In this Age of Google sometimes new stories boil down to keywords, and this week brought a story with keywords eerily reminiscent of headlines from back in the day: "Allegheny County", "Airport", "500 million", "20 years".
Twenty years ago, Allegheny County spent 500 million on the Midfield Terminal, which was an "investment in the future". As another blogger has recently pointed out, not everybody liked it at first but the Commisioners worked it until they got the politics and the numbers aligned and the County went ahead and built it.
At the time it was considered brilliant, a down payment on a future so bright you'd have to wear shades. How did that Midfield investment work out, and - with the benefit of hindsight - was it an investment or a gamble? If we knew then what we know now, if we knew of the risk of the County's Authority being saddled with hundreds of millions in debt, if we knew that a corporation could fill out some forms and walk away from an obligation, would we still gamble that half-billion dollars of the public treasury?
That's a key distinction: are our elected officials investing or gambling with the public treasury?
Turning from that somber bit of reflection, let's consider this week's bold pronouncements. The Allegheny County Executive (ACE) announces a 500-million deal for fracking at the PIT airport. Wow, this is great, let's go!
He has certainly opened the discussion by reframing it. But let's look at the details. What is really assured is $50M up front, and possibly up to $22.5M per year for twenty years - if everything works as advertised, best-case scenario.
Let's set the Fitz-Frack issue aside, for just a moment, and talk about the Airport and what it means. Right now it's a white elephant, a dead horse that we're still paying for, and yet it's also in spite of all that a key economic asset for the region. (key word: region).
The economic model for future development of "the region" is Allegheny County developing along the Aerotropolis model. (See the CMU report, story about the Robt. Morris Conference, official County 2011 ACED report.)
To do the Aerotropolis thing, you've got to have: (1) an Airport, (2) a City, (3)a Corridor with highway and transit connections between them. The government entity that contains all of those components is Allegheny County, and the person nominally in charge/responsible for that is the ACE. Wow.
The City is an essential node, it has functions it must perform that the suburbs and the Corridor cannot, but the city is an essential and insufficient player; the City cannot drive the Aerotropolis, only the County can. That recognition makes the recent moves in the transit and airport authorities more significant, and the Fitz-Frack announcement much more compelling.
Half-Billion Bets on the 20-Year Come: Gambling vs Investments with the Public's Fortune
In framing the Fitz-Frack decision (now a foregone conclusion, if the citizenry sticks to the ACE's script) as a financial no-brainer rather than a risky option that puts the airport (the key to the Aerotropolis and regional economic development) at risk, the ACE is betting on the come.
Just as we've seen (now) with the Midfield Terminal, the win/lose on the Fitz-Frack bet won't be known for twenty years, long after these players have moved on to their ignominy. And as we learned with Midfield, giving a corporation what it wants now and taking a long-term payoff doesn't make sense in the context of bankruptcy law. (Remember USAir?)
Here's the two alpha-questions I'd like to ask, in response to the ACE's gotta-play-to-win big money no-brainer reframing job:
- Has any aviation official (not a board member or political appointee) said that fracking at the airport is a good idea that won't put the airport operation at risk?
- The County can't touch the airport frack money; federal law requires that any airport frack money be used for airport improvements. Has any federal budget official concurred with the Fitz-Frack plan to divert Frack-Funds into airport real estate development, as the ACE suggests?
If we had political discourse, or public discussion about public decisions rather than half-billion announcements from the ACE, it would be interesting to see these questions addressed:
- Is it worth risking the crown-jewel airport, which cost $500M in 1992, for $50M upfront and the promise of up to $22.5M a year, varying with market activity?
- Was it necessary to remove the Airport CEO, who had a distinct focus on the whole airplane and runway thing, before announcing the Fitz-Frack plan? Why?
- Given the County's experience with USAir, bankruptcy, and long-term finance, isn't the Fitz-Frack plan essentially "trusting an oil company"?
A photo of a recent fracking event in WV:
Let me re-present the Fitz-Frack plan from a less sanguine perspective.
- Let's go out to the airport, which is a key economic driver which we can't afford to damage or lose, and drill for flammable and explosive materials.
- Even though the airport's main asset is long pieces of straight, level, smooth concrete, let's pulverize the earth underneath the runways.
- Even though there's an active underground mine fire in the south-western portion of the airport property, let's punch a lot of holes through the rocks and move flammable gas through them, cause they're at different depths and that can't possibly go wrong because they line the holes with concrete, just like in the Gulf of Mexico. (See BC Times, story, link )
- Let's do a lot of industrial activity at the airport where there won't be any NIMBY neighbors, even though the prevailing wind puts most of Allegheny County's population downstream.
- Let's give the ACE a future-money stream that he can monetize now, so he can pursue his agenda and let others pay the bills in twenty years.
- Let the politicians and not the aviation-operational types make the decision about what to do at the airport.
- Nothing can go wrong. (See Centralia, PA)
Personally, I liked it most when gambling was illegal.
I liked it less when gambling was restricted to casinos.
I don't like at all when gambling is used as public policy.