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HomeMy WebLinkAboutCouncil Provided Information - 12/2/2025Page | 1 2 5 8 7 6 COUNCIL STAFF REPORT CITY COUNCIL of SALT LAKE CITY TO:City Council Members FROM:Nick Tarbet, Policy Analyst DATE:December 2, 2025 RE:Tax Equity and Fiscal Responsibility Act Public Hearing for Sky Harbour Hangar Development ISSUE AT-A-GLANCE The Council will receive a briefing on the Sky Harbour hangar development on the east side of the Salt Lake City International airport that consists of the development of an aircraft storage facility situated on 8.4 acres and will include 4 box hangers, approximately 160,000 square feet. The project would be funded through a tax-exempt private activity bond (PAB) issued by the Public Finance Authority of Wisconsin, in an amount not to exceed $95,000,000. Federal regulations for tax- exempt PABs require the Council to hold what is known as a TEFRA (Tax Equity and Fiscal Responsibility Act) public hearing on this proposal. No other Council action is required. After the public hearing the mayor may sign a public approval certificate for SLC Development LLC to receive bond proceeds on a tax- exempt basis to finance the project. The development entails no financial liability for Salt Lake City. The City will not issue the bonds or assume any financial liability. The public hearing for these types of bonds is required by Section 147(f) of the Internal Revenue Code of 1986, as amended. The hangars would be available to any tenant who wants to lease hangar space at the airport. The transmittal letter notes the development will increase revenue to the airport in the form of ground rent, fuel flowage fees in addition to increased property taxes, aircraft ad valorem, county fuel taxes and new air sales and use taxes. The Council will hold a briefing on December 2 and the public hearing on December 9. Item Schedule: Page | 3 2 5 8 7 6 POLICY QUESTIONS The Council has previously held a TEFRA public hearing for the Paxton Ave affordable Housing project on October 7, 2025. At that briefing the Administration noted they are in the process of developing parameters for TEFRA proposals because there is a substantial amount of uncompensated administrative effort associated with them. For example, there is a substantial amount of coordination between the City’s Finance Department, bond counsel and the requestor’s bond counsel on the proposed changes to the documents as well as timing of the hearing. o The Council may wish to ask the Administration for an update on the creation of that policy. ©2025 Sky Harbour Proprietary SKYHNYSE Investor PresentationSummer 2025 Salt Lake City International Airport Community BenefitsWinter 2025 SKYHNYSE •Sky Harbour (NYSE: SKYH) develops and manages modern aviation infrastructure at airports across the U.S. •Sky Harbour’ home base campus offers four primary benefits to airport sponsors and communities 1.Meaningful economic development through direct payments and associated tax revenues 2.Significant private capital investment in an asset that reverts to the City with decades of remaining useful life 3.Community benefits through high-paying jobs and internships, preparation for the future of air mobility, and environmentally focused construction 4.No disruption to other airport businesses •Sky Harbour’s 11.3-acre Home Base campus at SLC consists of 1.Four SH-37 hangars (i.e., 170K SF of hangar, office, lounge, storage) 2.200K SF of apron 3.~70K SF of vehicle drive and parking 1 Executive Summary SLC Development LLC, a Delaware limited liability company and subsidiary of Sky Harbour Group Corporation, is requesting that the City hold a public hearing so that the Mayor may sign a public approval certificate for SLC Development LLC to receive bond proceeds to (a) finance the costs of the development, construction and/or equipping of a 11.279 acre Business Aviation hangar development located at Salt Lake City International Airport (SLC). The City will not issue the bonds or assume any financial liability; rather, the bonds will be issued by the Public Finance Authority, a commission organized under and pursuant to the provisions of Sections 66.0301, 66.0303 and 66.0304 of the Wisconsin Statutes in one or more series, in an amount not to exceed $95,000,000. The public hearing for this types of bonds is required by Section 147(f) of the Internal Revenue Code of 1986, as amended. The request for the public hearing is a requirement of private activity bonds and is a procedural action that must be taken by the developer/issuer to comply with IRS regulations. A TEFRA (Tax Equity and Fiscal Responsibility Act) hearing allows interested members of the public to express their views regarding the issuance of the bonds for a certain project. 