Paso Robles Airport: economic asset or subsidized flying club?

June 4, 2024

OPINION by BILL BORGSMILLER

As the current fixed-base operator at the Paso Robles Airport, ACI Jet is providing this op-ed to give people a clear view of our perspective on the request for proposal process and anticipated next steps.

I will start by being candid about three things identified in a previous letter to the editor in another publication that ACI fully acknowledges; in fact we are proud of them.

Yes, we engaged in a public communication campaign called “Pairs Well with Paso” using modern tools to promote awareness of our proposal and the request for proposal process. This involved the use of social media, accepting invitations to appear on radio programs, and direct email campaigns to customers and constituents. We even developed an AI tool (of which we are very proud) that allowed individual supporters to draft their own personalized letters of support.

We did not, however, publish any comments attempting to discredit the mayor or the city manager. In fact, ACI was disappointed when Mayor John Hamon recused himself from the process. As an aircraft owner and operator, we thought he had a unique ability to fully understand the proposals.

Engaging the public through modern means is normal for a process like this. Is it perfect? Of course not, and I’m sure the city received a few letters from people whose connection to the airport is not obvious. Perhaps they are hobbyists or political junkies, but they are still real people who consciously chose to contact elected officials, and this is part of any open political process.

Still, the vast majority of letters are from real stakeholders, including many very prominent ones who have a genuine interest in the outcome and deserve to have their opinions heard. (Statistics for the responses are shown below.) In the end, if the city truly has lofty goals for the airport, it needs a partner that can advocate for itself and the local community on a global level to attract business to this area. ACI Jet has demonstrated that it is capable of doing that.

Secondly, our development would change the culture and direction of Paso Robles Airport. While our design is certainly inspired by the City’s small-town charm, it will also bring the high touch appearance and service that Paso is known for. It’s this unique combination of “first class plus small town” that makes this place special, and the airport desperately needs the first half of this secret formula to move forward. These changes will be positive for both the airport and the community.

Additionally, with 1,300 plus acres of land at Paso Robles Airport, most of which is undeveloped, it is hard to imagine how our proposed improvements would come at the expense of other users. There is plenty of room for everyone at Paso Robles.

Lastly, ACI’s business model is in fact focused on handling, managing, and maintaining larger aircraft while continuing to provide services to light general aviation. Our proposal is centered on the construction of larger commercial facilities that attract larger more complex aircraft. (Military, jets, future space port use, and eventually Advanced Air Mobility vehicles.) To be frank, this is where the money is at. These planes burn more fuel, require more complex services, and generate more jobs than their small piston engine counterparts.

That does not in any way mean that we lose sight of our light aircraft customers who also benefit greatly from a financially healthy airport. In fact, the best service for light aircraft is usually the result of a healthy bottom line that allows them to access resources at reduced costs. The QR code below features a short video that clearly explains why ACI Jet’s proposal is not only best for the airport’s future but for small aircraft as well.

At the end of the day, ACI Jet is willing to invest millions of dollars in development that will improve services for everyone. We’ve gone far beyond what we normally would with our proposal for PRB because we are a local company that believes in doing right by the Central Coast. As such, we felt an obligation to put our best and final foot forward with our proposal.

Why ACI Jet’s proposal is better

While there are numerous ways that ACI Jet’s proposal outshines the competing one, the metric that should matter the most is that ACI’s proposal offers objectively more investment (nearly double) to the community than the other one under consideration. We are offering to commit to an initial $6 million in development with an additional $12 million built on demand in exchange for a 40-year lease.

Our original proposal offered even more and is frankly what would best suit the future of this airport. Notably, most of ACI’s proposed improvements are large steel hangars that have a lifespan of 100 plus years, ultimately leaving the city with a huge win at the end of the lease when all improvements revert to the city ‘s ownership.

The other proposal offers no guaranteed investment up front, asks for an initial five-year term, and then takes 40 more years upon an investment of only $3.1 million. Additionally, by contrast their subsequent proposed development of $6 million to be built on demand is comprised of smaller box hangars and t-hangars which have shorter lifespans and lower residual values than ACI’s proposed large commercial facilities.

In short, this all boils down to a 40-year lease for a lot more or a 45 year lease for a lot less. That’s just the math. Additionally, ACI’s proposal refurbishes the public terminal, further reducing maintenance costs for the city and providing everyone with a better experience–even those just looking to grab breakfast at Joe’s on the weekend.

Finally, building larger hangars and attracting high revenue customers would support light GA aircraft that use the airport. In addition to modernized terminal facilities, our proposal is the only one that provides desperately needed additional hangar space ASAP. This provides a place for the bigger planes (e.g. Royal Air Force A400 Operations) to go without disrupting the use of existing hangars that they currently take over when they are in town to support their operations.

The politics of this process and the future

The real question here is what is in the best interest of the public and who is the airport supposed to benefit? Is it the locals that own planes at the airport, the visitors that land here, or the community (residents and business owners) as a whole? Candidly, we don’t believe that the evaluation scores from the two panels reviewing the proposals reflect the majority view of any of these groups, but rather the opinions of a handful of individuals pursuing their own agendas.

If any of the groups above were represented through a popular vote, I’m confident that ACI Jet would win and if it was the community as whole, it would be by a landslide. Still, that is not how this process works and the final decision here is the prerogative of the City Council.

I know that myself and everyone here at ACI respect our democratic process and we are thankful for the ability to participate in it. As such, we have pushed all communications to elected officials through appropriate channels even though public involvement has been far more restricted in this process than any other we have been involved in.

Finally, regardless of what decision is made, ACI is extremely proud to have rescued the City of Paso Robles when it needed our help 14 years ago. The previous fixed base operator went out of business and fuel was not available for critical emergency services such as CHP and Cal-Fire. We solved this problem in 24 hours and there has not been an interruption in service since. In addition to stability, we have subsidized light aircraft maintenance, brought Joe’s 19er Diner to the airport and delivered on all our commitments to set the stage for this airport’s success.

Where Paso goes next is up to the City Council and ACI Jet is willing to honor whatever decision is made. If they want to see new construction and economic progress based on business terms that will drive the airport forward, then game on! If not, then this airport will likely shrink economically and potentially face a situation similar to the one currently playing out in Santa Maria.

We think this is the wrong path, but if that is what the City chooses, we will respect the decision, exit in a professional manner and deploy our capital elsewhere into airports and communities that offer a warmer reception and higher rate of return.

Bill Borgsmiller is a San Luis Obispo County resident and the CEO of ACI Jet.