The county commissioners have approved a memorandum of understanding with the Delaware River and Bay Authority for construction of a new hangar at Cape May Airport, the latest development in the county’s takeover of the airport site.

Earlier this summer, the commissioners awarded a bid to the current airport operator under the DRBA, FlightLevel Aviation, to continue in that role after the county assumes control from the DRBA, the leaseholder and manager of the 1,000-acre property, in about four years.

In June 2024 the county filed notice that it would not renew the lease agreement with the DRBA, in order to gain unobstructed control of the county-owned property. Under that lease agreement, the DRBA manages the land, decides on capital investments and represents the county before the Federal Aviation Administration.

The county issued a request for proposal (RFP) for air operator services in March; FlightLevel Aviation was the only firm to submit a bid.

The Request for Proposal

Services by an air operator include appointment of an airport manager, along with sufficient staff to accomplish the service delivery requirements.

Air operator services also include providing regulatory and operational oversight for things like flight scheduling, safety protocols and other activities that ensure safe and efficient flight operations.

The county outlines the base service in the RFP, and these must be provided on a seven-day-a-week, 24-hours-per-day basis.

Among the functions being retained by the county is responsibility for all capital development at the airport. Under the current lease with the DRBA, capital investments were a responsibility of the DRBA.

The end of the DRBA lease arrangement will leave the county with a bill for what is estimated at $32 million for capital investments that the county must pay the DRBA at the conclusion of the lease.

In addition to seeking a replacement for DRBA as the airport manager and provider of airside operations, the RFP also offered two options that respondents could separately bid on.

Option one was for the provision of fixed base operator services. The provider here would be known as the FBO at the airport. This is where a bidder normally pays the airport owner for the right to offer aeronautical services at the airport.

These could include things like fuel provision, certain types of airplane maintenance, providing hangar space and tie-down service. In effect it allows the bid winner to operate a commercial business at the airport.

The second option was for the lease and operation of a public-use hangar. The hangar has not yet been built but is part of the DRBA capital plan for the airport, developed prior to the issuance by the county of its notice of nonrenewal of the ground lease.

Since the RFP was issued an arrangement has been reached between the county and DRBA to move forward with the construction of the public-use hanger at an estimated cost of $7.1 million under DRBA’s current standing as the sponsor and manager of the airport.

This allows the airport project to get the benefit of an available $2 million FAA grant. On Sept. 9 the county commissioners approved a memorandum of understanding with the DRBA to pursue the hangar project, “notwithstanding the issuance of the notice of nonrenewal.”

The RFP Response

In May, FlightLevel Aviation responded to the RFP with an expense pass-through, no-profit, no markup bid for providing air-side operator services at the airport. FlightLevel is already the FBO provider of aeronautical services at the airport and has an existing on-the-ground staff. The company’s website for Cape May Airport advertises services as varied as fuel and maintenance on the one hand and water and coffee on the other.

In its response FlightLevel says the company can support a “smooth and immediate transition to county-led sponsorship of WWD [Cape May Airport’s designation].” The response states that the transition in air-side operator services “involves formalizing responsibilities with a company whose leadership team is already in place with knowledge of the airport.”

The expenses to be passed through to the county are enumerated in a proposed budget for fiscal year 2025-2026 totaling a little over $1 million. This includes staffing and operating expenses. The current ground lease with DRBA runs until June 8, 2029. FlightLevel says in its response that the company is ready to “kick off” service within five days of receiving a notice to proceed from the county.

Even though the contract, according to the county RFP, is expected to run for five years, only the one year budget of expenses is presented.

FlightLevel also bid on both options. The option of providing fixed base operator services is in essence a continuation of the company’s current role at the airport. FlightLevel owns and operates a network of 10 FBOs across the East Coast and has been the airport’s FBO since 2013.

The company’s proposal under option one of the RFP is to continue to offer the FBO under a new agreement with the county. The costs would be at the level they are currently contracted for as the existing FBO for the airport. FlightLevel has an agreement that runs until 2028.

Option two was the lease and operation of the public-use hangar that has yet to be built. The company proposes that the “public-use hangar will serve as a flexible, revenue-generating facility focused primarily on transient and short-term jet storage.”

The company again cites its existing role as FBO, saying, “We will leverage existing staff, customer relationships and marketing channels to promote occupancy.” Cost for the option involves FlightLevel’s receiving the revenue from the hangar and covering all expenses.

The entire section of the response on option two did not anticipate the recently approved memorandum of understanding between the county and the DRBA for the construction of the hangar. In its response FlightLevel assumed it would be covering the debt level for construction for 15 years. This is another area of the award agreement between FlightLevel and the county where details will need to be worked out as to the lease amount for the hangar and the expected revenue flow to FlightLevel.

Current Status

Details of the county’s arrangement with FlightLevel have not been made public.

The county’s memorandum of understanding with the DRBA presents information that may require clarification for the public. The document states that “the parties [the county and the DRBA] have agreed that if the FAA approves of transfer of sponsorship of the airport to the county prior to June 8, 2029, the parties may agree to an earlier termination date,” the termination date reference being an early end to the DRBA ground lease.

How the arrangement to have the DRBA proceed with the construction of the public-use hangar will impact any possible early termination of the ground lease is unclear; how the MOU will impact the air-side operator services proposal for a fiscal year 2025-2026 initial budget is also unclear.

The assumption, given the language in the MOU, is that the agreement for the DRBA to proceed with the construction of the hangar adds to the debt the county must pay for at the termination of the ground lease, whenever that happens. The figure most often discussed is a payment by the county to the DRBA of $32 million, but that number has never had any public enumeration and confirmation by the county.

The ongoing lack of clarity extends to the county’s plans for the airport, an issue frequently raised during public comment at county commission meetings, but one the county says it cannot discuss in public until after the FAA rules on the change of sponsorship. There is no public schedule for when the county will approach the FAA.

Contact the reporter, Vince Conti, at vconti@cmcherald.com.