The city is increasingly worrying about tens of millions in promised benefits from privatizing the airport management that are now long overdue and looking more and more shaky. But at last week’s Airport Implementation Committee, Tradeport International officials pushed for even more subsidies from both the city and the province.
A key part of the 40-year lease that council granted to Tradeport International in 1996 was the private company’s assurance that it would improve the airport with a runway extension valued in 2009 at $35 million. The still largely secret deal forces the city to buy the required lands for that extension – something it has already spent $10 million on doing.
The last big land purchase in 2011 set taxpayers back over $3 million and was justified by assurances from Tradeport that they were about to begin environmental assessment and other regulator approvals for the extension. That still hasn’t happened and company officials admitted at Thursday’s meeting they are still a long way from even starting the multi-year preparatory process because passenger, cargo, and flight numbers at the struggling airport don’t justify it.
“I would say we at least have to have three or four times more aircraft movements than we have today to start moving on that,” airport CEO Vijay Bathija told Chad Collins when the councillor pressed him for the “magic number you need to extend the runway”.
After confirming the projected cost of the extension and that the approval process will take three to six years, Collins reminded the Tradeport official that the 40-year lease is already half over.
“So when does the city start to replace that equity that we anticipated at the beginning of the lease?” he asked. “I just don’t want to get to five years to go when you haven’t started that process and we start talking about commitments that were given to the city and not fulfilled.”
This year is the only opportunity for the city to renegotiate the leasing agreement, and the meeting agenda included a secret report on those negotiations. But that in camera update didn’t take place because only two of the five councillors on the committee showed up on Thursday morning, leaving it without a quorum to make decisions. Maria Pearson announced in frustration that she her co-chair Terry Whitehead had “bailed at 9:34” for the scheduled 9:30 am meeting.
Pearson and Collins agreed to informally receive the Tradeport annual report which projected that passenger numbers may exceed last year’s despite falling short in each of the first seven months of 2016 before trending higher in September and October. Collins reminded Bathija that years ago these numbers were supposed to be more than three times higher.
Earlier in the meeting, the Tradeport CEO pressed the city to expand HSR service to help poorly paid airport area employees get to work.
“People who work in those jobs at the cargo centre and cargo facilities like Purolator are mostly in starting jobs so they are likely being paid $12, $15, $20 an hour and a lot of these people can’t afford to come by car every day and they are having trouble reaching the airport because the public transit is actually limited during the night,” explained Bathija.
He also said cargo companies are complaining about road congestion between the airport and highway 403 during the morning rush hour.
“This cargo comes at 6 am or 5 am and then it gets sorted and when it comes out at 8 it’s really tight to the point where it’s becoming a constraint on investment to go from the airport to this exit and touch 407,” he said. “So we need some plan to address that sooner rather than later and sooner means like I’m talking about very soon, because this is going to be a part of the evaluation that companies do when they do their business case for investment [at the airport].”
Councillors agreed with Bathija that the province should widen the 403, and urged him to press Queen’s Park on the request.
Annual rent payments by Tradeport were forgiven for the first ten years of the lease but have been gradually increasing and last year for the first time exceeded a half million dollars, or about $320 per acre.