June 15, 2002
Will NFTA let Niagara Falls fly?
by Bruce Jackson
Will NFTA let Niagara Falls fly?
by Bruce Jackson
The Fourth longest runway in New York State
In the three decades since the Niagara Frontier Transportation Authority (NFTA) took it over, the Niagara Falls International Airport (NFIA) has fallen into disrepair and marginal use.
Fifteen or twenty years ago, NFIA handled a fair amount of charter traffic and commercially scheduled flights. Nowadays, most of the traffic is small planes and military aircraft from the Niagara Falls Air Reserve Station that shares use of its runways. Of the 79 aircraft based at the field, 47 are single engine, 17 are military, and only one is a jet. The airport averages a mere 58 takeoffs and landings a day, less than one percent of them commercial. You can spend a lot of time out there and the only things you'll see moving in the sky are gulls, starlings and blackbirds.
"The airport is critical to the region's economic health," says William Feder, who served on the Niagara county Legislature for 26 years. "The lack of development at the airport is such a tragedy. This is abuse of power at its boldest. It's just ignorance-based arrogance. All of the studies we had said you could really do something if you went ahead. But without initiative, spirited initiative, where are you?"
NFIA has the fourth-longest runway in New York State – 9125 feet long and 150 feet wide, a thousand feet longer than the longest runway at Buffalo-Niagara International Airport in Cheektowaga. The Niagara Falls airport, unlike Buffalo, can handle the biggest jets now operating, and it could, if properly managed, provide cargo and maintenance services the airport in Buffalo has no interest in providing.
Many urban areas have two or more airports serving their complex and varied needs. Sometimes the multiple airports are necessary because of the huge amount of traffic. Sometimes there is a split in function, with one airport handling international traffic, the other domestic; or one handling ordinary commercial flights, the other handling charter and cargo flights; or one handling the established older airlines (which have control of the limited number of gates), the other handling newer, lower-fare airlines; or one handling commercial flights, the other handling corporate and personal private flights. Houston has Houston International and Hobby; Orlando has Sanford and Orlando; New York City has JFK, LaGuardia, and Newark; San Francisco has San Francisco International and Oakland; Los Angeles has LAX, Burbank, and even smaller airports like the one just outside downtown Santa Monica.
People in the industry say these pairs or groups are collaborating rather than competing with another, that the multiple options benefit not only the various airports themselves, but also the communities they serve. So how come we have a thriving airport in Buffalo and an airport on life-support in Niagara Falls?
NFTA, NFIA and Cintra
The Niagara Frontier Transportation Authority, which acquired the Niagara Falls airport from the City of Niagara Falls in late 1969 for $2 million, also operates the Buffalo airport, so it is fully aware of what services it can and cannot provide, and what strains are developing as a result of increased passenger and freight traffic.
Two years ago, NFTA announced a 99-year-lease deal with Cintra, a Spanish construction firm: Cintra would take over full control of NFIA and do something with it. Exactly what Cintra would do remained vague. The deal had no termination clause, no penalty clause for lack of performance, no incentive for excellent performance; it required no specific Cintra investments in the airport for 13 years; and it set an absurdly high floor before Cintra would have to start paying anyone for its use of the facility – more than ten times the passenger traffic the airport had ever seen previously. The terms of the lease were so diaphanous that Cintra could have elected to do nothing with the airport other than use it as a staging area for the heavy construction equipment it was shipping to North America as part of its Canadian road-building operations, and nothing could have been done to force them to make the airport more useful to anyone else until the expiration of the 99-year lease.
The entire process had been pushed along with a velocity rare in major public works ventures. NFTA never explained the reasons for its rush to judgment. The Authority issued a request for proposals for a private takeover of the airport on July 1, 1999; the RFP had a 90-day deadline. The FAA accepted NFTA's request to permit privatization of the airport in early August. Only two organizations managed to get proposals in by the September 30, 1999, deadline: Cintra and the Niagara County Industrial Development Agency. On January 10, 2000, Governor Pataki announced the NFTA-Cintra pact.
Senator Charles Schumer later asked the NFTA to hold public meetings to explain the selection process and the specific terms of the contract; he said the airport was important to the economy of the region, so the people of the region had a right to know what NFTA was really doing and why it was doing it. So far as I've been able to determine, that public meeting never took place.
LaFalce takes on the NFTA
The NFTA-Cintra agreement was fiercely opposed by Rep. John LaFalce and disliked by nearly everybody, except the NFTA and New York state senator George D. Maziarz (R-Niagara). LaFalce disliked the terms of the deal and was angered by the secrecy surrounding NFTA's negotiations with Cintra. He questioned NFTA's pushing for finalizing the deal when major questions were still unanswered.
