TCRA owners explore airport authority concept

Hank Hayes • May 22, 2008 at 12:00 AM

BLOUNTVILLE — The terrorist attacks of Sept. 11, 2001, resulted in airport liability concerns that accelerated talk about creating an airport authority at Tri-Cities Regional Airport, airport owners were advised Thursday night.

“It was 9/11 and recent years of turmoil in the airline industry that placed this discussion back on our agenda,” Airport Commission Chairman John Abe Teague, who represents Washington County, Tenn., told about 25 elected and appointed officials representing airport owners at a meeting held at Northeast State Technical Community College.

Issues surrounding those liability concerns, plus what happens with TCRA’s $7.9 million debt by moving from an airport commission to an airport authority, dominated the question-and-answer portion of the meeting.

TCRA legal counsel Bill Bovender said that after 9/11, a number of airport owners asked about liability concerning incidents at the airport.

“The answer to that is ‘You’re liable for anything that occurs at the airport to the extent you’d be liable under Tennessee law,’” Bovender said at the meeting.

But Bristol, Va., which owns 10 percent of TCRA, has “no protection” under Tennessee law for what happens at the airport, according to Bovender.

Pete Peterson, city manager of Johnson City, asked how the airport authority could take on TCRA’s debt, now issued through Sullivan County and guaranteed by the taxing authority of the owners.

Peterson was told by attorney Bill Argabrite, whose firm represents TCRA, that the airport’s debt could not be transferred to the authority, but the authority could issue new debt to pay the old debt off.

A $4.50 passenger facility charge paid by travelers with their boarding passes is currently the main revenue stream set to pay off the airport’s current debt load through 2015, said TCRA Executive Director Patrick Wilson.

The authority’s ability to issue new debt, according to Wilson’s presentation to owners, would depend upon its financial strength at the time as judged by bond agencies.

“However, the credit market that has developed over the past year would currently make this process more difficult than in the past,” Wilson said.

Since 1966, TCRA has been financially self-sufficient, with no local tax funds going into its operation.

But the airport depends on more than 80 percent of its operating revenue from airlines and passengers, and is currently feeling the squeeze from economic turbulence by an aviation industry hit hard by high fuel prices.

TCRA doesn’t set airfares, meeting moderator Ken Maness of Kingsport reminded airport owners.

“We are there to provide the environment that causes airlines to want to come here and to fly,” said Maness, the commission’s vice chairman.

TCRA officials also stressed an airport authority would give the airport “greater ability” to pursue federal grants and aviation-related economic development.

Wilson gave the example of building a new corporate hangar on the airfield.

“Part of the challenge is centered around the fact that because the land of the airport was acquired with federal funds a company cannot come in and actually purchase a piece of land from us to build a building,” he explained. “We need to get the approval of all the owners. ... That could put us at a time disadvantage.”

TCRA’s commission currently operates as an “unincorporated joint venture” among the owners, which would become “member owners” under an airport authority with the same ownership percentages.

Airport commissioners are expected to consider a final recommendation on the airport authority this September and could send enabling private act legislation creating the authority to Tennessee lawmakers next January.

Interstate issues with Bristol, Va., also would have to be resolved.

“We have examined all the issues and based on the information we have, knowing where we’ve been ... and where we have to go in the future, especially with the airline industry ... I think the commission is ready to move forward,” Teague said after the meeting. “If we continue to hold hands like we are right now and do things, I think we can move forward with the airport authority.”

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

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