Alders Advance 43-Year Tweed Deal

After hours of debate about the length of the term and about who stands to profit, a committee of alders unanimously advanced a proposed 43-year agreement between the city and Tweed’s airport authority.

That was the outcome of Monday night’s four-and-a-half-hour meeting of the Board of Alders Finance Committee. The virtual meeting took place online via Zoom and YouTube Live.

The sole topic for discussion, debate, and a subsequent advisory vote Monday night was a two-part order related to Tweed New Haven Airport.

The first legislative item would have the city sign a 43-year amended and restated lease and operating agreement with the Tweed New Haven Airport Authority. The second would repeal a city law that prohibits airplanes that weigh more than 160,000 pounds from using Tweed.

Both are designed to enable a separate but parallel four-decade agreement between the airport authority and the Goldman Sachs-owned airport management company Avports. That company, which has managed Tweed for the past 22 years, in turn plans to invest $70 million in private funds into building a new four-to-six-gate terminal on the East Haven side of the property and lengthening the airport’s main runway to 6,635 feet. (Read more about those expansion plans here, here, and here.)

After hours of spirited public debate Monday, committee alders voted unanimously in support of both the proposed city-airport authority lease agreement and the proposed ordinance amendment about aircraft weight.

Both proposals now advance to the full Board of Alders for further debate and an expected final vote in September.

“This airport is an opportunity for our community,” Dixwell Alder Jeannette Morrison said in support of both legislative items. ​“This is growth. It’s about evolution.”

“I think that we have a great opportunity to actually make this work, not just for the airport,” but for the city and the Morris Cove neighborhood as well, said Board of Alders President and West River Alder Tyisha Walker-Myers.

“The fundamental question is,” Westville Alder and Finance Committee Vice-Chair Adam Marchand added, ​“Do we believe we should be pushing forward with a possible plan that could make the airport commercially successful, or should we not? It is my opinion that we should.”

43 Years? Really?

While nominally limited to two specific proposals about the 43-year, city-airport authority lease and the aircraft weight law, Monday’s Finance Committee hearing — just like a recent two-part City Plan Commission hearing about planned improvements to the airport’s current West Terminal to make way for a new budget airline — became a vehicle for discussion and debate about the airport’s larger expansion plans.

Monday’s hearing was in some ways a reprise of other hearings since airport backers first unveiled those plans in May: Regional business boosters touted the job possibilities of a larger transportation network. Neighborhood critics expressed concerns about increased traffic and noise and air pollution. Government watchdogs called attention to the potential use of eminent domain. And environmentalists rang the planetary alarm bell about promoting fossil-fuel intensive activities in a coastal area of the city at a time of escalating climate change.

Another related question popped up again and again Monday night: Why 43 years?

Why would the city agree to such a lengthy term for a venture as seemingly risky as the privately-funded expansion of a publicly-owned airport that has long struggled to attract commercial air carriers, and that sits in a coastal area of the city that is prone to flooding?

“Quick” 43-Year Profit Horizon

“It’s 43 years for a lot of very important reasons,” city Economic Development Administrator Michael Piscitelli said. ​“To create a horizon, if you will, for the authority to be successful, for a repayment period for Avports’ investment.”

He singled out that the proposed lease agreement does include a provision that allows for the city and the airport authority to review and potentially revise the agreement 20 years before it expires.

City-hired financial adviser Mary Francoeur was more blunt in her explanation for the proposed 43-year term.

“It’s really about giving Avports the opportunity to recoup their investment in comparison to their concessions,” she said. ​“Forty years is actually going to come pretty quickly. It’s an opportunity for them to slow grow the airport and make the improvements that are going to add value here, and recoup that investment. It is consistent with other projects we’ve seen nationally.”

Airport Authority Executive Director Sean Scanlon said that even if the city approves the 43-year lease agreement, the airport will still be owned by the city. He said that holds true even if the airport authority enters into a separate ​“facility” agreement with Avports that would have the latter design, build, finance, operate, and maintain the new terminal for 43 years.

Tweed will also still have an airport authority executive director and airport authority board that will play a ​“regulatory role and they will be able to hold Avports accountable. … That board and the executive director will still be able to serve as that regulatory oversight of Avports going forward.”

Why not just have a 20-year lease to start? Walker-Myers pressed. ​“What are the benefits of” jumping straight into a 43-year deal?

