Selling An Airport

Story sound familiar??
http://www.tacomadailyindex.com/portals-code/list.cgi?paper=88&cat=23&id=641776&more=

A decade of financial losses at Tacoma Narrows Airport has forced City Hall to consider offloading the 43-year-old, 650-acre airport located near Gig Harbor in unincorporated Pierce County. “We have a sound, unremitting, 10-year history of losses at the airport, and they are getting worse,” said City Manager Eric Anderson Tuesday, during a city council study session.

According to data provided by city staffers, the city defaulted on two inter-fund and general fund loans totalling $3.2 million at the end of last year. Additionally, the costs associated with an agreement between the city and the Federal Aviation Administration (FAA) to create runway safety zone improvements has climbed from an initial estimate of $6 million to nearly $18 million. The city would need to pay $1.1 million toward those improvements -- money that isn’t budgeted, according to Anderson.

The news Tuesday upset the mayor and several councilmembers. “We were assured repeatedly that this was a slam-dunk deal that would generate tremendous revenues,” said Baarsma, who recalled two council decisions in 2000 and 2002 to authorize the loans. “I find this surprising and I’m disappointed. If those assurances hadn’t been made, we wouldn’t have approved the loans.” Councilmember Julie Anderson was concerned that councilmembers weren’t notified that both loans defaulted Dec. 31. “I don’t think it comes as any surprise it’s a losing proposition,” said Councilmember Jake Fey.

City Manager Anderson proposed transferring the airport to another owner, or shutting down the airport and selling the land. News that the city could sell the airport pleased Councilmember Bill Evans. “We were always told that we couldn’t close it,” said Evans, referring to a long-time belief that the FAA would not permit a sale. “I’m happy to hear that.” According to Anderson, the FAA is “reluctant to close airports, but cannot requite an entity to operate an airport at a loss.” However, if the city closed the airport and sold the land, if would have have to return 95 percent of the market value to the FAA because the airport was built with federal funds. Still, Anderson was confident that even five-percent profit on the sale would cover the loans because the airport was located on “prime development land.” “Almost as important,” said Anderson, “it would stop the bleeding.”