In a statement released August 18, 2000, LaFalce said, "When the NFTA publicly announced a few months ago that there would be a 99-year 'lease,' I was stunned, and immediately called [NFTA board chairman Luiz] Kahl and [NFTA Executive Director Lawrence] Meckler. I then learned that, contrary to my admonitions, there were no real performance standards, and that possibly – indeed, probably – there would be no rent for the entirety of the 99-year lease. Instead, there would be a transfer of ownership to a publicly-traded foreign conglomerate without any ability for local officials to ensure that the public's interests are protected."
The NFTA stonewalled LaFalce and everyone else who criticized the deal and the way the deal was reached, much as the Buffalo and Fort Erie Public Bridge Authority (of which Kahl was also a member) had been doing in its attempt to force its anachronistic and expensive steel twin span design on Buffalo.
LaFalce repeated and expanded on his August 18 concerns in a detailed May 3, 2001 letter to the chief counsel of the FAA. "This proposed 99-year lease," he wrote .essentially transfers ownership of the Airport to a foreign conglomerate, without any ability for local authorities to ensure that the public interest is protected throughout any portion of the 99-year lease. The lease has no requirement that Cintra meet specific performance standards, and cannot be terminated as long as the Airport is operated in accordance with FAA regulations, regardless of passengers, cargo traffic, or other economic development.LaFalce then critiqued just about everything known about the agreement, even the existence of NFTA's partner in the deal, which he described as a "recently-created Delaware shell corporation," one that "has no assets, only a letter from the parent firm."
More than anything else, that fact, compounded by the lack of reasonable rental payments and inadequate incentives for development of the Airport, has raised serious concerns in the Buffalo-Niagara community about the proposed privatization of NFIA. In fact, citizens in Niagara Falls have collected over 20,000 signatures on a petition opposing the lease.
"We are not going to have another chance to decide the future of the Airport," he wrote, "and I believe we should not blindly turn it over to a recently created shell corporation just because the public entity charged with overseeing the NFIA has failed."
He ended his letter to the FAA saying he could not support the lease agreement, and asking the FAA to force NFTA to include performance standards, a termination clause, make the parent company responsible for airport improvements and operating costs, require more realistic rental payments, and, perhaps most important and almost surely most odious to the NFTA, "require the other provisions demanded unanimously and bipartisanly by the Niagara County Legislature on May 1, 2001."
The NFTA-Cintra deal, the details of which were still murky, collapsed of its own weight last December, when the Federal Aviation Administration said the airport's operating losses under the deal would be so great it couldn't possibly generate enough new investment to justify privatization under federal law. For a variety of reasons, Cintra seemed happy to get out of the deal, but NFTA seems to have lobbied strenuously against the FAA decision. The money they spent on that effort was squandered: the deal was as dead.
We'll never know if the opposition by LaFalce and others would have been enough to get FAA to say no to the deal. September 11 was probably a factor: after the terrorists' airborne attack, Washington couldn't have been comfortable turning over control of an airport that is home to two air reserve units to a foreign corporation.
Niagara County crash lands
LaFalce had argued that NFTA should break off negotiations with Cintra and look instead for an airport operator who might actually contribute something to the region's economy. He also said that "any deal for the airport should retain local control, include periodic reviews of the manager's performance and allow for termination if performance standards aren't met." (Andrew Z. Galarneau, Buffalo News, 18 December 2001).
Several months ago, the Niagara Airport Development Corporation, a subcorporation of the Niagara County Industrial Development Agency, submitted a concept plan to the NFTA that would, said John R. Simon the Agency's executive director, "take this underutilized airport that is currently owned by the NFTA and change it into a thriving airport in three specific categories or areas of use. Those three areas are air charter, air cargo, and aircraft maintenance facility." A key condition, he says, was that the NFTA transfer ownership of the airport to the NCIDA.
The airport has a terminal with several gates and customs and immigration facilities. The terminal is modern-looking, but it does not have jetways, which it would need if it were to be a serious site for charter flights from abroad. The hangar and maintenance facilities are sorely in need of rehabilitation and expansion.
The Niagara County IDA is a nonprofit public benefit corporation, which means it is eligible for federal grants that could cover as much as 90% of the costs of airport improvements. NFTA is a public benefit corporation too, and it has used such funds for the development of the new Buffalo airport. Those federal airport improvement grants are competitive. Some NFTA critics say one reason NFTA let the Niagara Falls airport fall into disuse and opted for the no-gain Cintra deal was that it didn’t want to be in competition with itself for those federal funds. The Cintra deal made the airport Cintra’s problem for the next century, and Cintra, as a private operator, wouldn’t have been eligible for those federal airport development grants.
