TO: Urban Renewal Agency Board
THROUGH: Keith Stahley, Executive Director
FROM: Kristin Retherford, Community Planning and Development Director
SUBJECT:
title
Fairview Urban Renewal Area grant exception for airport fencing and security gate to support the relocation of Metal Innovations, Inc. to the Salem-Willamette Valley Airport.
Ward(s): 3
Councilor(s): Phillips
Neighborhood(s): Morningside
Result Area(s): Strong and Diverse Economy
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SUMMARY:
summary
Urban Renewal Agency consideration of exceptions to the Fairview Urban Renewal Area grant program on the use of funds and private match requirements for Metal Innovations, Inc. to install security fencing and secured automatic gate at the Salem-Willamette Valley Airport for their new business location.
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ISSUE:
Shall the Urban Renewal Agency (Agency) permit exceptions to the Fairview Urban Renewal Area grant program (FURA Grant) for Metal Innovations, Inc. (MII) to install new security fencing and automatic gate at the Salem-Willamette Valley Airport (Airport)?
RECOMMENDATION:
recommendation
Approve exceptions to the FURA Grant Program for MII to install new security fencing and secured automatic gate at the Airport.
body
FACTS AND FINDINGS:
Airport boundary security fencing to the west needs to be replaced to accommodate the relocation of MII from the Aurora Airport and the re-establishment and expansion of their business on the Airport. The security fencing and secured access point supports airport security requirements for commercial air service. This is an eligible project in the FURA plan, but this was not included in the 2025 budget as a capital project. The most efficient way to meet MII’s relocation timeline is to provide these funds as a grant to MII so that they can contract directly for this improvement. The City process for seeking budget authority and procuring a contractor does not align with MIIs relocation timeline, which is the end of August. To date, MII has rehabilitated multiple buildings at the Airport and has a contractor that is available to perform this work. By relocating to the Airport, MII is positioning for future work and job growth and planning for 80 jobs on the airport. This fencing and secured gate will provide employee access to their facility.
Staff is seeking an exception of up to $220,000 to pay for the entire cost of the security fencing and gate.
Agency authorized exceptions to the FURA Grant to pay 100 percent of the security fencing is the fastest approach to enable MII to have the fencing installed in the timeframe that fits their business.
If the exceptions are approved by the Agency, staff will review the FURA Grant materials and enter a grant commitment so MII may construct on schedule.
MII plans to pursue a standard FURA capital improvement grant within the next four months to construct a new building next to the two buildings they have acquired on the airport.
BACKGROUND:
The Salem Municipal Airport Strategic Business Plan 2019 (Plan) developed by the City’s Urban Development Department identified opportunities to: rebrand/rename the airport; grow aviation industries; increase development and land leases; establish commercial air service; develop partnerships to expand STEM and aviation-focused training and education; pursue emergency management and resiliency including development of an Airport Emergency Preparedness and Resiliency Plan; and other opportunities. In the five years since the Plan was created, the Airport has begun operating commercial air service, multiple new hangers have been developed and new leases established, the Salem’s Career Technical Educational Center (CTEC) has begun operating aviation educational programs on the airport, the airport has been renamed, and an Emergency Preparedness and Resiliency Plan has been developed.
MII’s relocation to Salem from the Aurora Airport is major stop towards growing aviation industries with the strong potential of establishing an aviation industry cluster at our airport. MII is an industry leader in maintenance, innovative solutions, repairs, alterations, and modifications on fixed and rotor wing aircraft. MII employs the latest technological equipment and repair processes to ensure on-time delivery and unmatched quality at competitive prices and is an FAA-certified repair station.
This grant will allow the Airport to maintain required security for operating Commercial Air Service while also allowing secured access to the two hangars acquired by MII and the building they will be constructing within the next year, which are all located north of the Airport terminal. The on-Airport campus that MII is establishing will employee at least 80 individuals and create internship opportunities with CTEC aviation students. It will build on an established business relationship between MII and Garmin, also located on the Airport, and attract commercially and privately operated aircraft to the Airport for service, maintenance, and modification. It is anticipated that this will ultimately result in additional aviation businesses locating on the Airport.
According to the International Civil Aviation Organization’s Circular 292-AT/124 Economic Contribution of Civil Aviation, which is the result of a study intended to assist planners and decision-makers in identifying the economic contribution of civil aviation, “the output multiplier in terms of value is estimated at 3.25 while the employment multiplier is estimated at 6.1. These multiplier effects imply that for every $100 of output produced and for every 100 jobs generated an additional demand of $325 and in turn 610 jobs is triggered in other industries.” In addition to direct benefits from lease revenue, high-value on-airport jobs, airport fees, fuel purchases, and visitor spending in terms of food and accommodations for those transporting aircraft to Salem, there are also indirect economic benefits. These include those local business that will be providing goods and services to MII and any other aviation companies that locate on the Airport. Wages in the aviation industry are higher than the national average for all industries and vary according to the job. On average, these jobs pay approximately 30% more an hour than the national average salary.
The Agency created the FURA Grant (21-10 URA) and approved changes to the Fairview Urban Renewal Area (FURA) and FURA plan (23-8 URA) for Airport public improvement projects and industrial development.
Use of urban renewal funds for security capital improvements is not new. Security or strategic project grants have been established by the Agency in the Riverfront Downtown Urban Renewal Area (18-573 URA) and the North Gateway Urban Renewal Area (21-575 URA).
Tory Banford
Project Manager
Attachments:
1. FURA Grant Guidelines
2. MII Perimeter Fencing Plan