Terminal at Kodiak, Alaska, Airport May Have Buyer

MarkAir's terminal at Kodiak Airport, which has stood empty and unused since the airline's 1995 demise, may soon have a new owner. The state lending agency that took it over after MarkAir went bankrupt and out of business has received a $230,000 offer from a local Kodiak aviator to buy the building.

David Hilty, who has a business running air-taxi, flight-seeing and other small-plane operations out of Kodiak, said he made a bid for the run-down facility after eyeing it for years.

"It's dilapidated, and it's been there for a long time," Hilty said. "It's time for somebody to do something with that building."

His $230,000 offer matches the amount at which the Alaska Industrial Development and Export Authority values the 17,122-square-foot terminal on its books, said Jim McMillan, the agency's deputy director of credit and business development.

The terminal was initially valued at $857,401 when AIDEA bought it out of U.S. Bankruptcy Court in 1997, McMillan said.

The Kodiak terminal is one of 10 MarkAir once put up as collateral on an AIDEA loan, he said.

In a separate and controversial deal in 1991, AIDEA spent about $6 million to buy three other hangars from MarkAir and lease them back to the airline, which was struggling to reorganize its finances and needed cash after a failed attempt to expand out of its Alaska base into the Lower 48.

Despite AIDEA's efforts to keep it aloft, MarkAir's debt load ultimately proved to be too much for the airline to carry, and it ceased operations in 1995.

The company abandoned the Kodiak terminal in September of that year after a fire damaged a restaurant on its top floor.

It landed on AIDEA's books in 1997 after attempts to find a buyer for the property while it was in bankruptcy court failed, McMillan said.

The terminal has been sitting empty, unheated and with no other maintenance since then, McMillan said.

The Kodiak Island Borough made a pitch to buy the building in 1999, asking AIDEA for an $800,000 loan to pay for it. The agency turned down the loan request because borough officials couldn't show how they would repay it, McMillan said.

Hilty said he's interested in buying the terminal because it will give his business room to grow. He said he's leasing property at the airport and would use the old MarkAir building as an air cargo and terminal facility.

AIDEA directors are expected to consider the purchase offer at their board meeting Nov. 9 in Anchorage. The agency will accept offers from other interested parties until 2 p.m. on Nov. 5.

Of the 10 terminals that MarkAir put up as collateral on the AIDEA loan, all but two -- the one in Kodiak and another in King Salmon -- have been sold, McMillan said.