County Catches Parking Privatization Bug
The County Chief Executive wants to explore the possibility of turning some 13k parking spaces at Pittsburgh International Airport over to the private sector. The hope is that a private interest would be attracted to the possibility of managing and profiting from airport parking and would give the County a massive up-front payment, something to the tune of $500 million or so. That money could then be used to retire a big chunk of debt related to the airport and hopefully lower the fees the airlines operating at the facility are now paying to help retire the debt. Those fees are very uncompetitive in comparison with other airports.
It is a good idea that should be explored. Much like the Pittsburgh proposal to turn over parking garages and lots to a private operator in order to get money to retire debt and shore up pensions, the County would have to work through a separate entity to get the deal done. In the case of the County it is the Airport Authority. The Authority would likely have to complete a valuation of the assets and determine bidding procedures, etc. Though some have been optimistic that the parking could fetch $500 million, considerations like staffing, maintenance, ability to increase rates, applicable FAA regulations, and private ownership (which would entail having to pay property taxes) might lower the number.
Another thing to keep in mind is the $110 million left from the gaming disbursement for retiring debt at the Airport. If a bid is pursued, is successful, but brings in less than the $500m, that money could be used to close the gap. If the bid brings in at least $500m (or more), there will be a strong temptation to use that money for other purposes (the County intercepts all of the money according to state law) that don’t involve paying off airport debt.