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@NCCapitol

Bill to take airport from Charlotte gets tentative nod

Posted March 12, 2013

— Charlotte would cede control of the Charlotte-Douglas International Airport to a newly formed regional authority under a bill the state Senate gave tentative approval to Tuesday.

The 33-16 party-line vote, with Republicans backing the measure, will need to be confirmed by a second vote on Wednesday before the measure goes to the House. 

"Charlotte-Douglas International Airport, by any measure, is not broken," said Sen. Malcolm Graham, D-Mecklenburg, questioning the wisdom of the bill. "Why are we about to destabilize the region?"

Lawmakers from Charlotte are also divided on the issue, which is controversial locally. Gov. Pat McCrory, a former Charlotte mayor, said there should be more study of the shift before lawmakers move forward.

Making his case for the bill, Sen. Bob Rucho, R-Mecklenburg, acknowledged that the airport, until now, has been well run and has provided an economic boon to the region.

"If we lose that, we lose a huge economic driver," Rucho said. The bill, he argued, would give areas around the city a stake in ensuring the airport's success. 

Bonds are a concern

One major concern surrounding the move has been how investors in bonds issued to fund airport improvements will react. The legislation would transfer responsibility for those bonds to the new authority. 

State Treasurer Janet Cowell has said she is concerned about the potential credit impacts, for both the city and the state, related to the transfer of those bonds. But her office has not yet issued a report on the potential consequences.

Rucho and Graham presented colleagues with dueling memos on the matter Tuesday.

Rucho cited a March 11 letter from Donald Cunningham, a lawyer with Jones Walker LLP who provided an opinion to Alliance for a Better Charlotte.

"It is our view that the creation of the authority as the successor agency of the city with respect to the airport pursuant to Senate Bill 81 will not impair the contractual obligations owed to bondholders of the Airport Revenue Bonds and therefore should not require the consent of such bondholders," Cunnigham wrote. 

But Graham dismissed the letter, saying that it was not a legal opinion and contained no legal citations. He circulated at Feb. 26 letter from Greg Gaskins, chief financial officer of Charlotte.

"The city will be in default under the bond documents if such an assignment or transfer takes place without bondholder consent or without redeeming all the bonds that can currently be redeemed," Gaskins wrote. 

Graham asked Senate Rules Chairman Tom Apodaca why the chamber wasn't waiting for Cowell's opinion. The State Treasurer's Office oversees the bond debt of all of North Carolina's local governments. 

Apodaca, R-Henderson, replied that Cowell's opinion wasn't ready yet.

"We could argue one counsel's better than the other," Apodaca said. "The House can take it up if something comes back differently." 

Amendments fail to land

Graham offered three different amendments, all of which failed along mostly party-line votes. 

His first amendment would have delayed the creation of an authority until after a study paid for by the city of Charlotte. A second would have given the city, Mecklenburg County and local business groups more appointments to the authority board.

His last amendment would have curbed the ability of commissioners from outside Mecklenburg County to deal with matters of eminent domain. That last amendment reflected a broader anxiety that people from a wide area would be making decisions about an airport located in Charlotte.

"One of the things that concerns me is that folks from the region will now establish flight patterns that go over my house and my neighbors' houses," said Sen. Joel Ford, D-Mecklenburg.

Other Senators pushed back, pointing out that airports like Raleigh and Greensboro are run by regional boards as well.

Speaking to the eminent domain issue, Sen. Peter Brunstetter, R-Forsyth, said, "This is absolutely nothing new."

After an hour and a half of debate, few minds seemed change.

Sen. Martin Nesbitt, D-Buncombe, tied the Charlotte airport issue to other pending actions lawmakers are considering. He pointed to a move would take Asheville's water system and put it in the hands of a regional authority.

"Surely, we are not going to run the state of North Carolina this way, where we're all under threat of our neighbor deciding he likes what we've got and is coming to take it because he's a Democrat and you're a Republican," Nesbitt said.

The measure passed Tuesday, but because it affects public borrowing and fundraising, the Senate must vote on two separate days before it can move to the House, where it's fate is unclear.

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  • unc70 Mar 12, 2013

    Can't wait for a legal opinion on the status of the bonds.

    To chants of Vote, Vote. Like fracking and so many other things.