Department of Transportation

Privatization of Stewart International Airport: Monitoring of Lease Agreement

Stewart International Airport, which is located near Newburgh, was acquired by the Department of Transportation in 1982 and was operated by the Department with the assistance of contractors until April 1, 2000. At that time, as part of an airport privatization program sponsored by the Federal Aviation Administration, the Department leased the airport to a private corporation (SWFAA) for a period of 99 years.

We examined the Departmentís monitoring of the lease agreement and found that certain improvements were needed. For example, a reporting mechanism was needed that enabled the Department to monitor whether SWFAA had made the level of capital expenditures required by the lease, and such a mechanism was also needed to inform the Department when environmental violations were detected at the airport by the Department of Environmental Conservation (contrary to the terms of the lease, a wastewater discharge violation involving deicing fluid was not reported to the Department by SWFAA). We also found that the Department had yet to be paid $1.5 million by SWFAA for two parcels of land that were remediated by the Department in accordance with the lease. According to SWFAA, the parcels were not remediated to its satisfaction. We recommended that the Department promptly resolve this disagreement and collect the $1.5 million.

For a complete copy of Report 2002-S-57 click here.
For a copy of the associated follow-up report click here.