By Kent Jackson
During the past 14 years, an attempt to build an international cargo airport on the border of Luzerne and Schuylkill counties encountered turbulence but never crashed.
Proposals for the operations, funding and management of the airport have changed. The airport proposal outlasted the political careers of supporters and persisted after two backers went to prison.
On Aug. 2, after a three-year effort, Gladstone Partners of Pittsburgh received approval to develop the airport from the Schuylkill County zoning board. Before getting clearance, Gladstone contested issues twice in Schuylkill County Court and once in Commonwealth Court and participated in a series of monthly hearings that the zoning board held, starting last winter.
“Every time I think that this project is done, it seems to be resurrected in some shape or form,” said state Rep. Jerry Knowles, R-Tamaqua, whose district includes the proposed airport land in Schuylkill County.
Whenever the airport plan gains altitude, people get shaken up, Knowles said.
Opponents said noisy planes will worsen lives of people living near the airport while roads, water supplies, hospitals, schools and other services cannot withstand the crush of workers who will move to the region because of the airport.
Supporters said the airport will jolt the economy by employing 4,500 and spinning off even more jobs at a surrounding business park, although the park was dropped from the application sent to the Schuylkill County zoning board.
People on either side of the issue wonder how Gladstone can generate the estimated $1.6 billion needed to build the airport.
“Where in the world do we come up with that kind of a number in this economy?” said state Sen. David Argall, R-Tamaqua, who represents Schuylkill County.
The lawmakers whose districts include airport land – Argall, Knowles, state Rep. Tarah Toohil, R-Butler Township, and state Sen. John Yudichak, D-Plymouth Township – said no one from Gladstone asked them about obtaining state money for the airport.
“I have had no conversations with the developer and am not aware of any participation of state support, certainly not through my office,” Yudichak said.
U.S. Rep. Lou Barletta, R-Hazleton, who was Hazleton mayor before he entered Congress, said no one from Gladstone asked him about obtaining federal money for the airport either.
Five years ago, the Pennsylvania Legislature seriously considered guaranteeing $250 million of airport bonds, which when repaid with interest, would have totaled an allocation of $495 million for Gladstone.
Since then, the main backer in the legislature, state Rep. Todd Eachus, a Democrat who represented Hazleton and rose to House majority leader, left office. Eachus dropped his support in 2009 after a report to the state Legislative Budget and Finance Committee outlined financial obstacles to the airport and after one of the partners in Gladstone, Robert Powell, an attorney from Mountain Top, was indicted. Eachus lost re-election partly because he flew on Powell’s private jet to attend a news conference unveiling Gladstone’s plans in 2007. Former Luzerne County commissioner Greg Skrepenak, who also attended the news conference to support the plan, later resigned to serve a prison term for accepting kickbacks unrelated to the airport.
Powell is serving a 17-month prison sentence for bribing two Luzerne County judges to obtain county contracts for two juvenile detention centers that he and another partner in Gladstone, Gregory Zappala, developed.
Zappala faced no charges in the investigation of the juvenile centers. His investment banking experience will be key to lining up investors to finance the airport.
Few success stories
The report given to the Legislative Budget and Finance Committee said Zappala faces a tough task.
Of the numerous attempts to start cargo airports, even at former military bases where the runways and other structures already exist, “few have been successes,” the report said.
Neither of America’s largest freight companies – FedEx or UPS – planned to use Gladstone’s airport.
FedEx expressed no interest in opening a hub at the airport. UPS representatives said they were 98 percent certain that the Philadelphia International Airport would provide the company’s long-term needs, according to the report.
Even without UPS or FedEx, Gladstone said the airport could operate by forming an alliance with international air freight carriers, but the report called an agreement like that unprecedented.
Since the report came out in the summer of 2008, Zappala’s task hasn’t grown easier.
Conditions worsened for the world economy generally and for air freight companies.
A few months after the report came out in 2008, DHL withdrew from the U.S. air freight market and closed its airport hub in Wilmington, Ohio, devastating that community’s economy.
Last month, Asia’s largest international carrier, Cathay Pacific Airways Ltd., recorded its biggest losses since 2003. The airline attributed the losses to rising fuel prices, reduced passenger flights and a 7.6 percent drop in revenue from freight.
Zappala last talked publicly about the airport in 2008. During a public meeting with state lawmakers at Hazleton Area High School back then, he said attracting companies like UPS or FedEx would be difficult, but added he wouldn’t invest money if he didn’t think the airport would succeed.
Efforts to reach Zappala last week about his plans for financing and managing the airport failed. Neither his attorney in Pittsburgh, William G. Brucker, nor Frederick Fanelli, the Pottsville attorney who represented Gladstone before the Schuylkill County zoning board, returned telephone calls in the past two months.
