Palo Alto: Council approves deal to take over airport

PAOA deal to transfer Palo Alto Airport from Santa Clara County to the city has all but been cleared for take off.

As midnight approached Monday, the Palo Alto City Council unanimously approved a complex set of documents that would place the city in control of the airport, known as PAO. The State Lands Commission and the Federal Aviation Administration still need to weigh in on the deal.

“This is an outcome that we’ve had strong interest in for some time,” said Councilwoman Gail Price.

The county has operated the airport on land leased from the city since 1967. In 2006, the county announced it wasn’t interested in continuing the arrangement past the lease’s expiration in 2017.

“There is “no compelling reason” for the county to continue, Santa Clara County Roads and Airports Department Director Michael Murdter wrote in a report. The county “shoulders all of the business risk,” he said, but has no control over development at the facility.

A subsequent consultant’s report indicated the city could operate the airport at a profit and the council opted to try to end the lease early.

The deal comes at a critical time. According to a city manager’s report, Palo Alto must complete the transfer of sponsorship, operation and management of the airport by mid-August in order to qualify to receive federal funding for an urgently needed runway project.

“If the FAA does not approve the city as the PAO sponsor by mid-August, the city may lose a portion of the $610,000 in federal grant funding, for which it would be eligible for the current federal fiscal year,” the report said. “If this deadline is missed, the city would lose fiscal year 2014 funding, and the runway repairs would be delayed by at least one year.”

To win the FAA’s blessing, the city needs a 20-year minimum lease from the State Lands Commission due to confusion over who really owns the land under the airport. The county solved the quandary by obtaining a lease from the commission and the commission is expected to approve a similar agreement with the city when it meets Friday.

The lease would also give the city and the commission time to sort out the ownership issue once and for all.

Palo Alto Airport is the third-busiest airport in the Bay Area and sees more than 180,000 operations per year, according to Manager Andrew Swanson. It also serves as a refueling center for medical choppers.

Despite the unanimous vote Monday, some council members were worried the airport would end up costing the city.

“I think both parties are delighted with what’s going to transpire,” said Councilwoman Liz Kniss.

“I just want to have on the record, though, that I have some real concerns about it,” she continued. “This is not a slam-dunk money maker and I’m going to read that back to you sometime in 2017 or 2018, because running an airport turns out not to be an easy kind of thing to do.”

Mayor Nancy Shepherd agreed.

“This is going to be tricky for us to make money and I certainly hope that this was a wise decision,” she said.

Others in the community, however, hailed the deal. Among them was Bob Lenox, who sat on a working group that ultimately recommended forming a nonprofit to manage the airport.

“I’m looking forward to bringing Palo Alto Airport into the 21st century and making it a signature gateway to our community instead of the embarrassment it is today,” said Lenox.

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