By Patricia Reynolds
Business Journal Writer

    Modesto City-County Airport will soon be home to a new ten-bay hangar.
    On January 6 the Modesto City Council approved the new building and awarded Applegate Johnston, a construction company located in downtown Modesto, as the general contractor and builder for the project.
    According to Jerome Thiele, Modesto Airport manager, the last time a hangar was built was in 2002, and prior to that, in 1987.     
    “This is something we have been looking to pursue for some time,” he said.
    The new building, Hangar L, will join twelve existing hangars and will accommodate ten single engine or light twin planes, boosting hangar capacity from 109 to 119 aircraft.  Thiele said he views the project as a way of building for the future, and he anticipates increased business as a result of the new hangar.
    “We may not fill the hangar the first year, but we will as demand increases,” he said. “This will attract more aircraft to the facility.”
    Additional aircraft translates to additional fuel sales which enables the airport to collect a fuel fee of seven cents per gallon. Also, more aircraft means more take-offs and landings and more maintenance, generating sales tax revenues.
    Thiele said that an arrangement between local governments has enabled the raising of funds for previous projects and most recently, for Hangar L’s construction.
    According to Thiele, in May 1955, the City of Modesto and Stanislaus County partnered in the continued operation of the airport. Stanislaus County was invited to join the City in the operation of Modesto Municipal Airport, later Modesto City-County Airport. The joint financial strength of these two government agencies led to the development of a new longer primary instrument landing system runway in partnership with the Federal Aviation Administration airport improvement grant program.
    In addition, Stanislaus County allocates a portion of the Aircraft Possessory Tax, calculated at 1 percent of average blue book value for aircraft annually, to the airport, Thiele said. The 2008 allocation amounted to $198,420, with the projected 2009 allocation being roughly the same.
    The Airport Advisory Committee has saved these allocations to fully fund construction as well as pay for design, administrative, environmental study and contingency construction costs of the new hangar.  Allocated tax funding saved to date totals $741,452, and with an additional allocation for this fiscal year the total comes to $939,873.
    Evan Yoshino, Applegate Johnston’s project manager with the firm’s general contracting division, describes the project as the construction of a big metal T-hangar building complete with storm drain site work.
    Based on a public bidding process, Yoshino says that Applegate Johnston’s $611,000 bid came in well under the City’s estimated construction portion of the total project cost.
    “In this case the City of Modesto did their own architecture work and the engineer’s estimate was around
$1.1 million, right in that ballpark,” he said. “Right now, the contract is awarded based on lowest responsible bidder.  Whoever has the low bid with the complete scope is awarded the project.”
    Because it will be funded publicly, the project was put out for public bid. This means that any qualifying general contractor was eligible to bid based on a set of specifications and drawings the City published, says Yoshino. All bidding firms utilized what is called a prevailing wage, based on union scale, in their proposals.
    According to Yoshino, the winning margin was tight, with the second place bid coming in only $20,000 higher than Applegate Johnston’s.
    The large number of construction companies participating and the competitive nature of the bid, he says, was a direct result of the troubled economy.
    “Since the housing market has fallen apart, there’s been a huge influx into commercial and industrial construction which is what we do, and by people that are maybe not as qualified to do it,” he said. “We have not experienced the same slowdown reflecting the market but we’ve definitely seen it as far as pricing, which is definitely lower than it’s been in a quite a while. People are hungry.”
    While the overall economic outlook for much of the San Joaquin Valley is grim, the fact that the City is utilizing an experienced construction company is good news for Modesto, Yoshino says.
    “Once we’re awarded the project, absolutely we have a huge advantage because we’ve done this before, and we’ve worked with subs that do this on a regular basis,” he said.
    These subcontractors are all local firms, and like Applegate Johnston, are excited to work on a local project.
    “Our company has had to kind of go to diverse locations. We’ve had to go down to Fresno, down to Visalia, up to Sacramento, out to the bay area just to stay busy,” said Yoshino. “So, when you see one that’s in your backyard you jump on it and you’re excited about it and I think a lot of our subs are the same way.”
    Yoshino named four area companies Applegate Johnston will use for subcontracting. Steelco will perform the metal building and erection work while Best Electric will be responsible for the building’s electrical requirements. Hensleys will conduct the grating and paving while Dowdy will provide the concrete.  Applegate Johnston will be responsible for all other work.
    While a project start date has not been announced, Thiele estimates the hangar will be up by August of this year. Yoshino says the hangar construction is an approximate 100 working day project, or about a 5-month effort.
    Currently, Applegate Johnston is finishing contract execution and then will hold a pre-construction meeting where scheduling details will be identified.