St. Clair County Airport Still Needs Millions of Tax Dollars to Keep It Going Each Year

Nov. 3—Boeing's recent announcement that it's building a drone factory at MidAmerica St. Louis Airport in Mascoutah was good news for officials who have fought criticism for two decades over the cost of building the airport and the challenges of making it solvent.

The factory will bring about 300 jobs to the region, they point out, and it shows the defense contractor's long-term commitment. But it won't affect the airport's bottom line — at least not much — based on St. Clair County's two most recent audits.

The county still is spending more than $6.5 million a year to keep MidAmerica open for use by Scott Air Force Base and one passenger airline, Allegiant Air. Boeing's annual land-lease payment for the new factory will be $450,000.

The county-owned airport has been operating at a deficit since the terminal opened in 1998, despite early predictions that it would be turning a profit after five years. Related debt has risen to nearly $90 million, compared to the county's roughly $30 million share of initial construction costs.

Supporters argue that the airport's existence has kept Scott Air Force Base off the U.S. Department of Defense's list of base closures, a key factor for economic stability in the region. Opponents are skeptical.

St. Clair County audits are prepared by county Auditor Patty Sprague and the Scheffel Boyle accounting firm. The BND looked at both 2019 and 2020 because of the impact the COVID-19 pandemic has had on many businesses, including MidAmerica.

"Enplanements grew from 33,000 passengers in 2015 to more than 153,000 in 2019," the 2020 audit states. "Due to the pandemic, however, enplanements plummeted in 2020 but have rebounded in 2021. As normally reported by airports, this translates into more than 300,000 passengers normally going through the MidAmerica terminal."

Despite the dramatic drop in passenger flights last year, the airport actually benefited financially from COVID-19. That's because it received $3.6 million in federal grant money through the Coronavirus Aid, Relief and Economic Security (CARES) Act.

MidAmerica Director Bryan Johnson declined to be interviewed for this story. Rich Sauget, chairman of the St. Clair County Public Building Commission, which oversees the property, didn't return calls for comment.

Pre-COVID accounting

MidAmerica was designed to alleviate traffic at Lambert St. Louis International Airport, bring passenger service to the metro-east and support operations at Scott Air Force Base, which uses its runways.

Federal and state funding covered most of MidAmerica's $313 million cost ($218 for construction and $95 million for the required removal and replacement of a base housing complex).

In 2019, the airport took in $2.7 million in landing fees, terminal-usage fees, rents and fuel-sale profits, according to that year's audit. It spent $4.7 million for salaries, supplies and other operating costs, requiring the county to cover a $2 million annual deficit.

Beyond the operating budget, the county:

—Paid $4.2 million in interest on bonds and debt certificates that have been issued for MidAmerica development, expansion and improvement over the years (and refinanced in some cases).

—Paid about $1.8 million in airport-related debt principals, as projected in its 2018 audit.

—Took in $1.4 million in grants, real-estate lease payments and other airport-related, non-operating revenue.

Overall, the county cost came to about $6.6 million for 2019. Remaining long-term debt related to MidAmerica was $74.6 million, not including an expected $44.4 million in interest on bonds.

Post-COVID figures

In 2020, the airport took in $2.4 million in landing fees, terminal-usage fees, rents and fuel-sale profits, according to that year's audit. It spent $5.2 million for salaries, supplies and other operating costs, requiring the county to cover a $2.8 million annual deficit.

Beyond the operating budget, the county:

—Paid $3.6 million in interest on bonds and debt certificates that have been issued for MidAmerica development, expansion and improvement over the years (and refinanced in some cases).

—Paid $2 million in airport-related debt principals, as projected in its 2019 audit.

—Took in $4.9 million in grants, real-estate lease payments and other airport-related, non-operating revenue.

Overall, the county's costs would have totaled $7.1 million for 2020, but the one-time infusion of CARES Act money dropped it down to $3.5 million.

"Airport revenues increased more than $1 million," the 2020 audit states. "Declines in operating revenues due to the COVID-19 pandemic were offset by $3.6 million in Federal CARES grants.

"Aeronautical rents, fees, terminal concessions, Passenger Facility Charges, and parking revenues represented a $394,000 decrease. Fuel sales decreased more than $1.6 million as fuel prices continued to be volatile; however the number of gallons sold also dropped nearly 227,000 gallons."

Remaining long-term debt related to MidAmerica was $87.1 million in 2020, not including an expected $25.5 million in interest on bonds. This represents an increase in debt and decrease in interest due to refinancing.

Regional importance

County, state and federal officials who represent Southern Illinois have long emphasized MidAmerica's importance to the region as an economic driver, mainly because of its military and civilian "joint-use" status and sharing of runways with Scott Air Force Base.

The 6,000-acre airport property surrounds the base on three sides.

Scott is the largest employer in St. Clair County with more than 13,000 government, civilian and military employees and an annual economic impact of $3.5 billion, according to a standard paragraph that appears in all audit introductions.

"The Community understands the importance of the Base and County leadership has helped avoid any encroachment on base property," the audits state. "This has been the #1 criteria cited in previous base closure discussions. The Base continues to expand bringing additional jobs to the county."

Audits also note that MidAmerica's operating deficits include fixed costs — such as fire safety and security, insurance and runway maintenance — that are required to comply with the Scott joint-use agreement and to maintain Federal Aviation Administration "grant assurances."

On the civilian side, Allegiant Air offers non-stop passenger flights from MidAmerica to 12 U.S. destinations, including Las Vegas, Phoenix and vacation spots in Florida and South Carolina.

The airport also serves as a shipment hub for Northbay Produce, which occupies a 56,000-square-foot refrigerated warehouse on the property.

Boeing expansion

The Boeing Co. announced on Sept. 17 that it's building a 300-square-foot production facility at MidAmerica that will be used to make the U.S. Navy's first aircraft-refueling drones.

It will be the defense contractor's second factory at the airport. The existing one, covering 50,000 square feet, produces components for fighter jets, commercial airplanes and military helicopters.

Boeing will pay $65,000 in rent the first year for the new factory, then about $450,000 annually, Johnson told the BND in early September.

Before MidAmerica even opened, it had been featured in an NBC Nightly News segment called "The Fleecing of America," largely because officials hadn't found an airline to provide passenger service at the airport after spending more than $300 million in taxpayer money to build it.

St. Clair County Board Chairman Mark Kern defended the county support in 2010, when NBC reporter Kevin Tibbles returned to do a second "Fleecing" segment.

"When balanced against against $2.3 billion worth of economic impact that Scott Air Force Base brings to the region ... We believe that that's a trade-off worth taking," Kern said.

Four airlines — Pan American Airways, Great Plains Airlines, TransMeridian Airlines and Allegiant Air — eventually tried to operate out of the MidAmerica terminal. All ceased operations. Allegiant returned in 2012.

Today, other airport tenants are North American Helicopter, American Veterans (AMVETS), the Illinois State Police, Illinois Army National Guard Readiness Center and U.S. Customs and Border Protection.

MidAmerica added 500 parking spaces in 2020, according to the county audit. It's now increasing its terminal size from 53, 500 to 98,599 square feet. Officials expect to cover about $13 million of the $30 million cost with FAA grants.

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