Local, state, federal interests in Atlantic City Airport complicate sale

But as lawmakers discuss a possible sale or transfer of its operating lease, a close look at the airport and the surrounding site shows multiple interests and obligations that would have to be addressed. A potential takeover of airport operations by the Port Authority of New York and New Jersey would involve a more complicated transition than state government simply signing it over.

The South Jersey Transportation Authority, the independent state agency that would lose control under a proposal floated by lawmakers, owns only 2 percent of the site. Most is owned by the Federal Aviation Administration.

As the Port Authority continues to look into the possibility of taking over airport operations, a consideration is that there are existing agreements between agencies on airspace jurisdictions, funding and on leases of the site’s land. The transfer could require changes in the process for federal funding sources for airport upgrades.

Key Atlantic City legislation enacted into law in February to create an Atlantic City Tourism District includes a provision envisioning a potential airport “sale” and for proceeds to be distributed between eight southern New Jersey counties.

A spokesman for Senate President Stephen Sweeney declined comment on the airport’s ownership and lease arrangement, and referred all questions to the SJTA and FAA.

Sweeney told a Press of Atlantic City editorial board two months ago that he foresaw the airport being moved from the control of the SJTA to the Port Authority, which operates airport hubs including Newark International.

In a March 25 interview, Sweeney said: “Selling the airport is to get the expertise and basically the buying power of the Port of New York that operates Newark Airport to try to bring larger carriers in to Atlantic City and develop it.”

But buying what the SJTA owns of the airport would account for only 2 percent of the total site.

Although Atlantic City International is bigger in land area than Newark, JFK and LaGuardia combined, any plans to expand the regional airport into a hub may mean building on land that is currently owned by federal authorities.

In a 1991 deal, the city of Atlantic City sold its share of airport property to the SJTA, getting $11 million for an area of just 83.6 acres around the existing terminal building. The Federal Aviation Administration owns most of the vast remainder of the 5,052-acre site.

The arrangement means the SJTA does not own the runways and taxi-ways used by the airplanes. The FAA leases about 2,000 acres to the SJTA for that use.

SJTA spokeswoman Sharon Gordon said the SJTA did not pay anything for that lease, but under the agreement, the SJTA assumes responsibility for keeping the runways in good working condition.

Further complicating the ownership of the site, the Laurel Memorial Park cemetery, which is designated as private property on an FAA site map, occupies 117.5 acres in the heart of the property.

Sweeney, D-Salem, Gloucester, Cumberland, in March talked about a straightforward sale or leasing of the airport to the Port Authority, which he said could expand the massive site to rival big hubs.

“They could attract big carriers,” he said. “More flights means more people coming down here.”

However, Holly Baker, a spokesperson for the FAA, confirmed that more than half of what is considered the airport site is not currently owned by or leased to the SJTA.

Baker declined to comment on any potential sale or new lease agreement. The airport site hosts the federal William J. Hughes Technical Center, which is owned by the FAA.

Nearby, the NextGen Aviation Research and Technology Park is being built adjacent to the airport. Gordon said the project is privately funded, but said the SJTA is one of its “cornerstone entities.”

A takeover could require at least technical changes in the process in which core initiatives are funded on-site. Both the NextGen project and an airport improvement program rely on federal grants.

A change in ownership could complicate that funding: The SJTA acts as the enabling agency for FAA grants, both for airport improvement grants and also as part of NextGen. Because the SJTA is located in southern New Jersey, airport improvement funding is provided from one of the FAA’s Eastern regional offices covering southern New Jersey, which is based in Harrisburg, Pa.

In airport improvement grants alone, Atlantic City International has received more than $76 million from the FAA since the program’s inception in 1985, FAA records show.

Transferring ownership or operations to a new enabling agency in New York, such as the Port Authority, raises questions about how future grants would be authorized. The FAA has a separate regional office in New York that handles grants for airport agencies in that area. Baker would not comment on what grant changes would result under circumstances where the airport changed hands.

However, Baker said that existing FAA grants already require the operating agency to maintain the condition of the airport for 20 years.

The varying interests around the site has left some local legislators leery of any sale or transfer of the airport.

Assemblyman John Amodeo, R-Atlantic, said Thursday that he had “major concerns” about the proposal foreshadowed in the Atlantic City legislation.

“This is a far, far bigger picture and process than we’re assuming,” he said.

Looking at any sale, he said, “I’m not sure what it would accomplish — and it seems to move a southern New Jersey asset and give it away.”

Sen. Kevin O’Toole, R-Bergen, Essex, Passaic, disagrees. O’Toole was involved in early discussions about the airport’s future, and believes a change in ownership would be beneficial.

“When you look at what the city did with that site, what’s going on there now, it’s a vastly underused resource,” he said.

Unlike the SJTA, “the Port Authority isn’t such a political entity,” he said, alluding to the fact that while New Jersey state lawmakers make all appointments to the SJTA’s board, the Port Authority is a bi-state agency.

Moving the airport to Port Authority control, he said, “I think would give very cynical entities a fresh start.”

Contact Juliet Fletcher:

609-292-4935

JFletcher@pressofac.com