CATCH Articles:
Sharp split on airport land deal
Mar 04, 2008
Council divided down the middle last week on whether taxpayers should ante up $3 million for an undisclosed land purchase somewhere near the airport. The proposal came from the private company that runs the airport which doesn’t want to cover the costs through increases to passenger fees.
Tradeport International operates the city-owned airport under a 40-year lease signed in 1996. Since that agreement is a lease, not an ownership transfer, it requires the city to buy lands for necessary runway extensions.
The resolution that was debated last week apparently includes some lands for runway extensions, but also applies to an extra 45 acres whose purpose is unclear and was only revealed to councillors in a closed door meeting on February 26.
When the issue came before council the following evening for final ratification, it sparked an hour-long debate and a motion from Brad Clark and Chad Collins that called for extra airport land purchases to be paid for from passenger fees rather than property taxes.
Collins said he was very surprised “with this whole notion that the city is now required to ante up resources” for lands not covered under the 1996 agreement, and warned that this will likely be followed by similar demands.
“This will not be the last time that we receive such a request,” he predicted. “So it’s not just $3 million that’s at stake; it’s probably a figure that far surpasses $3 million and I think it would be difficult at this point in time to gauge what that dollar figure, but it is a substantial amount of money.”
Several councillors countered that it made good business sense to financially support the airport. Lloyd Ferguson pointed to increases in airport investment and taxes since the privatization took place. Terry Whitehead called the purchase a “strategic investment” and argued “the taxpayers aren’t on the hook for anything” because the city will regain control of the lands in 2036.
Clark countered that the issue wasn’t the purpose or value of the lands but who is going to foot the bill – taxpayers or airport users.
“If we need this additional land there, then the question is how are we going to pay for it,” he said. “I would expect that councillors would jump at the opportunity to take funds from a user fee as opposed to the taxpayers. I’d be surprised if anyone doesn’t support that.”
But it turned out that seven councillors and the mayor didn’t support that and cast votes against it, exactly matching the eight who supported the motion. A tie vote automatically is defeated.
Whitehead argued increasing passenger fees to levels closer to other airports threatened the competitiveness of Hamilton’s facility.
“One of the reasons or rationale why their head tax is cheaper is because they are trying to attract more business to the community which is a benefit on the long term,” he said. “Let’s not tie one of their hands behind their back in the context of trying to attract new airlines, as well as retain the ones here.”
That raised the ire of Sam Merulla who recalled last November’s council decision to increase HSR fares instead of raising taxes.
“Some of the people who are not supporting this have supported user fees on the backs of taxpayers,” he noted. “Now suddenly, we’re prepared to purchase this land on the backs of the taxpayers to benefit a private entity.”
Brian McHattie appealed for council unity behind Clark’s motion, warning that the decision to allocate the $3 million from next year’s budget “precludes” consideration of other strategic investments in areas like the downtown.
Mayor Eisenberger came down on the other side of the debate, suggesting “that this may just be an attempt to stop this process from happening on this land purchase”, and offering to support a move to “explore opportunities” for other revenue sources with Tradeport.
“I’m very interested in negotiating, but not tied to stopping this from happening and not moving forward,” he declared.
Clark responded that his motion didn’t call for stopping the purchase.
“This actually is moving it forward and everyone of this council could turn around and vote in favour of this so we could actually begin negotiating with the airport about a user fee,” he argued. “You’re the one who said it was stopping it. You’re the one who said it was obstructionist. I didn’t say that.”
Eisenberger shot back: “I didn’t say it was obstructionist either. That never came out of my mouth.”
After the 8-8 vote, Collins pointed out that there had been negotiations with Tradeport for the past two years on finding ways to finance extra land purchases “to arrange and secure the exact same relationship or new funding source that was put in the amendment just five or ten minutes ago”.
Guy Paparella, the city’s director of airport development, confirmed the unsuccessful attempts.
“We tried various options, including things like head tax, and essentially were told that a deal’s a deal, the lease is the lease, and we will meet the obligations on that particular arrangement.”
Pointing to this, an angry Sam Merulla sarcastically noted the contrast between the city going beyond the requirements of the lease agreement with the extra $3 million purchase, and Tradeport’s response to the request to raise passenger fees.
“So if a deal is a deal why the hell are we doing it? So it’s really really striking that – to hell with you guys, a deal’s a deal, but okay we’re just going to take everything.”
The land purchase was approved 9-7. Voting in support were Jackson, McCarthy, Pasuta, Mitchell, Pearson, Whitehead, Ferguson, Powers and Eisenberger.
They were opposed by Bratina, Clark, Collins, Duvall, McHattie, Merulla and Morelli. Powers joined the latter group in supporting the Clark/Collins motion, but otherwise the division was the same as on the 8-8 vote.