KC v. Tulsa v. Fort Worth: Whose overhaul base closes??

ShowME · Post by **ShowME** » Fri Jul 04, 2003 9:46 am

Kansas City definitely has some stiff competition. Fort Worth is the headquarters for American, Tulsa's overhaul base is the biggest overall. I actually have gained some respect for Mayor Barnes though. You can't say she hasn't been putting a good proposal on the table. I also think American has already gave the shaft to Missouri enough.

"City offers American $200M in bonds to stay in KC

Kansas City is dangling a $200 million-plus carrot in front of American Airlines to persuade the carrier to keep its overhaul base and roughly 2,000 employees at Kansas City International Airport.

Kansas City Mayor Kay Barnes made public a letter Thursday afternoon that she'd sent to American Airlines on Wednesday seeking to persuade the airline to keep its Kansas City operations alive. The airline has six months remaining on its base lease with the city.

"We are offering a long-term lease of the base with a pledge of $100 million in already voter-approved, tax-exempt Special Facility Airport Revenue Bonds to upgrade the base in accordance with the plan proposed in our meeting in Fort Worth, (Texas) on June 24, 2003," Barnes said in the letter.

Along with the bonds, the city's offer includes:

â€¢ No lease principal and interest payments will be due for the first five years.

â€¢ The new lease payments will not start until the lease's sixth year.

â€¢ The city will provide credit enhancement for the bonds through its Bond Extension and Retirement Account.

â€¢ The city will provide $4.5 million a year to cover a portion of the bond's debt service.

â€¢ The city will make an additional $100 million in Special Facility Airport Revenue Bonds available to create a state-of-the-art CFM 56 engine-maintenance facility at KCI if American Airlines decides such a project is feasible.

American Airlines spokesman Todd Burke said the airline will not yet discuss its negotiations with any cities where it has operations.

The Business Journal reported Tuesday that Fort Worth-based American Airlines is finishing a review of its main maintenance bases in Kansas City, Fort Worth and Tulsa, Okla., as it prepares to announce how it will cut its infrastructure."

Â© 2003 American City Business Journals Inc.

trailerkid · Post by **trailerkid** » Sat Jul 05, 2003 1:50 am

I'm sorry, but for God's sake....

Enough with the corporate welfare!!!!!! If a business can't stay open (United, AA, whoever) without public support, then let them close. It is not our job to support crappy airlines who offer crappy service. Invest $200 million into something that will create a homegrown company that will provide jobs with growth opportunities, not freaking American Airlines. Where was this $200 million for Vanguard, Barnes? Don't blame the fact that you run a poor business that's used the public money as a crutch for decades on 9/11 and a drop-off in tourism. Let this old, haggardly dog die.

Post by **dangerboy** » Sat Jul 05, 2003 8:50 am

Yeah $200 million could go a long way in other areas. Like attracting a more healthy company to replace the skilled jobs at the overhaul base. Or basic infrastructure to help retain or attract a variety of small and large businesses. This American proposal is like lashing ourselves to a sinking ship. The airline industry had severe structural problems long before Sept. 11, all that tragedy did is bring those problems to a head - it didn't cause them.

Also, where is the state's portion of that package? They will probably fork over a big chunk to help retain the St. Louis hub and call center, so how much is the state giving to the overhaul base?

ShowME · Post by **ShowME** » Sun Jul 06, 2003 11:24 am

Name me a company that employs 3,000 people in the KC area that doesn't get corporate welfare. Also remember that if they do close the overhaul base Platte Counties unemployment rate nearly doubles overnight.

Post by **mean** » Sun Jul 06, 2003 5:31 pm

Name me a company that employs 3,000 people in the KC area that doesn't get corporate welfare.

You're probably right, but just because that's the way it is doesn't mean that's the way it should be or must be. If the city of Kansas City throws away hundreds of millions of dollars to ensure that a tiny fraction of one percent of the metro population doesn't have to suffer the awful, unthinkable fate of collecting unemployment for a few months, I will tear all the hair out of my head and mail it to Mayor Barnes in protest.

It's easy to forget that many if not most of those 2,000 people don't live in Kansas City, and yet look: here come the City's taxpayers to bribe one of the richest corporations that has ever existed with their pittance of an offering. Disgusting. American Airlines deserves to go down in flames.

Er, the airline, of course, not their planes. No pun intended.

