Palo Alto's long and heated debate over the future of Palo Alto Airport will resume later this month, when a City Council committee considers whether the city should become more involved in managing the facility.
The council's Finance Committee is scheduled to consider on Oct. 19 whether the city should take over airport management from Santa Clara County, which currently operates the city-owned facility. The lease, which was signed in 1967, is scheduled to expire in 2017, but county officials have expressed an interest in breaking it sooner.
According to a new analysis, a city-operated airport could provide a long-term windfall for Palo Alto, though only after several years of operating losses. The analysis, compiled by the Kentucky-based firm R.A. Wiedman & Associates, estimates that the city would realize a profit of $13.5 million from the airport by 2037 if it were to take over operations next year. But to get to this point, the city would have to endure a deficit of $129,200 for the years 2012-17.
The analysis also estimates that the city could claim a $17.8 million profit if Palo Alto were to break the county lease and hand over airport operations to a third-party operator. That option would lower the city's financial risk, but would also take away much of local control over the facility's day-to-day operations.
The new report largely backs up the persistent claims from airport proponents that the busy facility could be a revenue generator. But it also points out that any profits the city makes from the airport would have to stay in the airport because of federal regulations.
"In short, the City of Palo Alto could not earn any money from the Airport to use elsewhere," the report states. "All money made at the facility would have to be reinvested in the Airport."
If Palo Alto officials decide to take over airport operations from the county by 2012, the city would have to hire an airport manager and assistant airport manager, and assign a part-time city worker to assist with airport operations. It would also need to set up an Enterprise Fund for airport revenues and set up a billing system for airport tenants, according to the report.