A few local developers are offering to buy hundreds of acres of land from the Lehigh-Northampton Airport Authority before that authority faces deadlines to pay multi-million-dollar fees it owes as the result of a lawsuit.
But the authority has no such agreements of sale with the Rockefeller Group, a New York City-based commercial real estate developer and broker it has been working with for more than a year.
The authority still doesn’t know how much land Rockefeller wants to buy, how much it will pay for it and when it will buy it, said Dean Browning, the authority's secretary-treasurer.
“We have an opportunity to walk away from Rockefeller and open the land up to other buyers,” said Browning.
“Within the past several weeks the airport authority has issued a request for proposals that a number of developers have responded to, saying they would be interested in all of the land.” He added those responses included “firm commitments that they will settle in a sufficient time for us to handle our lawsuit payments.”
The authority intends to sell between 750 and 900 acres of unneeded land to make court-ordered payments in a lawsuit it lost. It must pay $5 million by December 2014 and $6.6 million by December 2015.
The successful lawsuit against the airport involved land it acquired years ago for future runway expansion, which never happened. Ironically, much of that same land now will be sold to pay off the lawsuit.
The authority must pay $3 million on the lawsuit by this December, but most of that money will come from the Federal Aviation Administration.
Browning said the authority does not have the money to make the lawsuit payments in 2014 and 2015. He said his primary responsibility is to make sure it has the money to settle the lawsuit.
Browning said nothing in the authority’s current agreement with Rockefeller requires that Rockefeller buy the land in time to generate money in time for the authority to settle those lawsuit obligations.
“I’m making this a public issue because I think we are confusing our responsibilities on the board,” said Browning. “We have a fiduciary responsibility to come up with the money to settle the lawsuit. I don’t think pursuing the course we’re currently on with Rockefeller will allow us to do that.”
Tony Iannelli, chairman of the airport authority board, questioned why Browning voted to move ahead with Rockefeller just last week if he now opposes continuing that professional relationship. “He must forget that he voted yes at the meeting.”
Iannelli said at other board meetings Browning repeatedly has expressed concern about selling land in time to have the money to pay off the lawsuit obligation.
“He has certainly reminded us on many occasions about the very difficult financial situation we’re in based on the lawsuit,” said the board chairman.
“We get that loud and clear. We know the time line very well. I don’t know how to satisfy his concerns other than waving a magic wand and going to settlement tomorrow.”
“The board is certainly moving forward, we are focused on selling the real estate,” said Charles Everett, executive director of Lehigh Valley International Airport. He said selling that real estate before the lawsuit payments are due “is certainly our goal.”
Browning said the authority recently sent out a request for proposals to a number of developers, “many of whom are local,” and at least one local developer said he will take all of the land and “will commit to us that we will get sufficient money in 2014 and 2015 to handle the lawsuit payments. He would make payments in June 2014 and June 2015, before our December 2014 and December 2015 deadlines.”
Browning declined to identify that local developer.
“We’re delighted to know there is a lot of interest in the real estate,” said Everett.
He confirmed some of those developers may be interested in buying all the land.
Iannelli said many local developers have said they are very interested, but “none have brought us any money yet.”
Browning believes the authority can part company with Rockefeller without being sued for terminating its agreement with that company. He said even if there was a lawsuit, it would not be substantial.
But he said many members of the authority board fear another lawsuit if they sever ties with Rockefeller. They also fear the Lehigh Valley will lose a Federal Express facility to be built on some of the land Rockefeller plans to purchase north of the airport.
Browning said that Fed Ex facility would employ up to 1,000 people.