After two years of negotiations, the Lehigh-Northampton Airport Authority thinks it has neared a deal to let a developer build an industrial park on 297 acres along Airport Road.
But first the Federal Aviation Administration needs to determine if the potential agreement with Majestic Realty passes muster.
The authority’s board of governors voted unanimously to send two potential contracts between the authority and Majestic to the FAA for review. The authority needs the bureaucratic blessing before it can enter into any development deal, because the land was originally purchased with FAA grant money.
“This is an important milestone, but there are a lot of steps ahead,” Darren Betters, the authority’s director of business development, told the board before it voted Tuesday morning.
The authority has been in talks with Majestic since December 2017 to develop farm fields from Schoenersville Road to north of Orchard Lane. The authority has hoped to lease the land to a developer, who would build office space, small industrial spaces and potentially some retail or restaurants on the site. The developer would then lease the buildings to tenants.
LNAA Executive Director Tom Stoudt initially hoped the negotiations would be pieced together by October 2018, but the project proved more challenging than both sides thought. The airport’s land was purchased with FAA grants, and the terms of any lease must comply with federal regulations. The resulting complexities over issues such as fair market value and nondiscrimination requirements bogged things down, Stoudt said.
“They [the regulations] are very onerous in some circumstances, but when you’re a federal partner like us, you don’t have an option,” he said.
Stoudt estimated it would take at least two months for the FAA to review the documents. Then both sides would need to incorporate any FAA-mandated changes before signing final contracts. After that, Majestic still would need to bring any construction plans to Hanover Township, Northampton County, for approval.
Absent major hitches, Stoudt estimated Majestic being able to break ground by the end of 2020. Ed Konjoyan, a senior vice president for Majestic, was not immediately available Tuesday for comment.
After the Sept. 11 terrorist attacks, the airport authority pursued the lease deal in an effort to diversify its revenue sources. In the years after the attacks, airline bankruptcies and mergers dramatically changed the industry and caused business at regional hubs like Lehigh Valley International Airport to plummet.
The downturn came as the airport lost a legal battle that cost it more than $25 million. The authority sold hundreds of acres along Willow Brook Road to The Rockefeller Group to settle its debts. Rockefeller has turned the land into a major warehouse corridor, including a massive FedEx Ground distribution center.
The Majestic deal could allow the authority to collect money long-term, but the scale was not immediately clear. Stoudt repeatedly declined Tuesday to provide estimates on how much the authority stands to earn from the deal if approved.
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