TCRA making push for creating airport authority

Hank Hayes • Nov 4, 2007 at 12:00 AM

BLOUNTVILLE — Tri-Cities Regional Airport would gain eminent domain power and the ability to issue bonds for capital improvements under a draft of private act legislation creating an airport authority.

Making a landmark change in TCRA’s legal structure since the airport’s 1937 opening is a slow-moving process with a goal of being presented to Tennessee lawmakers in 2008.

All but one of the airport’s owners — area city and county governments — have approved the concept of creating a 12-member airport authority to replace the existing 12-member Airport Commission.

Mayor James Rector of Bristol, Va., said his city’s leadership is still studying the authority issue and isn’t close to a decision.

“Are we for it or are we against it? I don’t know,” said Rector, who is the city’s representative on the Airport Commission. “I’m not ready to vote on it. ... I understand the majority of the Airport Commission feels like we need to move rapidly. Until I can understand what we’re doing, I cannot move as rapidly as some of them want to.”

Jim Bowdoin, the city’s previous representative on the Airport Commission, opposed creating an airport authority. He cited control issues as the primary reason.

Rector added the city might like to sell its 10 percent stake in TCRA if “the right offer came along.”

Airport officials have indicated that determining an ownership interest value is a complicated issue because of federal grant investment in TCRA facilities.

“The FAA (Federal Aviation Administration) would require repayment of any unamortized improvements that were funded with these grants,” TCRA Executive Director Patrick Wilson said. “Therefore, any estimated value of the airport would be reduced by the potential repayment of these grants. An additional FAA regulation prevents any funds that were generated through the operation of the airport from being used for non-aviation related items. ... The FAA could not permit a city or county to use the airport to generate income for the city or county.”

Under the draft authority legislation, TCRA would become its own governmental organization acting as an instrument of the cities and counties, and be exempt from all taxation.

The authority commission membership and ownership setup would not change. Washington and Sullivan counties, in addition to Johnson City and Kingsport, would each continue to have a 20 percent stake in TCRA. The cities of Bristol, Tenn., and Bristol, Va., would still own 10 percent apiece. Each owner would still be able to appoint representatives to an airport authority commission.

The legislation says it is needed because Bristol, Va., is an out-of-state owner, making TCRA not eligible for an authority charter under Tennessee law. Of the six commercial airports in the state, TCRA is the only one not governed by an authority.

TCRA has an existing document put together by the airport’s legal counsel examining the pros and cons of creating an authority. The advantages include TCRA having eminent domain power and being able to issue tax-exempt bonds. TCRA owners would also be insulated from lawsuits brought against the airport and would no longer be liable for future debts in proportion to their ownership interests. It would also be easier to acquire grants from federal and state governments.

Wilson has advocated that an airport authority could help deal with economic development issues — mainly the airport’s planned south side airfield growth.

The document, however, also pointed out that the current Airport Commission setup has prospered.

Wilson said the draft authority legislation has been submitted to the airport’s owners to get feedback.

“We’ll try to consolidate any comments or questions the cities or counties may have into the next revision of the document,” he said. “Then we’ll send it back out and give them a chance to look at it. Ideally, they will not have any other comments and we’ll be able to send it on to the state. ... Our goal is to have it ready (for lawmakers to consider) by January.”

For more about TCRA go to www.triflight.com.

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