Friday, January 16, 2009

Privatizing LB Airport `unlikely'

By Paul Eakins, Staff Writer
Posted: 01/15/2009 10:18:43 PM PST

Privatizing the Long Beach Airport is unrealistic and unlikely to happen, acting Airport Director Chris Kunze told the Airport Advisory Commission on Thursday evening. The concept first came up last week when the City Council was to discuss "leasing opportunities" at the airport in closed session. However, pressured by community members, the council voted to reschedule the discussion for an open session that has yet to be placed on a meeting agenda. While no new details about the proposal emerged from Thursday's commission meeting, Kunze said Long Beach's airport noise ordinance would make the airport unattractive to both private investors and the Federal Aviation Administration.

The FAA's Airport Privatization Pilot Program allows for private companies to lease or outright purchase airport facilities. Five airports across the country are allowed to participate in the program, though so far only Chicago Midway International Airport is close to privatization. "This whole privatization program that the FAA has launched was for the purpose of enticing private capital into infrastructure expansion, more terminal building, more runways," Kunze said. "It just seems highly unlikely to me ... that they would want to take up one of those five slots for an airport where that privatization would not create any additional capacity because of our noise ordinance."

Long Beach's noise ordinance limits the number of commercial flights to 41 per day and creates restrictions meant to reduce noise. With little opportunity for expansion, and little unused, developable land at the airport, Long Beach's airfield would be unattractive to most investors, Kunze said. Road to privatization Perhaps the only way a private entity could make money from the airport would be by raising rates and charges on airlines, Kunze said. However, those rates are set by the airlines' leases and can only be raised beyond cost of living percentages if 65 percent of the airlines vote to increase them, he said.

On the other hand, Kunze said, the city of Long Beach would benefit from privatization by getting access to new revenue sources. The airport is an enterprise fund, which means its revenue is used to sustain its functions without giving any money to the city's general fund for police, libraries and other services. If the airport were to be leased or sold, then the city's general fund would receive that revenue. Long Beach's general fund has been staggered by the economy as oil, sales tax, vehicle license fees and other revenues have dropped. City officials had to balance a $16.9 million budget deficit to start the fiscal year in October, and they're now expecting another $15.7 million revenue shortfall.

At the same time, a private operator would likely want to increase the number of flights, or at least might not be vigilant in enforcing the noise ordinance, Kunze said. An unpopular option Commission Chairman Bob Luskin said privatization wouldn't go over well with Long Beach residents. Community advocate groups fought for years against a planned terminal expansion at the airport that they believe may lead to more flights and noise. "I can't imagine the community uprising if the city contemplates selling this to a private, for-profit industry, so my personal feeling is that this is an issue that is not going to go very far," Luskin said.

Most of the other five commission members didn't vocalize a strong opinion on privatization during the meeting, but afterward they all said they didn't like the idea.

No comments: