Port weighs leasing out portion of BAX area

Auto storage proposed at Toledo Express

3/19/2012

With the airplane parking area outside the former BAX Global cargo hub not currently needed for flights, the Toledo-Lucas County Port Authority may lease some of that space for temporary storage of new cars and trucks.

The port authority’s airport committee last week reviewed a three-month lease with Streamco Inc. for up to 60 acres of the 78-acre cargo apron.

If the full board of directors approves the deal Thursday, Streamco would pay the agency $700 per acre per month.

Officials expect total revenue of about $80,500 during the three-month period because Streamco would not be obligated to use all 60 acres for the entire time.

BAX Global closed its Toledo cargo operation Sept. 1. Although BX Solutions, a local start-up organized by former BAX executives, moved in later last year, its operations to date have strictly involved truck-hauled freight.

A staff report to the airport committee stated that leasing the apron to Streamco “will at no time negatively impact the port authority’s ability to handle cargo flights if that opportunity presents itself.”

The apron is an ideal place for vehicle storage because it is concrete and secure, port President Paul Toth told the airport committee.

The port authority had leased 28 acres of the cargo apron that BAX was not using for six months in 2005 to Consultants Unlimited, a vehicle-storage company working for what was then DaimlerChrysler AG.

BX Solutions’ focus on truck freight is an element in the port authority’s refinancing this week of bonds that remain from the agency’s construction of the former BAX hub.

Mr. Toth reported that a $9.4 million, 15-year bond issue closed Thursday for refinancing the “tail” of debt left when BAX moved out and subsequently negotiated a lease termination with the port authority that allowed BX Solutions to move in.

The old bonds had an interest rate of 6.375 percent and the new rate is 4.6 percent, Mr. Toth said. That should save the port authority about $2 million over their 15 years’ servicing, he said, and rent from BX Solutions will cover the payments.

Because BX is a trucking operation, the new bonds’ interest is taxable to bondholders, the port president said. Although BAX in its later years had shifted significant freight from airplanes to trucks, its remaining air-cargo operations kept the hub qualified as an “airport facility” that was tax-exempt under federal rules.

The need to change to taxable bonds was the main reason for refinancing, but the lower interest rate is a clear benefit, Mr. Toth said.

Refinancing also “gives us full flexibility to do whatever we want with that building,” he said.

BX Solutions leaders have said they could expand into air cargo.

Reporting on discussion from a meeting earlier in the week, airport committee Chairman Jerry Chabler asked about the status of navigation-aids improvements at Toledo Express that would make it more attractive to international cargo airlines.

Mr. Toth said the port authority has been working with the Federal Aviation Administration to gradually add features to the airport and its approaches that would qualify Toledo Express as a “Category 2” instrument-landing airfield.

During BAX’s operations, the port president said, establishing such systems was a low priority because BAX aircraft were not equipped to make use of them.

He agreed that having “Category 2” capability now would make the airport more marketable, because it would reduce the risk of flights having to divert from Toledo during fog or other bad weather.

But airport navigation aids are the FAA’s purview, so such an upgrade is not something the port authority can decide to do on its own, Mr. Toth said.

Contact David Patch at: dpatch@theblade.com or 419-724-6094.