The deal needed to have a term that would ​“justify the significance of the investment that our partner is making into the terminal,” Piscitelli said. ​“Avports has walked us and the authority through why the longer horizon is important for private investment.” This longer period means that Avports won’t have to rush to make its money back, he said, and it recognizes that Tweed is a ​“slow growth airport.”

Critics: Watch Out For Goldman Sachs

Many of the 30 people who spoke up during the public hearing portion of the meeting Monday were unconvinced by that rationale for a 43-year term.

“Why 43 years? People don’t even stay married for 43 years,” Townsend Avenue resident Toni Criscuolo said. ​“These people are buying, they’re not selling. They see a desperate city … They are preying on our weakness.”

Fair Haven Heights resident and Green Party alder candidate Pat Kane agreed.

“A 43-year contract is extraordinary,” she said. ​“You are potentially obligating two generations of New Haven residents on a deal that’s not even clear.”

Westville resident Tim Holahan emphasized that this long-term deal is with a company whose corporate lineage warrants some serious skepticism.

“Goldman Sachs is ultimately the player that we would be bringing into the city, and we know what Goldman Sachs’ motive is: profit,” he said. ​“Goldman Sachs does not come to New Haven to help New Haven.”

East Rock environmental activist Nora Heaphy cautioned that the 43-year deal extends well past the time that the Morris Cove neighborhood where the airport resides could be underwater due to climate change-induced sea level rise.

“Firms like Goldman Sachs will profit in the short term, and will be experiencing none of the long-term consequences of this project.”

City Point resident and city public school teacher Leslie Blatteau said urged the alders to slow down the approval process so that they can really interrogate why Avports is willing to make such a big bet on New Haven’s airport. ​“Goldman Sachs is involved. Red alert,” she said.

East Rock Alder Anna Festa asked Scanlon to clarify exactly what the international investment bank’s role in this airport expansion is.

Avports is a subsidiary of an investment fund that is owned by Goldman Sachs, Scanlon replied.

“Is that like a private equity group type of deal?” Festa asked.

“Yes,” Scanlon said. ​“An infrastructure investment group, to be more specific.”

Scanlon stressed that Tweed’s current annual revenue is around $1.8 million, while its current annual costs are around $3 million. The difference is made up by state and local subsidies. This new proposed expansion deal would get rid of all city and state subsidies for good.

“This company Avports believe that can make” Tweed a successful commercial airport, he said. ​“If they’re not successful, then they would have given it a shot.”

When asked for comment Tuesday morning about Goldman Sachs-related concerns raised at Monday’s hearing, Avports CEO Jorge Roberts responded by email, ​“There is risk in every project, but what’s so important about the plan for a new HVN is that the risk is being borne primarily by a private company, not the City or its taxpayers. Avports and its owners have a long, successful history and track record managing airports across the country, and we have managed Tweed New-Haven for two decades.

“We are a 94-year old company that has done our research, and we believe in the future of Tweed as a neighborhood regional airport in an area where too many residents are currently driving to New York when they could be flying directly from New Haven.”

Supporters: ​“Defining Point” For New Haven

Not everyone who spoke up during the public hearing portion of Monday’s meeting took aim at the length of the proposed deal and the potential motivations of private investors.

Some characterized the proposed lease agreement and the planned Avports-funded expansion as an economic opportunity to be seized and celebrated.

“Deals like this don’t come up very often,” Greater New Haven Chamber of Commerce President Garrett Sheehan said. ​“From where I sit, this seems like a great deal for the city, for the city’s finances, and for the city’s economic development efforts.”

Hamden resident and airport authority board member Robert Ellis agreed. ​“It is an opportunity to expand the airport as never before,” he said, ​“one that will allow it to become self-sufficient” and more attractive to potential future commercial carriers.

New Haven Works Executive Director Melissa Mason said her local job pipeline agency is eager to partner with Avports and the new budget airline Avelo to help fill the hundreds of jobs to come from an expanded airport.

And Yale New Haven Health Senior Vice President Vin Petrini said that the proposed 43-year lease agreement has his and his organization’s ​“unwavering support.”

He said New Haven likes to compare itself to Cambridge, Silicon Valley, and the Research Triangle, but it’s missing one key piece of infrastructure that those three research and business hubs all have: a functional, accessible airport.

This is ​“a moment in time that could be a defining point for the City of New Haven,” he said.

Watch the full Finance Committee hearing below.