3100 ft private owned but public use airport. Built 1946. Wife and I own the land but rent it to the airport. 2 mortgages already for the airport and another for hangar construction.

My local county has decided since I built a two new hangars to reassess for 2023.

Taxes went from $14000 per year to $52000 per year plus a $16,000 fine for a Clean and Green violation since I built one hangar on part of a field that was in the program. But I already had T hangars on that corner of the field and back in 2011 I thought we removed that section for future hangar construction. They disagree and only removed the area of the building square footage. So 11 years later now being charged back tax plus interest. I went through every permit process known to man for the hangars but apparently the assessment office didn’t get the memo.

Since the hangars are listed as commercial has anyone else been able to negotiate with their local county assessors office for a rate that more reflects the rent generated by the buildings and runway?

About 100 acres make up the airport. Super Walmart next door and commercial development so close comparable land sales are no good.

Hangars are a mix of ages and converted farm buildings except for T hangars 10 bay wood frame sliding doors, no lights and dirt ramps. partial concrete floor and the rest dirt floor. Built 2009

New hangars are 105X95 and 125X95 with hydraulic doors each end. gravel dirt ramps and taxiway. They were $850K to build for the pair. 1M if you count permitting, engineering for site work, moving power, phone and water and earth work.

Other group hangars, airport office and shop are wood frame converted farm buildings from 1965 to 1990 all needing roofs and with some structural problems. Paved ramp from 1990 and grass taxiways. About 20,000 sq ft.

They also caught my barn which was permitted as ag use. Local airport bluegrass band framed up the downstairs to play about 4 hours each week, upstairs is no longer hay but holding airplane parts. Built 2010 using rough lumber from local sawmill. Taxed commercial use but I never charged a dollar in rent for it.

Paved runway was taxed as an improvement. Any ideas on approaches to deal with the situation appreciated. Filling out forms for appeal process but that’s a sticky situation also because it opens up the possibility their appraisal will increase the taxes from their current estimate.

Find a good tax attorney.

I have one who just started working on it but he’s not an airport guy so figured would see if anyone else has been down this road.

I got depressed when I realized it’s $1000 week for tax or over 1M after 20 years.
If they don’t increase it again.

Guess this should have ended up in the plane talk forum...

Haven’t had to deal with that but would agree that a tax attorney would be the way to go. Not sure it would be necessary to find someone specifically trained in representing airport owners as those would be few and far between.

Stories like this make me sick to my stomach. Sorry you're having these issues. Like Thomas Bienz, you dealing with somebody who doesn’t suffer any consequences if they lose a legal battle. It's no skin off their back if they lose, but if they win, they win big.

I had a somewhat similar problem when I moved to Texas and brought my MU2 with me. I had purchased the MU2 when I was a Missouri resident, long before I began thinking of relocating. A couple years after I moved to Texas, the state came after me saying that I purchased the MU2 for the purpose of bringing it to Texas and wanted $43,000 in sales tax. They had no case whatsoever, but there were no consequences if they lost, which they did. It cost me $10,000 in legal fees, to get my $43,000 back that I had to pay BEFORE my case went to court. They threatened me with ridiculous daily penalties if I didn't pay upfront and sue to get my money back.

Our government is totally out of control with respect to property/sales taxes. We are basically renting the stuff we already own back from the government to feed greedy local politicians and their pet projects. Based on the government buildings I see and the tax increases I have personally suffered, municipal government is likely one of the most corrupt branches of government.

What you can do in our area and hopefully what you can do in your area is apply to be assessed based on the value of your rental income. For example, let's say your raw land is worth $2.5 million. However, if your rents only produce $100K per year (and I'm making up a 10 cap multiplier) so the net present value of the property is actually $1 million.

The Assessor will use this $1 million valuation rather than the $2.5 land valuation. Our airport is virtually identical to yours and taxes like this.

Mike

76N?

Hire a tax attorney. My in-laws fight this every year at a privately owned public use airport in Houston.

Yes 76N Tunkhannock PA. We are pretty rural area but progress is pushing in. Checkout on google maps to see layout.

I’m lucky that the airport approaches are protected by natural features and flood plain areas to keep development down that would block the runway.

But to the side is a busy highway with recent development. Local gov is looking for 3M for the schools after closing all the outlying buildings to save costs a few years ago. But talking to others in the local government the shortfall may be as high as 20M.

