Orange County Board of Supervisors voted 3-1 Tuesday to approve a plan from its fixed-based operator at John Wayne Airport to sell bonds to finance $120 million in improvements.
The sale of public bonds is done by a governmental agency, but Clay Lacy Aviation Inc. has a plan to issue the bonds through the California Municipal Finance Authority.
Supervisors were skeptical of the project when they debated it in August, but board Chairman Doug Chaffee joined Vice Chairwoman Katrina Foley and Supervisor Vicente Sarmiento in supporting it on Tuesday.
Supervisor Don Wagner voted no. Supervisor Janet Nguyen abstained.
Foley said selling the bonds will allow the company to pay for improvements that include new terminal hangars and office space, which will be “owned by the county — that’s important.” The new facilities will be “leased and operated by Clay Lacy” with “additional guarantees and indemnification” of the county, Foley added.
“None of these private equity bonds will utilize taxpayer funds,” Foley said. “This project will help reduce the rent for the sheriff’s hangar.”
Wagner blasted the bond deal, calling it “crony capitalism at its worst.”
“We are picking winners and losers and it is simply the case that rich folks will be able to invest in this project and they will get tax benefits from doing so, so taxpayers end up hurt in that those folks are no longer sharing the same tax burden they would otherwise would, and it also opens the flood gates for other deals, which I imagine we will have zero ability to say no to and be consistent,” Wagner said.
“It is a principle thing. As a government entity we should not be giving our powers to private entities.”
Sarmiento said that, “While I agree with a lot of the philosophy that Supervisor Wagner just mentioned, I am not a big believer that big corporate entities that take advantage of public funds at the expense of the public, but to the extent that this doesn’t appear to be that this is something of an investment that is going to be a net benefit to the residents here.”
Sarmiento said he liked the deal for “enhancing our assets” that will “remain with us.”
Chaffee said he liked that the sheriff’s department will get its own building. When it shared officers it placed all of the building under specific security protocols, he added.