Chattanooga Metropolitan Airport Authority on Friday moved ahead with plans to build a new general aviation terminal and hangar space, despite concerns there's not enough traffic to justify the facilities.
The panel OK'd a $3.6 million bid by Morgan Construction and Paris Construction to raise a 9,000-square-foot terminal on the west side of the airport's main runway along with 12,000 square feet in hangar space.
Also, the Authority approved a $354,000 engineering services contract with Allen & Hoshall.
Phillip Higginbotham of Morgan Construction said work is to start within weeks and take about 10 months to complete.
"It's a significant and exciting project for the city," he said.
The work is the first phase of $10 million in new facilities, which include a fuel farm and even more hangar space.
On Monday, the airport plans to seek proposals for another fixed-base operator to run the new sites. FBOs typically supply fuel and hangar space for aircraft.
Mike Landguth, Airport Authority president, said customers have indicated they want more competition at Lovell Field.
"The driving force behind this initiative is the customer saying, 'We want competition,''' he said.
But, an official for existing fixed-based operator Tac Air said there's already competition from other airports in the region which offer fuel and services.
"We're for the free market," said Tac Air marketing director David Edwards. "But another point I want to stress - Chattanooga is not an island to itself."
He also cited recent falling general aviation traffic at the airport. Edwards said the airport's master plan shows higher projections, but those are based on pre-recession data.
Landguth and others have cited the arrival of Volkswagen, Alstom's big expansion and other existing and planned growth as reasons for the new terminal and hangar space.
The west side is largely an undeveloped tract. The planned new terminal and hangar will sit across the main runway from existing facilities.
Landguth said the state will pay 90 percent of the project's cost while the airport will pick up the rest from its operations budget.
Dan Jacobson, the Authority's chairman, read a letter from Mayor Ron Littlefield supporting the project.
"I support the project 100 percent," the mayor said in the letter. "It's about economic development."