Westchester County Executive Rob Astorino announced last Thursday that he has selected Macquarie Infrastructure Corp. to operate Westchester Airport as part of a $1.1 billion public-private partnership dedicated to improving this vital county asset without expanding its footprint.
Macquarie was the unanimous choice of a bi-partisan task force made up of members of the Astorino administration and the Board of Legislators (BOL) to evaluate the three proposals received in April to manage, operate, maintain and improve the airport.
“The goal from the start has been a better, not bigger airport,” said Astorino. “This proposal does just that: Private investment capital – not taxpayer dollars – will improve the passenger experience, implement new environmental safeguards, and preserve the character of the neighborhood, all while creating a long-term revenue stream to help pay for county programs. This is an example of smart government operating on all fronts.”
Shortly after Astorino released the decision, BOL Chairman Mike Kaplowitz suggested the decision be put on hold until George Latimer takes over as County Executive after winning in the Nov. 7 election.
“I believe that it is appropriate to take into consideration the opinions of County Executive-Elect George Latimer during our budget deliberations. I also believe that any decision regarding the privatization of the Westchester County Airport should not be undertaken until the new administration has an opportunity to fully research the RFP respondents’ proposals,” Kaplowitz said.
During the campaign Latimer spoke out against privatizing Westchester County Airport. “Westchester County Airport is not supposed to be ‘Laguardia North’. Once again Rob Astorino puts his politics before the people of Westchester County. He knows that this is a bad and harmful airport deal, but will do anything to deflect from his fiscal mismanagement of the County. It is no secret that the privatization deal is one of Astorino’s many budget gimmicks,” said Latimer.
The three companies were graded based on both their technical capabilities and financial offers. Macquarie, which is based in Manhattan, received the highest overall score. HPN Aviation Group, a joint venture between Oaktree Transportation and Connor Capital Transportation Opportunities, ranked second, and FerroStar Westchester Airport Partners, a consortium made up of Ferrovial Airports International and Star America Fund, placed third.
According to the Astorino release, Macquarie’s proposal would net the county $1.145 billion over the course of a 40-year lease: a $595 million financial offer accompanied by $550 million in capital funds to maintain and improve the airport’s infrastructure. The lease is “as-is/no expansion,” which means the airport’s existing terminal footprint will not expand; there can be no expansion of runways; the number of gates remains at six; and the cap of 240 passengers per half hour stays in place.
Under the terms of the lease, the county wwould receive just over $300 million upfront, which includes lease payments, money transferred to the general fund from county money locked at the airport and various reimbursements.
In accordance with governmental accounting standards, the county would be able to use $30 million the first year ($6.5 million from the first year’s lease payment; $21 million transferred to the general fund from the airport; and $2.5 million in expense reimbursements). In addition, the county will also be reimbursed $10 million for police costs at the airport, and those reimbursements will increase 2.5% a year over the term of the lease and total $674 million.
In future years, $6.5 million, which is the amortized value of the $261 million leasehold fee over 40 years, would be applied annually to the county budget as revenue to offset expenses.
The next step, unless the vote is tabled until Jan. 2018 is for Macquarie and members of the County Executive’s staff to finalize the lease and send it to the BOL for its review. The lease requires 12 votes for passage.
The selection process was run by Frasca & Associates, a transportation and financial consulting firm.
/* Style Definitions */
mso-padding-alt:0in 5.4pt 0in 5.4pt;