Authority orders appraisal of airport's parking lots
December 12, 2009 5:00 AM
Pittsburgh International Airport has 13,200 spaces in its parking garage and surface lots.
By Mark Belko Pittsburgh Post-Gazette
Officials have taken the first step toward the possible sale of the parking lots at Pittsburgh International Airport in a bid to dramatically slash costs and attract more airlines.
The Allegheny County Airport Authority board unanimously approved a contract with Walker Parking Consultants yesterday to appraise the Pittsburgh International parking lots and to evaluate the potential for privatization.
The airport authority board members have been considering the sale of the airport's parking garage and surface lots, 13,200 spaces in all, for months at the urging of Allegheny County Chief Executive Dan Onorato, who sees it as a means of driving down the airport's cost per enplanement, among the highest in the country.
The lots produce about $22 million a year in revenue, all of which goes to offset the fees the airlines pay to Pittsburgh International. The airport probably would lose that revenue if the lots were sold, although authority Executive Director Bradley D. Penrod said yesterday that there may be potential for a shared arrangement.
Mr. Onorato has said he believed that a sale could generate more than $500 million. Officials hope to generate enough money to eliminate the airport's $475 million to $480 million debt. The bulk of the airline payments each year go to pay down that debt, most of it stemming from the construction of the midfield terminal, which opened in 1992.
Merrill Stabile, president of Grant Oliver Corp., which currently manages the airport lots, has said a $500 million sale was "not beyond the realm of possibility."
If the authority could get enough to pay off the debt, fees to the airlines would plummet to almost nothing. The airport's cost per enplanement was $11.75 as of the end of November. It is scheduled to rise to $15.24 in January.
Officials are hoping dirt-cheap charges would entice more airlines to take a chance on Pittsburgh after repeated cutbacks by US Airways left the airport a shell of its former self.
Mr. Onorato favors the hiring of the consultant, spokesman Kevin Evanto said.
"He is supportive of taking a look and seeing potentially how much revenue we could get from a deal," he said.
Authority board Chairman Glenn Mahone cautioned that the consultant's hiring was "step one" in exploring a potential privatization and doesn't commit the airport to a sale. If Walker finds that a sale isn't feasible, the authority won't pursue it, he added.
"I think these current circumstances require us not to leave any stone unturned," he said.
Mr. Penrod said Walker's work should give the airport a good idea of what the lots and parking facilities are worth.
"We will not give it away," he said. "But if it's a very attractive number that does the intent as far as reducing the cost per passenger, then we've done our job."
Mr. Penrod said at least a couple of other airports were considering the sale of their parking lots, including San Francisco International. Chicago had lined up a $2.5 billion deal to privatize Midway Airport, but it collapsed last spring, with tight credit markets cited as the reason.
The Pittsburgh Parking Authority also hired Morgan Stanley to help engineer the lease of city public parking garages and meters.
Walker will be paid up to $84,500 plus 0.04 percent of any revenue earned in a sale.