News

June 26, 2008

Bill lays out requirements for cargo airport

State Sens. Musto, Baker want conditions met before $502M facility gets funds.

By Jerry Lynott jlynott@timesleader.com
Business Writer
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Two weeks after a state committee recommended conditions be set before lawmakers fund the construction of an estimated $502 million cargo airport near Hazleton, two local legislators did just that Wednesday.

State Sens. Raphael Musto, D-Pittston Township, and Lisa Baker, R-Lehman Township, introduced a bill that would set standards for the developer, Gladstone Partners LP, which proposed building the airport on 1,000 acres in Luzerne and Schuylkill counties.

The project is being promoted as an economic boon for the region that would create nearly 5,000 jobs and provide an alternative to the congested Northeast Region transportation corridor.

Among other things, Senate Bill 1509, or the “Cargo Airport Funding Act,” would require approval of the project by the Pennsylvania Department of Transportation, a commitment from one or more integrated air cargo carriers that will serve as an anchor tenant and certification that the developer has invested the greater of $250 million in private funds or half of the total cost.

Musto said he and Baker want to ensure the project is beneficial to taxpayers before any state money is released.

“We’ve got some pretty good safeguards,” he said.

“With the developer shopping for a huge amount of public money, and a report now issued indicating a fairly high level of risk, the need for clear and effective taxpayer protections is clear. And they must be in place before the first state dollar is pledged,” Baker said in a prepared statement.

Last year the senators introduced the resolution that called for the state Legislative Budget and Finance Committee to conduct an economic impact study on the proposed project that was seeking $250 million in state funds for construction.

The study, performed by a trio of consultants, was released June 11 and concluded standards should be met prior to the state committing any funds to the project.

The study raised concerns about the lack of interest shown by either UPS, FedEx or DHL, known in the industry as integrated carriers that operate both aircraft and trucking fleets.

“No successful all-cargo airport has been developed in the (United States) absent an integrated carrier,” the study said.

In response to the study, Gladstone agreed with the inclusion of an anchor tenant and said it has had ongoing discussions with several major companies it declined to identify.

Gladstone principal attorney Gregory Zappala of Pittsburgh could not be reached for comment on the Senate bill, said Catherine Shafer, a spokeswoman for the developer.

The bill further requires the airport have a designated level of activity, the securing of all state and local permits and agreements with each county, municipality and school district where the project is located to provide financial offsets to pay for increased local costs.

“This legislation puts taxpayer protection in front of a developer’s escape route, ensuring that the risks and rewards are clear and shared,” Musto said in a prepared statement. “This legislation protects working families from being stuck with the bill.”

Jerry Lynott, a Times Leader staff writer, can be contacted at 570 829-7237.

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