The Daviess County Water District’s (DCWD) effort to purchase the land beneath its office from the Owensboro-Daviess County Regional Airport (OWB) remain in limbo, stalled by Federal Aviation Administration (FAA) regulations and uncertainty over federal policies. DCWD officials say the inability to purchase the land may lead to rising rental costs, which could ultimately impact customer rates.
While the parties have continued discussions, the airport board has not made a formal decision, according to OWB Director Tristan Durbin.
“I would say there really isn’t an update,” Durbin said. “At this point, no decision has been made, and it is currently just kind of at a standstill right now.”
The DCWD has leased the ground at 3400 Bittel Road for nearly 40 years and constructed its own facilities there. The current lease expires in 2027. Under the most recent lease proposal, DCWD officials said, the agency would face increased costs, prompting them to seek ownership of the land rather than continue leasing.
“With the latest lease proposal, we’re looking at spending close to $1 million on the property with additions and upgrades,” DCWD board chair Phil Haire said. “One of the criteria was that PSC came to us and said we need to ensure we have good approvals and long-term leases.”
Appraisal and offer developments
In accordance with FAA regulations, an appraisal was conducted to determine the fair market value of the property, a process jointly funded by DCWD and OWB.
“The property has been appraised,” Durbin said. “We have shared that with the water department. There were really no quarrels or issues with what the appraiser came back with. They were fine with it. Our board was fine with it. It was just a step we felt we needed to do to make an educated decision.”
DCWD submitted an initial purchase offer, which expired in August. However, after the appraisal, DCWD submitted a new offer that aligns with FAA guidelines requiring a sale price not lower than the appraised value.
“The appraisal amount for the current property and the buildings was in or around the $800,000 range,” Haire said. “We provided (OWB) with another offer based on the appraisal amount because apparently FAA regulations state that they would not accept any offer less than appraisal. So we made them an acceptable offer based on the appraisal.”
Haire also noted that DCWD is seeking to purchase additional land beyond the 2.4 acres it currently occupies.
“We would like to purchase another 0.6 acres joining us,” he said. “That would round us up to three acres, and that’s what we would kind of need in order to be able to utilize the property that we need for incoming trucks and customers.”
FAA and airport board considerations
While OWB has not rejected the offer, it has yet to decide whether it will move forward with the sale, citing uncertainty over FAA policy changes.
“We’ve been talking to them for probably a year and a half,” OWB Board Chair Doug Hoyt said. “We did suggest to them that we were happy to have them as a neighbor and would offer them a long-term lease to stay there.”
Hoyt emphasized that the airport board has not taken a formal stance on selling the land.
“We have not decided if we want to sell yet,” he said. “We haven’t said we don’t, but we haven’t said we do. And so it gives everybody time to think through, see what’s going to shake out in all the stuff that’s happening in Washington, specifically among the FAA.”
If the airport board ultimately decides to sell, additional actions would be required before the transaction could proceed.
“The next steps would be to approach the FAA and then follow their process, which part of that would include phase one environmental, potentially an archeological assessment,” Durbin said. “They would require that appraisal as well. There are additional steps that they would need us to take, but those are some of them.”
Lease versus purchase considerations
OWB has previously offered DCWD a long-term lease rather than a sale, but due to financial concerns, DCWD has remained committed to purchasing the land outright.
“We have been making an effort at the airport now for a number of years to bring leases more current with all of our tenants and make them reflect market value,” Hoyt said. “It makes sense to do that because it maximizes our revenue and makes it a fair arrangement.”
However, Haire said DCWD’s concern is that its rental costs will continue to rise under a lease agreement, ultimately affecting its ratepayers.
“They’re basically doubling our rent because it’s based on the square footage of the buildings that we built, not the land,” he said. “It’s no longer about the land, it’s the buildings. And so even the offer that we have made, the appraisal was based off of the buildings that are on the land and the land itself.”
If DCWD cannot finalize a purchase agreement, Haire said the organization is prepared to relocate.
“If the airport board is OK or feels confident that they’re going to approve this purchase, then we may hang around and wait for the FAA,” he said. “But if the airport board is not real sure about it, then we may not hang around. Time is of the essence, and 2027 will be here before you know it.”
Haire said DCWD has asked OWB to make a decision by the end of April.
“We may go to them and just ask for a vote of confidence,” Haire said. “Do you feel like this is a good thing for the airport as well as for the community? Or do you feel like that it’s not a good thing? And if they feel like it’s not a good thing, then we may proceed and go do something else.”
With both sides awaiting clarity from the FAA and each other, the future of the property remains uncertain.
For more background on the ongoing issue, read our previous coverage here.
