Executive Summary
The General Mitchell International Airport (GMIA) is one of Milwaukee County’s most valuable assets, with an estimated market value of between $96 and $132 million. The County currently receives no direct financial return on this valuable asset. This paper proposes leasing the airport for 30 years to a professional airport firm, to be run on a commercial basis. Such a lease could produce a net new revenue stream to the County estimated at $8 million per year. It would also reduce the County’s future debt burden and permit the airport to be operated in a more businesslike and user-friendly manner.
A commercial airport firm would proceed cautiously with the aggressive expansions programmed in the recently approved airport Master Plan. Over the next 15 years there would be modest terminal and runway improvements, but there is probably no need to add a major new terminal, an additional parking structure, or a new parallel runway within this time frame. The forecasts on which these plans were based are overly optimistic, and would not likely be accepted as commercially viable by a private airport firm. Such a firm would more likely expand the airport’s commercial concession operations to generate additional revenue by providing a much greater variety of goods and services to airport users.
The financial effects of leasing the airport would be increased airport revenues, lower airport operating costs, and a new revenue stream to the County government, reducing the need for future tax increases. Airport bonding requirements would be greatly reduced during the next 15 years, compared to the Master Plan’s projections, leading to important savings on debt-service costs.
It is legally feasible for the County to lease the airport, without any need for federal or state legislation. Federal airport grants would still be available, since the County would remain the airport’s owner. Outstanding bonds could remain in effect, and they could retain their tax-exempt status.
Overall, leasing the airport to a professional airport firm could produce benefits to airlines, passengers, and Milwaukee County and its taxpayers.