In flight: A proposed charter service could develop land at the Sullivan airport

By ANNEMARIE SCHUETZ
Posted 8/24/21

TOWN OF BETHEL — A “major development project” could take off at the Sullivan County airport, county attorney Michael McGuire said on August 19. An individual named in the …

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In flight: A proposed charter service could develop land at the Sullivan airport

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TOWN OF BETHEL — A “major development project” could take off at the Sullivan County airport, county attorney Michael McGuire said on August 19. An individual named in the resolution as “Number 18 Corporation,” “wants to fly charters, have folks fly in directly from Canada,” McGuire said. Currently, anyone coming here from Canada has to pass through Stewart International Airport in Newburgh first.

“It’s a very ambitious project. There are obviously a lot of questions to be answered,” said McGuire, “but we’ve got land that’s not going to be developed.”

The land in question is “currently deemed unbuildable and not readily available for development,” according to the resolution.

At this point, the developer wants a letter of intent or an option agreement, McGuire said.

Under the terms, that person would pay $5,000 per year for the next three years, while “he sees if it’s feasible to build in this area.” An easement would be needed from the FAA, water would need to be connected with the Town of Liberty and sewer with the Town of Bethel.

“And if he’s able to go forward after two to three years of due diligence, he would pay us $1 million a year” for a 60-year lease, McGuire said. However, that dollar figure would be reduced by the cost of improving the infrastructure.

The total (gross) paid to the county, including an annual two percent increase, would be $115 million, and the cost of the improvements is estimated to be between $30 and $35 million. (The resolution says “up to” $36 million.) So the county would actually see about $80–85 million, he said.

In addition, the county “will require that the lease holder will be required to purchase all fuel from the County of Sullivan at a price to be negotiated as part of the ultimate lease agreement.”

That matters because “fuel sales at the airport are really the driving financial force,” McGuire said.

The resolution passed, 9-0.

Fueling the matter

The final amount that Number 18 Corporation would pay for fuel hasn’t been negotiated yet, but there’s no question that it’s an important issue.

Airport administrator Jim Arnott explained how fuel pricing works at the Sullivan County airport.

The airport pays a wholesale price for the two kinds of fuel they use: 100 low-lead aviation gas (Avgas) and jet fuel (aka Jet A). “Of course there is a different price for us to purchase either fuel, and it is posted weekly by our supplier.”

Arnott used the previous week as an example, noting that it should be kept in mind  that aviation fuel is more expensive than car fuel because there are fewer refineries and depots. But if you buy in volume, it costs less.

The purchase price for Avgas was $4.32 per gallon, and the airport set the selling price at $5.25. They made about 83 cents per gallon, due to taxes. Jet A’s price was $2.65 and the airport sold the fuel for $5.25, “with an apparent margin of $2.60.”

The average business jet purchase is for 200 to 250 gallons. “Routinely we do get purchases by a single airplane for 1,000 to 3,000 gallons.”

In July, Arnott said, the county sold $99,000 in fuel, and for August, as of last week, it was $86,000.

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