The south suburban village of Lansing has been the home of a small airport since Henry Ford built it in the 1920s.
Now expanded, owned by the village government and racking up losses of almost $1 million in six years, the airport has been a drag on Lansing’s finances. Meanwhile, legal costs mount from multiple lawsuits.
Owned by Lansing for 40 years, the airport operates two runways and has always depended on subsidies from the village. While the Lansing Municipal Airport’s current financial problems can be fixed, village officials need to act quickly, said Bob Malkas who spent 23 years as the airport manager before retiring in 2008.
Planes are tied down outside the runway at Lansing Municipal Airport. Photo by Casey Toner.
“Clear up all the issues before they exacerbate and turn into things you can’t control,” he said.
The airport’s troubles are taking a toll on the village, which says it can fund only 59 percent of its firefighter pension obligations and 48 percent of its police pension obligations. The airport lost about $988,000 from 2010 to 2015, village financial records show. Following airport losses, the rating agency Moody’s in 2013 cut the village’s bond rating two levels to A3.
While the village’s credit is still rated investment grade, Lansing Mayor Norman Abbott said the airport’s financial woes may cost the village a “couple million dollars” in higher interest if it borrows $10 million for a road project next year.
In the same year that Moody’s cut Lansing’s credit rating, the village acquired through a sheriff’s sale an abandoned single-engine 1967 Cessna 210G airplane that sat in an airport hangar since 2008. While the plane can’t fly, the village spent $28,000 to refurbish and insure it. Malkas said the purchase was an unusual move for an airport, which doesn’t usually own planes.
The south suburban Lansing Municipal Airport lost almost $1 million in the past six years. Photos by Casey Toner.
Abbott said he believes the plane can be sold for a profit some day. As for the airport’s losses, Abbott contends that the village is investing in the 607-acre airport by repairing and upgrading facilities to make the operation profitable.
“There’s no sense in having an airport if we can’t make it go,” Abbott said.
Revenue has been hit as tenants struggle, which also has led to lawsuits.
For more than three decades, airport operator Associated Air Activities occupied Ford’s 10,000-square-foot hangar and sold gas, fixed airplanes and offered flight lessons.
The historic Ford Hangar, built by Henry Ford, at Lansing Municipal Airport. Photo by Casey Toner.
In 2014, the village moved to evict Associated’s owner Wade Palmer, claiming his firm remained onsite for seven months after his lease expired without paying rent or fuel fees totaling $9,000, according to a lawsuit. By June 2015, the debt ballooned to $26,202.
“We just weren’t making enough money to make payments,” Wade said. “It was hard times at the airport.”
Palmer agreed in June 2015 to leave, turn over his two fuel trucks and surrender a standalone building south of the Ford hangar if the village dropped the suit and stopped trying to collect past rent.
The village is locked in litigation with tenant Steve Leaven, the owner of Chicago Business Air Centers, which stored airplanes, pumped fuel, performed maintenance and managed jet charters. Lansing filed an eviction lawsuit against Leaven in June 2014, claiming that he owed unpaid rent for a year totaling $18,825. A second lawsuit followed in December 2015 alleging that Leaven owed the village more than $30,000 in fuel fees. Leaven filed for protection under U.S. bankruptcy law in early 2015.
In February 2010, the owner of Shannon’s Landing, a restaurant and bar at the airport, sued the village after being evicted one year earlier for failing to pay $57,400 in rent. Among other allegations, the owner claimed he was unable to retrieve his merchandise from his office after the village changed the locks. Village officials say they agreed to let him remove his gear from the building in exchange for dismissing the lawsuit, but they never received the rent money. The owner and his lawyer could not be reached for comment.
A father and son also sued the airport in July 2012 alleging that airport manager and former RTA deputy executive director John DeLaurentiis gave away their toy airplane, a small scale replica F-4 Navy Wildcat that was being housed in a village hangar. The village settled the case in June 2014 for $6,000.
DeLaurentiis said his goal since taking over as airport manager in 2008 has been to “get the place functioning like a business” and operate without the village subsidizing it.
“Ever since the Village acquired the Airport in 1976, there had been expectations that the Airport would be self-funding and successful but that never happened in the eyes of reasonable people,” DeLaurentiis said in a statement.