Associated Painters Inc., the Spokane-based commercial- and military-aircraft painting company, has signed a land-lease agreement with Spokane International Airport and plans to build a second hangar near the airport for expanded production by next fall.

"Our current facility is booked 100 percent," says Rod Friese, president of Associated Painters. "For us to expand and grow our business, the need was evident even a year ago. After about 14 months of doing studies, this is what makes the most sense for us."

The company is financing the project that is expected to start in December, depending on weather, at an estimated cost of $8 million, Friese says. If the winter weather is too harsh, then the construction could start by early March, with a goal to have the hangar operational by early September.

Friese adds, "We turn work down every week. We're trying to get this hangar up and running to have it operational Sept. 1, 2013. I already have planes booked in the hangar then."

Associated Painters has formed a new limited liability company, Spokane-based RND LLC, to build the 55,200-square-foot facility just east of its existing 41,400-square-foot hangar that it leases from the airport. Associated Painters began painting operat-ions here in 2010, and earlier this month, it completed moving its headquarters to Spokane from Everett, Wash., where it was based for 22 years.

In addition to its operations here, the company has painting facilities in Everett, Oklahoma City, and Jacksonville, Fla., Friese says.

The company expects to hire 40 to 60 people here within a year, Friese says. Currently, it has about 50 employees based here, he says.

Garco Construction Inc., of Spokane, is the contractor for the second hangar project, and Bernardo Wills Architects PC, of Spokane, is the architect.

The second hangar is designed to be larger than the first one by 13,800 square feet to accommodate the company's headquarters offices, a back shop, and a warehouse, Friese says. Associated Painters is leasing about 2,500 square feet of temporary office space from the airport in a building near its current hangar, but it will move the offices once the project is complete, he says.

Associated Painters' existing hangar at SIA, which the airport constructed, cost about $6 million to erect, and the company signed a 20-year lease with the airport to occupy the facility. In fall 2009, the Washington state Community Economic Revitalization Board approved a $4 million loan toward that project.

Todd Woodard, SIA spokesman, says the Spokane Airport Board on Oct. 17 approved RND LLC's request for a 30-year lease of adjacent land and an operating agreement for the second hangar facility, on a site that has 2.3 acres.

Associated Painters' hangar is located on the south side of the airport, along an aircraft ramp just west of the air traffic control tower.

Friese says this time around, the airport board didn't want to fund another hangar, and instead is looking more to private investment in airport operations.

"This is a different board," he says. "I needed to grow my business. It was either look at other locations or build the facility myself."

He says the company about a year ago had considered a slightly larger $13 million second hangar for accommodating wide-body airplane painting operations, but it then studied the market potential for that option as well as demand for its current niche of painting single-aisle aircraft.

"This one better mirrors our exact hangar we currently have that we lease," he says. "We've had such great success with the existing facility at the airport, we're essentially mirroring the existing hangar with some upgrades. With our current customer base, there's really not a need for a wide-body painting facility."

The new facility will have upgrades of mechanical equipment and controls, onsite wastewater treatment, and improvements that reduce utility usage, he says. It's also about 20 feet wider than the existing hangar.

He adds that the second facility "is specifically for painting Boeing 737s." He says the company has some five-year contracts with current customers, and that the pipeline appears solid for a long time.

"We're the sole provider of painting jobs for single-aisle airplanes for Southwest Airlines," Friese adds. "We'll be painting about 125 Southwest airplanes in a year. That fills our current airplane hangar. The current hangar, which we lease and that the airport built, is full."