Myrtle Beach May Need to Repay FAA after Cancelling Terminal Project

May 4, 2007
An FAA letter to the county Monday warned it may need to recoup "some or all of the federal funds expended on this project" if the county deems the terminal a dead issue.

May 3--Because it is unusual for a project as large as the airport terminal to grind to a halt, the FAA was unsure Wednesday how much of its funding, if any, Horry County might have to repay.

The agency said it granted about $16 million total to Horry County for the terminal, though it could not immediately say how much of that was spent. The county estimated it has spent between $8 million and $12 million of that.

An FAA letter to the county Monday warned it may need to recoup "some or all of the federal funds expended on this project" if the county deems the terminal a dead issue.

While the county mulls its options, the ground rules for the FAA reclaiming its money remain somewhat unclear, according to the agency.

Most repayments are required after small-scale construction violations -- not after millions of dollars are pumped into planning a 14-gate terminal, said Scott Seritt, manager of the agency's Atlanta airports district.

Repayments on the terminal project at Myrtle Beach International Airport might come down to the timeline of the city's Community Appearance Board review, which began when the board first rejected the project in December and continued through last week with a final board vote against the terminal, Seritt said.

"At what point did we suspect this project was going to be voted down by the Community Appearance Board, was that $1 million ago or was it $5 million ago?" he said. "In a reasonable, prudent process, would we have stopped three months ago?"

The county spent about $350,000 total trying to appease the CAB with terminal redesigns since the city board first rejected the project in December, according to Horry County Attorney John Weaver. It was unclear Wednesday whether that additional spending will be paid with any FAA funds.

New designs and months of additional engineering work failed to influence the board, which rejected the terminal, saying its west-side location wouldn't fit in with nearby city development.

If the county is forced to repay the FAA, the money will come from airport coffers, which now hold about $12 million, coming from airport passenger and landing fees, that was being saved for terminal construction, Horry County Council Chairwoman Liz Gilland said.

The airport funds cannot by law be commingled with county tax money, Gilland said.

"If we have to pay the FAA back, we have the cash to pay them back," she said.

Neither the FAA nor Horry County could immediately provide the amount of FAA funding spent on the terminal or how much of that could qualify for repayment.

FAA grants to the airport are spread out over years and each can be divided between many areas, including costs that are unrelated to the terminal, Airport accountant Pat Apone said. The county could not determine Wednesday what money the FAA could be including to come up with the $16 million figure, she said.

Meanwhile, the FAA is allowing time for Horry County to decide whether the terminal project will ultimately live or die before it begins discussions on recouping grant money, Seritt said.

"We really didn't want to put some arbitrary date on the county. We want to give the parties some time to talk," Seritt said. But the agency needs to know as soon as possible whether the county will be accepting another $6 million in grant funding it could receive this year for the terminal, he said.

"If we are not going to spend it in Myrtle Beach, we need to spend it somewhere else."

Contact TRAVIS TRITTEN at 626-0303 or [].