . l Summary .... 3 Recommendations 4 Airport Background 6 Lake Havasu City Socioeconomic Background 8 Lake Havasu City- Mohave County Comparisons 8 Growth Potential 16 Cone l us ion . 22 Lake Havasu City Airport Technical Aspects 23 Introduction .. 23 Airport Location 23 Airport Classification 23 Airport Compatibility 24 Airport Facilities .. 24 Airside Improvements 24 Landside Improvements 27 Airport Deficiencies 28 Land Interest 32 Airport Certification 33 Airport Capital Requirements 34 Lake Havasu City Airport Economic Analysis 36 Demand for Service. 36 Operational Profile 38 Evaluation of Options 41 Option #1: Do Nothing 41 Option #2: Receive and Operate Lake Havasu City Airport 42 PAGE Option #3: Develop an Alternative Airport 44 Option Summary 47 Appendix 48 Pictures 49 Exhibits Exhibit A - Five-Year Construction Program. 58 Exhibit B - 2O-Year Recon Plan . 59 Exhibit C - 2O-Year Recon Plan Showing Five-Year Development Program 60 STUDY PURPOS E During the last several years , the Lake Havasu City Airport, which is cur­ rently privately-owned and operated by McCulloch Properties, Inc., has been the object of many studies. A study concerning the relocation of the airport from its current site on Pittsburg Point to an alternate site in the Standard Wash area was conducted by Trico International in 1973. 1 Another study consisted of an extensive appraisal of the fair market value of the private property which makes up roughly half of the current airport premises. This appraisal was done by Burke, Hanson and Homan, Inc., during the early part of 1976. 2 All of this activity, coupled with recent comniunication from McCulloch Properties, indicates a strong desire on their part to bring about either the relocation of the airport in order to take advantage of the commercial value of the property or to at least avoid the operational losses generated by the airport by transferring its ownership to some public entity. It is the purpose of this report to examine the following issues relevant to the Lake Havasu City Airport: 1. Investigation of the market area to be served by the airport, i.e.: does the growth potential of the area reinforce the need for such a facility? 1 Lake Havasu City Airport Perspectives, Tri co International , 1973 2An Appraisal of the Fair Market Value of a Portion of the Land Comprising the Lake Havasu City Airport, John T. Hansen and Douglas Kruse, 1976 -1 - 2. Evaluation of near tenn operating revenues and expenditures to deter­ mine the likely profit or loss potential over the next few years. 3. Examine the economic costs and benefits of some alternatives for deal­ ing with the airport facility. 4. Aid ADOT in the fonnulation of a policy which will enable it to handle this case and similar cases as they arise in the future. -2- SUMMARY This study has brought out many points discussed in prior studies of the Lake Havasu Airport. However, many ideas developed here have not been developed in other studies and, to our knowledge, have never been considered in the analysis of the airport at its current location or in alternative locations. Some of our more important findings are: l. There is ample space for growth in Lake Havasu City. 2. There is a large amount of sold, yet unoccupied, property that would lend impetus to future development. 3. While developed land area implies a population potential of 100,000, limitations on access to water could restrict expansion. 4. There is no prospect for profitable or even break-even operations at the Lake Havasu City Airport for the foreseeable future. 5. The existing facility has several major deficiencies that would require remedial action if the airport is to meet FAA standards. 6. Public ownership of the airport would entail a high probability of continued operational losses as well as major capital outlay, the return on which could easily be negative. 7. The question of who should bear the financial burdens of owning and maintaining this airport is an issue of justice. Given that the Lake Havasu City facility cannot be self-supporting, policy makers must decide who shall make up the deficits. - 3 - RECOMMENDATIONS 1. The existing airport site should be maintained as the Lake Havasu Airport. Discussion: While another site could be developed (as reviewed under Option #3, page 44), as a replacement airport, this is not considered feasible, since sufficient FAA ADAP funds and sponsors' match­ ing funds are not available for such an undertaking. Also, any new airport site would be more distant from the population area being served, and would require duplicating existing private and publfc airport capital investments. 2. The State Park Board should require that the airport continue to be main­ tained by McCulloch Properties Inc. (MPI), in accordance with their lease agreement until such time as successful negotiations with a public entity have been completed. Discussion: To date, the possibility of local government acquisitions of the airport properties has not been fully explored. Questions exist concerning whether Mohave County would accept ownership of the facility. Also, it has not been determined if some other quasi­ government or non-profit organizations have an interest in oper­ ating and maintaining this airport. The agreement between the State Park Board and MPI requires MPI to continue to operate the airport until the le~se is cancelled or until the agreement is waived. This covenant should be enforced. 3. ADOT should take an active role in precipitating negotiations between inter­ ested eligible sponsors, the State Park Board, and MPI. Discussion: To date, records do not indicate a past effort to bring inter­ ested airport sponsors together with MPI. In fact, it is not certain what MPI.'s position is regarding relinquishment of their airport interests. ADOT should review the Lake Havasu status in meetings with MPI officials. After this, prospective airport sponsors should be ascertained, and meetings with these entities should be held. Finally, ADOT should act as a mediator in final negotiations between the interested parties and MPI. 4. If an eligible sponsor successfully completes airport acquisition negotiations with MPI, ADOT should provide a Tr.ansition Grant to defray initial operational deficits. -4- Discussion: Table 17, page 40, predicts a $40,000/year difference between airport revenues and operating costs. To offset this projected loss, a short term (two years) annual State subsidy to the local authority assuming airport control would appear reasonable. Nearly all other airports in the State have received construction grants in the past. Lake Havasu has provided years of service to the public without public subsidy. Therefore, to use State resources to make public acquisition of Lake Havasu airport more attractive would appear to be consistent with past state policy to assist local airports. It is considered proper that funding to implement this recommendation should be secured through a special appropriation from the General Fund. 5. State operation of the airport should be avoided. Discussion: Past policy established by precedent dictates t hat the State should not take over operation of this airport. Arizona ha never taken over operation of an existing airport. Recent telephone ~ontact with t en different western state aeronautics offices revealed that there is a uniform policy in this regard. If Arizona breaks this long standing position, similar requests from other communities for State assumption of operational responsibility for their airports may be expected. Such requests would be difficult to decline if one instance occurred where the State assumed operation responsibility of an airport serving a municipality or population center. 6. If MP! ceases operation of the airport and local government will not accept the operational responsibility for the airport, the following course of action is reconmended: A) The airport should be closed. B) The airport land under the control of the State Parks Board should be land-banked for future airport use. C) MP! should be approached to see if they will donate their fee-simple land to the airport land bank. This property is located in the center of the airport lands. D) Until the property within the airport land bank is required for airport purposes, the property should be posted and marked to insure that the State does not incur liability for any unauthorized air or ground operations. -5- AIRPORT BACKGROUND The construction of Parker Dam in 1938 created Lake Havasu and opened vast recreational opportunity along the entire length of the Lake. This recreational opportunity was, in all probability, part of the reason for the construction of the landing strip and rehabilitation center by the Army Air Corps during World War II. After the war, the facility was abandoned and received only occasional use by recreationally oriented aviators. In 1958, Robert McCulloch established a testing site there for outboard motors. He subsequently decided to extend his manufacturing operations to the area but was unable to do so because of land purchase problems. However, in 1963 McCulloch acquired the 26 section area where Lake Havasu City is now located and proceeded to establish manufacturing operations in the area. The new facilities generated new uses for the old airstrip and with the planned development of the city and attendant land sales promotion effort, substantial improvements were made to the airfield. The fly-in sales campaign conducted by McCulloch Properties from 1972-1975 and the testing operations for the J-2 gyrocopter generated substantial airport use.