Mike that is the angle I’m looking at because the hangars will never make the rent of a store front or even a storage locker facility per square foot.

Local county owned airports are very low on hangar charges to the north and west of me so that sets the market rate. Lower than my cost to even borrow money to build a hangar.

I am worried though because the property is good buildable level land above flood plain right next to super walmart and other development with a possible high volume road access. Great for getting appraised for the bank but not so good for a tax appraisal.

The airport and buildings really just devalue the property. Commissioners are the tax board and they have been pro airport so hopefully this goes ok. But I need to find the angles that allow them to save face as it is fair compared to others in the county if they do lower the tax rate.

I’m not sure how to figure it because I own a few airplanes and the airport as a business also owns airplanes which are in the same hangars as airplanes owned by others that rent space.
I don’t charge myself rent but does the value of that spot get figured in the income? Also I financed the new hangars through the owner of the king air but he does not pay hangar rent for his Kingair spot and 421(headed for scrap due to corroded wing spars). I have a Queenair (missing one engine) here tied up in bankruptcy not paying rent but I’m trying to buy it back (owned previously it for 20 years as jump plane and to use as backup for Kingair) so I don’t want to push it outside to watch it deteriorate. My kids and my father own three airplanes that I have hangared but they are not income generating. (Stinson 108, Piper Vagabond and Pacer) Plus various shops and hangars used for the airport shop maintenance business which we all work at. Business and personal get twisted together pretty much since we all live on the field. Hard to separate a building cleanly between personal and commercial use

I hate to hear this, I suffered under the same from the local taxing body who started raising the land values instead of the asset (improvement) value. 66% of my tax bill was land.

Here is a reference to look at https://www.faa.gov/airports/resources/ ... chap15.pdf

There is a tree marking contest going on at the state and federal level, arguing that tax revenue from property tax must be reinvested back into the airport(s) from which it was levied. Of course the states want it in the general fund. My only experience is in Illinois where I still have airport investments. It helps if you get grant money for improvements as It keeps the local government somewhat in check when the feds get involved.

I can suggest to contact AOPA and your congress critter. Some of them have no clue your airport even exists.

As far as commercial vs private use, sometimes segregation of facilities and a few signs is all you need to assign the use. It depends on the state and the tax code. A competent tax or real estate attorney and/or CPA might be a wise investment.

Thanks. That is an interesting link. yes land values went up here too. I’ll have to compare percentage of the bill to previous bills.

Because this airport is privately owned I’ve never been eligible to apply for AIP or any federal funding. We are allowed to apply for State Bureau of aviation grants but that has a lot of other issues. But the wording in that link is just “Airport Sponsor” not making a distinction in every section. I’ll review further.

Successfully We have been able to go through the state grant process for initial runway paving in 1990 and purchase of the runway extension property in 2011.

These were for the 75% state 25% local grants.

But the last one was tough because I had 5 years earlier I had guessed the project to extend the runway would cost $550,000. Purchase and construction.

I had negotiated with WALMART to buy the vacant field behind their store for $350,000. This was based on three commercial appraisals.

All was going ok until the state awarded the grant. They did not give us notice but contacted the local news agency, paper and other news sources to say that my airport was awarded a grant for $550,000. Guess what the asking price jumped up too.

I had to scramble to get three more appraisals for the new price and then it only covered 75% of that. Then the state sent their share but it was $50,000 short. When I asked why the grant manager said “ We decided to withhold that until you give us a copy of the recorded deed” Ok but I have to buy it to record the deed. So scramble again to find additional $50,000 with closing date very close. Wife and I were literally cleaning change from console of the van and anywhere else to cover the check”.

Then the state wanted language to cover the grant assurance. I said ok give me example language so I can have it written in. “no we will not supply any language you have to have an attorney write up what is needed and submit so our attorneys can review for changes”

Well how the heck do we write that with no example to go from. So many $$$ in attorney fees later they still had not approved it. So the deed sat unrecorded for a month. Finally I said just record it. So we did and then the state called all pissed off.

I said "I’ll add it as a covenant later once approved language is given".
It was a total mess to get through and never again will I go through that process.

10 years later I just finally got through construction, trees moved, earth work and power lines relocated and ready to add markings on the runway extension so it’s a complete runway (except lights). Now I’m hearing it has been to long and I may need to reapply. ugh.

So on the map it shows 2000’ runway and the length is 3100’. Not related to county tax but this is how these things go. It’s a long process.

