Long Beach officials to consider privatizing airport
The Long Beach City Council on Tuesday is expected to go into closed session to consider the possibility of privatizing its airport, according to City Manager Pat West.
In an interview, West said investment firms including JP Morgan & Co. and Merrill Lynch have expressed interest in taking over the 60% of the airport’s runways and facilities that are not already leased. Financial arrangements for such a deal would be made under the auspices of the Federal Aviation Administration’s Airport Privatization Pilot Program, West said.
At least one council member, however, has publicly criticized the idea of letting go of the facility and suggested the city, which faces a $15.7-million budget shortfall in the coming year, should instead focus on reduced spending.
-- Louis Sahagun
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Looks to me like JP Morgan & Merrill Lynch will not only consolidate their businesses (merge?) and raises prices (the utlimate result); but the big question is -- are they also using TARP money to buy/invest in the privatization of the LB Airport -- among other things that are not of true benefit to consumers but to their shareholders. Seems we are subsidizing corporations so that they can benefit for their board/shareholders -- but not to benefit customers. There is something very twisted about all of this. In terms of transparency -- which LB government is known not to be -- the other million dollar question is -- how long have LB officials or the City Management been engaged in talks about the airport that belongs to the taxpayers? In other words; what did the City Council know and when did they know it... did the City Council give the City Manager permission to negotiate behind the public's back?
Posted by: Traci Wilson-Kleekamp | January 12, 2009 at 07:05 AM
Privatizing an airport is a tricky thing to do - particularly an airport that started out as military base. The FAA puts many conditions on the billions of dollars it doles out in grant money, including keeping the airport open to public use, and not discriminating against particular users. Privatizing Long Beach Airport could prove to be a legal morass.
There is a statute that limits the amount of money an airport owner can receive from the sale of an airport. See, for example http://www.aviationairportdevelopmentlaw.com/2008/09/articles/faa-1/plan-now-if-you-plan-to-sell-later-restrictions-on-use-of-airport-revenues. But that limit is modified somewhat by the Pilot Program mentioned in the article, which really has not been utilized. In many cases, the administration of an airport is run at a loss, with the difference being made up by tax revenues and revenue from the leasing of the property.
That being said, Long Beach would be in good company if it were to move forward with privatization - the City of Chicago is considering privatizing Midway Airport, after having successfully privatized a toll bridge.
Posted by: Steven Taber | January 06, 2009 at 10:31 AM
The City of Long Beach needs to count its blessings. The Long Beach Airport is a wonderful facility EXACTLY THE WAY IT IS. Find another way to balance the budget.
Posted by: Digit | January 05, 2009 at 05:35 PM
I'm all for it if it's not a short-sighted decision to cure a temporary problem. However, the airport is a huge municipal asset that has unfortunately been crippled by the NIMBY's in the vicinity. If anything can be done to eliminate the ridiculous 49-flight cap, then all the better!
Posted by: LGB Supporter | January 05, 2009 at 04:57 PM
It seems that governments are considering selling off property in these harder times. However, in the long run when the economy recovers I would imagine that this will be looked back upon as a hastily considered measure. As an LB resident I would like them to consider all other options before privatizing our airport. After all, privatization hasn't always worked out for the best in the long run.
Posted by: Cody | January 05, 2009 at 03:14 PM
City of Long beach owns the airport? Since when?
Posted by: Bad Planning | January 05, 2009 at 03:13 PM
there is a nation wide movement by gvt (s) to liquidate municipal airports for the asset the real estate represents to them. the question is, is this a get rich quick scheme that is in the best interests of all parties?
or a scheme to rid communities of those elitests in their flying machines looking down upon the rest as they scurry about to do business and escape long lines ?
Posted by: stewart | January 05, 2009 at 01:13 PM
Another bad idea from one of the most ineffective city governments around. Let's not forget this is the very same airport into which they have been dumping money hand over fist to remodel. Through this latest idea the Long Beach City government once again shows its back to its constituents. They should be concentrating on reducing costs at the airport, stopping the unnecessary construction, and increasing the share of revenue it gets from such other facilities like the Port. Ultimately, the sale of the airport would only serve to temporarily and cosmetically patch the holes in the city budget.
Posted by: Robert Mejia | January 05, 2009 at 12:26 PM
City Manager Pat West and the council members should consider, how to get more revenues out of LBA. It's a money maker not a burden. If only they would help LBA by easing restrictions, more flights and people would use it and generate more revenue for the city to make up for the shortfall. LBA is an asset to the city that they should work to improve it's revenue not sell it.
Posted by: Stanley Hutchinson | January 05, 2009 at 11:47 AM