Niagara County was asking NFTA to turn the airport over to them, make them the owners of it. The NFTA’s failed Cintra deal would have handed the airport to a Spanish construction company for a century in return for unlikely financial returns and uncontrollable uses. The NCIDA proposal would have kept control of the airport at home, had protections and escapes if the operator with which it contracted didn't deliver, and was designed to complement the expanding activities of the Buffalo airport.
But then, for reasons I've never been able to determine, the NCIDA proposal collapsed.
What NFTA said
I asked Lawrence Meckler, executive director of the NFTA, what's going on with the Niagara Falls International Airport now:
There's a whole lot going on in terms of the NFTA trying to put an action plan together to see if we could attract some business out at Niagara Falls Airport, with the Cintra privatization effort no longer feasible. We're working on a number of different tacks to be able to attract some aviation concern to the airport.
But there's nothing currently on the table?
There's nothing currently on the table. One of the things we're looking at is trying to attract an air cargo operator and we've been working on putting together an RFP [request for proposals], but that's not out on the street yet in terms of a document.
The Niagara Falls IDA told me when I last talked to them, which was a while back, that they were trying to get NFTA to turn the airport over to people in Niagara Falls. Is there any movement on that or is that dead?
What we advised the IDA is, if they had any specific proposal they could present it to us. I think we last met a month ago and they were looking to put a proposal in late summer. But we don't really know exactly what they would have in mind.
Is that a possibility, that NFTA would let go of the airport?
The NFTA as a public authority, under FAA rules and regulations, can only sell the airport to another public entity. For example, in the Cintra deal, one of the reasons it was set up as a lease arrangement is that we weren't in a position to sell the property. Any proposal that would be put in would have to have the long-term backing of a public body. So, for example, if the IDA put a proposal in where they wanted to actually acquire the airport, they would need, say, Niagara County to back that up.
To be the actual agency to whom it was turned over?
Not necessarily. Just some commitment long-term that they would pick up the operating expenses and the capital expenses. From the discussions we've had, it doesn't appear as if Niagara County legislature is enamored of that possibility. But we welcome any proposal and we'd look at anything that came by to create some activity out there.
Is NFIA a problem or a symptom?
NFTA critics say that the agency has neither the political imagination nor will to develop or run the two airports it owns, so it has focused on Buffalo to the detriment of Niagara Falls. Some critics see NFTA's problems as more fundamental. A senior Erie County official, for example, said:The NFTA is the single greatest impediment to development in the Buffalo area. They are sitting on valuable assets as speculators, allowing demand tracts to sit undeveloped and unattractive, while the city suffers. Consider the NFTA's ownership of the Small Boat Harbor. Since when did recreational boating qualify as "transportation?" The Small Boat Harbor was taken from the city Parks Department in the early 70's to allow the NFTA to acquire assets to justify its status as a patronage haven for Republicans in an area that was dominated by Crangle-led Democrats. The Small Boat Harbor is a park, a park with boats. Why we need a "transportation authority" which manages a rapid transit-bus system and two airports to manage a park is beyond comprehension, unless – of course – you consider that the Small Boat Harbor makes money. Not many things managed by the NFTA do.Whether or not NFTA is in fact aggressively pursuing operators for the airport, right now nothing is on the horizon. The last deal NFTA cut for the airport was with Cintra, a record that doesn't occasion optimism. The Niagara County Industrial Development Agency might come up with a viable operating plan but if Meckler is right about the lack of enthusiasm among Niagara county politicians, there's only a slim chance of any radical change in the operation of the facility.
Political fallout after September 11 may have contributed to the collapse of the Cintra deal, but it definitely is helping keep Niagara Falls International Airport up and running. The reserve units operating there have been busy these past months, and will in all likelihood continue being busy for some time to come. That means the federal government will continue keeping the runways and other basic airport facilities in good shape. The only thing the airport lacks is a reason for existing when there's no war going on.
A facsimile of Rep. John LaFalce's entire letter to the FAA is on line in Acrobat PDF format. http://www.house.gov/lafalce/stmt_010503_nfta.pdf. It's a large document, almost 2.4 meg, so if you don't have a high-speed line it will take a while to download. It's the best statement of what was wrong with the Cintra deal I've seen, so it's well worth a look.
For a good history of the airport, see "Niagara Falls International Airport: Overview presented by the Institute for Local Governance and Regional Growth, March 11, 1999"
http://regional-institute.buffalo.edu/resources/online_p&r/nfia/nfia_overview.txt