S.B. Airport: Losses to hit almost $1 million next year
10:00 PM PDT on Thursday, June 23, 2011
San Bernardino International Airport will spend more than it makes in its next fiscal year and that's even if it lands an airline that starts flying by November or December, bringing in passengers that buy food from concessions, pay to park or rent cars.
On Wednesday, commissioners approved the airport's next budget that forecasts it earning $6.1 million but spending $12.4 million starting July 1. Of those revenues, 39 percent is expected to come from airline service in the form of landing fees or passengers paying to park or eat. A $5.5 million grant from the Inland Valley Development Agency, a related group that has been overseeing the development of the former Norton Air Force Base, will shrink the airport's overall losses next year to $982,400.
For years, airport officials have attempted to persuade airlines to be the first to offer scheduled passenger service. The main terminal building is all but officially finished, the runway has been repaved and empty parking lots at the airport have landscaping and in some cases solar panels. The electric signs posted nearby indicate all the lots are "full."
Airport officials have long said that the airport would operate at a deficit and remain subsidized by the IVDA through at least 2015.
"We are birthing the baby," said Don Rogers, director of the IVDA and San Bernardino International Airport Authority.
The IVDA has paid $101.5 million, so far, to finish building the airport terminal including improvements to the tarmac, parking and equipment inside. The Million Air terminal, which opened in August 2010, cost $20 million, while the U.S. Customs building under construction has cost about $21 million so far. Those figures don't account for the additional amount of grant funding the IVDA and airport has received from the FAA and Department of Commerce's Economic Development Agency.
The IVDA collects its revenue from tax increment from three surrounding cities and San Bernardino County. The agency expects to earn $28.3 million next year and spend $27.3 million, not counting $94.2 million to be spent on capital projects and funding to support the airport.
Airline or not, the airport is managed by San Bernardino Airport Management LLC, also known as SBAM, which is poised to get $250,000 next year on top of $2.6 million to reimburse SBAM for employee costs and $257,500 to pay for an airport manager and overhead.
SBAM is guaranteed a percentage of revenue earned at the airport, but in the absence of revenue, it gets paid at least $250,000, officials said Wednesday.
Scot Spencer, the landlord of a majority of hangar space at the base that has recently housed test Boeing 747-8s, and developer of the airport's main terminal, U.S. Customs building and Million Air general aviation complex, is also the manager of SBAM. An employee with Virginia-based airport management firm AvPorts is SBAM's chief operating officer.
A year ago, airport officials said they were close to luring an airline and additional incentives were offered. This year, the airport has added $550,000 to its budget to help an airline market its San Bernardino service and a $250,000 finder's fee to be given to SBAM if that entity persuades an airline to sign up for regular service.
IVDA and SBIAA commissioners also approved consulting agreements worth up to $668,702.42 for 13 individuals and businesses, including the airport's aviation director Bill Ingraham and legal counsel Lewis Brisbois Bisgaard & Smith LLP who can be paid up to $200,000 each, according to their contracts.
Reach Kimberly Pierceall at 951-368-9552 or kpierceall@PE.com
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