Pella council signals support to discontinue South Central Regional Airport pursuit and direct sale of acquired land

City of Pella staff on Wednesday advised the council that the South Central Regional Airport (SCR) project is unlikely to be built in the foreseeable future and recommended the city work with Oskaloosa to discontinue pursuit of the regional airport and direct the SCR board to liquidate property and repay federal grants.

The recommendation came during an extended policy and planning presentation by Mike (city staff), who reviewed the SCR history and funding. Mike said the SCR agency has acquired roughly 378 acres toward an approximately 600‑acre site and that the Federal Aviation Administration awarded grants totaling about $5,245,000 for the project. He said the FAA advised that, absent continued pursuit, grant repayment obligations could extend roughly 20 years from the original agreement date and that sale proceeds must be handled to satisfy the federal share of acquisition costs or current fair market value, whichever is greater.

Staff highlighted several hurdles: difficulty acquiring remaining parcels, a prior Iowa Supreme Court ruling that limited the termination provision in the intergovernmental agreement, and infrastructure and road‑closure complications tied to the proposed site. "We believe the project faces significant challenges that make construction unlikely in the foreseeable future," Mike told the council, and he recommended an amendment directing the SCR board to sell property and repay grant funds while maximizing sale value.

Public commenters urged the city to act. John Bstra, a Mahaska County resident, argued the project had disrupted century and heritage farms and said local legal and financial exposure had been substantial. Kyle Reynolds, a business jet pilot and longtime airport stakeholder, urged the council to terminate the city's interest in the regional project and to focus local planning and investment on the Pella Municipal Airport.

Council members discussed legal and practical limitations, including the Iowa Supreme Court decision that struck down a termination penalty provision but left the 28E agreement largely intact; one member noted the agreement still includes a damages clause for unilateral withdrawal. Several council members said the decision on how to proceed must be coordinated with Oskaloosa and with the SCR board. The council did not record a formal, final ordinance rescinding participation on the public record in this session; rather, members signaled support for staff's recommendation to direct the SCR board toward sale and repayment and to provide the board adequate time to maximize sale proceeds.

The staff presentation identified a potential repayment exposure roughly equal to the federal acquisition share of the land grants (staff highlighted approximately $4.78 million tied to 378 acres as one discussion figure) and noted the FAA could, in some circumstances, allow returned funds to be reallocated as grants to the remaining airports in the area if proper process is followed. That possibility was presented as a potential benefit if property sales proceed and funds are returned to the FAA.

Next steps described by staff included coordinating with Oskaloosa on the terms of any joint recommendation, establishing a sale timeline that allows the SCR board to maximize value, and clarifying exact repayment amounts with the FAA. The council also discussed board membership and a replacement for a retiring SCR board member. The SCR matter remains subject to subsequent formal action by the SCR board and any intergovernmental decisions by Oskaloosa before the city takes final, binding steps.