Though Manhattanites have already begun booking winter trips to Phoenix, city commissioners gave an incentive package for Allegiant Air the third degree before approving it 4-1 Tuesday.
The city agreed to reimburse the airline, which will begin providing twice weekly flights in November, up to $100,000 per year for two years for ground handling and fueling costs. The city also waived all airport fees, which would total about $43,000 annually, for two years, said Peter Van Kuren, Manhattan Regional Airport director.
Commissioners acknowledged that announcing the new flights before the incentive agreement was approved was a bit awkward. Allegiant requested the announcement happen before the meeting so that it would be a surprise to the public, Van Kuren said.
“Of course it was requested, which some feel is creating pressure,” Mayor John Matta said. He asked Van Kuren whether Allegiant had a track record of staying in a city once the incentives expired.
Van Kuren said he didn’t know specifics, but he acknowledged the company could move on after the two years. “If Allegiant doesn’t make money, they’re going to leave,” he said.
Matta said it sounded like the research hadn’t been done. “If we don’t know the answers to these questions, how do we know we negotiated the best deal?” he asked.
Van Kuren said he did negotiate to try to get the best deal, but Allegiant would not have come without a 0-fee offer.
Commissioner Wynn Butler said some airports that use Allegiant service had 90 percent occupancy, but Allegiant still left because it operates “more as a travel agency,” selling not just flights but hotel and rental car packages.
“Just because planes were full, that wasn’t enough,” Butler said. “That troubles me.”
Van Kuren said the incentives merely get airlines into a market; they don’t guarantee that they’ll stay. “That’s how they work,” he said.
But Commissioner Rich Jankovich said the incentives will account for only a small portion of Allegiant’s revenue. At 104 flights a year, he estimated that the city’s money will account for only about $1,000 of each flight.
“It’s not make or break,” Jankovich said. “I’m not sure the amount of incentive is enough to make that difference.”
Van Kuren said he expects the flights to be successful, and in the meantime, he believes they will draw more passengers — and ultimately, more airlines — to Manhattan.
With Topeka getting new air service to Chicago, officials said they feel Manhattan must stay competitive to prevent losing passengers to nearby hubs.
Commissioners pointed out that other factors help balance the cost/benefit equation.
For instance, some of the incentives going to Allegiant will be paid to Kansas Air Service, the local company handling the airline’s ground service.
Commissioner Usha Reddi said with revenue travelers bring to hotels and other local businesses, it “may end up balancing it out at some level.”
In total, the city is set to get back about $68,000 of its investment, according to an estimate.
Butler noted that the $200,000 is coming from an “old” economic development fund created for a project that was rejected. The money in the fund has to be used on economic development, not infrastructure.
“If we could put that money on roads, I would clearly put it on roads, but we can’t in this case,” said Butler, who cast the dissenting vote. “Is the return on these flights worth that cost? That’s the bottom line.”
But on the other side, Matta said the city has to consider maintenance and wear and tear to the airport facilities.
“In the future, I’d like to see a lot more research done,” Matta said. “We need to leverage our fixed costs. We have to start making more money on these things.”
Two other items on the general agenda:
• Commissioners voted to allow the mayor to send a letter of support for Bluemont Youth Cabin to be considered for the state and national historic register.
Butler said his only concern would be unintended costs to the city. He said supporting putting the cabin on the historic register didn’t mean he would support putting a lot of tax dollars into its maintenance down the road.
The Manhattan Preservation Alliance and Historic Resources Board both support the nomination for the cabin, built in 1938 as a project of the Works Progress Administration. The motion carried 5-0.
• The commission agreed to a first reading of an ordinance regarding the enforcement of the obstruction of drainage easements.
Stormwater engineer Shane Swope said residents sometimes put fences or shrubs in drainage easements, which can compromise the city’s stormwater drainage system.
Reports of obstructions tend to come in to the city as complaints from neighbors. Currently, if the complaint isn’t resolved, it could end up going to district court.
The ordinance would allow complaints to be resolved through municipal court, which City Attorney Bill Raymond said would be more timely and possibly less contentious. He said the measure would be in line with what other cities of Manhattan’s size do.