Friday, May 04, 2007

BAA Walking Away From Airport Contract

When former Indianapolis Mayor Steve Goldsmith (R) inked a deal back in 1995 with BAA to manage the entire operations of the Indianapolis Airport Authority, it was viewed as a cutting edge initiative which promised savings to the public of nearly $100 million over the 10-year life of the contract. As recently as 2003, BAA boasted the Indianapolis contract as its largest because it managed the airport in its entirety, including all retail operations. BAA's regional USA director at the time described it as an "unusual contract" because only a handful of such arrangements existed in the country. But it's all coming to an end just as the airport readies its new midfield terminal, which is scheduled to open in 2008. BAA has apparently decided to walk away from its contract one year prior to its scheduled date for termination. The Star reports:

BAA Limited had been contracted to manage the airport through the end of 2008 but will instead turn over control at the end of this year.

Airport officials said in a press release that the change is meant to provide a smooth transition in advance of opening the new $1.07 billion midfield terminal in late 2008.

BAA had told the Indianapolis Airport Authority that it did not intend to seek a new contract or a contract extension when the current one expires, the statement said.

The airport authority and BAA are in discussions about how to transition back to full control by the airport authority. An agreement on the timing of the transition is expected to be reached in coming weeks.

Much of the existing management team will remain in place when BAA steps aside, the statement said.

Lacy Johnson, president of the Airport Authority board, credited BAA for improvements made at the airport.

"Their leadership in introducing a more commercial approach through expanding the airport's retail and parking offerings was paramount," Johnson said in the statement. "Their role contributed greatly to the development of additional non-airline revenue. We thank BAA for its role in the continued success of Indianapolis International Airport.

If privatization of the airport was such a great deal for the taxpayers, why would the Peterson administration now be turning it back over to the airport authority? And why would BAA be walking out early on a contract which it has boasted about for so long? The former British-owned company was purchased just last year by a Spanish company, Grupo Ferrovial SA for a whopping $19 billion. Grupo Ferrovial reported its first quarter earnings this year had more than quadrupled following the purchase of BAA.

One can't help but speculate whether Mayor Peterson's decision to hand control of the airport to Lacy Johnson didn't impact BAA's outlook on the contract. In June, 2004, the Indianapolis Star reported on a lawsuit brought against the airport authority by David Roberts, the man BAA hired to direct the airport's operations. Roberts made serious allegations in a lawsuit against Johnson and the airport authority after he said he was forced out of his job. The Star reported on June 4, 2004:

The former airport director at Indianapolis International Airport alleges he was fired last year for calling attention to "political opportunism" in airport hiring and contracts by an influential Democrat that Mayor Bart Peterson named as airport board president in 2000.

Indianapolis Airport Authority board President Lacy Johnson and board members attempted to influence airport staff to hire political favorites of Johnson, including an embalmer for whom there were no suitable job openings, according to a five-page notice of the former director's intention to file a lawsuit, which was recorded with the state and obtained by the Indianapolis Star."

Johnson attempted to influence employment of minorities, unionization of employees, allocation of space to airlines and concessionaires . . . engagement of favored contractors and suggested removal of BAA employees who were considered politically too Republican.

The former airport director, David Roberts, claims that in 2001 Johnson asked him to employ a "female state representative who was unqualified as an embalmer and who was a protege of Mr. Johnson's godmother."

The godmother "is also a Congresswoman," the complaint states, in an apparent reference to Indiana's only congresswoman--Julia Carson, a Democrat who represents Indianapolis.

When Mr. Roberts told Mr. Johnson there were no suitable vacancies, Mr. Johnson said, "Other companies do this," according to the complaint.

Johnson, an attorney at prominent Indianapolis firm Ice Miller, was out of the office and could not be reached for comment Thursday . . .

Roberts' lawsuit was quietly settled, and the local news media has long since forgotten about those events. Federal and local prosecutors were too busy chasing after low-level government corruption to notice Roberts' allegations. A local spokesman for BAA told WTHR's Mary Milz that the company was looking for a long-term contract with a larger stake in the airport, something airport officials didn't want. The idea that Johnson is going to have total control of the airport after the end of this year is troubling, particularly when you consider the amount of money at stake. You can bet taxpayers are going to come up on the short end of this stick.


Wilson46201 said...

"Roberts' lawsuit was quietly settled, and the local news media has long since forgotten about those events." The plaintiff died so the case was moot. His allegations were never used in court.

If there's a powerful African-American in the news in Indianapolis, you can be sure AdvanceIndiana will find a negative spin against him or her!

According to the story I saw on TV, after BAA was bought-up by the Spanish investors, the new owners decided to get out of the airport management business. No big deal!

Dredging up old newspaper allegations does not bring clarity to current international business executive dicisions...

