There has been speculation for several months about possible privatization plans for the airport, mainly following plans forwarded by local investment firm owner Dock Treece and his two sons (Dock David and Ben) that Toledo Express would perform better in private hands.
“The airport is one of Toledo’s most important and one of Toledo’s most valuable assets,” said James Tuschman, vice chairman of the port authority board, after thanking the mayor for his vote of confidence. “We, the port board understand that and our staff understands that. It’s critical that we continue operational continuity.”
“It’s difficult running an asset like the airport when the community isn’t necessarily behind you and then always looking at challenging you as to why it’s not as successful as maybe some believe it should be,” said Paul Toth, Port Authority President/CEO.
Mayor Collins declared early in his term that Toledo Express would be “the airport of choice” if any of his administration’s officials needed to fly anywhere on city business. He also has encouraged other government and business leaders to follow a similar policy.
Toledo City Councilman Rob Ludeman had taken steps to call for a council hearing on possible privatization plans, short of actually setting a date for such a hearing. He later decided against it and dropped the idea of a public hearing.
Toth called it “important to send a positive message” to the Federal Aviation Administration (FAA), which he stated had “challenged” the port authority as to whether the federal agency would provide $6 million in discretionary funds for what he called “two important projects” at the airport. The port authority president also pointed out the Ohio Air National Guard base there provides a $100 million annual economic impact.
Each of the projects involves rebuilding a taxiway for airplanes—one at Toledo Express and another at Executive Airport in suburban Wood County. Toth called those upgrades “safety issues.”
The port authority president stated that even the air cargo market only has two operating competitors left that still fly overnight packages: Fed Ex and UPS. Seven other air cargo providers have closed, including BAX Global, which once operated at Toledo Express.
“We’ve come a long way from the bottom of the market in 2008,” said Toth, pointing out the airport has seen recent double-digit increases in both passenger traffic and air cargo. “We challenge the status quo every day. We run all of our facilities, our operations much like a business and we will continue to lift every rock and find every opportunity to bring economic prosperity to Northwest Ohio.”
“When the word gets out that there’s a loss of confidence, it could very easily be a tipping point in terms of economic development,” said Mayor Collins. “What triggered this is the stone-cold reality that the city of Toledo and its asset were being questioned (by the FAA). It drove me to this position.”
The mayor also called it “irresponsible” to put the national security mission of the 180th fighter wing “in jeopardy” by entertaining any notion of privatizing the airport.
“I’m not going to be a party to the disassembling of the 180th,” said Mayor Collins. “To compromise that by chartering out information of that relationship and that responsibility, I’m not going to be silent with that. I cannot be silent with that.”
Dock David Treece attended the press conference on behalf of his family’s interests in privatizing at least a portion of the airport. He challenged the mayor on his assertions by stating that “the lack of confidence from the FAA is nothing new.” He pointed out the discussion by the FAA two years ago about closing the airport air traffic control tower at night.
Treece contended such a move would “make it difficult” for the 180th fighter wing to operate at the airport and that “all commercial air traffic would cease.”
Mayor Collins fired back that “anecdotal what-ifs” are what caused the FAA to raise such questions and that he had not seen the Treece proposal for privatizing the airport or the identities of any financial backs of such a plan.
“The only thing we know is the criticism that has been leveled at the port authority,” said Mayor Collins. “I’m not going to be silent when the port authority is brought under the microscope of ridicule and I have not seen anything that would even give me comfort in knowing that you even have anything that is viable.”
Toth acknowledged that the FAA is seeking to streamline its operations nationwide and the closing of towers at night in smaller markets such as Toledo and Youngstown is very possible “within the next five years.” But he stated the port authority “can make a strong case” to keep it open. The port authority CEO stated a new tower design also is possible.
“You’re out of your league on this,” Toth angrily told Treece. “Those guys look at a scope. They can control Toledo’s airspace from Mesa, Arizona or Cleveland, Ohio, or Timbuktu for that matter. It is a fact that the FAA is going to have to consolidate its operations and we should all expect that’s going to happen. But it’s not going to shut down passenger service. It will not shut down the military and it will have no negative effect whatsoever on businesses at the airport.”
According to a 28-page business plan filed at the website www.toledoairports.com, the only “equity owners” listed for Toledo Airport Facilities Company, LLC (TAFC) and Toledo Airport Operations Company, LLC (TAOC) are members of the Treece family. Those two companies would be formed to operate both airports “and to facilitate development at and around the sites of both facilities,” according to the Treece proposal.
The business plan stated TAFC and TAOC “have already received a credit commitment totaling over $1 million from a local community bank.” But the proposal also left open the possibility of having “to raise funds from shareholders, who have already made available more than $1 million to cover any short-term operating deficits.” The business plan also called on the possibility “in the future” to take on “new shareholders in exchange for equity financing.”
Under the business plan released the day after the mayor’s press conference, the short-term goal for the companies would be to take both airports to “break-even” status. The business plan also is predicated on the hiring of contractors to handle such operations as maintenance, security, and fire-rescue services. According to the plan, such moves would reduce the monthly operating expenses of both airports by about $100,000.
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