‘Financial constraints’ force Oro-Medonte to sell airport shares

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Township council has agreed to sell its 20 per cent share in the Line 7 airport to the County of Simcoe for nearly $1.5 million

19 July 2019 by Chris Simon  Simcoe.com

Airport network

Inside a hangar at Lake Simcoe Regional Airport during the recent announcement of the creation of a southern Ontario airport network. – Torstar file photo

Oro-Medonte is grounding its stake in the Lake Simcoe Regional Airport.

Township council has agreed to sell its 20 per cent share in the Line 7 airport to the County of Simcoe for nearly $1.5 million. That money will be used for facilitating business development within the township.

As part of the agreement, the township will look to retain one seat on the airport board.

The decision would make the county the majority shareholder and it comes as the airport prepares for a three-phase, $65.9-million upgrade to the facility. 

Oro-Medonte’s stake would have put the municipality on the hook for about $8 million in costs related to the first two phases. The airport wants to move ahead with the upgrades quicker than initially planned, after two large businesses shortlisted the site for expansion.

“Given its current capital funding priorities, the township is not in a financial position to provide the investment that would be required in the next one to two years,” Oro-Medonte corporate services director Donna Hewitt said in a July 17 report to council. “The airport is not in a position to finance these expansions through debt. As such, the expansion can only be financed by its shareholders. Given the township’s financial constraints, staff brought a report to council regarding the potential divestment of shares.”

The first phase of the proposal — which would cost about $27.5 million — includes a runway extension from 6,001 feet to 7,000. The runway would also be widened from 100 to 150 feet. Electronic and visual aids, including an approach lighting system, are proposed to be installed.

A second phase includes enhancements to charter services. The final phase would require the construction of other infrastructure, including an air terminal.

In June, Barrie council approved a plan to sell a majority of city shares in the airport to the County of Simcoe for $3.7 million. The plan means the city’s stake would be reduced to 10 per cent from 60.

The county is in a position to fund the expansion, Hewitt said.

Oro-Medonte would also save about $147,000 per year in operating costs associated with the airport, she said.