Ridge Global, the consulting firm of Tom Ridge, a former Pennsylvania governor and U.S. secretary of homeland security, presented information during the zoning hearings in Schuylkill County on behalf of Gladstone. It is unclear if Ridge, for whom the airport is named in Erie, where he grew up, or his firm will play a further role in planning or investing in the airport near Hazleton. Ridge Global did not reply to emails sent on Aug. 13 and Wednesday.
Gladstone partner Michael Marsicano also failed to return telephone calls the past two months.
Marsicano, a retired airline pilot, shaped the idea for a cargo airport while serving as Hazleton mayor between 1996 and 1999.
The idea might have started in the mid-1990s with Tom Ogorzalek, the local manager for Butler Enterprises. He suggested building a tri-county airport to replace Hazleton Municipal Airport. Ogorzalek said some of Butler Enterprises’ land in Schuylkill and Luzerne counties could accommodate the airport and related business such as air charter services and aircraft maintenance shops.
Marsicano expanded on the idea and said he believed the airport could help relieve congestion at the international airports that serve New York City – John F. Kennedy, LaGuardia and Newark Liberty.
Whereas Ogorzalek envisioned a 6,000-foot runway with room to expand to 8,000 feet, Marsicano proposed a runway of 13,000 feet, long enough to land air freighters from China. After leaving the mayor’s office, Marsicano helped keep the proposal alive by joining Gladstone.
The name of the partnership comes from the old telephone exchange when people dialed G-L as in Gladstone at the beginning of calls made to Hazleton.
To ensure that Gladstone returns their calls, the Schuylkill zoning board required the partners to designate someone who will communicate with county officials until the airport construction ends. As of Tuesday, Gladstone hadn’t told the county planning and zoning office whom to contact.
More work to do
Zoning board members set two other conditions when permitting the airport.
Gladstone must establish emergency services such as fire suppression, ambulances and police for the airport, and Gladstone must build a road between the airport and Interstate 81. Plans call for extending state Route 424, which intersects with I-81, through the airport to state Route 924.
Steve Barrouk knows that tying a road to I-81 takes time and money.
Barrouk helped create exit 168 on I-81 at the Luzerne County arena in Wilkes-Barre Township, which was being built in the 1990s when he led the Greater Wilkes-Barre Chamber of Commerce.
“We managed to get this thing done in less than 10 years,” Barrouk recalled recently.
Years before the arena, now named Mohegan Sun Arena at Casey Plaza, opened, the Pennsylvania Department of Transportation marked an exit at the mile marker 168 but never built the exchange there.
Having an exit on the drawing board, however, helped Barrouk and his colleagues gain approval from PennDOT.
So did support from government leaders, including Ridge, then-state Rep. Kevin Blaum and former U.S. Rep. Paul E. Kanjorski.
Kanjorski, who incidentally kept alive the proposal for the cargo airport after Marsicano left the Hazleton mayor’s office, obtained a federal earmark of $25 million to build the exchange for exit 168.
“The key was we had the governor on board and the entire delegation. I think that really made the difference. The availability of the earmark was huge,” Barrouk said.
Barrouk, who jokes that PennDOT time passes slower than normal time, said the political and financial backing compressed the schedule for building exit 168.
“If we had to wait for the traditional funding, we’d probably still be waiting,” he said.
Transportation approvals and financing aren’t all that Gladstone waits for before developing the airport.
Getting zoning approval took three years, and legal issues remain unresolved.
On Thursday, East Union Township and Service Electric Cablevision asked Schuylkill County Court to rescind the zoning approval.
In its appeal, East Union argues that the township rather than the county’s zoners should have decided whether to permit the airport. Gladstone applied with the county one day before the township enacted a zoning ordinance, and the county workers initially told Gladstone to apply with the township.
East Union also argues that the airport failed to meet conditions for the special exception because of adverse effects that it would have on the health, safety and welfare of the community.
Representatives from Service Electric Cablevision testified that aircraft would disrupt cable television service.
Gladstone also failed to obtain a permit from PennDOT’s Aviation Bureau, submit a parking plan or do a land survey, but the township said those actions should have occurred before the company won zoning approval.
“The zoning board erred because they looked at the economic impacts. If they looked purely at the zoning, they never would have got it,” said Donald Karpowich, the attorney for East Union Township.
Karpowich thinks the appeal will reach the state Supreme Court.
While settling the legal issues might take years, the wait could work to Gladstone’s advantage if the economy improves and investors come aboard.
Cathay Pacific, even while reporting substantial losses last month, continued to spend money, building a cargo terminal in Hong Kong in anticipation of a healthy market for air freight.