Friday, November 29, 2013

Lehigh-Northampton Airport Authority adopts $46 million capital plan - Most big-ticket projects are delayed until after the airport repays its current debt

Lehigh-Northampton Airport Authority has adopted a 5-year, $46 million capital projects plan that pushes most of the expensive projects beyond 2016 so it first can repay its debt.

That means for the next three years, the airport will be focused on necessary minor maintenance like runway repairs and vehicle purchases, while more than $35 million of big ticket items like main terminal renovations are put off until 2017 and 2018.

It is the reality for a struggling airport that must spend the next three years focused on paying off the remaining $14 million of a $26 million court judgment against it for taking a developers land in the mid-1990s.

"We really had no choice but to back-load the capital plan," authority Executive Director Charles Everett Jr. said. "You can see that most of the spending is delayed until after we've paid the judgment."

The airport is scheduled to make a $3 million payment this week to WBF Associates, the development group that won a $26 million judgment against the airport when a Lehigh County judge determined that the airport effectively condemned 632 acres of development land around the airport in the mid-1990s.

That payment must be followed by payments of $5 million in 2015 and $6 million in 2016. It's caused the airport to begin selling unneeded assets, including all that WBF land, and has limited how much it can spend on capital projects.

As a result, only $1.5 million of the $46 million capital spending plan will be spent in 2014 for such things as computer upgrades, vehicle purchases and roadway repairs. The biggest chunk — more than $200,000 — is the airport's match for a federally-funded project underway to install a collapsible section of roadway at the end of the main runway. The runway extension, called an Engineering Materials Arresting System, is designed to safely stop a plane that has run off the end of the runway.

Another $2.8 million is scheduled to be spent in 2015 for such things as completing that EMAS project, security system upgrades and nearly $300,000 in improvements at Queen City Airport, the small-plane airfield in a south Allentown.

Roughly $6.3 million slated to be spent in 2016 for projects includes more upgrades at Queen City and the replacement of the terminal building at Braden Airpark, the small-plane airfield in Forks Township. The authority is trying to sell Braden, which means that work may not need to be done.

But the bulk of the money is scheduled to be spent in years four and five, and Everett admits some of that may never happen. Included in that is $15 million in main terminal renovations designed to improve the baggage-handling system, and to expand the security area for arrivals and departures.

Both changes were expected to be necessary to improve security and relieve congestion, but unless the airport's passenger traffic doesn't rebound, it may not be justified. After hitting the 1 million passenger mark several years ago, airline mergers and a difficult economy have caused passenger counts to fall. The total number of passengers is projected to drop to just more than 600,000 this year — the lowest mark since the mid-1980s.

A second project slated for 2018 is a $10 million parking garage, a parking expansion that is currently unnecessary because the airport's existing surface lots aren't close to capacity. Everett explained that those projects have been on the airport's capital plan list for years, and will again be pushed back if the airport's passenger traffic doesn't improve. Everett said he is still hopeful that can still happen, particularly if the facility can attract new airlines.

For example, though its parking lots are not currently full, expansion would have been necessary if the airport had been successful in attracting the popular Southwest Airlines into the main terminal last year. At it turned out, after months of consideration, Southwest declined.

"Obviously we'll be reassessing this plan annually," Everett said. "The only projects set in stone for now are those in 2014."