A city councilor is calling on City Manager Michael V. O'Brien to initiate discussions with investment banks and private equity firms on the possible sale of Worcester Regional Airport.
Councilor-at-Large Dennis L. Irish said last night that his order, which will be taken up by the City Council tonight, would be in addition to discussions Mr. O'Brien is having with the Massachusetts Port Authority about the agency taking over the airport from the city.
He said it would benefit the city to have more than one entity involved in discussions about the airport.
"Currently, we are only engaged with Massport about the airport's future and that may not necessarily get us the best deal possible for this valuable asset," Mr. Irish said.
The councilor said he would like to see the city manager meet with investment bankers to see how the city can pitch the airport to groups that deal with infrastructure funds.
He said infrastructure funds invest in public transportation assets, such as toll roads, railroads and airports. Such funds are managed by specialist fund managers, who make the investment decisions on behalf of the fund, and generally seek diversification across multiple assets, industries and geographic regions.
Investment opportunities for such funds traditionally arise from government privatization opportunities, such as what the city is pursuing with the airport.
"The manager should continue his discussions with Massport, but it might be in the city's best interests to get another party involved in the discussions as well," Mr. Irish said.
As part of his fiscal 2008 budget proposal, Mr. O'Brien has talked about turning over Worcester Regional Airport's assets to Massport. By doing that, the manager hopes to rid the city of its $1.85 million annual budget commitment to the airport.
Mr. O'Brien said he is still in negotiations with Massport about the airport takeover, and all signs are pointing to an agreement in which the agency would lease the facility from the city for a nominal fee.
"My decision to divest of this city asset is no different than a Fortune 500 company which periodically evaluates their business models and concludes that a certain business segment no longer fits into its strategic mission," Mr. O'Brien said. "Worcester should not be operating an airport, but we should and must benefit from the long-term economic potential of having one within our city limits.
"I will negotiate hard, and in good faith, along with my bargaining team for a fair financial package for this city," the manager added. "This will by no means be a fire sale, for (the airport) is far too valuable an asset. I will also not divest this asset at the expense of the quality of life in this city or its neighborhoods."
While the city owns the airport, Massport has run the facility since 2000 under operating agreements with the city. The current agreement expires this year. Currently, Massport picks up the tab for 67 percent of the airport's operating deficit, while the city covers the remaining 33 percent.
In a related item, Mr. Irish is also calling on the city manager for a report concerning the possible sale of the Worcester Memorial Auditorium.
The 4,000-seat auditorium, which opened in 1933, ceased being a multipurpose, public-assembly facility and entertainment venue nearly 10 years ago when part of the basement of the building was renovated as the new home of Worcester Juvenile Court. But the court will be moving out of the auditorium when the $180 million Regional Justice Center now under construction opens.
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The Massachusetts Port Authority yesterday agreed to extend its financial support of Worcester Regional Airport for six months. Massport's board, meeting in Boston, approved an extension of...
It is therefore a given that the next operating agreement with Massport should lead to the authority taking title to the 1,300- acre facility.
Little is publicly known about the status of the talks, including whether an outright sale of the property to the state agency is in the offing.
A REGIONAL INITIATIVE Massport seeks to turn around Worcester Airport while helping meet future New England demand By John F. Infanger, Editorial Director July 2000...