ShowME · Post by **ShowME** » Sun Jul 06, 2003 6:34 pm

I agree with everyone's disgust with the possible tax breaks involved and trust me I hate American Airlines as well I just hope if they do decide to close it that it doesn't throw a monkey wrench into the current boom going on in the Northland. Also if they do decide to close it and give St. Louis the shaft as well I will always bad mouth that airline for the rest of my life. They will find out that word of mouth is a biotch that's for sure.

Post by **dangerboy** » Sun Jul 06, 2003 11:28 pm

mean wrote:
It's easy to forget that many if not most of those 2,000 people don't live in Kansas City, and yet look: here come the City's taxpayers to bribe one of the richest corporations that has ever existed with their pittance of an offering.

Very good point, Mean. A blue collar place the overhaul plant probably doesn't get many workers from the KCMO portion of Platte County. Most workers there are probably from the small towns north of the city limits. However, don't forget that at least in theory American is paying KCMO payroll tax for those workers, and those workers are paying the earnings tax.

GuyInLenexa · Post by **GuyInLenexa** » Wed Jul 09, 2003 6:29 pm

On July 1, 2003 in USA Today, it was reported that Fort Worth mayor, Mike Moncrief received assurances that he should not worry about thier base closing at Fort Worth Alliance Airport. The FW base is their newest and has ample room to expand. The Tarrant county area is the second largest aerospace center outside of Wichita adding new jobs for expansion would not be a problem. This was reported in several Texas papers also.
Fort Worth is my hometown and is where American Airlines had it's start at Meacham Field.
I do not think KC should offer such an amount of money to keep the few thousand jobs that will probably be lost anyway.
We should be looking for other tenants and other ways to secure jobs at large.
Improvements should be geared to bringing new airlines and jobs to the city, such as some of the other emerging airlines.
We need a stronger strategy for KCI. I do not think it should be ran by the City of Kansas City, but there should be a BiState taxation district created so the entire metropolitan area can contribute to it's infrastructure and future development. That is how DFW was created. After 1973 when DFW was created, the Dallas Fort Worth area became world class.
We should emulate this, especially if Lambert Field is losing it's undeserving status as a major hub.
I think we can survive the loss of jobs a lot easier than losing the potential revenue for this corporate welfare venture.

LG

QueSi2Opie · Post by **QueSi2Opie** » Thu Jul 10, 2003 11:57 am

Nicely said

ShowME · Post by **ShowME** » Thu Jul 10, 2003 4:44 pm

We should emulate this, especially if Lambert Field is losing it's undeserving status as a major hub.

Explain how St. Louis has an underserving status as a major hub? Keep in mind if St. Louis does lose hub status then they'll be another city competing against us for "emerging airlines".

We need a stronger strategy for KCI. I do not think it should be ran by the City of Kansas City, but there should be a BiState taxation district created so the entire metropolitan area can contribute to it's infrastructure and future development.

This won't happen in my lifetime and I'm 31. There's a better chance of the Johnson County crowd building there own airport in Olathe. Until this happens KCMO should charge an excise ticket tax on residents who live outside of the city who use the airport.

GuyInLenexa · Post by **GuyInLenexa** » Thu Jul 10, 2003 6:25 pm

Lambert Field:

I travel a lot in my job and it has to be one of the worst airports I have ever been in.
It is usually dirty, the air conditioning is not working. it it difficult to navigate through. Of course this is opinion, not judgement

I admire the mass transit on the roof, but it needs a major overhaul itself.
KCI has much more room to expand. I realize STL is larger than KC but Atlanta is smaller than NYC, and it is a larger hub than them.
Our airport needs a lot more than terazzo floors to improve. I think they need to drop the semi circle narrow terminals. DFW has on their new additions.
An excise tax should be made, but how would you implement it? Would you only include departing or arriving passengers?
I know there was talk regarding another airport in JOCO several years ago. That would be a disaster, KC's metro is too small for two passenger airports at this time.
Thanks for the response, Show Me

ShowME · Post by **ShowME** » Thu Jul 10, 2003 7:54 pm

Anyone which purchases a ticket to fly out of KCI will be charged a $3.00 surcharge to help with modernization and the overall competitiveness of the airport. This wouldn't affect passengers who are switching planes only passengers which originate from KCI. I'd have to look into it but I'm sure the city would be the one to pass something like this. I myself would divide the money up such as this.

$1.00 for possible airport light rail project or connection to future KCMO light rail.

$1.00 for improvements around KCI in general.

