Juneau Airport Board to weigh selling old Hertz building and keeping the proceeds

The Juneau International Airport Board will consider Thursday whether to recommend that the Assembly approve a competitive sale of the former Hertz wash bay building on Cessna Drive, with the airport keeping the proceeds. The board meets at 6 pm.

Under the proposal, the airport would keep the land beneath the building and require any buyer to sign a new airport lease. Staff say a buyer would take over maintenance and capital costs for the aging structure, built in 1969, rebuilt in 1985 and last renovated in 1997, while the airport collects ground lease revenue. Staff also recommend that the sale proceeds and future ground lease revenue stay with the airport.

Hertz's wash bay lease ran through Oct. 31. In early October, staff confirmed the City and Borough of Juneau owns the building, though records do not show whether it began as an airport asset. Several parties have expressed interest. Airport Manager Andres Delgado told the board some would use the building and others propose demolishing it and building on the site. He said it is assessed at $133,000.

At the board's Oct. 8 meeting, members asked whether sale money would come back to the airport, and they voted 7-0 to delay a decision until they knew, according to draft minutes. The same night, Sherri Layne of the CBJ Law Department discussed a city attorney memo on how the Assembly handles enterprise funds. She said the charter lets the Assembly move enterprise money into the general fund after enterprise needs are met, and that because the FAA controls so much airport spending, most airport money has to stay at the airport.

City Attorney Emily Wright told the Assembly on Sept. 14 that the charter section "was initially drafted that enterprise funds would be solely used for the enterprise activities," adding, "The Charter Commission specifically changed that."

Board member Angela Rodell called the practice unusual and said it left the airport unsure whether wash bay money would come back. Chair Eve Soutiere said Assembly support for the airport appears to be fading. Vice Chair David Epstein said the Federal Aviation Administration's input should be part of any decision on the proceeds.

A board recommendation would go next to the Assembly, according to a Nov. 2 memo from Delgado. The Assembly holds final authority over any sale.