Macquarie Infrastructure Corp. has been tapped by Westchester County Executive Robert Astorino to operate Westchester County (HPN) as part of a $1.1 billion public-private partnership.
Astorino’s office said Macquarie was the unanimous choice of a bipartisan 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.
The county legislature needs to approve the deal. It was unclear at press time whether the legislature will take up the issue before January, when new lawmakers take office. Astorino will be vacating his seat as well, with George Latimer taking over as county executive in January. Latimer has been critical of the airport privatization plan.
If a deal is reached, 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 up front, which includes lease payments, money transferred to the general fund from county money locked at the airport and various reimbursements, the county executive office said.
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 percent 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.
“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.”
Westchester County embarked on the privatization process for HPN in early 2017, following a backlash from Astorino’s previous move in November 2016 to transfer management of the airport to Oaktree Capital Management. Frasca & Associates LLC, a New York City-based transportation consulting firm, assisted in the RFP process.
HPN is part of the Federal Aviation Administration’s Airport Privatization Pilot Program, which allows airports to explore privatization as a means of generating access to various sources of private capital for airport improvement and development. Under the program private companies may own, manage, lease and develop public airports.
Other bidders were HPN Aviation Group, a joint venture between Oaktree Transportation and Connor Capital Transportation Opportunities; and FerroStar Westchester Airport Partners, a consortium made up of Ferrovial Airports International and Star America Fund.