In 'team effort,' airport to seek federal tax ruling

Warwick Beacon ·

When the City Council approved a resolution calling on the General Assembly to approve legislation giving the city $900,000 in payment in lieu of taxes (PILOT) as the host city of Green Airport, the immediate reaction of the Rhode Island Airport Corporation is that it would be illegal.

Nonetheless, Iftikar Ahmad, RIAC president and CEO, said Tuesday that the agency is inviting Mayor Joseph Solomon to attend the Feb. 7 meeting, at which the board will consider a resolution calling on the state’s congressional delegation to explore means for airport payments in lieu of taxes. Presently, RIAC is paying $500,000 to the city for police and fire services rendered on an annual basis.

“This resolution would support the City Council and the mayor,” Ahmad said.

Ahmad said he believes Solomon wants “to see the city get ahead” and at the same time have a successful airport.

“He thinks both can be achieved…businesses can thrive and the airport can thrive,” Ahmad said.

What Ahmad envisions is a petition backed by the state congressional delegation calling on the Federal Aviation Administration to review and amend restrictions on PILOT to local municipalities.

For Ahmad to increase payments to the city, as the council suggests could be legislated by the state, would be considered malfeasance and could not only lead to action against him personally but also jeopardize FAA grant funding flowing to RIAC. It’s not an action Ahmad wants to risk.

Nonetheless, Ahmad, recognizes the importance of working with the city and wants to build that team.

“It’s important that we’re all going in the same direction,” he said. “It’s our city, we’re all together on one team.”

Ahmad feels RIAC is taking steps in the right direction. He cited airport property on Airport and Post Roads and measures to clean up weedy parking lots and derelict buildings.

“The blight was there.” Ahmad said he set “hard deadlines” to clean up the sites, “this can’t be there anymore.” He said RIAC is also moving to return to city tax rolls surplus property such as the former LAZ Airport Parking on Post Road in the shadow of Route 37. That property, consisting of more than six acres, was recently sold to PHM Warwick 2018 Investors LLC for $3,350,000.

Ahmad pointed to the internship program RIAC will start in the next week in collaboration with the aeronautics academy at the Warwick Area Career and Technical Center this month as an example of the city and airport working together. Three academy students will work alongside people at the airport learning different phases of the operation Monday through Friday during the semester.

The $500,000 RIAC pays the city is to reimburse the cost of police and fire services, although an accounting of those costs has not been provided as requested by the Beacon. Some council members reason the airport is costing Warwick taxpayers close to $2 million. The $500,000 is actually a tenth of what the city gets in airport-related payments, according to RIAC calculations.

In addition, the city received $540,000 in property taxes for the Red Beam garage that is not owned by the state; $1,440,000 in parking surcharges; $800,0000 from the state in airport impact aid; $1.3 million in hotel taxes, $140,000 in food and beverage sales tax and $800,000 in sales tax and surcharge on the $6-a-day customer facility charge on rental cars for a total of $5,520,000, according to RIAC.

Ahmad also took the occasion to define the costs and the benefits of having the Patriots’ jet based at Green Airport. He said in exchange for waiving $118,000 in fees, the airport receives an estimated $969,000 in marketing benefits. Those include mention of Green as the Patriots home airport of their website, radio and television, social media and on “ribbon” notices in Gillette Stadium.

Is it anything more than promoting the Green Airport name?

Ahmad believes so. He notes that even a few points “in our load factor [the number of seats being filled]” offset the fees waived.

“I think it is a good deal for us,” he said.

The Patriots agreement runs through July. Ahmad could not say how the board would treat its renewal.

Brian Schattle, RIAC chief financial officer, couldn’t say what might be planned following the Super Bowl on Sunday. For starters, he thinks when the team returns will depend on the outcome of the game.

Either way, RIAC has the Patriots and their return on the radar. But, as Schattle points out, what happens is up to them.

“It’s their show and our venue,” he said.