Wednesday, July 16, 2008

Long Beach Airport's future discussed

By Paul Eakins, Staff Writer
Article Launched: 07/15/2008 10:06:31 PM PDT

LONG BEACH - Planned terminal improvements and construction of a new parking garage at the Long Beach Airport shouldn't be impeded by airlines' financial woes nationally, city officials said Tuesday.

But officials said they are keeping an eye on the industry's cutbacks, and some council members warned against the city getting in over its fiscal head.

Assistant Airport Manager Christine Edwards presented the council with a report that says the city will have to raise passenger fees and parking rates if it is to finance bonds to pay for the projects.

Between $50 million and $65 million in bonds will be needed to expand the terminal from 56,320 square feet to 89,995 square feet as planned, the Airport Finance Overview report says.

Building the parking garage may require up to another $65 million in bonds, the report says.

However, the ultimate cost of the terminal and garage projects is still unknown because they are in the preliminary design phase, Edwards said.

"We don't know yet that this is the magic number," she said.

The report says that the airport's cost for each person who boards a plane would increase from $5 to between $9.50 and $11 to finance $50 million in bonds for the terminal construction. For a $65 million bond, the fee would increase to between $12 and $15, the report says.

To fund the new parking structure with up to another $65 million in bonds, parking rates would increase from $1 to $2 per hour, and from $17 to $19 daily in the existing parking garage, the report says. Once completed, the new parking structure would have a parking fee of $15 per day.

Edwards said that one of the airport's weaknesses is that JetBlue makes up 79 percent of the passenger market, which means if the airline should falter as many others have, the city could see airport revenues drop.

But, she said the airport is well positioned to attract other providers.

"If JetBlue went away, it would just be a matter of time" before other airlines moved in, she said.

In fact, JetBlue is expanding its operations, and is expected to announce today a new destination from Long Beach, Edwards said.

City Manager Pat West said he recognizes that the airline industry "is in a state of turmoil right now."

"We'll be taking that into consideration as we move forward," West said.

But while West and Edwards seemed confident that the airport project could move forward as planned, Councilwoman Rae Gabelich suggested officials should consider completing it in increments.

"I just encourage you and encourage everyone on this council to move extremely cautiously so that we don't find ourselves in a problem area," Gabelich said.

No comments: