Supervisor suggests possible JWA sale

June Casagrande

Just as city officials declared defeat in their dream of taking over

John Wayne Airport, County Supervisor Charles Smith has asked staff

to examine the feasibility of selling the airport to help pay down

county debt.

City leaders have been talking with Newport’s own county

representatives, Jim Silva and Tom Wilson, in hopes of possibly

taking control of the airport. The supervisors’ -- especially

Wilson’s -- resistance to the idea prompted city officials basically

to abandon hope of taking over the airport and instead look for other

ways to play a role in airport operations.

But they weren’t expecting the bombshell from Smith, who

represents Santa Ana, Westminster and Garden Grove and who thus has

not been part of the talks with Newport Beach.

“This wasn’t specifically pointed toward Newport Beach, but

Newport Beach did trigger it,” Smith said. “What I asked is that

staff to tell us what the advantages and disadvantages were and

explore the possibility of putting John Wayne Airport on the market

for sale to Newport Beach, [the Orange County Transportation

Authority] or whatever agency and for the funds generated to go

toward debt defeasance for the county.”

But the legal hurdles are huge. Under federal law, revenues

collected by airports can’t go to county or city general funds.

Strict rules say they can only be used for specific airport- and

aviation-related expenditures. Though that’s exactly the legal area

that county staff will explore, Newport Beach City Manager Homer

Bludau said that preliminary research by the city suggests the law

will serve as a dead-end.

“Based on our studies, we think that you can’t sell an airport

then put that money in the general fund,” Bludau said.

Still, the airport’s rock-solid finances are attractive to a

formerly bankrupt county still struggling to pay off its debts. In

2002, the airport had an operating income of about $17 million on

total revenue of $76 million. Over the years, such margins have left

the airport with $39 million in the bank -- money that can only be

used for the airport itself.

“Right now the county runs the airport but we get no money from

the airport for our general fund by law,” Smith said. “At the same

time, the county is spending so much money in interest from our in

from our debt defeasance bonds. I’m trying to think out of the box

for potential ways to get out of this quandary.”

The city has been looking for ways to increase its role in John

Wayne Airport management in order to prevent airport expansion that

could occur after an expansion agreement expires in 2015. The eye on

John Wayne is just part of a multi-tiered approach to what the city

has labeled “sphere issues” as it has opened up talks with the county

in the last few months.

The city also hoped to take over operation of the Sheriff’s Harbor

Patrol, but a frosty reception to the idea has left city leaders sure

it’s a lost cause, Mayor Tod Ridgeway said. A Sphere Issue Committee

is also exploring whether the city can take over the Santa Ana

Heights Redevelopment Agency and play a larger role in tidelands and

operation of the Coyote Canyon Landfill.

Ridgeway and Bludau both said that talks on these other sphere

issues are encouraging.

“It’s too early to tell where our talks will lead but I think some

good things will come out of our conversations,” Bludau said.

* JUNE CASAGRANDE covers Newport Beach and John Wayne Airport. She

may be reached at (949) 574-4232 or by e-mail at

june.casagrande@latimes.com.