$1.00 for airline industry recruitment efforts or office parks.

tat2kc · Post by **tat2kc** » Thu Jul 10, 2003 8:25 pm

how long would it take kcmo to recoup the 200 million it wants to invest in the overhaul base? I can't imagine that the base generates that much income for the city, other than earnings tax. I mean, even with 3,000 people paying an earnings tax of 1%, how the hell much is the payroll? With American in such poor financial shape, the very real prospect of bankruptcy would take american off the hook for repayment of the bonds. Tax incentives need to be an investment that will return more than it gives away!

QueSi2Opie · Post by **QueSi2Opie** » Sun Jul 13, 2003 6:31 pm

ShowME wrote:Until this happens KCMO should charge an excise ticket tax on residents who live outside of the city who use the airport.

Great idea, let's keep havin' Kansans help Missourians who can't help themselves.

ShowME · Post by **ShowME** » Sun Jul 13, 2003 6:57 pm

Great idea, let's keep havin' Kansans help Missourians who can't help themselves.

That's funny I always thought Missourians helped Kansans. I always see so many JO plates at the Truman Sports complex, airport, art museums, The Plaza, Lake of the Ozarks, Branson etc. Of course we're talking Kansas. A state whose history has been thoroughly documented to be a bunch of leeches off Kansas City, MO. Maybe you hypocrites will realize one day that if it wasn't for Missouri your state would be neck and neck with North Dakota.

eliphar17 · Post by **eliphar17** » Sun Jul 13, 2003 7:50 pm

ShowME wrote:That's funny I always thought Missourians helped Kansans. I always see so many JO plates at the Truman Sports complex, airport, art museums, The Plaza, Lake of the Ozarks, Branson etc. Of course we're talking Kansas. A state whose history has been thoroughly documented to be a bunch of leeches off Kansas City, MO. Maybe you hypocrites will realize one day that if it wasn't for Missouri your state would be neck and neck with North Dakota.

Whoa there, take a deep breath and think about what you just said. If you took away all those JO plates from Kansas City, you would be left with a city that would barely rival Omaha. Maybe you will realize one day that people who live west of the state line are residents of the Kansas City metro just as much as anyone east of the line. Maybe you will realize one day that we in JoCo are not to be written off as mindless suburbanites. And believe it or not, there are suburbs on the Missouri side too. Shocking thought, I know.

What you meant to say was that Kansans do indeed help Missourians, at least when it comes to making Kansas City the great city it has become.

Post by **dangerboy** » Sun Jul 13, 2003 8:11 pm

KCI doesn't really get any tax money. It's mostly self-sufficient with airline gate leases and passenger fees - so unlike most public facilities it is payed for by the people who use it. A bistate authority for owning and running the airport would be a good idea though, just like it would be a good idea for most regional facilities.

ShowME · Post by **ShowME** » Sun Jul 13, 2003 8:11 pm

If you took away all those JO plates from Kansas City, you would be left with a city that would barely rival Omaha.

No we would still have the Truman Sports complex, The Plaza, the airport, the arts etc. Keep in mind Missourians initially and continue to fund these area's not only Kansas Citians benefit but also Johnson Countians.

Post by **dangerboy** » Sun Jul 13, 2003 8:19 pm

What's with random bi-state bashing all of a sudden? Come on people, every metro area has both urban and suburban areas. Here in KC, many Kansans and Missourians pay income taxes to the opposite sate, plus many Kansans and suburban Missourians pay earnings taxes to KCMO - just like many KCMO residents shop and pay sales taxes in Joco and Eastern Jack.

While Kansans are a minority in the metro area, the reality is that without them we would be a metro of 1.2 million, not 1.8 million. A market of that size would mean no pro sports teams, fewer flights at a smaller airport, less money for philanthropy, etc. Still, the center of the metro is in Missouri and it is important for suburbs in both states to support regional assets in the core - both on an individual level and on a larger govermental level.

ShowME · Post by **ShowME** » Sun Jul 13, 2003 8:22 pm

bistate authority for owning and running the airport would be a good idea though, just like it would be a good idea for most regional facilities.

Why on earth would I want a group from Kansas having input on what's good for KCI? I can already see it.

This weeks agenda for the KCI coalition. Johnson County group wants a KCI annex located in Gardener to be funded. Evidentally many residents have built new homes located around 199th & Metcalf and didn't have the foresight to realize that the airport was an hour away.

Alright I'll quit being a smartass. How 'bout a compromise. I'm for Johnson County having a sayso in KCI if Freedom Inc. can run the Blue Valley School District.

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