Gov. Pat McCrory is taking a hands-off approach to the Charlotte Douglas International Airport imbroglio and recommends lawmakers slow their fast-track legislation to transfer ownership and operation of the facility from the City of Charlotte to a newly created regional authority.
Nonetheless, Senate Bill 81 sponsored by Sen. Bob Rucho, R-Mecklenburg, is scheduled for a vote on Tuesday.
“I have not been approached by the leadership in the city on that issue or by business leaders in the city on that issue, but there’s an obvious conflict, and I’ve recommended that they slow down that legislation,” McCrory said at a news conference last Tuesday.
He had “probably a two-second conversation” with Rucho about the bill, he said. “I think this is an issue that Charlotte needs to resolve among themselves.”
“Aren’t I local? What about Sen. Rucho?” said state Rep. Bill Brawley, R-Mecklenburg, who introduced House Bill 104, companion legislation to Rucho’s bill.
“I think it’s reasonable that the governor would take that position. This is trouble he doesn’t need,” Brawley said. “He doesn’t have to sign it, so he can say whatever he wants on it.” Because the airport legislation is a local bill, the governor does not have to act on it.
Rucho said he is hearing sharp criticism from the business community about how Charlotte is handling airport operations. Concern also is being voiced over safeguarding plans to ship cargo by rail from the coast to trucking terminals at an airport-based, national distribution intermodal park under construction.
“This is the first [city] administration that is starting to reach in and use the assets of the airport, which has never been done before,” Rucho said.
Among concerns he said he has heard is that the municipal police department took over security of the airport for about $7.3 million this year, after a roughly $5.3 million federal stimulus grant for 30-50 new police officers expired.
“Who knows where those police officers are working, and are we subsidizing them with airports?” Rucho said.
“Unless we can take out the politics and patronage from this administration that seems to be running with the idea they should have more say in the airport, especially now with the intermodal park, I shudder with the possibilities of increased cost that would come at the expense of us losing what is a critical economic engine for our state,” Rucho said.
“The more you use it as a piggy bank, the more you risk not having the efficiency” that is the lifeblood of the low-cost, high-volume airport hub, he said. “That would be worse than whatever the loss of the [NFL’s Carolina] Panthers would be.”
“There is concern outside the immediate Charlotte vicinity about the health of the airport, and there is concern among the business community in Charlotte,” Brawley said. “We are seeing the City of Charlotte exerting more and more control over the airport.”
Like McCrory, some in the Charlotte business community are declining to choose sides.
“We’re following the legislation very closely,” said Bob Morgan, president of the Charlotte Chamber of Commerce. The Chamber “has not taken a position,” he said, and declined to take further questions on the matter.
Rucho’s bill passed in two Senate committees but was twice pulled from a scheduled vote of the whole Senate.
“I want to be perfectly sure we’re doing all the due diligence that needs to be done” before a vote is taken, Rucho said of the reason for delaying the vote.
Specifically, he is awaiting a determination from bond counsel whether conversion of the airport to an authority-operated entity will impair some $800 million in airport revenue bonds. Charlotte officials say their bond counsel believes the bonds would go into default with an ownership change.
“The assurance that I got is that this can be handled,” Rucho said. Opponents of the measure, he said, are producing “a lot of misinformation and smoke screens.”
On the Senate floor last Wednesday Rucho said, “We are expecting a bond counsel letter from a very fine bond counsel” this week. By then “all of the certainty will be re-established.”
Rucho didn’t name the bond counsel, but he had been working with the state Treasurer’s Office on the matter.
“The department’s legal team is currently seeking counsel for an outside opinion on the issue. The decision to retain a firm to provide the opinion will be based on cost of the proposal and the firm’s expertise in this area,” Walton Robinson, Treasurer’s Office press secretary, said Thursday afternoon.
Final recommendation for a firm requires approval from the attorney general’s office, Robinson said. “We expect to receive a bond counsel opinion by mid-March.”
Meanwhile, Brawley’s companion legislation remains idle in the House.
“We’re monitoring the ongoing conversations on the airport,” said Jordan Shaw, spokesman for House Speaker Thom Tillis. He referred questions to Brawley.
“I do keep the speakers’ office and his staff informed of what’s going on,” Brawley said. “And we are looking at the bond issue and other issues as well. I’m not at a point where I’m ready to start discussing what I’ve learned.”
At the same time, he continues to gather information and talk to stakeholders, “but I’m not ready to move the bill in committee,” Brawley said.
Brawley said there is nothing unusual about using a regional authority. Other airports use them, and Charlotte and Mecklenburg County already belong to other regional transportation agencies, he said. Like Rucho, he worries about the city maintaining sole authority of an expanding airport that is a huge and growing statewide economic asset.
“Look what happened to Atlanta, to New Orleans, to Detroit,” where those cities run the airports, Brawley said. Landing and embarking fees are $18 per passenger, whereas Charlotte’s is $4, he said.
Because of that low fee, Charlotte Douglas is a high-volume connector hub for US Airways. Without the US Airways hub, there is not enough local passenger base revenue to keep all the flights going to so many destinations, Brawley said.
Airlines for America, an airlines trade group, said the 10 airlines that have reported year-end results for 2012 showed $151 million profit on revenues of $143 billion, or 21 cents per passenger carried. US Airways and American Airlines were among the 10 reporting.
“If Charlotte Douglas were to raise their fees by 25 cents they could wipe out all the profit made in Charlotte,” Brawley said. “It could make it hard for the airline to be successful at that hub” if the city were to increase costs to help offset costs of city operations.
He said he does not want to risk returning to the days before Charlotte had a hub and connecting flights were routed out of Atlanta.
“You had to go through Atlanta to go to heaven,” Brawley said.
Dan E. Way (@danway_carolina) is an associate editor of Carolina Journal.