Panel Refuses to Seek Buyers for Airport : Transportation: Commission says trying to sell John Wayne facility would trigger lawsuits and a loss of federal funds. Supervisors can override decision.

The John Wayne Airport Commission on Monday rejected a recommendation from its director and the county’s chief executive officer that officials solicit proposals for the sale of the airport.

“I see nothing but the down side, nothing but problems, nothing but the undermining of an efficient, well-run airport,” commissioner Michael L. Lapin said after more 2 1/2 hours of discussion on the legal pitfalls blocking the potential sale of the airport and a flurry of litigation that could result.

County CEO William J. Popejoy recommended last week that the airport issue the so-called “requests for qualifications” to see if any potential buyers could overcome the legal and financial hurdles blocking a sale, and ultimately dull the pain of the county’s bankruptcy by transferring millions in proceeds to the county general fund.

The commission rejected that recommendation after hearing threats of litigation from airlines and other users of the airport, and a glum analysis from airport counsel that the sale would flout federal law and could lead the FAA to withhold grant money which is key to maintaining airport safety.

“Any attempt by the County of Orange, the Board of Supervisors or its director of the airport to divert revenue from the airport to the county will be met with a stiff legal challenge, an administrative challenge and legislative remedies in Washington, D.C.,” warned John Ek, director of state government affairs for the Air Transport Assn., which represents all major passenger and cargo airlines.

The airport commission serves only in an advisory role to the Board of Supervisors, which will take up the matter April 18 and can override the commission’s recommendation.

Rather than seek proposals from potential buyers on a short deadline, commission chairman Gary L. Proctor moved instead to put the task of analyzing the thorny legal and policy issues surrounding a sale in the hands of a task force convened at Popejoy’s direction last month.

Airport revenue topped $58 million last year, but federal law prohibits the county from tapping into those funds for non-airport uses. Federal law would have to be changed to allow the county to keep sale proceeds in its general fund.

Also, before the airport could be sold, the county would have to repay $253 million in bonds and $66 million in grants from the Federal Aviation Administration.

Airport counsel Michael Scott Gatzke told the commission Monday that the FAA could withhold grants if the county flouts federal law and seeks to sell the airport to use the proceeds for its general fund.

The sale also presents a policy challenge, because any buyer likely would require access to a civilian airport under discussion for the El Toro Marine Air Corps Station, he said.

Virtually all users of the airport have opposed any move to privatize it, fearing a rise in costs such as landing fees, rents and concessions. In addition to the Air Transport Assn., they include the Aircraft Owners and Pilots Assn., the National Business Aircraft Assn. and the California Pilots Assn.

FAA officials also have said that federal law now clearly bars the county from profiting from the sale of the airport. FAA officials also are concerned that a new owner would hike user fees.