North Little Rock plan for airport put on hold

The North Little Rock Municipal Airport’s $3.6 million expansion project is the latest casualty of the coronavirus pandemic.

The Aeronautics Division of the Arkansas Department of Commerce, bracing for a downturn in revenue from aviation fuel sales because of reduced flying as a result of the virus, has said it won’t provide a $600,000 grant for the project until it’s long-term revenue picture becomes clearer.

As a result, the expansion project is on hold, the airport’s director, Clay Rogers, said Thursday.

Rogers broke the news at a meeting of the North Little Rock Municipal Airport Commission.

“We’ve got some curveballs we weren’t expecting,” he said.

Rogers said he still expects to receive the money eventually.

“The state still likes the project,” he said. “They still are willing and wanting to give us some help.”

The setback is the latest for the project to upgrade the airport amenities as a way to attract and keep businesses. It originally was going to be financed as part of the bond issue that also helped pay for a new police and courts building. The airport component was dropped last year after city officials ran into obstacles over the airport that would have delayed the bond issuance.

A planned restaurant also was dropped from the project and the planned new terminal was scaled back to a single story rather than two.

The project still includes a new general aviation center, a 15,000-square-foot corporate aircraft hangar, and expanded parking and connections to the runway and taxiway system at the airport at 8200 Remount Road.

The setbacks left commission Chairman Jim Julian frustrated.

“We have been on the cusp of making significant modifications and improvements to the airport numerous times,” he said. “It seems like every time we get close things fall through.”

With $3 million still available, Julian and other commission members agreed with Rogers that a way to build the projects in phases should be pursued.

Rogers said the final details and costs remain to be worked out, but the phasing could see construction of the terminal, the aviation center and the parking and the dirt work associated with the hangar so “the hangar would be shovel ready” when the state grant became available.

The Aeronautics Division is limiting grants to runway and taxiway work as well as safety improvements for now, said Jerry Chism, the agency’s director.

The division’s April income actually was up, but the revenue reflects March activity and might have included the sale of an aircraft.

The division relies principally on revenue from the sales tax on aviation fuel. It is set at 6.5 percent. The division receives 4 percent. It also receives sales tax revenue on aircraft sales.

Chism said his agency received about $1 million in revenue for April, up from the $650,000 it typically sees.

“I might be surprised, but I’m anticipating a downturn in income,” he said. “It takes a couple of months. For now, we need to fund just essential projects.”

Airline travel, in particular, has collapsed nationwide. The low fuel prices also will mean lower tax receipts, Chism said.

The expected decline will be offset, in part, by a federal government covid-19 relief package that contains a provision that any federal aid state airports receive from the relief package doesn’t require matching local funds. That amounts to $2.5 million to $3 million annually, Chism said.

Separately, Rogers told the commission it is eligible for a $69,000 grant from the same relief package. Airports are encouraged to put the money toward operations rather than capital projects. The commission voted to seek the grant and apply it to operations.

“We have been on the cusp of making significant modifications and improvements to the airport numerous times. It seems like every time we get close things fall through.” — Chairman Jim Julian