Palo Alto Weekly

News - December 10, 2010

Palo Alto goes full throttle on airport takeover

City Council decides to take control of Palo Alto Airport operations before its lease with the county expires

by Gennady Sheyner

Palo Alto's effort to take control of its airport began to lift off the ground Monday night after the City Council started a new fund to pay for airport operations.

The Palo Alto Airport has been operated by Santa Clara County since 1967 under a 50-year lease, which will expire in 2017. The council agreed Monday night that the city should try to take control of the airport even before the lease expires.

County officials decided in 2006 to not renew the airport lease and have kept airport maintenance at a minimal level since.

The council's decision was bolstered by a recent report from the consulting firm Ralph Wiedemann & Associates, which concluded that the small but busy airport could bring in a hefty long-term profit. This profit, however, would have to be reinvested back into the facility because of Federal Aviation Administration (FAA) regulations, Wiedemann told the council Monday.

FAA regulations also make it all but impossible for the city to convert airport land to other uses, he said.

"The grants that we take from the FAA come with strings and the strings basically say it has to be an airport for at least 20 years," Wiedemann said. "Even then, they still have to grant you permission to close it and they may not."

Councilman Larry Klein championed an early takeover of the airport, noting that the facility is slated to revert to city control by 2017 even if the council does nothing.

"The question on the airport is not whether, but when," Klein said. He is a member of the council's Finance Committee and served on the 2005 Palo Alto Airport Working Group.

Klein also said that given the county's lack of investment in the airport the city has "every incentive to get this done earlier rather than later."

"If we delay things all we're doing is letting things deteriorate," he said.

Several members of the airport community lauded the council's decision and said they look forward to seeing renewed investment in the airport.

Ralph Britton, president of the Palo Alto Airport Association, said the county has already stopped doing maintenance work on the airport's runways. He called for the city to make the airport "the kind of facility that Palo Alto can be proud of."

The council voted unanimously to contribute $300,000 into the new Airport Enterprise Fund, to pay for legal fees and consultants associated with the transition. The council also considered setting up a new advisory commission to assist the city with airport operations, but ultimately decided that such a move would be premature.

The council voted 5-4 to reject a delay in discussing whether to form a new commission, with council members Greg Scharff, Nancy Shepherd, Klein and Vice Mayor Sid Espinosa dissenting.

The council did defer deciding whether the city should operate the airport on its own or hire a third party. Staff will examine both options in the coming months and make a recommendation by the middle of next year.

The Wiedemann report estimated that the city's profit from the airport could be as large as $16.2 million by 2037 if it were to take over airport operations in 2012.

Staff plans to hire an airport expert in the next two months and begin negotiations with the county by March 2011.

Staff Writer Gennady Sheyner can be e-mailed at gsheyner@paweekly.com.

Comments

Posted by Old Palo Altan, a resident of Old Palo Alto
on Dec 7, 2010 at 1:27 am

Bravo!

The airport is an asset of immense value to the entire community, and it's good to see the Council stepping up to ensure proper stewardship of this gem.


Posted by Wayne Martin, a resident of Fairmeadow
on Dec 7, 2010 at 10:29 am

The Palo Alto Airport has been a financial black hole since it was moved to the baylands. In the 1950s, the then operator was constantly demanding a handout from one level of government, or another, as the following articles from local papers of the time attest:

Web Link

Moreover, there is little evidence that the Palo Alto Airport (PAO) provides anything of economic value to Palo Alto, or the Palo Alto City Government. And, given the 02.17.10 crash of a plane on IFR (Instrument Flight Rules) in East Palo Alto that resulted in the lost of power for Palo Alto, East Palo Alto, and elsewhere, the lost of income, business, and productivity can easily be shown to be in the millions:

Estimation of Economic Loss Due To 02.17.10 PAO/EPA Crash:
Web Link

People who applied for compensation because the power went out were told, rather arrogantly: "We don't have to supply you power, even though we are the monopoly power provider in this town" (or words to that effect).

No one on the City Council has ever officially spoken about the economic impact of this crash, or future crashes. They seem to be people who are being led around by one particular council member, like sheep.

There seems to be no interest in safety at this facility by the current operator, and it's hard to believe that there will be much interest if the City of Palo Alto takes over this facility.

This airport has never been able to take care of itself. The claim that it provides a "positive impact on the local economy" is simply without proof.


Posted by Joel, a resident of Barron Park
on Dec 7, 2010 at 11:48 am

It is a shameful environmental choice to keep an elite group of carbon users on the bay in a city that prides itself on the care of the earth and its carbon use by its citizens. May the Tides rise on us!


Posted by Rob Tanner, a resident of Crescent Park
on Dec 7, 2010 at 12:16 pm

Hallelujah! Good to see that the City Council has sided with the voices of reality and reason, and rejected the knee-jerk NIMBY scare tactics spewed by Wayne Martin and others.

The airport is staying. Full stop. That much is clear. Time for Palo Altans to accept it and let us all work together to make sure it operates at optimal efficiency and financial return.


Posted by daniel, a resident of Embarcadero Oaks/Leland
on Dec 7, 2010 at 2:05 pm

The airport is a financial and environmental disaster, on top of being a constant mortal threat to neighboring communities. It is also a shameful example of the well-to-do being subsidized by the tax payers. It's telling that the pilots have ed the county when they were asked to pay fees closer to real market rates and the county capitulated. This white elephants must be deactivated. There are legal ways to do it and they must be explored.


Posted by Charles, a resident of College Terrace
on Dec 7, 2010 at 2:41 pm

What is this profit? Unlike other enterprise funds, earnings cannot be returned to the City but must be reinvested in the airport. But any losses will have to be made up by city taxpayers.

I didn't hear the council address the problem/cost of liability last night. Is the City liable for accidents like the recent crash into East Palo Alto? How much insurance must be carried? Who pays for it?

Why is this a "shining jewel"? A small percentage of the airport users live in Palo Alto while the majority live in other cities and are subsidized by PA taxpayers.

It is a guess as to how much "profit" will be made especially if tie-down fees are increased to maintain the facility and aircraft owners leave. I call this a lose - lose deal.


Posted by daniel, a resident of Embarcadero Oaks/Leland
on Dec 7, 2010 at 3:01 pm

Not only will the city be required to reinvest all profits in the airport, it would be liable for any fatalities, injuries and property damage caused by airplanes using this airport. This would require very high insurance premiums, financed of course by the Palo Alto tax payers, while the large majority of the airport users are not Palo Alto residents. A major catastrophe, which is probably more a question of when than a question of if, would probably force the city to settle for perhaps tens of millions of dollars and guess who would pay for that. We already have a record of what happens when the airport administration tries to increase user fees-the pilots go to court, so if anything, I expect the airport to lose even more money under city management and those loses will again be subsidized by the Palo Alto tax payer.


Posted by PA Booster, a resident of Palo Alto Hills
on Dec 8, 2010 at 3:24 pm

"Not only will the city be required to reinvest all profits in the airport, it would be liable for any fatalities, injuries and property damage caused by airplanes using this airport. This would require very high insurance premiums, financed of course by the Palo Alto tax payers"

Where's your civic pride? This is a small price to pay for yet another Only In Palo Alto achievement. Look: Menlo Park, Atherton, Cupertino, Los Altos and Los Altos Hills can only USE the airport. Palo Alto, on the other hand, HAS the airport, like it also has the regional sewage treatment plant.


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