2 Background Description & Financing Requirements Re-Introducing Sky Harbour 3 The Best Home Basing Solution in aviation – Bar None Not an FBO – rather a completely new operating concept with unique benefits to airports Built to Last / Here to Stay •Publicly Traded (NYSE: SKYH) •Well-Capitalized Active Issuer of Public Bonds Our Product Our Team Culturally and Professionally Diverse •Experienced Airport Operators (30+ airport projects) •Military Aviators •Top Real Estate Professionals •Finance Industry Veterans Sky Harbour Home Basing Operator •Direct Revenues via Ground Rent, Fuel Flowage, and Concession fees •Indirect Revenues v ia Aircraft Ad Valorem, Fuel & A/C Sales tax, and Leasehold Improvement Taxes •Significant Capital Investment in airport infrastructure that reverts to the airport w/ over half its useful life remaining •Hundreds of jobs estimated to be created or preserved •State of the Art Construction, LEED design •Building for the future of air travel and mobility Note:Additionally, a Sky Harbour campus wouldhave limited impacton airport traffic –applies to landsidevehicular andtaxiway congestion. 4 Benefit Overview Sky Harbour is a proven developer delivering economic value to airport sponsors ©2021 Sky Harbour Confidential and Proprietary SLC Development Site Plan 5 Key Details •~11.3 acre plot •Four 43K sqft SH-37 Hangars •Office/lounge, storage, and indoor vehicle parking •+200k sqft of apron and managed ramp •+70k sqft parking stalls •~3K sqft of GSE and support facilities ©2021 Sky Harbour Confidential and Proprietary Economic Development: Direct & Indirect Revenues Economic Impact Drivers Direct Payments to SLC •Ground Rent •Aviation Fuel Flowage •Concession Fee Other Tax Revenues and Fees •Property Tax, Aircraft Ad Valorem •County Fuel Sales Tax •Property Taxes: Possessory & Leasehold Interest •New Aircraft Sales and Use Taxes 6 Significant expected total direct revenues to the citizens of Salt Lake City and Salt Lake County ©2021 Sky Harbour Confidential and Proprietary Economic Development: Jobs Sky Harbour preserves or create hundreds of jobs in the local communities Typical Sky Harbour Employment EMPLOYMENT IN DEVELOPMENT •Construction (e.g., GCs, Trades) •Construction Support (e.g., Architects, Engineers) •Associated Development (e.g., Finance, Legal) IN OPERATION •Sky Harbour Employees •Tenant Direct Employment •Aircraft Business Services •Non-Aviation Business Services SKY HARBOUR ACADEMY •Ground Handler, Fueler, and other aviation jobs Hundreds of local jobs on avg. ©2021 Sky Harbour Confidential and Proprietary 7 ©2021 Sky Harbour Confidential and Proprietary Noise Reduction Typical Sky Harbour tenants operate late model business jets that emit less noise than other based aircraft Category Aircraft Year db Midsize Citation XLS 1996 82.9 Super Midsize Citation XLS 1996 72.3 Large Falcon 2000S/EX 2003 79.4 Large Long Range Gulfstream G550 2003 80.3 Super Midsize Citation Sovereign 2004 72.4 Large Long Range Falcon 7x 2005 79.8 Midsize Gulfstream 150 2006 81.4 Large Embraer Legacy 650 2011 77.9 Large Long Range Global 6000 2012 82.7 Super Midsize Challenger 350 2013 75.3 Large Falcon 2000LXS/EX 2014 79.4 Large Gulfstream 500 2014 80.3 Sky Harbour Campus Average 78.68 Illustrative Based Tenant Average 80.56 - 82.68 Source: OEM & FAA Noise Certifications on Take-Off/ Lateral and JETNET data for Base Tenants Illustrative Sky Harbour Campus The average noise footprint of a Sky Harbour campus is 2 to 4 db lower than that of the total based fleet All based-tenant campuses affords the opportunity to encourage our tenants to adhere to airport noise abatement regulations: Quieter Nights Programs Quiet Jet Departure Programs Full Runway Length Departures Maintenance Runup Hours Adherence Limited Use of Reverse Thrust (when safely able) Preferential runway usage (when applicable) 1 2 3 4 5 6 8 ©2021 Sky Harbour Confidential and Proprietary Corporate Social Responsibility Each Sky Harbour campus features the Sky Harbour Academy training program Paid training for a lifelong career in the high-paying aviation industry; Hundreds of jobs for the local community 9 •Sky Harbour Academy recruits members of disadvantaged and underrepresented communities with an interest in aviation. •Sky Harbour provides full training and certification as line service technicians and CSRs. •All expenses are paid, including certification fees and personal study stipends. •Assistance with placement in high-paying aviation jobs, including with Sky Harbour at an average salary rate of ~$50K-$65K ~300-500 trained individuals ready for a career in aviation industry Potential Partner Organizations Ground Operator Training at SGR airport … Plus Community Colleges and Technical Schools that with Aviation programs ©2021 Sky Harbour Confidential and Proprietary 10 Benefits for Many Stakeholders Salt Lake City International Airport •Private investment in airfield infrastructure •Optimized airport bandwidth for other initiatives •Direct and indirect revenues •New state-of-the-art aviation assets Citizens of Salt Lake City and Salt Lake County •Significant Private investment in airport infrastructure •100-year asset that reverts to the City with plenty of useful life •Strong Economic growth •Hundreds of high-paying jobs created or preserved Airport Tenants •Efficient land planning and availability for multiple tenant types (e.g., Corporate Hangar, MRO) •Delivery of underserved business aviation infrastructure to contribute to regional economic growth 1 2 3