Oaktree Capital Management has agreed to a 40-year revenue-sharing lease with Westchester County to manage its airport.
The $140 million deal will keep the Westchester County Airport, a four-gate facility serving JetBlue Airways, American Airlines and United Airlines, privately managed. The proposal is made possible through a Federal Aviation Administration programme, which must approve the deal, that allows small to mid-size airports to be managed through PPPs.
“The driving force behind this proposal is simple: unlock millions of dollars of value that have been created at the airport and put this idle money to work in ways that benefit everyone who lives, works and visits Westchester,” said Westchester County executive Robert Astorino.
The terms of the deal include a $130 million upfront payment from Oaktree. After expenses, Westchester County will net $111 million, which said it structured as an annuity to guarantee long-term cashflow.
Oaktree accepts financial responsibility of Westchester County Airport through this lease and commits to spending $30 million of capital improvements. These include redesigning the passenger lounge, simplifying the ticket area, improving parking, new baggage claim equipment, upgrading concessions and installing a new wastewater treatment facility.