McKinney Airport

When the FBO (flight based operations) were purchased by the city of McKinney in 2013 for $25M, the promise was that the profits of the FBO would pay for the FBO loan. The city paid the first installment in 2016 and second 2017 loan installments, not the FBO. If you include the FBO purchase, the city has or will pay approximately $79M from 2013 to now. 

Can McKinney privatize the airport or its assets?
Currently, the law only allows for 40 year leases of the airport or assets by private businesses. There is a way around that, though because the federal government has an Airport Privatization Pilot Program that McKinney could join.
"The airport privatization pilot program is designed to allow airports to generate access to sources of private capital for airport improvement and development. The 1996 Reauthorization Act, Title 49 United States Code §47134, authorized the Federal Aviation Administration (FAA) to establish the pilot program. The 2012 Reauthorization Act increased the number of airports that could participate in the program from five to 10. The same restrictions on participation apply. Only one large hub airport can participate in the program, and one of the airports must be a general aviation airport. Commercial service airports can only be leased and general aviation airports can be sold or leased. Most commercial service airports in the United States are owned and operated by local or state governments. Public-use general aviation airports are both publicly and privately owned. "

Here's the current Texas code preventing real privatization:
TRANSPORTATION CODETITLE 3. AVIATIONCHAPTER 22. COUNTY AND MUNICIPAL AIRPORT
Sec. 22.020. OPERATION OF AIRPORT BY ANOTHER. (a) A local government, by contract, lease, or other arrangement, on a consideration fixed by the local government and for a term not to exceed 40 years, may authorize a qualified person to operate, as the agent of the local government or otherwise, an airport owned or controlled by the local government.
(b) A local government may not authorize a person to:
(1) operate the airport except as a public airport; or
(2) enter into a contract, lease, or other agreement in connection with the operation of the airport that the local government may not have made under Section 22.021.
(c) An arrangement made under this section must be made subject to the terms of a grant, loan, or agreement under Section 22.055.
Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.
Sec. 22.021. USE OF AIRPORT BY ANOTHER. (a) In operating an airport or air navigation facility that it owns, leases, or controls, a local government may enter into a contract, lease, or other arrangement for a term not exceeding 40 years with a person:
(1) granting the privilege of using or improving the airport or air navigation facility, a portion or facility of the airport or air navigation facility, or space in the airport or air navigation facility for commercial purposes;
(2) conferring the privilege of supplying goods, services, or facilities at the airport or air navigation facility; or
(3) making available services to be furnished by the local government or its agents at the airport or air navigation facility.
(b) In entering into the contract, lease, or other arrangement, the local government may establish the terms and fix the charges, rentals, or fees for the privileges or services. The charges, rentals, and fees must be reasonable and uniform for the same class of privilege or service and shall be established with due regard to the property and improvements used and the expenses of operation to the local government.
(c) An arrangement made under this section must be made subject to the terms of a grant, loan, or agreement under Section 22.055.
(d) The 40-year limit on the term of a contract, lease, or other arrangement provided by Subsection (a) does not apply to a contract, lease, or other arrangement under this section between a local government and this state, the United States, or an agency or instrumentality of this state or the United States.
Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995. Amended by Acts 1997, 75th Leg., ch. 557, Sec. 1, eff. June 2, 1997.
Sec. 22.022. DURATION OF CERTAIN LEASES. (a) A lease of real property may not exceed 40 years if:
(1) the lease is made under Section 22.011(c) or (d), Section 22.020, or Section 22.021; and
(2) at the time of the execution of the lease, the property is used as nonaeronautical property and is located on an airport on which there are active federal governmental aircraft operations on federal government property.
(b) A renewal or extension of a lease under Subsection (a) may not exceed 40 years. If the lease provides for more than one renewal or extension, the renewals or extensions may not in the aggregate exceed 40 years.
(c) This section does not prevent the parties to a lease from making a new lease to take effect after the expiration of the previous lease or after the expiration of the period covered by a renewal or extension of the previous lease.
Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

For more information on airport privatization and how it works in Europe, read this CATO article here
"A 2016 study by Airports Council International (ACI) found that 47 percent of airports in the 28 European Union (EU) countries are either “mostly” or “fully” private, which is up from 23 percent in 2010.21 Since the largest airports in Europe tend to be the ones that have been privatized, the ACI study found that 75 percent of passenger trips in the EU are now through privatized airports.

According to the ACI study, there are 60 “fully private” airports in the EU, including the main airports in Antwerp, Budapest, Edinburgh, Glasgow, Lisbon, Liverpool, Ljubljana, London, and Zagreb. In addition, the study found that the main airports in Birmingham, Brussels, Copenhagen, Florence, Naples, Rome, Venice, Vienna, Zurich, and numerous other cities are “mostly private,” which generally means that they are structured as corporations and the private sector holds a majority of the shares."

According to the ACI study, there are 60 “fully private” airports in the EU, including the main airports in Antwerp, Budapest, Edinburgh, Glasgow, Lisbon, Liverpool, Ljubljana, London, and Zagreb. In addition, the study found that the main airports in Birmingham, Brussels, Copenhagen, Florence, Naples, Rome, Venice, Vienna, Zurich, and numerous other cities are “mostly private,” which generally means that they are structured as corporations and the private sector holds a majority of the shares."


Funding Structure

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