The City of McKinney’s takeover of Collin County Regional Airport is nearly complete.
On Tuesday, the McKinney City Council approved the issuance of $18 million in debt to be used in the purchase of assets at CCRA currently owned by Schuler Development.
The total purchase price for the airport assets, which includes hangars, buildings and lease agreements with the airport’s current tenants, is $25 million. Once the purchase is completed, the city will control all operations at CCRA, including fueling services and the operation of the FBO (fixed base operations) at the airport. Cutter Aviation currently runs the FBO at CCRA. Cutter’s operation agreement is due to expire on Oct. 31.
The council’s approval of the issuance of debt is a procedural step in the takeover plan. The city’s chief financial officer, Rodney Rhodes, told the council that the bond issuance will not affect the city’s bond rating. The council approved the debt issuance by a 5-2 margin, with Randy Pogue and Ray Ricchi dissenting.
Pogue voted for the airport purchase and still supports it, but questioned the issuance of debt as the proper course of action to raise the funds needed to complete the sale. Pogue told TownSquareBuzz.com that he didn’t know if the city did the proper due diligence on the funding options before deciding on the issuance of debt.
Ricchi initially voted in support of the airport purchase, with the caveat that the city sell the assets on to another buyer and does not “go into the airport business.” He told TSB that he changed his mind on the airport purchase and no longer supports it because there is no “exit strategy for the city.”
“I wanted to see a plan to sell the assets and move on…not go into the FBO business,” Ricchi said. “The city manager has not put forth that plan. My concern is every day that we own a non-performing asset, we are costing the taxpayers money.”
McKinney resident Mike Giles questioned the airport purchase during Tuesday’s council meeting, telling the council that he wonders why there’s only one other municipally owned FBO in the entire country.
Ricchi agreed with Giles’ question. “There is not a plan to spin off these assets,” Ricchi said. “You can find buyers before the ink is dry. This is taxpayer money and we’re acting like its ‘Monopoly’ money.”
With the issuance of debt approved, the city’s purchase of the airport will move forward. The sale is scheduled to close within the next month and the city is due to take over FBO operations from Cutter Aviation on November 1.