PITTSFIELD — Town officials have finalized funding to build a $1.5 million hangar and new taxiway at the Pittsfield Municipal Airport.

The project is part of ongoing updates to the airport, often called Curtis Field, and will allow the town to increase revenue by renting out space at the hangar.

Other improvements will improve the taxiway, the paved strip on which airplanes travel between the hangar and runway.

The project, which has also received state and federal grants, is considered a “model” for how other communities might build hangars.

“Both the federal government and the state government talked about how this can be viewed as a model project,” Town Manager Kathryn Ruth said. “It was one to test out. Could this work? And it can work.”

To cover the cost of the project, the town has received $1.1 million from the federal government and almost $345,000 from the state. The funding leaves the town’s share of the project at $75,350, according to Ruth.

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The town’s share of the cost amounts to about 5% of the grants the town has received. With the COVID-19 pandemic, many grants have reduced their match requirement to 2.5% or even zero, according to officials.

The final cost to the town will not be clear until the grant matches are confirmed for next year.

The funding for the airport work includes a $300,000 loan from the town of Rangeley, facilitated by the Maine Department of Transportation.

Rangeley received money for a project, but has been unable to spend it due to delays, so instead of losing the funding, the town has opted to loan the money to Pittsfield.

Ruth said Pittsfield will save money it receives from the federal government and use it to repay Rangeley.

“The Maine DOT has been exceptionally good in matching up those towns,” Ruth said. “They don’t want the money to be lost, and they don’t want the towns that need more money for their projects to be continuously stalled.”

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With the funding secured, the next step is a design for the hangar. The engineering firm Hoyle, Tanner & Associates Inc. is working now on the design, Ruth said. The project is expected to be put out to bid over the winter, with construction beginning next summer.

The town plans to rent out space at the hangar, according to Ruth, who said several prospective tenants have already shown interest.

The airport brings in money through leases, taxes on privately owned hangars and excise taxes on airplanes kept there. The revenue totals about $26,000 a year, about what it costs the town to operate the facility.

After the new hangar is operational and rented out, Ruth said, it will allow the town to generate more money than what it costs to operate the airport.

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