Where this all ties in is recorded on the runway extension property there is the PA state grant assurance that if the property is not used for aviation then the grant has to be repaid. It would be $412,500 or 75% of fair market value (not sale price) at that time. But since the runway extension property is owned by the airport licensee. (Skyhaven Airport) and the rest of the runway is owned by myself then does this become a factor for appraisal on all of the deeds. Nothing could be built in the field as long as the whole runway is in operation.
Local gas infrastructure worked out that they had money to the county to pay for projects but under a narrow scope. We found where since we had formed a County airport authority to help keep an eye on zoning that the authority could apply for seal coating and remarking of the runway through the county. It’s not AIP money but worked out for $23,000 to help cover the costs of the project ($34,000)

This came through the local county Commissioners office so they are willing to help and would like to see the airport remain so we are at least on good relations.

I don't know how your particular tax system works, but in Michigan they local municipality that bills for taxes can provide a worksheet for each taxable item. They also have a base tax per square foot for hangars based on the "quality" of the building, then over time it gets depreciated, etc..

Thanks Jason. I’m not aware of that for PA but it gives me a good comparison and I’ll ask specifically if there is one.

You are getting Played.

Someone wants your property for more lucrative development. I'm sure they are a source of continuing advice to your assessor on how best to find the nooks and crannies to tax.

Since it appears you already have long term debt, think about restructuring to eliminate it. Then think about re-developing the property yourself. (this may take a partnership with an angel).

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If you can pull it off yourself, think about paying off your debt and closing the airport for redevelopment. then remove all the 'improvements' and apply to revert to the original zoning (ag).


Bulldoze it and plant alfalfa.

This would send a powerful message.

No won’t do that. I’ve been at it too long to stop now. Restructuring to eliminate debt is not an option without closing it. Grew up here since day one. 3rd generation of our family to operate this airport since 1946. 4th already working in the shop with me every day.

But if it was not an airport there would be a Lowes right where I’m sitting. It and other development was pretty far into the planning stages when I bought it back in 2008. Getting the loan took operating on a monthly rental basis while courting different banks for 7 years.

The Super Walmart was supposed to be dead center off the end of the runway. Locals resisted but the farm who sold out to them was a high dollar Bull breeding facility who was bought out by an Ohio Company. They told Wal Mart Don’t worry about the airport it’s going away... Walmart called me about putting a crane on the end of the runway for construction. I ended up with a decent working relationship with Walmart and was able to finally buy the field for runway extension that the bull breeding farm would never sell for 65 years.

I ended up buying the back 2/3 of that property using a 75% Bureau of Aviation grant and they moved the store. Downsized the construction. Canceled Lowes and the smaller out stores planned for the airport.

Zoning came in and we got airport hazard zoning as part of it. Since the airport was not closing then the primary surface interfered with the store. They could have dug it down for clearance but it would have cost a lot more. We got darn lucky with the timing of all of these things working out. A few months either way on any of them and it would not have happened.

But in exchange everything new on the airport is a conditional use hearing. I’m on the township zoning planning board now. So I can keep an eye on things better.

I don’t think there is local harmful intent but the size of land, buildings needed and square foot of pavement etc. to run an airport is much different than other commercial property. Income generated is not the same. When fit into existing formulas it gets expensive real fast. But I’m told it has to go through the appeal process for any changes.
So working through the applications and getting all info ready for the appeal. It’s risky because they could reappraise and raise the tax instead of lowering it. That would be bad...
I just need to give them good solid reasons why it should be different that they won’t be in trouble for later. Then I think they will go along.

I do see possibly they are out searching for money being squeezed on the other end by school system and items like local jail spending going through the roof.

Though we have talked of buying a lot more cows and a open air liquid manure pit if it all went south.

You pretty much nailed what is going on. Some builders likely have the ear of the tax folks because of the politicians they donated to. We are seeing a LOT of this with data centers taking over land zoned for AG. Some airports in Loudoun became a pet project of politicians - Glasscock off of Gum Springs is one of these. It is a hospital and cost managed apartments. There are 3 total that were out here in Aldie, used 30+ years for AgSpraying. One has John Champe HS planted on it. Nice flat-ish land. The other two have houses on their old land.

Eventually someone will come to buy your airport and offer a premium for the land and buildings then tear them down and put up a box store or strip mall and maybe some commuter parking and rent managed apartments.