Major NYC Bizav Hub To Seek Privatization

 - November 14, 2016, 12:22 PM

An initial offer to privatize New York’s Westchester County Airport (HPN) has met with a chilly reception from the county’s lawmakers. In a legislative session last month, the county’s board of legislators investigated the deal Westchester county executive Robert Astorino proposed as part of his 2017 budget plan. Under the proposal California-based investment firm Oaktree Capital Management would take over control of the New York City-area, dual-use airport for the next 40 years.

Opponents of the plan criticized its lack of transparency, pointing out that while there are several companies that would be suitable bidders for the contract—among them AvPorts, which has managed HPN for the county since 1977—no RFP on the subject was discussed or submitted. In essence, Oaktree was the sole competitor. The RFP process is technically not required, but the county’s failure to solicit competing bids has raised eyebrows among many in the county.

If approved, the current deal would make HPN the first commercially served airport in the U.S. to be privatized, and would take the county out of the profit-and-liability equation for the airport. That would be transferred to Oaktree, which would pay the county $130 million, in addition to making infrastructure improvements at the passenger terminal. Indeed, Astorino has already penciled in $15 million in upfront payments from the deal to bridge a gap in next year’s county budget, which must be ratified by December 27.

‚ÄčStakeholder Concerns

General aviation accounts for 78 percent of the traffic at HPN, one of the most bustling business aviation hubs in the country. The site is home to several corporate hangars, two fractional hubs and five FBO facilities (two each operated by Signature Flight Support and Ross Aviation, and one by Million Air, which is to be replaced by a new $70 million complex). According to private operators and businesses that serve general and corporate aviation at HPN, there was no request for input or feedback on the proposed deal. They fear that if the deal is approved, it could result in drastic hikes in landing and fuel flowage fees.

While county officials seem amenable to the idea of privatizing HPN, its initial reception suggests the current deal will face difficulty gaining traction. “We’re going to have to open this up to the marketplace,” the chairman of the County Board of Legislators, Michael Kaplowitz, was reported as stating.

Confirmation of any such deal requires the approval of at least 12 of the 17 county legislators, the FAA and a majority (65 percent) of the commercial carriers that serve the airport.