Stanton’s Idea to Sell Airport Stuns Officials

Supervisor Roger R. Stanton on Wednesday suggested that the county sell John Wayne Airport to the Transportation Authority for $100 million or more to help pay for badly needed facilities, such as a new jail or South County civic center.

The airport is profitable, but federal law requires that its revenue be spent only on the facility and its operations. Consequently, Stanton said in an interview, county government would benefit more from a onetime infusion of cash than by managing the airport.

Cash-starved municipal governments across the country are searching for innovative ways to raise money, with the sale of airports being one option for many larger cities and counties. Vice President Dan Quayle has advocated that Los Angeles sell its international airport to help rebuild the city after riots.

Other county officials were stunned by Stanton’s idea, which he called a “trial balloon,” and their initial reaction was generally negative.

“Obviously that is a pretty serious proposal to make, and I don’t have all the facts on it,” said Supervisor Thomas F. Riley, for whom the new passenger terminal at JWA is named. “But my initial reaction on it is a resounding no. I would hope my other colleagues on the board would feel the same way.”

“I’m trying to figure out why the OCTA would want to buy it,” Riley said. “I don’t see who it benefits. The airport is making money so what do we gain by this? I’m very much opposed to it and somewhat angered that (a sale) could be suggested.”

Supervisor Harriett M. Wieder also was taken aback by the suggestion. “I don’t understand a proposal like that,” Wieder said. “It’s a short-term kind of approach, and government is in for the long haul. I’d like to hear about it from him.”

Supervisor Gaddi H. Vasquez said he was unfamiliar with Stanton’s proposal and reserved judgment. But Vasquez said he believes that the airport is worth at least $300 million due to its recent expansion, a sum OCTA might have trouble raising.

While saying he had not worked out the details, Stanton said the Orange County Transportation Authority might be able to sell bonds to buy the airport and use airport profits to repay the debt. Stanton said a price tag of $100 million was a minimum amount and agreed the airport may be worth much more.

But with the county recently forced to slash $241 million from its budget, sale of JWA offers a unique opportunity to raise much-needed funds. He suggested that the money could be used to build a new jail or a branch civic center in south Orange County.

Stanton, currently chairman of the Board of Supervisors and a member of OCTA, said it makes sense for OCTA to control the airport and all public transportation. “There could be tremendous improvement in terms of efficiency . . . in coordination of surface transportation in and out of the airport,” he said.

OCTA is an independent, autonomous agency but its 12-member board includes four county supervisors. The others are six city council members, a public-at-large representative and the director of the local Caltrans office who does not have a vote.

Airports that receive federal aid, as JWA does, cannot spend their profits on non-airport needs, such as social programs or jails. As a result, the Board of Supervisors gains no budgetary advantage by owning JWA. Getting OCTA to buy the airport would provide some money that otherwise is unavailable to the county.

Stanton acknowledged the proposal is in the “preliminary stages.”

“It has to be a win-win situation for OCTA, the county and the airport or we don’t do it,” he said.

Stanton has long advocated that OCTA take over a separate agency that is building three publicly owned toll roads in the county, arguing that there are too many transportation organizations and not enough direct accountability to voters.

Beyond consolidating agencies, OCTA control of the airport might open up new ways to tap airport revenue, Stanton said. For example, OCTA perhaps could seek legislation that would free airport funds for construction of a monorail system to JWA.

Stanley T. Oftelie, chief executive officer of OCTA, said Stanton’s idea is worth investigating and credited him with seeking new solutions to the county’s budget crisis.

“Roger Stanton is coming up with ways to pay for things without raising taxes,” Oftelie said. “He’s also trying to tie up some loose ends on consolidation” of agencies.

Airport Director Jan Mittermeier said that it makes sense to have all county transportation matters under one roof but that many obstacles would have to be overcome.

“This airport is unique in a lot of ways,” Mittermeier said.

“There are the noise issues with Newport Beach, access issues with the airlines, Federal Aviation Administration rules; a lot of people would have to agree to this. And whether it’s practical or not will take a lot of research.

“So far,” added Mittermeier, “nobody has asked us to look into it. But if they do, we will do it.”

The biggest obstacle, Mittermeier explained, would be the 1985 court settlement that ended more than a decade of litigation against the airport. As part of that settlement involving the city of Newport Beach, homeowner groups and the county, limits were imposed on airport noise, traffic, terminal size and annual passenger volumes.

“It’s the county that’s bound by the court settlement,” Mittermeier said. “OCTA would have to agree to assume all of the county’s liabilities. Newport Beach would have to agree, and so would the FAA. I don’t really know what OCTA’s motivation would be other than close coordination of all county transportation issues.”

Mittermeier said OCTA probably could tap some airport funds for certain types of transportation projects. She said recent legislation allows use of federal Airport Improvement Program revenues for ground links between airports--for example, a rail system between Los Angeles and John Wayne airports.

About 8.5% of the cost of each airline ticket sold goes into the AIP trust fund. JWA has received about $55 million from the fund since 1980, Mittermeier said, mostly for runway, taxiway, apron, roadway and security system improvements.

Currently, the airport has a $20-million reserve, but Mittermeier said it serves as collateral for airport construction bonds that were sold as part of the airport’s $310-million expansion program.

Stanton hinted at his airport proposal in a speech he delivered on Monday.

He told OCTA board members: “I’m not suggesting that we get into the Navy business. . . . But I do believe that we should take a serious look at the wild blue yonder. . . .”

Times staff writer Eric Young contributed to this report.

John Wayne Airport

It is the fifth busiest in the United States. But most takeoffs and landings are due to heavy use of the airport by general aviation aircraft.

Airport Passenger Volume

During the first five months of the year, before the heavy summer travel season, passenger volume increased by more than 45,000 compared to last year:

Period: January-May, 1992 Passengers: 2,147,275 Period: January-May, 1991 Passengers: 2,102,180

1992-93 Projected Airport Finances

Revenue Sources Millions Auto Parking $11.4 Concessions 10.8 Landing Fees 8.1 Terminal Space Rent 16.4 Aircraft Tie-Down Fees 1.2 FAA Grants 10.2 Interest 5.0 Misc. Services, Property Use 5.1 Reserves 16.1 TOTAL $84.3

Expenditures Millions Professional Services $13.7 Salaries and Benefits 4.8 Other Services and Supplies 9.1 Equipment 2.3 Land 5.7 Capital Projects 28.4 Debt Service 20.6 TOTAL $84.6

Source: John Wayne Airport