County executives seek change at LVIA

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Dec. 14--Passenger travel is down at the Lehigh Valley International Airport and the large commercial planes that people often associate with big-time airports have in recent years given way to small regional jets and even propeller planes.

LVIA has not turned into the major hub that business leaders envisioned and, for the first time, the Lehigh Valley's two county executives are engaging in a power struggle with airport officials to change policies.

Adding urgency to the brewing battle is a $25 million court ruling against the airport. LVIA's taking of a developer's land has been winding though the courts for 13 years. Now, after spending $2 million on legal fees, the airport is out of appeals, and has no money to pay the award.

Airport Executive Director George F. Doughty -- with support from a majority of his 19-member authority board -- says not only is the airport's transition to smaller planes following a national trend, but it is also holding its own against a challenging economy.

And while the court loss is troubling, it was unavoidable, he contends.

Yet, even if Doughty is right, it's about to get a lot more difficult for him to convince his Lehigh-Northampton Airport Authority Board of Governors. Four of his allies up for reappointment will be gone by month's end as Lehigh County Executive Don Cunningham and Northampton County Executive John Stoffa look toward change.

"An airport is a critical element in economic development and our local economy, and ours is not cutting it," Cunningham said. "It's not as competitive as it should be. It's time we get more involved."

Doughty acknowledged pressure from the county executives -- whose only control of the airport is through the members they appoint to the authority -- but he chose a different word than "involved."

"I think the word we're looking for is meddle," Doughty said. "We're not picking up trash or running a police department. An airport is a highly technical operation that runs best without political interference. We know what we're doing, whether they realize it or not."

Four board members, including Chairman Glenn Walbert and Vice Chairwoman Linda Rosenfeld, will be replaced with people hand-picked by Cunningham and Stoffa.

When they arrive, they'll be asking Doughty why 250,000 fewer passengers will pass through the gates this year than five years ago, why the number of large planes taking off from the the airport is less than a third of what it was a decade ago, and how the authority board allowed a $10.4 million court-ordered land purchase to turn into a $25 million bill it can't afford.

Unmet expectations

Lehigh Valley business and political leaders have for years predicted that LVIA's location between New Jersey and Philadelphia would help it become the kind of bustling airport that would help attract Fortune 500 companies to the Valley.

That appeared to be happening when the airport went over 1 million passengers for the first time in 2000. But this year, fewer than 750,000 passengers will fly out of LVIA.

Perhaps more troubling to local leaders is the type of planes they're boarding. What used to be a full schedule of large commercial jets is now a parade of small regional jets and propeller planes -- called air taxis or commuter planes by the Federal Aviation Administration -- with fewer than 60 seats.

In 1997, for every LVIA passenger flying a commuter plane, more than four were boarding a large airliner such as a 727 or 737, according to Federal Aviation Administration records.

In 2008, three times as many passengers flew on small commuter planes than large airliners out of LVIA.

"We're in perfect position to be a reliever airport for overcrowded airports in Philadelphia and Newark -- and yet we're not," said David Haines, a Delta Airlines pilot appointed to the board this year. "This airport administration hasn't put a focus on commercial aviation in years. That's got to change."

Doughty says that's simply not true. He agrees LVIA can one day be a major player in regional aviation, but not in the midst of a recession that has caused double-digit decline in passenger travel nationwide.

He said that while LVIA's direct routes are limited, the airport has attracted two major carriers -- AirTran and Allegiant Air -- in the past two years and American Airlines will start flying from LVIA in June. It now has eight airlines flying to 13 destinations -- its most ever, he said.

And while it's true that LVIA now features smaller planes with fewer than 60 seats, that's a nationwide trend that started several years ago when fuel prices forced airlines to reduce seats and move less crowded routes into smaller planes to save fuel.

"Smaller planes are not a reflection of anything we've done or that LVIA is a small-time airport," Walbert said. "It's a reflection of business decisions by the airlines. What's going on here is short-sighted thinking by people who don't know the facts and don't want to know the facts."

