A new snag threatens to derail the much-touted monorail transit system proposed for John Wayne Airport.
McDonnell Douglas Realty Co., which has proposed building and paying for the $3.5-million monorail, has refused to finance the first phase of construction, a series of foundations or “footings” for the elevated track, in an apparent dispute with county officials.
Company representatives said Tuesday that they won’t pay for the work until an operating agreement covering such issues as insurance, liability and lease payments is reached with the company. That agreement is still under study because the county is analyzing a report on the monorail’s impact on airport concessions.
“What the county wants is for us to send them a blank check and they’ll send the agreement later,” said Bob Young, president of McDonnell Realty. “Listen, that’s crazy. We didn’t just fall off the turnip truck.”
Approval Was Expected
The County Board of Supervisors had been expected to approve construction of the monorail foundations as part of a $22.9-million contract adopted by the board Tuesday to build a new parking structure at the airport.
But board Chairman Thomas F. Riley announced before the vote that the monorail portion of the construction contract had been deleted because “McDonnell Douglas is unwilling to commit its funds.”
The action does not kill the monorail project as long as the county and McDonnell Douglas reach some sort of compromise by June 1, according to Tom Mathews, Riley’s executive aide assigned to the monorail proposal. But after that date, Mathews said, “it becomes virtually impossible” because of cost to modify the expansion project at the airport to incorporate the monorail.
June 1 Deadline
“We believe that the point of no return is June 1,” Mathews said in an interview after the board meeting. “Everybody has been put on notice that unless we have an agreement of sorts by that date, clearing the way for McDonnell Douglas to pay for those foundations, the project is in serious doubt.”
At Tuesday’s meeting, Riley firmly stated that the county is in no position to finance any aspect of the monorail project. The supervisors endorsed the monorail project last fall, principally because McDonnell Douglas offered to pay for the entire system.
The firm has proposed building twin 23-story office and residential towers near the edge of the airport in Irvine and wants to run the monorail from the towers to the new airport terminal that is under construction. The trains in the system--called a “people mover"--would travel its half-mile in about 2 minutes at a fare of 50 cents.
Proponents of the transit system were cheered 2 weeks ago when the project cleared a key hurdle. The city of Newport Beach had threatened to delay the airport expansion because of objections to the monorail proposal but withdrew its challenge March 13 after McDonnell Douglas agreed not to operate any airport terminal services, such as baggage-checking, at its office towers.
“That was a big step, and a lot of people felt the project was rolling again,” Kathie Rutherford, a county airport spokeswoman said. “Apparently, we still have issues to resolve.”
Preparation of an operating agreement has been delayed because the county is analyzing a recent report that concluded that construction of the monorail could cost the county-operated airport between $600,000 and $1 million in lost concession revenues, Rutherford said. The report, prepared by Aviation Planning Associates, said losses would result from travelers’ riding the monorail to the McDonnell Douglas towers and spending money there on gifts, food and ground transportation rather than at the airport.
Time to Study Project
Before drawing up an operating agreement for the monorail, Rutherford said, the county needs time to study ways to recover those potential losses, such as special fees or taxes charged to McDonnell Douglas for operating the monorail on county property.
“We have sold bonds to pay for the airport expansion, and we have an obligation to those bondholders to protect their investment,” Rutherford said.
Young of McDonnell Douglas said the Aviation Planning report “greatly exaggerated” the monorail’s impact on food and concession sales at the terminal. And he said the firm is “expressly prohibited” from opening competing gift stores and concession operations at the Douglas Towers.
“We have often wondered why nobody thought of the monorail idea before,” Young said. “Now, we believe, someone else did but got tired of all of the frustrations they ran into trying to get it approved. It seems every time we turn around, somebody has got their hand out wanting this or that.”