Airport wins in state’s gambling expansion

Pennsylvania’s gambling expansion has proven to be a stroke of good fortune for Pittsburgh International Airport.

As part of the bill enacted in October, legislators reauthorized $12.4 million a year that now goes to the airport for economic development and to reduce costs to the airlines that use it.

Without the reauthorization, sponsored by state Sen. Jay Costa, D-Forest Hills, the funding would have ended in the 2018-2019 state fiscal year. Now it will continue into the future unless there is some change in the gambling law.

Christina Cassotis, CEO of the Allegheny County Airport Authority, which operates Pittsburgh International, said the money will continue to be used to help pay debt service and for economic development, including incentives paid to airlines to start flights here.

“It’s incredibly important because it’s a validation of the strategy. It’s a validation of what we’re doing and how we’re using the money,” she said.

“The fact the Legislature made that choice, to me, is a sign that they are comfortable with how we are administering those funds and what we are using them for.”

The airport has been receiving $12.4 million a year from a slots-financed economic development fund for about the past decade. The money was first awarded at a time the authority was struggling to cut costs to the airlines after US Airways closed its Pittsburgh hub in 2004.

Ms. Cassotis said the bulk of the money will continue to be used to help lower the airport’s debt and “keep our costs competitive.”

While much of the debt incurred to build the midfield terminal, which opened in 1992, will be paid off next year, the authority has plans for a $1.1 billion modernization that includes a new building for ticketing and security, a new parking garage and a streamlined boarding facility.

The current building for ticketing and security would be mothballed or demolished and the number of gates reduced from 75 to 51, although there would be room for expansion.

Ms. Cassotis said the authority intends to use the state money to

help with the debt on the new bonds needed to finance the modernization.

That, in turn, would help to keep costs to the airlines lower since they are the ones responsible for paying debt service and financing the authority’s budget through airport rates and charges.

A “small portion” of the money would be used to provide incentives to airlines that start flights to new destinations, Ms. Cassotis said.

In the last year alone, the authority has agreed to pay out up to nearly $3.4 million in incentives to airlines to start passenger service to Frankfurt, Germany; Iceland; Seattle; Montreal; and Sarasota/Bradenton; as well as cargo flights between Pittsburgh and Doha, Qatar.

Ms. Cassotis said such payments are necessary. “They’re taking risks when they add service to an existing market or to a new market. They are expecting communities everywhere to step up and show their commitment by making an investment,” she said.

Mr. Costa, the Senate minority leader, said he is “very comfortable” with the airport authority using part of the money to provide incentives to airlines to start service.

He noted, for instance, that landing the Seattle flight, which will start next September, could be important to the region’s bid to secure Amazon’s proposed second headquarters. The online retailing giant, based in Seattle, has said such a flight is important.

“I trust that the airport authority will use these resources the best way it can to create further economic development for the region and Allegheny County. One way to do that is offering flights,” he said.

Mr. Costa added that he decided to include the reauthorization of the funding in the gambling expansion so that the authority could keep costs to the airlines as low as possible.

“I feel strongly that the airport is one of our strongest economic development opportunities for our region,” he said.