WHITE PLAINS, NY -- Westchester County Executive Robert P. Astorino announced today that he has selected Macquarie Infrastructure Corporation to operate Westchester Airport as part of a $1.1 billion public-private partnership dedicated to improving this vital county asset without expanding its footprint.
Macquarie was the unanimous choice of a bi-partisan task force made up of members of the Astorino administration and the Board of Legislators to evaluate the three proposals received in April to manage, operate, maintain and improve the airport in accordance with an FAA program that would allow the county for the first time to use revenues generated at the airport to help pay for police, parks, roads, day care and other services.
“The goal from the start has been a better, not bigger airport,” said Astorino. “This proposal does just that: Private investment capital – not taxpayer dollars – will improve the passenger experience, implement new environmental safeguards, and preserve the character of the neighborhood, all while creating a long-term revenue stream to help pay for county programs. This is an example of smart government operating on all fronts.”
The three companies were graded based on both their technical capabilities and financial offers. Macquarie, which is based in Manhattan, received the highest overall score. HPN Aviation Group, a joint venture between Oaktree Transportation and Connor Capital Transportation Opportunities, ranked second, and FerroStar Westchester Airport Partners, a consortium made up of Ferrovial Airports International and Star America Fund, placed third.
Macquarie’s winning proposal will net the county $1.145 billion over the course of a 40-year lease: a $595 million financial offer accompanied by $550 million in capital funds to maintain and improve the airport’s infrastructure. The lease is “as-is/no expansion,” which means the airport’s existing terminal footprint will not expand; there can be no expansion of runways; the number of gates remains at six; and the cap of 240 passengers per half hour stays in place.
Under the terms of the lease, the county will receive just over $300 million upfront, which includes lease payments, money transferred to the general fund from county money locked at the airport and various reimbursements.
In accordance with governmental accounting standards, the county will be able to use $30 million the first year ($6.5 million from the first year’s lease payment; $21 million transferred to the general fund from the airport; and $2.5 million in expense reimbursements). In addition, the county will also be reimbursed $10 million for police costs at the airport, and those reimbursements will increase 2.5% a year over the term of the lease and total $674 million.
In future years, $6.5 million, which is the amortized value of the $261 million leasehold fee over 40 years, will be applied annually to the county budget as revenue to offset expenses.
“By receiving money up front and then spreading payments over the course of the lease, the county has created a guaranteed revenue stream of more than $6 million a year to pay for county services,” said Astorino. “This is the opposite of a ‘one shot’ financial transaction. It’s 40 years of recurring revenues.”
In addition, Macquarie has agreed to spend a total of $550 million over the term of the lease on capital projects involving terminal improvements, environmental safeguards and customer amenities, such as quicker baggage handling, faster passenger screening, and more dining options.
Specific environmental measures proposed by Macquarie include:
· Constructing additional wastewater treatment capacity;
· Expanding deicing runoff capabilities to protect the Kensico Reservoir;
· Improving storm water and flooding controls;
· Maintaining the airport’s ISO 140001 environmental certification;
· Preparing a climate change resilience plan;
· Establishing a Citizens Environmental Committee to work with management.
HPN Aviation received a slightly higher grade than Macquarie for its financial offer, which came in at $626 million to the county versus Macquarie’s $595 million. But Macquarie committed to a significantly higher amount of capital improvements, $550 million versus $271 million for HPN Aviation, and Macquarie’s technical scores were also higher at 107 versus 96. The result was that all six members of the task force recommended Macquarie. The “Airport Task Force Report to County Executive” is attached.
The next step is for Macquarie and members of the County Executive’s staff to finalize the lease and send it to the Board of Legislators for its review. The lease requires 12 votes for passage.
The selection process was run by Frasca & Associates, a leading transportation and financial consulting firm.