Stoffa said he knows all he needs to know.

"All I know is that every time a family member or friend comes into town, I have to drive to the Philadelphia airport to pick them up," Stoffa said. "If the airport is running so well, why do so many people in the Lehigh Valley have to drive to Philadelphia or Newark?"

Costly litigation

If disappointment that LVIA hasn't met their expectations got Stoffa and Cunningham to start paying attention to the airport, 13 years of failed -- and costly -- litigation has prompted them to act.

In the early 1990s, the airport publicized a master plan that called for airport expansion, including a new runway, into a parcel that stretches from Willow Brook Road to just across Weaversville Road, spanning parts of Allen and East Allen townships in Northampton County and Hanover Township in Lehigh County.

Land mortgage holder Peter Fuller of Catasauqua and Flemington, N.J., developers WBF Associates, sued in 1996, claiming the airport plan amounted to an 'inverse condemnation' of the property, rendering it undevelopable and killing a planned 632-acre, 1,500-home and golf course development called Windwillow.

In 1998, a Lehigh County judge ruled against the airport and ordered it to pay for the land, with interest and damages. For the past 11 years, the airport authority has repeatedly challenged both the ruling and the amount it owes, twice taking it to the Pennsylvania Supreme Court.

But it has lost at every level, so now, property deemed to be worth $10.4 million has taken on interest and penalty costs that have run the bill to $25.5 million. In the process, the airport has spent $1.5 million on its own legal fees -- and because it lost the case -- is also on the hook for $437,000 in fees and costs for Allentown attorney Kevin Fogerty, who represents Fuller and WBF.

Doughty contends the airport would be paying just as much interest had it taken out a loan or sold bonds to pay the debt.

In October, the Supreme Court again denied an appeal by the airport. The ruling and amount are no longer in dispute, but the airport has taken the case back to Lehigh County Court, where it will argue that it does not have the money to pay.

"If I ran the county like this, there would be outrage," Cunningham said. "I don't understand how they could have allowed this to happen."

Doughty said the airport had no choice.

"We had to keep appealing because we never had a check to write and [the developers] refused to allow us to pay the judgment over time," Doughty said. "It may sound hard to believe, but this was out of our control."

Doughty added that the court award cannot legally affect airport business, including the nearly $15 million project to renovate the terminal over the next two years.

The two sides were back in Lehigh County Court on Friday, making more motions in advance of an April 19 hearing at which the court will be asked to determine how the airport will pay the bill.

The FAA -- which helps fund all airport capital projects, including expansion -- will help pay at least some of the judgment, although it's unclear how much. It's already paid $3.1 million, the original value set on the land by LVIA consultants.

In the past two months, the airport authority has approved another $139,000 for expert witnesses and authorized to pay its Washington, D.C., law firm, Hogan and Hartson, $300 an hour to continue litigation.

In the meantime, the debt increases by $2,694 per day. By April 19, another $342,238 in interest and penalties will be added.

End of Doughty's tenure?

When Doughty arrived from Denver International Airport, LVIA officials felt lucky to get him and Denver officials expressed regret in losing their aviation director to the Lehigh Valley.

That was 17 years ago, and while many board members say he's been masterful in running the Valley's airport through two recessions and a fuel crisis the past eight years, Doughty no longer has the confidence of the people who appoint four new board members each year.

The three-year contract paying him $148,000 a year expires at the end of 2011, and if Stoffa had a vote, someone else would soon be worrying about how the airport will increase traffic and pay its debt.

"He's been here a long time, but sometimes, it's just time for a change," Stoffa said. "Sometimes an operation benefits from new leadership with a fresh set of eyes."

Doughty said he won't lose focus over that thought.

"I can't be concerned with contract renewals that are two years away," Doughty said. "I have an airport to run."

matthew.assad@mcall.com

610-820-6691

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