Five months after striking a long-term lease agreement with the county executive, Oaktree Capital Management LP hopes the second time’s the charm for its proposal to manage the Westchester County Airport.
The Los Angeles-based investment firm has teamed up with another California company, Conor Capital, to form HPN Aviation Group. The newly created partnership plans to respond to a request for proposals (RFP) issued by the county earlier this month to operate the county-owned airport.
“This partnership reflects what we said we were going to do all along, form a local company and bring in highly qualified executives to professionally operate the airport,” said Thomas L. Bosco, the group’s executive chairman. “We are confident that we have pulled the right team together that understands the character of this airport, and we have the advantage.”
Oaktree has completed similar projects in Baltimore, Puerto Rico and London, and Bosco believes the company brings “the right talent and the right experience to the job,” while Conor Capital, which focuses on investing in transportation-related companies, is “a significant player in the industry, so the partnership makes sense.”
While declining to detail the company’s proposed bid, Bosco said HPN Aviation Group plans to keep in place the airport’s 240-per-half-hour passenger limit and added that a 40-year lease term “seems to be the sweet spot.”
Bosco, a former director of the aviation department for the Port Authority of New York and New Jersey, added that the company’s mission to improve service, support environmental initiatives and create a modern experience at the airport will set it apart from other bidders.
“We don’t have any specific information into who will be competition, but we expect that competition to be stiff,” he said.
About two dozen entities expressed interest in forming a public-private partnership to operate the airport prior to the RFP’s issuance on April 3, according to County Legislator MaryJane Shimsky, a Hastings-on-Hudson Democrat, though she added that it was too early to gauge serious interest.
“Unlike last time around, we must seek bidders in a fair and open bidding process,” said Legislator Ben Boykin, a White Plains Democrat. “If that means that the best thing for the taxpayer is no deal, then that is an outcome we should be pleased with.”
The RFP follows Westchester County Executive Robert P. Astorino’s November announcement of a $140 million plan that would transfer management of the airport to Oaktree. Astorino said the 40-year revenue-sharing lease would improve passenger experience, energize the local economy and strengthen environmental protections without increasing the airport’s footprint.
Some members of the Westchester County Board of Legislators balked at the administration’s plan, criticizing the lack of a competitive bid process and calling the deal a gimmick to balance an unbalanced budget. The full lease agreement proposal was sent to the board following the public announcement of the deal and just days before Astorino was set to deliver legislators with the 2017 budget, one that included $15 million in revenue from the airport deal.
In February, legislators chose to move forward with a search for a private operator for the airport and hired Frasca & Associates LLC, a New York City-based transportation-consulting firm that worked on the privatization of Stewart International Airport, to assist in the RFP process.
If selected, the new firm would take over operation of the airport from AvPorts, the Dulles, Virginia-based company that has managed the airport since 1977. The county pays AvPorts about $1 million per year to manage the airport.
The county will be accepting proposals to the RFP until July 14. As part of the process, Frasca & Associates rolled out a timeline that forecasts a public-private partnership in place by the end of 2017, though Shimsky said that may be a bit ambitious.
“Obviously there are a lot of factors because it’s a many-step process,” she said. “I don’t know how realistic that is.”
The proposed public-private partnership is a product of a Federal Aviation Administration program that would allow money paid to the county by a private operator to be used for all county programs. Until now, any revenue generated by the airport could only be used at the airport.
The partnership would attempt to reinvigorate an airport that has seen its passenger totals dwindle in recent years, falling to 1.5 million total passengers in 2015 from a high of nearly 2 million in 2010.
For Shimsky, who is chair of the infrastructure committee and a member of the RFP task force, ideal bidders would be able to find ways to maximize revenues without putting any further strains on a sensitive environmental area.
“We’re kind of in wait-and-see mode,” she said. “It’s kind of like you’ve sent out the invitations to your party and you’re waiting to see who shows up.”