Marion looking at future of its airport ownership

MARION — Seven years after the city paid $1.67 million to buy a chunk of the then-privately-owned Marion Airport, a new city manager and a new City Council majority plan to spend the next year determining what the fate of the facility will be.

The city of Marion owns the runway and a fixed-base operation building, but the airport is managed by a company called LuxAir Aviation, which also owns the rest of the property. LuxAir was formed in 2015 as the deal was coming together by Genesis Equities owner Jeff Witter and daughter Hannah Kustes.

“Who's going to own it and who's going to operate it, and what's that relationship? Those are the questions that aren't known. We are on the front end of determining the long-term future of the community asset,” said City Manager Ryan Waller, who started in Nov. to replace manager Lon Pluckhahn, who left to take another job.

One possibility is that the city could try to take full ownership.

The Marion Airport has been around since the 1950s. Jan Walton and her husband, Perry, who died in 2012, began operating it in 1986, and they purchased it in 1994.

The City Council purchased a piece of the airport for $1.67 million in May 2015 — paying twice as much as the aviation company paid per acre from its original owners on the same day. The airport supports daily traffic, including air ambulance services, flight training, charters, private business travel, aerial photography and agricultural spraying.

Over the years, planning around the small airport has been questioned by some residents, according to city records. The city established its Airport Layout Plan in 2017 guided by an Airport Advisory Board, made up of mostly private pilots.

The plan includes a list of improvements including adding an east-west runway. Its current runway runs north-south. The 2017 plan calls for about $30 million in overall investment.

The projected cost of the additional runway was about $9 million, according to the 2017 plan. The goal of a new runway would be to provide planes with a safer option to take off and land during windy Iowa days, where winds typically blow west to east, making it sometimes difficult to use the current runway.

“Given the priorities of the community — sewer system upgrades, water upgrades, the natural ebb and flow of capital improvement projects and operational needs — that level of investment has never risen to the top of the heap,” said Marion City Council member Grant Harper.

“The airport purchase was a contentious issue and our current council is sensitive to that, but we’re way beyond that now. Now, informed by the (airport layout plan), we are really rewinding time and going through an evaluation process over the next year to reassess what we’re doing,” he said.

Harper said council members plan to meet with interested parties to have as many engaged as possible.

“I think what we’re really doing in the next nine to 12 months should’ve been the detailed discussions that should’ve been had in 2015, even before the ALP got written,” Harper said.

Only the portions of the airport the city owns are eligible for Iowa Department of Transportation funding and grants, which was one of the reasons given at the time to pursue the purchase.

In 2020, the city completed an extension project for the current runway. The project cost $1.8 million, with $424,000 of that funded by an Iowa DOT grant as well as other grants for the design and zoning. The rest of the cost was covered by city bonds.

Now, the current council is looking for an organized path forward.

So far, the council has tabled the suspension of provisions of the 2017 plan calling for an additional east-west runway. The city also hired HDR Engineering for $50,000 to use as a consultant moving forward.

The city also reworked its lease with LuxAir, which includes a longer time period in which the company must give notice if its decides to no longer manage the airport. The revision extended the notice time from 30 days to a year.

Marion Airport Manager Steve Morton said LuxAir feels it is important for the city to regularly evaluate the airport and see how it can best position itself to serve the community and the region.

“There is a tremendous amount of economic growth potential that can come from enhancements to what exists at the Marion Airport today,” Morton said. “It is our hope that the city will continue to pursue and support the plans of the currently-adopted ALP in the future and make the most out of this unique and valuable community asset.”

Waller said city staff and members of the council will visit similar-sized municipal airports over the next few months to see how they operate and what issues Marion should consider, as well as development growth eastward and near the airport.

The Marion Economic Development Corp. is also seeking guidance on the city’s long-term plans for the airport. The Marion Enterprise Center is located near the airport, which provides space for commercial and industrial development.

“As the City Council evaluates and considers the future direction of the Marion Airport, it’s important for the development community to have clarity on the long-term plan that the city is committed to supporting,” said MEDCO President Nick Glew. “.... The most important perspective of a developer or land owner is certainty around how a long range plan may or may not impact property.”

Harper said that while the current operation is the public-private partnership, he questions whether it’s the structure going forward.

“LuxAir was created to capitalize on this area of opportunity, and when the airport came up for sale in 2015, they didn’t want to see it die and be lost to the community as a whole. So I applaud them for really catalyzing that, but at the end of the day, it really comes down to, is the public-private structure optimal for the long haul?”

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