Heathrow's Owner Tries to Buy Milwaukee's Airport

Maybe something was lost in translation, but a Spanish company is voicing interest in leasing or buying Mitchell International Airport.

The airport, however, isn't for lease or for sale right now.

Milwaukee County officials have studied the option, but airport privatization nationwide is facing skepticism in Congress - precisely because virtually all of the companies interested in taking over U.S. airports are based overseas.

And the only U.S. airport privatization deal completed to date is already falling apart.

El Economista, a Spanish newspaper, reported last month that Grupo Ferrovial, a multinational development corporation, was looking at Mitchell.

"Although it is too early to say that it is bidding for it, the Spanish company already has sent the first signals of interest in Gen. Mitchell International Airport," the newspaper wrote. "Ferrovial figures among the companies that have been interested in the process (of privatizing the airport), according to a spokesman for the group."

When asked for comment, the company's communications department told the Journal Sentinel by e-mail, "Ferrovial analyzes all the interesting opportunities."

Ferrovial owns British-based BAA, the world's largest airport management company. Another Ferrovial subsidiary, Cintra, is a partner in the Spanish-Australian consortium that is leasing the Chicago Skyway and the Indiana Toll Road.

Milwaukee County supervisors raised the prospect of selling or leasing county-owned Mitchell last year, under a 10-year-old Federal Aviation Administration pilot program.

Their interest was twofold: They wanted to raise money to solve unrelated county fiscal problems; and they wanted to head off a business-led push to turn Mitchell over to a proposed regional airport authority.

At the time, Chicago had reaped $1.8 billion for leasing the Skyway, a toll bridge on the city's south side, and Mayor Richard Daley was moving forward with plans to lease Midway Airport as well.

In October, a Wisconsin Policy Research Institute study estimated a long-term lease of Mitchell could bring in anywhere from $122 million to $520 million over 50 years, most likely in the middle range of $234 million to $385 million.

Also last fall, a county study found that leasing could be an attractive option. But the county study warned it was uncertain whether a leasing deal would succeed and how much money it could raise.

In the process of compiling that study, county researchers talked to representatives of Macquarie Infrastructure Group, Cintra's Australian partner in leasing the Skyway and the Indiana Toll Road, said county auditor Jerome Heer, the study's leader.

Macquarie runs airports around the world, and the county staffers were seeking information about how airport privatization works, Heer said.

But county officials did not make any overtures to offer the airport for sale or lease, said Heer and George Torres, county director of transportation and public works.

And the future of airport privatization is now in question as Congress considers long-term aviation legislation. U.S. Rep. Jerry Costello (D-Ill.), chairman of the House Aviation Subcommittee, has reportedly raised concerns about foreign involvement in running U.S. airports.

Similar concerns last year scuttled an attempt by a United Arab Emirates company to manage several East Coast seaports.

But Rep. Tom Petri (R-Wis.), ranking Republican on the aviation panel, predicts that the privatization program will be renewed and possibly expanded.

Petri said foreign companies are the only ones with experience in airport management because airport privatization is more common overseas.

"Security is obviously a major concern," Petri said, but federal officials "would not approve an application from some foreign terrorist organization or gangster organization" to run an airport.

Up to five U.S. airports can be privatized under the FAA pilot program. Only Stewart International Airport, in New Windsor, N.Y., has completed the process, and that deal is ending seven years into a 99-year lease.

One hurdle in privatizing an airport is an FAA rule that all airport revenue must be spent on the airport.

Under the pilot program, that provision can be waived only with the consent of 65% of the airlines operating at an airport and of airlines that handle 65% of the airport's traffic.

Because National Express Corp., the British company that leased Stewart from the New York State Department of Transportation, never won that approval, it couldn't profit directly from airport operations. National Express is now pulling out and selling its lease to the Port Authority of New York and New Jersey, returning the airport to public control.

Midway Airport's leasing application remains under review by the FAA.

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