Sacramento airport director stands by his expansion plan
By Tony Bizjak -
tbizjak@sacbee.com
Published 12:00 am PDT Saturday, May 17, 2008
Story appeared in METRO section, Page B4
Sacramento's Hardy Acree is, this week at least, the man the airlines really resent.
But the blunt-talking airport director doesn't have time or inclination to care. He's pushing full throttle on a $1.27 billion Sacramento International Airport expansion. And the airlines' anger over the price tag just tells him they aren't thinking ahead.
A Porsche-driving pilot with a penchant for fine wine, haute cuisine and high art, Acree doesn't live life on the cheap, nor does he think Sacramento should.
"I've always felt Sacramento needs to think bigger," Acree said. "We could be anything we want to be."
Hired by County Executive Terry Schutten in 1999 from the Houston airport, Acree got the task of plotting a bigger future for an undersized, aging airport.
That future – and Acree's career moment – is here.
Workers at the airport are expected to break ground next month on perhaps the biggest public works project in Sacramento history.
Acree, Schutten and Sacramento County's Board of Supervisors have designed a gleaming four-story steel-and-glass terminal in the center of the airport to replace Terminal B.
It will be backed by a hotel tower. A people-mover tram will take riders to a 19-gate concourse on the airfield. A second parking garage will serve the new terminal.
"This is a pivotal moment for the next 50 years," Schutten said. "The airport will be a significant economic engine for this region."
But as Acree and staff tie up last-minute loose ends, one thread has become more knot than neat bow.
Led by Sacramento's dominant carrier, Southwest, resident airlines charge Acree with twisting their arms to pay more than they should for what they think will be an oversized facility.
The airport balances its books with rent from airlines, fees on fliers and other charges.
But the economy is down, gas prices have jumped, and airlines are in a spiral of bankruptcies, forced mergers and cutbacks.
Sacramento's expansion costs are like pouring fuel on a fire, they say.
The disagreement this week bordered on the personal.
During a heated board hearing, airline representatives said they suspect Acree is retaliating – imposing a higher-than-necessary fee – after the two sides failed to negotiate an agreement.
"It seems punitive," Southwest executive Ron Ricks told The Bee recently. "The foundation of Mr. Acree's position is: I'm going to confiscate your profits … because I can."
Acree said airlines brought the situation on themselves, repeatedly shifting positions during negotiations, forcing an impasse.
The airlines last week pleaded with county supervisors, asking them to rethink the financing. Supervisors instead voted to increase fees 45 percent.
"It now is time we move forward," Acree said.
It's what Acree has been doing most of his life. He grew up in a family of migrant workers in what he calls the backwaters of Arkansas. He chopped cotton during the school year and picked berries in Michigan in summer.
Acree today is a lean, buttoned-downed businessman with a tightly trimmed gray mustache and an annual salary of $175,000. He still speaks with a bit of an Arkansas twang and references barns and shotguns in conversations about bond debt and strategic planning.
His interest in aviation, he says, started with seeing silver and orange Air Force planes on maneuvers. "I was fascinated how something that big could be suspended in air."
He worked as a mechanic in the Air Force, considered making a living as a pilot, but ended up with a master's degree in aviation administration.
He no longer flies. As a hobby, it's too expensive. He drives a cherry red Porsche Carrera.
"Sports cars, and Porsches in particular," he says, "are the closest thing to flying."
Acree dismisses the airlines' suggestion that he's trying to build a Taj Mahal in Natomas. San Francisco and San Jose also are spending more than $1 billion on airport expansions.
He acknowledges a billion dollars is no small thing.
"It's better to aim for the moon and hit the side of the barn than to aim for the barn and hit your foot," he said.
Sacramento will grow, he said. "You have to think long-term. The airlines today cannot grasp that."
Such comments have riled airlines officials, and likely added to the heat at last week's showdown, but Acree's boss backs his airport director.
"He can be firm when needed to be," County Executive Schutten said.
The airlines will continue to make the case that the planned fees are onerous. Meantime, several said, they'll consider reduced service and higher fares.
"It will impact our fare structure," JetBlue's Mark Busalacchi said. "To what degree, I can't say. We'll go back and determine that."
"We're trying to grow here," U.S. Airways executive David Anderson said. "We'll see. We'll look at the numbers."
Acree said he didn't want the new fees. In a sense, however, it fits his think-big approach.
Under the former fee system – called residual – airlines covered the difference between the airport's annual expenses and revenue from non-airline sources, such as concessions, parking fees and passenger ticket charges.
Because the two sides couldn't agree on changes, Acree said the airport had to switch to a "compensatory" arrangement, which adds both some financial risk and potential reward to the airport. Under the new system, the airport will charge airlines set fees. That leaves the airport responsible for revenue shortfalls, but it benefits when non-airline revenues beat projections.
Airlines can protest the fees as "unreasonable," and possibly delay construction. However, in a recent interview with The Bee, Southwest officials said they don't plan to protest because it would be hard to win.
Meanwhile, Acree's expansion plan cleared a key hurdle this month. Bond agencies gave the airport an A1 rating on $600 million of new bonds.
For Acree, it was endorsement of what the airport is doing, and what he thinks Sacramento should do more.
"I encourage leaders to think big, take risks," he said. "At least that's what I'm trying to do."
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