Luckily, by still banning anonymous comments, the place wont be littered up by Tandy and her ilk screaming about the Ghetto Mafia!

Gary R. Welsh said...

He died March 25, 2005 more than 9 months after the story was originally reported on. Do you know that the case wasn't settled before he died?

Gary R. Welsh said...

And the spokesman for BAA told WTHR that they wanted a longer-term contract with a greater stake in the airport. That's the reason he gave for walking away from the contract--no mention of getting out of the airport management business.

Wilson46201 said...

I saw my news on WISH-TV

indyernie said...

So Wilson has Johnson promised you a job?

Wilson46201 said...

The article in this morning's business section of the Star shoots down AI's dark conspiracy story. BAA wanted to be able to buy into the airports it manages -- Lacy wasnt going to sell off our Indianapolis Airport off to foreigners. BAA walked away...

Gary R. Welsh said...

You're not going to get by with your lies here, Wilson. BAA wanted a long-term lease, with a small ownership stake. Your buddy Lacy Johnson didn't have a problem selling off the hotel rights on airport property to his good buddies. What percent ownership did Sam Odle wind up with? Isn't he big buddies with Carson and Johnson? Oh I forgot, it's just the foreigners you have a problem with. You don't mind short-changing taxpayers to line the pockets of Democratic politicals cronies, but you have a real problem with a deal that might benefit taxpayers but just happen to involve a foreign-owned company.

Wilson46201 said...

From the Star:

"Company spokesman Mark Mann said BAA is primarily interested in airports where it can acquire an equity stake and enter long-term leases. He cited an airport in Hungary where the company obtained 75 percent ownership and has a 99-year lease."

Is that what you describe as a "small stake" -- go back to Marshall arithmetic classes, if so! 75% is three-fourths and 99 years is 24 years longer than Your Man Mitch's toll road 'sell-off'.

If you want to reduce Indianapolis to the status of a Magyar dependency, I dont think you'll find most Hoosiers agreeing!

Gary R. Welsh said...

Maybe if Bart & Lacy had considered their offer, we might have been able to raise enough money to take care of our long-term debt problems, Wilson. Instead, OUR TAXES ARE DOUBLING. Millions for Bart's millionnaire buddies. Tax increases for the working stiffs Bart & Lacy could give a damn less about.

Wilson46201 said...

You can always tell when Republicans are getting really desperate when they resort to faux-populism and working-class solidarity!

What's next? A loud chorus of "This Land is Your Land", "Which Side Are You On" and "We Shall Overcome"? LOL

Short Stop said...

You said: "You're not going to get by with your lies here, Wilson. BAA wanted a long-term lease, with a small ownership stake. Your buddy Lacy Johnson didn't have a problem selling off the hotel rights on airport property to his good buddies. What percent ownership did Sam Odle wind up with? Isn't he big buddies with Carson and Johnson?"


Julia Carson used to babysit Sam Odle. Also, he runs the hospital that has been the subject of gross medical malpractice. I hear he's an x-ray technician? Hmmmmm....

The same state representative, the embalmer, was also pushed on Dr. Ackles, the marion county coroner for the Chief Deputy Coroner position. The best decision Ackles could make was to say flat out NO!!!! The Ghetto Mafia has resented Ackles since.

Bart Peterson, Julia Carson, Lacy Johnson, Sam Odle, Vanessa Summers, Bille Breaux, they center township trustee gang all take care of each other.

Wilson46201 said...

You can always count on an unsuccessful Black woman to try to take down popular and elected Black leaders! Kinda sad, isn't it? "Shortstop" is ashamed to use her own name as well she should be!

Anonymous said...

Yes Sam Odle was an x-ray technician, we all started some place, I'm sure you didn't pop out the womb in your current occupation- short stop-

He also has a long list of other accomplishments, degree's and acknowledgements, if you do some research. When the issues arose at the hospital he was the 1st one to step up to the plate, look around at corporate America, anyone else would have sweep that under the rug and took care of it behind close doors, yes it could have been done. Regarding his investment in the airport hotel, it's just that an investment, if any of you had a dollar to invent in it you would be silly not to have too. Look for your faults and judgement some place else.

Anonymous said...

You said: Yes Sam Odle was an x-ray technician, we all started some place, I'm sure you didn't pop out the womb in your current occupation- short stop-

I wonder if the position was posted and what happened to all the candidates who have masters and doctors degrees in Hospital Administration...and I'm not talking about honorary doctorate degrees from Martin U.

-Brain drain is alive in well in Marion County.

Anonymous said...

Boy you all should do research before you blow out air-- he does have a Masters degree in Hospital Admin. from IU if you look.

Anonymous said...

Yeah he also has a god mother who is the queen of the ghetto mafia, I'm sure that helped a lot.