Thursday, February 14, 2019
TKC EXCLUSIVE FACT CHECK!!! COUNCIL LADY JOLIE JUSTUS $90-MILLION NEW KCI AIRPORT BOND SWEETHEART DEAL LACKS COMMITMENT FROM AIRLINES!!!
The airlines are desperate to collect $90-MILLION IN SHORT TERM FINANCING FROM CITY HALL that betrays promises that the new airport wouldn't cost taxpayers a dime.
The ordinance will face more scrutiny today.
However . . .
INSIDERS FACT CHECK LOCAL REPORTING AND REMIND READERS THE AIRLINES ARE ONLY COMMITTING TO ABOUT 9-YEARS BUT BONDS WILL DAY DECADES FOR KANSAS CITY TO PAY!!!
Here's a worthwhile explainer that deserves consideration mostly because the newspaper is working to back the status quo on this EPIC ripoff.
How risky is the KCI deal for taxpayers? Airport cheerleaders insist there is no risk because the airlines have just agreed to pay for the deal. These politicos would like you to believe they have delivered on their promise of a free new airport. At the most reacent Aviation Committee hearing we learned that the airlines are supposed to deliver a signed deal by Feb 25th agreeing to pay. But what, exactly, are the airlines agreeing to?
A TV station mistakenly reported: “Southwest Airlines Managing Director Steve Sisneros says the carriers will pay the entire construction cost plus financing costs estimated to be about $300 million, and all of the interest on the project over 35 years.”
This report is wrong “Carriers will pay the entire..cost…on the project over 35 years” is not the proposed deal. Steve Sisneros, Managing Director of Southwest Airlines, was at this week’s meeting to explain the deal. Sisneros stated that a “majority” of airlines agree to pick up airport costs for a MAXIMUM OF NINE YEARS, not necessarily the 35 years of bond debt. Sisneros point out that airlines typically are not willing to commit themselves to these kinds of deal for more that a decade, often for only five years.
This is a little noticed detail but enormously important to the proposed deal. Any initial agreement with the airlines to pick up hundreds of millions of dollars in bond debt will expire in less than a decade. At that point they could pull out of the agreement. Would they do that, leaving the airport (taxpayers) to pay for bond debt for another couple of decades? Why not? Consider that the deal requires airlines to be collectively responsible for the bond debt. Any airline that drops out of the deal reduces its operating costs while its competitors pay more. But wouldn’t this get that airline kicked out of the airport? Almost certainly not. Why? Because that would reduce airport income, worsening its financial position. No, taxpayers will take the hit. The airlines get a shiny new airport, the taxpayers get potentially hundreds of millions of dollars of debt.
Developing . . .