July 22--AUBURN -- A plan to buy out the 14 years remaining on a hangar lease at the Twin Cities' airport narrowly failed Monday night.
With City Councilors Tizz Crowley and David Young absent from Monday's meeting, councilors needed a four-vote majority to approve Auburn's loan up to $1.1 million to the Auburn Lewiston Municipal Airport.
With councilors Leroy Walker and Belinda Gerry opposing the idea, the loan failed by a vote of three in support and two against.
The airport planned to use the money to purchase the hangar from Nobility, LLC. It's currently home to Lufthansa Technik's efforts to rebuild a historic WWII Constellation aircraft.
Lewiston councilors unanimously agreed to the new plan in June.
Airport backers said the idea is designed to save the airport and the cities $48,000 per year.
Both cities are being asked to loan the airport the money out of their cash reserves. The airport would pay a 2.58 percent interest rate on the money, a much lower rate then the airport could qualify for on its own.
It's also nearly double the rate the cities would get purchasing a certificate of deposit for that amount.
The Auburn Lewiston Municipal Airport currently leases the hangar housing Lufthansa's project from Nobility, LLC., paying $249,750 per year through 2028. The airport then turns around and subleases the hangar to the Lufthansa Technik group for about $240,000 annually.
The airport has the right to purchase hangar for $2 million when the lease ends, but buying the hangar and the remaining lease now would save the airport about $48,000 per year.
Gerry said Monday she feels city finances are too uncertain to spend $1.1 million now.
"We've had hard times and they are just starting to get better, but I just think we are overdoing it," Gerry said.
Walker said he wanted to see a longer-term plan for how the hangar would be used. Lufthansa Technik has a contract though next year, but airport officials expect them to stay longer.
"I wish the plan would be in front of us 100 percent," Walker said. "If we are going to buy it out, what are we going to do with it when (Lufthansa is) no longer using it? I don't think we should be saying 'Maybe they're going to move out in two years, but we'll worry about it then.' I want to worry about it right now."
City Manager Clinton Deschene said he expects the matter will come back before councilors when all seven members are present.
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