County ratepayers poised to own equity in airport

New Tecumseth Free Press November 7, 2013
Simcoe County is about to become a partner in the Lake Simcoe Regional Airport (LSRA) through a $1.3 million agreement to purchase 20 per cent of the shares from the City of Barrie, which currently owns 80 per cent. Oro Medonte holds the other 20 per cent. The LSRA is located on 7th Line N just east of Highway 11 and is situated on 240 hectares (595 acres) of land. It has 58 hectares (142 acres) of serviced and un-serviced land available for airside commercial development opportunities and a further 24 hectares (60 acres) available for non-aviation development. It is managed by a municipal service corporation (Lake Simcoe Regional Airport Inc.) which is responsible for the Airport’s operation and maintenance.
A report to County council included on next week’s agenda, notes that discussions have been ongoing throughout 2013 between the CAOs from the Township of Oro Medonte, County of Simcoe and City of Barrie. The County of Simcoe, including the urban areas of Barrie and Orillia, provides a catchment population of approximately 450,000, who mostly live within 40 minutes drive of the airport. Barrie and Oro, with federal grants, have invested $15.8 million in the LSRA over the past three years.
“Generally, these investments increased the LSRA’s physical capacity as an economic hub and gateway to local and international markets. These are long-term assets that have not materially declined in value since their installation. Therefore, staff believe it is reasonable to use their historical cost as the basis for determining a valuation. Excluding the senior government’s contributions, 20 per cent of the shares would be worth approximately $1.3M,” according to the background report. “The LSRA Strategic Development Plan completed in 2011 anticipates the airport will become self sustaining from an operating perspective in 2018.  From a capital perspective, given the recent major infrastructure expenditures, no major rehabilitation is foreseen over the next 20 years. Capital of less than one million dollars is anticipated over the next five years to accommodate minor enhancements for demand. Beyond that, from year 5 to 20, approximately $5 million is projected to be needed to maximize commercial development and enhance airside operations.”
The LSRA offers several features that make it an attractive investment for the County of Simcoe, according to the report. From an economic development perspective, LSRA provides:
a) One of the top-ten busiest airports of its size and category in Canada.
b) The core air transport conduit for all fixed-wing air support for CFB Borden.
c) International access combined with proximity to Highway 400, making it an attractive location for business development opportunities.
d) Services that attract significant corporate/executive aircraft activity.
The deal with Barrie would not involve an exchange of money. Instead, Barrie, which buys services from the County for programs like social housing, Ontario Works, and paramedics, would utilize the value of the LSRA ownership purchase for the City’s contribution toward capital requirements in 2014 and/or subsequent periods.