- There's plenty of buzz?? Yeah, as in we waited this long for this..
- The courtship of corporate, commercial and general aviation is heating up? Isn't this the job of the airport to court these different aviation lines, why has is taken so long to heat up?
- Dozens of developers have responded to an RFP means nothing. Show me ten proposals with $10,000 deposits and then we can talk. We will be lucky to get one.
- The agreement between the city and the the is very important to the success of ORH. No kiddin. Talk about the understatement of the year.
- MassPort may possible even take title via an extended $1 per per year lease!!! Did I read that right?? Yeah I did. Finally!!!!!!
I don't blame MassPort if they do not want to extend the current agreement. Over the last 8 years, I bet you that they are out of pocket approximately $5,000,000, not to mention there time and effort. For what?? Nothing.. Now at $2,000,000 per year, even excluding debt service, if MassPort were to cover 67% of the operating deficit, it will run them about $1,000,000 per year. If you were MassPort would want to renew the agreement? No way!! To top it off, they can never realize any return on 3 and 5 operating agreements. MassPort needs to either take title, either by outright sale or long-term lease (99 years) to invest the much needed funds, while giving MassPort a chance to realize a return on their investment.
This brings up another question can we simply long-term lease the airport or outright sell it without an RFP? There is an municipal asset (valued more then $20,000) and must follow the Commonwealth of Massachusetts procurement laws as outlined by MGL (Mass General Law) 40B. It would appear to me that an RFP must be put together and publicized for any possible suitor (Harry Tembenis' airlines, etc), a direct negotiation with MassPort does not appear to meet the requirements of 40B, in my opinion.
Take a moment to review one of our original recommendations, click here and hit the "Vision and Recommendation Key".
13. Invite airport management companies to Worcester and review the possibility of putting together an RFP whereby we lease the entire airport to a private management company.
Althought this is good news, I believe that we will need to put together and RFP to allow MassPort to outright take title (Sale) or long-term lease (99 years) ORH. We should have been working on this the past three years starting on July 1, 2004, when the current three yeat agreement was renewed!!!!
Telegram Editorial December 17thCritical talksMassport involvement key to airport’s future
There’s been plenty of buzz about Worcester Regional Airport recently: Its federally funded master plan is near completion. The courtship of corporate, commercial and general aviation by the Massachusetts Port Authority, which operates the airport, and city officials is heating up. Dozens of developers are responding to requests for proposals for building new hangars and other facilities. But make no mistake: The success of all of those activities, and the airport’s future, hinges entirely on the continued involvement of Massport, the city’s stalwart partner on Airport Hill. The agreement between the city and the authority expires next June. It would be difficult to overstate the importance of Massport — and not just because it has picked up much of the municipal airport’s operating deficits.
As operator of Logan International and Hanscom airports, it has resources, political clout and expertise Worcester’s airport could never match on its own. As the keystone of New England’s air transportation system, Massport is uniquely positioned to identify and nurture niche services that will play a pivotal role in making the airport financially self-sustaining. Massport officials remain convinced Worcester’s airport is a vital aviation resource and have indicated eagerness to stay involved. Indeed, the critical talks leading to a new operating agreement already are under way. Among the issues on the table is exactly what form Massport’s involvement will take. That it will continue to operate the facility should go without saying. Beyond that is the possibility that Massport would at some point assume physical control of the airport — by taking title, perhaps, or via an extended $1-a-year lease arrangement. That would mean, for Massport, flexibility to plan and undertake long-term development strategies and, for Worcester, assurance that the agency’s involvement would continue — in short, a winning outcome for Massport, Worcester and the region’s air transportation system.
7 comments:
Really do not thing the implications of this Editorial should be underestimated. The fact the this ($1 per lease to MassPort) is even mentioned means that this is "in play". This is the best news that we have had about ORH since the $455,000 Small Community Air Service Grant, which has been completely mispent by the Airport Administration.
