The Westchester County (US) has announced a new plan for the Westchester County Airport that would save taxpayers more than US$140 million, improve the overall passenger experience, energize the local economy, and strengthen environmental protections.

The airport is a county-owned airport in Westchester County, New York, three miles northeast of the central business district of White Plains, in the towns of Harrison, North Castle and Rye

The plan – made possible by Westchester’s eligibility in a Federal Aviation Administration program that allows small to mid-sized airports to be run as public-private partnerships – would be structured under a 40-year revenue-sharing lease with Oaktree Capital Management, L.P., whose record includes the successful completion of similar projects in Baltimore, Puerto Rico and London.

The plan would keep in place the current limits on passengers, the footprint of the terminal and the hours of operation. The number of gates at the airport would remain at four. There will be no addition of new runways or extensions of existing runways.

The public-private partnership between Westchester County and Oaktree is not a sale. The airport will continue to be owned by Westchester County and will continue to be privately managed. What is changing is that Oaktree will be the new manager and that by structuring a new lease in accordance with the terms of the FAA program, money paid to the county by Oaktree can be used for all county programs. Until now, any revenue generated at the airport could only be used at the airport.

The net payments and savings to the county will total more than US$140 million. The county will receive an upfront payment of US$130 million from Oaktree, which after revenue share and expenses will provide the county with net proceeds of US$111 million over the course of the lease. The proceeds have been structured like an annuity to create a steady, long-term revenue stream that the county can draw on to offset expenses and help to keep taxes stable over the next four decades.

First year net revenue to the county will be US$15 million; followed by a net revenue of US$5 million in each of the next four years; followed by average net revenue of more than US$2 million for the remaining years on the lease.

The partnership with Oaktree also relieves the county of the financial responsibility for capital improvements and ongoing maintenance at the airport

Westchester County Executive Robert P. Astorino said:

“The driving force behind this proposal is simple – unlock millions of dollars of value that have been created at the airport and put this idle money to work in ways that benefit everyone who lives, works and visits Westchester. We are creating a reliable, long-term source of funding that will assist taxpayers, help pay for parks, police, day care and all of our other services, and enhance the passenger experience at our airport, and doing all of this without changing the current character of the nearby neighborhoods. This is smart government adapting to the future, while protecting the present and past.”

Emmett McCann, managing director at Oaktree and lead for the firm’s airport efforts, stated:

“Westchester is building on a national trend towards delivering the airport improvements and innovation this country needs. By utilizing the strong demand for stable long-term infrastructure investment, creating a best-in-class passenger experience, and successfully aligning the interests of all stakeholders, the county is enhancing the local economy and creating jobs without placing a further burden on the airport’s neighbors and local taxpayers. We expect this project to serve as a model for similar airports across the country.”