Airport Authority Takes Step Toward Bond Issue : Burbank: If renovation is approved, it would be the first time the facility has helped finance one of its privately operated businesses.

The Burbank-Glendale-Pasadena Airport Authority took preliminary steps Monday toward issuing bonds that would provide the airport’s largest tenant with money for a $12-million renovation project.

The panel did not commit itself to approving the project proposed by Media Aviation or to actually issuing the bonds, but took the first step in the required legal process.

The project and the financing mechanism are expected to come before the authority for final approval sometime next year. If approved, it would be the first time the airport has played a “middleman” role in getting financing for one of its privately operated businesses.

Media Aviation, one of two large fixed-based operators at the airport, has long had plans to renovate its 35-acre leasehold on the northwest section of the airport. But the project has been on hold, awaiting the authority’s selection of a site for a new terminal. The authority voted in March to build a new, larger terminal northwest of the two runways--but not on Media Aviation’s land, freeing the company to proceed with renovation plans.

Under the proposed financing deal, the authority would issue taxable and tax-exempt bonds worth $12 million, with the proceeds going to Media Aviation to build hangars, renovate ramps and construct a terminal facility.

The bonds would be secured by rents from Media’s tenants and would not directly affect the airport’s credit, airport officials said.

Media Aviation President Robert Volk said the action taken Monday ensures that if the bonds are issued, the company can recover the funds it spends now on early design and engineering studies.

He estimated that those studies would cost about $500,000 over the next six months.

But the authority’s action was blasted by Richard Close, president of the Sherman Oaks Homeowners Assn. and longtime critic of the airport, who said the authority should instead come up with financing schemes to sound-proof schools and homes around the airport.

He also said he feared the renovation project at Media Aviation would increase air traffic at the airport, and thus cause greater aircraft noise problems in adjacent neighborhoods.

Although Burbank Airport has never before assisted in providing financing for tenants, Rios Marrero, the authority’s controller, said it is not unusual for public agencies, such as cities and redevelopment agencies, to assist private firms in getting special financing.

In fact, the city of Los Angeles has for 20 years assisted tenants at city-owned airports in receiving financing, said Donald Miller, deputy executive director of the Los Angeles Department of Airports.

He said most of the $700 million in tax-exempt bonds issued for airport projects over the years have come through a nonprofit organization called the Regional Airport Improvement Corp.

Marrero, added, however, that the financing deal under consideration may open Burbank Airport to requests by other tenants seeking special financing.

Airport Director Thomas Greer said the authority would consider any application for similar financing on a “case-by-case” basis.