AÂ New York City-based infrastructure company is making its case to become the new manager and operator of the Westchester County Airport.
Macquarie Infrastructure Corp., which operates a variety of businesses of bulk liquids and gas production and distribution, has responded to the county”™s request for proposals (RFP) to enter into 40-year public-private partnership.
“It”™s a community”™s decision as to how they handle their airport,” Â said Clive Lowe, executive chairman of MIC Airports LLC, the Macquarie entity that would operate the airport. “In the end, if the public-private partnership is the route they”™ve chosen to go through, then we present ourselves as very serious, very motivated contenders for that opportunity.”
As part of its portfolio, Macquarie owns Atlantic Aviation, a Plano, Texas-based operator of more than 60 fixed-base operator facilities across the country, including locations at Stewart International and Teterboro airports.
“We understand that market very well,” Lowe said, “but we also run small and major commercial service airports, so the blend of the two in effectively our backyard as a New York company makes this a very compelling opportunity for us.”
Macquarie also has ownership and management interests in eight airports worldwide, including the Brussels Airport, Copenhagen Airport and Delhi Airport.
Listed on the New York Stock Exchange, the company reported net income of $32.6 million in this year”™s first quarter, up from $20.2 million during the same period last year. The company is also an affiliate of Macquarie Group Ltd., 13,500-employee, $145 billion global banking conglomerate. Headquartered in Sydney, Australia, the financial services company operates offices in 27 countries
“What we”™re hoping to do is sort of bring our national presence and our global credentials and our local presence to this opportunity, which we think is very exciting,” Lowe said.
Macquarie was one of a trio of companies that responded to the county”™s RFP, according to the county”™s communication director Ned McCormack.
Another of those bidders is Los Angeles-based Oaktree Capital Management LP, the company with which Westchester County Executive Robert P. Astorino had hoped to sign a 40-year lease agreement to operate the airport late last year.
Astorino announced in November a $140 million plan that would transfer management of the airport to Oaktree, asserting that the 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.
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.
Bids were due on July 28, and as part of the process, Frasca & Associates rolled out a timeline that forecasts a public-private partnership in place by the end of 2017.
“The county is really just shifting its role from sort of a manager of a current private entity who operates an outsourced contract to a landlord,” Lowe said. “They still own the airport. They still control the airport. They still have a say over its strategic direction, but what they”™re doing is looking to harness the best global airport management practices that are out there to help them navigate the future.”
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 in New Windsor, to assist in the RFP process.
Bids were due on July 28, and as part of the process, Frasca & Associates rolled out a timeline that forecasts a public-private partnership in place by the end of this year.
“The county is really just shifting its role from sort of a manager of a current private entity who operates an outsourced contract to a landlord,” Lowe said. “They still own the airport. They still control the airport. They still have a say over its strategic direction, but what they”™re doing is looking to harness the best global airport management practices that are out there to help them navigate the future.”
Macquarie has participated in seven public-private partnerships in North America, largely in the roads and transportation sector. Most recently, the company started construction earlier this year on the Goethals Bridge that connects Elizabeth, New Jersey to Staten Island.
With public-private partnerships, “It”™s a very different proposition to a straight privatization,” said Jonathan Walbridge, managing director of Macquarie Infrastructure and Real Assets, the company that manages Macquarie. “The public counterparty does remain involved and they remain in control.”
The lease with the county specifies standards by which the airport must be operated and maintained throughout the duration of the lease, Walbridge added.
“That”™s the county saying, ”˜This is the bar and this is what you must do to be in compliance, and if you”™re not, you don”™t remain the tenant,” he said.
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.
“Airport management, in our experience, is about balance,” Lowe said. “It”™s about managing a vital transportation community asset in the interest of all the stakeholders.”
With those stakeholders in mind, the company has made an effort to reach out to members of the community surrounding the airport.
“We”™ve had several meetings with local villages and towns and various other community groups really to go on a listening tour to understand what people want from the airport, what they like about the airport, what the concerns are,” Lowe said. “I think that”™s been very helpful for us in building a body of feedback.”
Much of that feedback has related to passenger and commercial traffic at the airport, along with environmental concerns.
“We”™ve factored that into our thinking and into our response (to the RFP),” Lowe said. “We think there is an opportunity to improve the airport in certain areas, address a lot of those concerns and then help the airport move in the direction that satisfies the needs of all those stakeholders.”
If chosen by the county, Macquarie would look to create working or collaborative groups with representatives from airlines, the general aviation community, elected officials and constituents “that would discuss areas of concern that we would use to sort of propose plans” and to “provide a regular forum for all these constituents and stakeholder,” Lowe said.
The 240 passenger-per-hour limit at the airport would remain in place, Lowe added, and the lease prohibits its new operator from expanding the airport”™s footprint.
“We do see within those constraints opportunities to make a good thing better, and we”™d be very excited to have this in our portfolio,” Lowe said. “There”™s definitely a need to de-clutter the space and make it easier to process through to airside.”
If selected, a 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 for its management.
“We”™re not private equity, we”™re not here for the short-term,” Walbridge said. “We”™re not focused on the exit. We do intend to be here fully through the 40-year duration of the lease. It has been a 40-year business plan very much developed with the objectives of the county in mind.”
