NEWPORT NEWS, Va. (WAVY) — The Peninsula Airport Commission has reached a $2 million settlement with TowneBank to resolve a dispute over a loan made to a now-defunct airline.
The commission co-signed a loan with PeoplExpress in 2014, when it looked like the airline would be going to the Newport News/Williamsburg International Airport. PeoplExpress defaulted, however.
The Virginia Department of Transportation discovered earlier this year that the commission had used $3.5 million in public funds to pay off the loan.
Secretary of Transportation Aubrey Layne said earlier this year the funds were supposed to be used for infrastructure and capital improvements.
Layne struck a bargain in November for the commission and the bank to find a “meaningful settlement.” The two sides agreed not to enter into a lawsuit while they worked toward an agreement.
The two sides issued a joint statement Thursday morning regarding the settlement:
It is the hope of all parties that this resolution will clear the way for the PAC to focus on its true mission of providing the public with a viable airport and reliable, economic service.”
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