The 2010 Airport Master Plan identified that additional airfield development acreage could be utilized for expanding cargo operations if the small parallel Runway 10R/28L was shifted 1,000 feet to the west.  While the 1,000 foot shift could be constructed on Airport land, additional land to the west would need to be acquired to accommodate FAA required runway approach protections.  In 2013, staff contacted the landowners west of the Airport, James and Kerry Vincent, to determine whether they might be amiable to the Airport buying their 60.78 acres of land.  Mr. Vincent indicated that a land sale was something he thought could be worked out.

After securing two appraisals and one review appraisal, an offer was tendered to Mr. and Mrs. Vincent.  However, with all of the surrounding property being recently purchased by Billings Flying Service at amounts well above appraisal amounts, the negotiations dragged on until the Airport contacted the FAA Airport District Office (ADO) to seek permission for an Administrative Settlement from the FAA.  In an Administrative Settlement, the sale is evaluated and a determination made as to whether the costs of pursuing condemnation would be more than just approving an amount for the land that exceeds the appraised amount.  The FAA subsequently agreed to the Administrative Settlement amount of $759,750.  

City Council may:

• Approve the FAA Administrative Settlement amount for the 60.78 acres that the Airport must have for runway approach protection; or
• Not approve the FAA Administrative Settlement amount and proceed with condemnation proceedings.

While a typical FAA funded project is usually a 90% Airport Improvement Program (AIP) grant, and a local match of 10%, it appears that as a result of the Coronavirus Aid Relief and Economic Security (CARES) Act, the grants received this year will be issued at 100% Federal only.  Subsequently, there is no financial impact to the Airport for the purchase of the needed land.

The 2010 Airport Master Plan identified that additional airfield development acreage could be utilized for expanding cargo operations if the small parallel Runway 10R/28L was shifted 1,000 feet to the west.  While the 1,000 foot shift could be constructed on Airport land, additional land to the west would need to be acquired to accommodate the runway approach protections.  In 2013, staff contacted the landowner of the parcel west of the Airport that would be impacted by the runway construction, and inquired as to whether they might be amiable to the Airport buying their land.  The land owners, James and Kerry Vincent, utilize their 60.78 acre parcel for a horse pasture.  Mr. Vincent indicated that a land sale was something he thought could be worked out.  In 2014, the Airport approached Mr. and Mrs. Vincent for permission to start an Environmental Assessment of the property, which would be funded with an FAA AIP grant.  With permission received, the Environmental Assessment was started and the final report completed and approved by the FAA in early 2016.   Following the completion of the Environmental Assessment, the Airport submitted a letter to Mr. and Mrs. Vincent formally telling them that the Airport, with financial assistance from the FAA, was interested in acquiring their 60.78 acres of property so that Runway 10R/28L could be shifted the 1,000 feet to the west.  This letter also notified them that Federal funds were going to be used to assist in the land purchase.  This process would follow the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as amended. Because the Airport was in amiable negotiations for the land, the FAA allowed the Airport to proceed with the construction project to shift Runway 10R/28L the 1,000 feet to the west.  This project was completed in the Fall of 2017.   During late 2015 and early 2016, Billings Flying Service was working to purchase the property directly south of the Vincent parcel and directly west of the Airport.  Because of the price of the purchase, the valuation of the surrounding properties, including the Vincent property were impacted.  The Airport had two appraisals and a review appraisal completed to meet the City of Billings land purchase requirements.  The two appraisals varied significantly, mostly because one appraiser considered the property that Billings Flying Service was buying (contingent on a zone change from Agriculture Open Space to Controlled Industrial and Public) superior (highway access) and less encumbered by the restrictions of the Airport.  As a result, that appraisal came in at $4,000 per acre and a total price of $243,120.  The second appraisal gave the Billings Flying Service property more weight and included property purchased by the City (Public Works) south of Highway 3 and west of Swords Park in which the City paid $9,494 per acre.  This appraiser gave the property an appraised value of $10,000 per acre and a total value of $622,900 (including $15,086 for infrastructure and buildings).  Because of the wide discrepancy in value, the review appraiser was asked to provide a technical review and a value determination report.  This appraiser provided a valuation of $562,000 for the property.   In June 2018, an offer was put forth for the review appraiser's amount.  Mr. and Mrs. Vincent were not happy with the amount and enlisted the assistance of a local attorney.  In 2019, Billings Flying Service purchased more land to the west of the Vincent property, again at values above the appraisal amounts.  After a number of counter offers in which the Vincent's attorney referenced the purchases surrounding the Vincent's property, the Vincents settled on the amount of $759,750, which amounted to $12,500 per acre.  Given that Billings Flying Service had purchased all of the neighboring land in the area for more per acre than what the Vincents wanted, the Airport contacted the FAA ADO to seek permission for an Administrative Settlement from the FAA.  In an Administrative Settlement, the cost is evaluated and a determination made as whether the cost of pursuing condemnation would be less than just approving an amount for the land that exceeds the appraised amounts.  City Attorney, Brent Brooks, assisted in providing a justification to the FAA and they subsequently agreed to the Administrative Settlement amount of $759,750.   Besides the amount of $759,750 for the land, Mr. and Mrs. Vincent wanted to be reimbursed for their improvements to the property, including a small horse barn, hay shed, corrals, fencing, road work, utility line installs, and a number of other items with an original value of around $64,000.  The Airport countered that these items were of little interest or value to the Airport and as compensation for those improvements, the Airport would rather provide a five-year no cost lease for the land so that the Vincents could continue to keep their horses on the property until they made other arrangements.  After some additional discussions on this item, Mr. and Mrs. Vincent agreed to the five-year no cost lease in lieu of the improvement value.  This will allow them time to purchase new land under 26 U.S. Code 1033, Involuntary Conversions, providing the Vincents with two years to purchase property similar or related in service or use to the property being sold to the Airport and subsequently not having to recognize any gain on the sale.

The stakeholders would be James and Kerry Vincent, the FAA, and the City of Billings Logan International Airport.

For the purchase of land, the City usually requires that Resolution No. 93-16740 be followed.  In this case, since the funding is coming from the FAA through the AIP grant process, staff is requesting that the City Council waive the requirements of Resolution 93-16740 and proceed with the land purchase for this necessary Airport Runway Protection area.