The Chattanooga Airport Authority and their bond issue games to buy TAC Air are very concerning. Private planes at the Chattanooga Airport are serviced by a privately-owned company called TAC Air, and a taxpayer-subsidized operator called Wilson Air.
The privately-owned company, TAC Air, pays rent to the Chattanooga Airport Authority, and operates without a dime of taxpayer funds. The TAC Air business model is for profit to survive. If TAC Air operates in the red, they are out of business.
The taxpayer-funded operator, Wilson Air, has an operating contract with the Airport Authority Board that provides if Wilson Air operates in the red, the operators are not responsible to make up the losses. It gets better - if Wilson Air operates with a profit, they share in the profit.
To date, Wilson Air has operated in the red to the tune of over $1.31 million. The Wilson Air business model is if we earn a profit, it is bonus time. If we operate in the red, who cares? The taxpayers pay the tab. What kind of contract is this, share in profit, but not in losses?
In 2010, the Chattanooga Airport Authority Board voted in favor of a $10 million federal grant to construct a government-subsidized plane facility, Wilson Air that would compete directly with the private plane facility, TAC Air, who pays rent. The Chattanooga Airport Authority borrowed funds, or leveraged bond issues on airport revenue for the local match of $10 million grant, which is believed to between `10 to 20 percent of the $10 million.
Interestingly enough, the Chattanooga Airport Authority recently asked the City Council to make the taxpayers of Chattanooga the group that guarantees repayment of the bond issues, instead of Airport revenue. Of course, our City Council approved this change throwing the taxpayers under the bus. So now, we the taxpayers of Chattanooga, not the Airport Authority revenue, guarantee repayment of the Airport Authority’s bond issues or loan funds.
Returning to 2010, the Chattanooga Airport Authority built their new government-subsided private plane facility, Wilson Air, to compete directly with privately-owned, TAC Air. At this time, the Airport Authority Board contended that Wilson Air was constructed to create a competitive market at the airport for private plane fuel and services. However, in 2010, the TAC Air hanger was only utilized to about 60 to 70 percent capacity. The market demand for additional private plane services simply did not exist. Yet, the Chattanooga Airport Authority proceeded and built additional private plane services where a market demand did not exist.
Moving ahead in 2013? The very predicable happened. Wilson Air operated in the red and to date has lost over $1.31 million, because there was not an ample market or demand for the additional private plane services or storage. The Airport Authority proceeded regardless of facts. With Wilson Air operating in the red, the Chattanooga Airport Authority, who created this financial debacle, now proposes to buy out TAC Air for over $7 million through bond issues that the city of Chattanooga taxpayers will guarantee. We the taxpayers are being encumbered for these decisions.
It is my understanding that the Airport Authority’s motive in attempting to buy out TAC Air for $7 million is to destroy the competition for Wilson Air. But wait a minute, it was just 2010 when the Airport Authority claimed they were creating competition. Get your story straight, Airport Authority, and stick with it, but pick one. The Airport Authority’s wasteful bond issue games and contracting terms are very concerning. Where would the taxpayers begin to clean up this mess?
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The Chattanooga Airport Authority Board is wanting to use Chattanooga city tax money to buy TAC Air and eliminate any competition for Wilson Air, a city owned business. A member of that same board, Mike Mallen, also helped push through the Tax Incremental Financing, aka TIF, for the hedge fund corporation, York Capitol, bond issue for their Black Creek Mountain development. Black Creek Mountain is advertised as "Resort Style Living" for those that can afford it.
Many people upon hearing of the TIF did not agree with the money being used that way and at least one lawsuit was filed to stop it. Mike Mallen sits on the board that now wants to spend your tax money to put a competitor out of business.
Are these ways you wanted your tax money spent or would you rather have it spent on fire and police protection?