Peninsula Airport Commission meets to discuss public funding

This Nov. 21, 2017 photo shows Secretary of Transportation Aubrey Layne meeting with members of the Peninsula Airport Commission in Williamsburg. (Credit: WAVY/Rob Rizzo).

NEWPORT NEWS, Va. (WAVY) — The Virginia Department of Transportation wants the Newport News/Williamsburg Airport to settle its dispute with Towne Bank. Secretary of Transportation Aubrey Layne has an incentive in mind to make it happen.

Local and state officials met Tuesday morning to discuss an ongoing fight over public funding at the Newport News/Williamsburg International Airport (PHF). Before the meeting Secretary Layne had an offer.

“If you do reach an agreement then we are gonna back you on unrestricted payment,” Layne said. “We will put you back where you’re treated like every other airport in the Commonwealth.”

In January, reported that the state pulled all funding from airport after state officials claimed the commission misused millions in taxpayer money.

The state said the Peninsula Airport Commission used $3.5 million to pay off a private bank loan for a now defunct start-up airline. According to Secretary of Transportation Aubrey Layne, the funds were supposed to be used to go toward infrastructure and capital improvements projects, but instead were used to repay the loan when PeopleExpress went out of business.

Ken Spirito, the commission’s former executive director, told Newport News City Council in February that he stood by the decision to use the state funds.

A state audit found PeopleExpress first approached Norfolk International Airport (ORF) before going to the Peninsula. ORF Executive Director Robert Bowen told 10 On Your Side the airline never had a plan for operating, and asked for more incentives that were “more than what we would give to even an established airline.”

Those negotiations stopped, and PeopleExpress sought business at PHF — who was looking to fill a gap left by the loss of AirTran at the time. The commission agreed to guarantee a $5 million loan taken out by PeopleExpress.

Related: Shakeup at PHF in midst of state audit

The Virginia Department of Transportation released a five-month audit in June — and the state ordered the commission to pay back the money. Layne eventually told the commission that it didn’t have to pay back the money, but maintained the airport had to use $3.5 million of its own money on improvement projects.

“I hope that we can come to a resolution, but so far there has been very little movement,” airport commission member Sharon Scott said. “I’ll be honest with you.”

After Tuesday’s meeting the Peninsula Airport Commission voted to re-send a settlement offer to Towne Bank.

The airport commission wouldn’t tell 10 On Your Side what the details of the offer were. But, they will have another meeting on the November 28th to see where they stand on a resolution with Towne Bank.

State officials also required all board members to go through conflict of interest and freedom of information training. Layne has suggested the board consider term limits for members, have fewer closed sessions and start live streaming its meetings to be more transparent.

In the midst of VDOT’s audit, Layne said state lawmakers wrote new laws requiring all airports in the state to get approval from the aviation board before they spend taxpayer money.