Lets hope this gets done and someone else, whether it is MassPort or someone else (Harry Tembenis), takes control of ORH.
Mr Randell, again, do you think it's good practice to sell off or bargain lease an asett that is Assessed at $25 or 30M (has maybe even a higfher FMV??), when in fact at least one of the problems is the City's continued inability to properly manage an airport? WE DO NO TBELONG IN THE AIRPORT MANAGEMENT BUSINESS
Yes, this place is a hard sell, but we need to give new talent a bite at the apple before we decide selling or bargain leasing is the correct move.
New managemnt first and if that does not pan out then RFP it to see what the place is worth. A private co. owning the place will generate 100"s of thousands in new tax revenue, even if it sells for only 1/3 of assessed value.
This place has far too much potential to hand it off to Massport at THIS TIME.
Another thought ..off topic, $ 195,000 handed off to a non profit, non TAX paying entity in the form of waived feees and I have to avoid certain streets in my neighborhood b/c the asphalt pavement is in such terrible condition and in some cases ther is no pavement at all! This is insanity.
Maybe all the private street abutters should show up at next meeting re thsi 195K handout and make some noise??
Jahn:
The way I figure it we will need to do an RFP. From there we will have two options 1) outright sale or 2)long-term lease.
It sounds by the editorial that we are, in fact, looking at a long-term lease. In other words, I do not think we are looking at a one-time hit of 25-30 million from a sale. Instead we will be looking at a much smaller annual long-term lease, which saves us from the $2,000,000 deficit.
The management company would then come in invest their monies and hopefully do a much better job and turn a profit, generate property tax, etc. The question is how much per year do we lease the airport to MassPort for??
That is why we need to do an RPF?
LOL !!!! Good pre-emptive 'shut Harry up' strike, Bill !!!
:-)
Harry Tembenis
Worcester, MA
Bill, this is my big concern. I do not want to see this leased (or sold) to Massport for $1 annually nor do want Massport to be the only suitor that we court. Why should they have the only crack at it?
It appears that maybe ther is some opinion that we do not have to RFP it? If we dont, then the taxpayers lose again.
Please keep in mind that Logan now has add'l capacity in the form of a new runway and that Comm air flights are actually down at Logan over the past 10 years. See the flight activity 10 year chart in MP's annual report. I do not want to see us become the orphaned, red headed kid after we hand over the reins to Massport.
If Anything at this point, Let's hand over the management but NOT the asset, But keep in kind, w/MP will we still retain the same management? I guess it great if Maspport comes and spends millions in paving and improvements, but what godd will it all be if we are still left with littel or no comm air service?
Bill, I here you saying (writing) that the most important thing should be getting it off of Worcester's proverbial back, simply because it is/has been a financial drain. WHO it goes to, what THEY do, whether THEY make a profit or flounder with the market, is purely secondary. This is my position, even if it's not yours. We are not able to be selective at this juncture. Just get it off the city's list of liabiities and move on to promote our real assets: vibrant tax-paying, revenue-generating, job-offering businesses in other sectors. As someone said here, the city has no place in the airport management business.
Jahn:
Two years ago in our recommendations on the http://www.flyroh.com, we urged the City to put out an RFP for the airport. Whoever came back with the best offer, whether it be Massport or an airline (Harry always thinking of you) or how about a start like Eclipse look for a NorthEast base? Who knows.
Bottom line we all know the airport is an asset, but it has only been a financial drain on the airport. Does the City run the Centrum--no!! Who runs Wachusett Mountain? The Crowley Family.
My only fear is that we waited so long, now less then 200 days left, MassPort is holding all the cards. If they threaten not to extend the current agreement, unless we long-term lease the airport, do you think the tax-payers of ORH are ready to start kicking in $2,000,000 per year.
Bottom line is that I think we are all in agreement. We need to privatize the airport. At the same time, we all want to make sure that we get the best deal and are not leasing the airport out below market value.
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