Commission approves 4% hangar rent increase amid broader budget and grant hurdles

Airport staff briefed the commission on multiple budget and funding items — including federal contract tower site-selection and environmental work, approach-mitigation studies, runway and pavement projects, a recently opened fuel farm and lease revenues — and proposed a 4% increase in hangar rents to shore up airport finances.

Chad and Ryan, airport staff, summarized revenue trends and expense pressures. They showed fuel-sales growth since 2021 and credited a prior change in fuel pricing strategy for increased fuel profit. Ryan explained that the airport’s two core revenue sources are fuel sales and leases, and noted the airport’s growing nonoperating revenue from interest and the business center. He also described a planned professional-services contract for market-level assessments by a consultant, Michael Hodges, to inform hangar and lease pricing.

Staff described a long-running complication with the federal contract tower (FCT) grant. The Federal Aviation Administration (FAA) expects a site survey and siting analysis before environmental work, but the state aeronautics office’s grant checklist lists environmental review as a precondition; that sequence would require the airport to pay for environmental work before a grant is available. Staff said the state aeronautics office agreed to pay for the lowest level environmental review on all three candidate sites so the airport can proceed.

On approach mitigation, staff reported that NV5 and Barge have identified tree locations affecting approach surfaces and are evaluating trees that could grow into protected approach slopes over a five- to ten-year horizon. Staff said tools such as height restrictions and navigation easements will be used on a property-by-property basis where needed.

The commission reviewed a Tennessee Aeronautics Commission (TAC) hangar-rent “calculator” produced by Kimley-Horn that assigns suggested rent ranges based on hangar type, age, doors, utilities and county economic factors. Staff said A, B and C-type T-hangars currently charge $2.33 per unit in the airport’s internal metric and fall below the TAC suggested range; other hangar groups were closer to or within midpoint market estimates. Ryan told the commission the consultant will provide square-footage and market comparisons to refine rent targets.

After extended discussion about fairness across different hangar types and concern about the state potentially using the model in grant decisions, Commissioner Canyon Lowery moved to increase hangar rents 4% across the board; an unnamed commissioner seconded. In a roll-call vote, Shelby Hutton said she would “kind of abstain”; Canyon Lowery and five other commissioners voted in favor. The motion carried.

Action (motion): "Increase hangar rents by 4% across the board." Mover: Canyon Lowery. Second: unnamed commissioner (stated at the meeting). Vote tally recorded during roll call: Shelby Hutton—abstain; Canyon Lowery—yes; Paul Myers—yes; Bill Shacklett—yes; Bruce (Drew) Shelley—yes; Veleska Starnes—yes; Steve Waldron—yes. Outcome: approved.

Commissioners also discussed potential short-term strategies to grow fuel-volume revenue, such as temporary discounts or weekend promotions to attract transient fuel customers, and whether to revise ramp fees for larger aircraft. Staff said it would prepare a fuel-discount pilot analysis to estimate the gallons needed at a reduced price to offset revenue loss.

No further votes were taken at the meeting. Staff said they will continue to refine the airport budget with the city finance department, to pursue grant options for RPZ (runway protection zone) property acquisition, and to return to the commission with updated rent and revenue analyses.