Plans to sell Long Beach Airport?

The following was copied from the article written in the Long Beach Press Telegram on Jan 2, 2009.


LONG BEACH -- City Manager Pat West has called for a closed session of the City Council next week that one councilwoman fears could lead to the sale of Long Beach Airport. The council is scheduled to meet at 4:30 p.m. Tuesday at City Hall to discuss "terms of lease or acquisition" of the airport, according to the meeting agenda.

West said Friday that the city had been contacted by a slew of financial companies interested in an airport deal, including notable potential investors such as Citigroup, Goldman Sachs, JP Morgan, Merrill Lynch and Morgan Stanley, according to the meeting agenda. When asked whether the airport's sale is on the table, West said only that the meeting is about "leasing opportunities," but wouldn't explicitly say that it isn't about selling the airport. City officials aren't allowed to discuss the details of closed session items.

"We have an opportunity to investigate some lease opportunities at the airport," West said. "We want to gauge the City Council's interest before we spend any time looking at these opportunities." Councilwoman Gerrie Schipske released a statement Friday questioning whether West should be discussing an airport deal with investors without receiving council direction to do so and indicating she wouldn't support privatizing the airport. Any such discussion, she said, should be made in open council session.

"With budget deficits looming, the idea to sell city assets ... is focusing on the wrong solution," Schipske said in a statement. "The only discussion this City Council should be having right now is how we plan to live within our means and what steps we will take to reduce spending." After making cuts to eliminate a $16.9 million budget deficit coming into the current fiscal year, city officials are expecting an additional $15.7 million revenue shortfall.

West said leasing parts of the airport to be operated by private companies is nothing new. About 30 percent of the airport is leased by airlines, aircraft storage companies, rental car companies, restaurants and other businesses, he said. The remaining runways and other facilities aren't leased, West said.

If investors were interested in buying the airport, it could be done through the Federal Aviation Administration's Airport Privatization Pilot Program. Several cities have shown an interest in that program, submitting applications in recent years. However, most were withdrawn or rejected.

Only Chicago's application to privatize Chicago Midway International Airport remains, leaving four slots available only for nonlarge hub and general aviation airports such as Long Beach's. Becki Ames, chief of staff for Mayor Bob Foster, said she didn't know the details of what is to be discussed Tuesday and that it is too early to criticize whatever may be presented to the council.

Ames said Schipske "must know something that all the rest of us don't."