Nov. 14—The Crossville City Council wants to continue its relationship with Azure Flight Support Services at Crossville Memorial Airport, paving the way for the company to make investments at the general aviation airport.
"We're interested in building a couple more hangars — whatever is available there — so that we can have room for growth," said Allen Howell, partner and CEO of the Smyrna, TN-based company during the council's Nov. 1 work session. "We have people who come in and want to base their airplane here and we don't have a place to put them in a hangar.
"We're willing to invest the money to build the hangars."
City Manager Greg Wood said hangar space is only part of the issue. Many of the existing airport hangars do not accommodate the wingspan of larger aircraft.
"These hangars will be larger. They will handle a multi-engine aircraft," Wood said.
The city has prepared a site for construction of four additional airport hangars. Azure is currently working with flight technology startup Whisper Aero — based in Crossville — on the design of a specialized hangar for the company developing quieter electric jet engines.
But the company wants to know it will have time to recoup its investment with a longer-term contract.
The city first contracted with Azure to operate the airport in May 2019. The two-year contract included an option for a two-year renewal, which extends through May 2023.
Howell said Azure is seeking a five-year contract with an option for a five-year renewal.
"Which would allow us to continue to make investments in what we're already doing, which is aircraft and tooling," Howell said.
In the past, many hangars were build with grants from the state of Tennessee, but that's no longer the case.
Hangar costs have increased in recent years. However, the market rates for renting those spaces makes it challenging to recoup the initial investment solely from rental payments.
"For us to invest in a hanger, we need the fuel sales to go with it," Howell said. "If we were to build a hangar and, two years from now, we're no longer operating and selling fuel and we're stuck with just hangar revenue.
"So we're asking for a contract extension now because we're looking at potentially starting building hangars at the first of the year."
Azure employs about 15 people in Crossville and reports an annual payroll of about $600,000. Revenue is estimated at $2 million for 2022, a figure that includes fuel sales, maintenance services and flight training.
The council also noted that the original contract did not account for increasing costs and inflation. The company is still being paid management fees based on the 2019 contract. Azure asked for a 10% increase in the management fee. Councilman Rob Harrison recommended a new contract include provisions for annual price changes based on an agreed-upon standard, such as the Consumer Price Index.
Wood added that the Quonset Hut at the airport should also be included in a contract extension. The facility was in poor condition and a "junky mess" when Azure took over the airport it was not considered viable as a rental facility.
"They've done such a good job of cleaning it that now there's at least one transit aircraft that's using it now," Wood said. "Once we get finished with the auction with the aircraft and have a little more room — we need to do a little more work ourselves as far as lighting and doors — that will give us interim space."
Howell asked for a revenue sharing agreement for the hut — 60% to the city and 40% to Azure — similar to the agreement in place for other hangars.
"We pull the airplanes in and out, keep the hanger clean for our 40% and provide liability insurance," Howell said.
During the Nov. 8 meeting, Councilman Art Gernt moved to approve a contract extension, contingent on attorney recommendation of the final draft, that gave Azure a five-year term with a five-year automatic renewal option; a 10% increase in the management fee; a provision for inflation-based annual increases; and provision for cost-sharing of the Quonset Hut hangar. Harrison supported the motion, which was unanimously approved.
Howell said the extension mitigates the risk to the company in the real estate investment in the short term, but said he believes the company's service is what keeps the relationship with the city strong.
"We know as long as we're doing a good job, we can stay," Howell said. "We've been in Smyrna for 40 years. I'm not as concerned about 10 years from now. If we're still doing a good job, you're going to want to keep us."
In other business, the council approved the following purchases and bids:
—$44,744 for six baseball/softball scoreboards at Centennial Park. The purchase is more than the $21,000 budgeted for new scoreboards, so a budget amendment was also approved
—Purchase of 22 sets of protective clothing for the Crossville Fire Department up to the $80,000 budgeted for the year
—$8,000 for purchase of fire extinguishers for city facilities, with a $5,000 grant from Public Entity Partners, the city's insurance carrier, through the Property Conservation Matching Grant program
—$6,832 for replacement of the Wells Rd. sewer pump
—$30,000 reimbursement to Veolia for increased electric costs at the water treatment facility, with a budget amendment
—$9,715.56 for street light repairs
The council also approved designating various vehicles as surplus property, including a 2008 Ford Crown Victoria, 2000 Chevy 2500 pickup truck and 2008 Chevy Tahoe previously used by the fire department.
The city is planning a live auction to sell collected surplus equipment.
"We've got enough vehicles to go to auction. We've also got some lawnmowers and things like that. We'll go ahead and get that going before the weather gets bad," Wood said.
The council approved using Marcka Auction Services to conduct the auction.
A change order was also approved for the repair of a high-mast light pole on Peavine Rd. The light was damaged in a traffic accident and scheduled for repairs when additional damage to the internal cables was identified.
It will cost an additional $14,068.48 to replace the internal cables and extend the project by 60 days. The council approved a budget amendment for the increased cost.
The council also approved the following budget amendments:
—third and final reading of a $295,625 amendment to various parts of the 2022-'23 budget
—third and final reading of a $1.9 million amendment to the budget for phase 3 of the Northwest Connector road project
—second reading of a $10,000 amendment for purchase of a leaf vacuum
—second reading of a $50,000 amendment for purchase of a stud-frame building for the street department
—second reading of an $82,000 amendment for construction of a pedestrian bridge at Meadow Park Lake.
Heather Mullinix is editor of the Crossville Chronicle. She covers schools and education in Cumberland County. She may be reached at hmullinix@crossville-chronicle.com.
