Philadelphia International Airport is poised to cut ties with PPA after nearly 50 years

The Philadelphia Parking Authority’s four-decade reign over airport parking operations could come to an end within a year, cutting into a significant chunk of the authority’s operations and putting about 100 agency jobs on the line.

Last week, the city’s Department of Aviation paid off more than $54 million in PPA bonds related to the airport parking garages, effectively giving the airport full control of its own sprawling parking garage complex, which the PPA has operated since the mid-1970s.

“With this debt extinguished, the Division of Aviation now owns the airport parking garages and economy parking lot,” PHL spokesperson Heather Redfern said, “and is proceeding with plans to better integrate parking into the airport’s overall ground transportation system and develop the economy lot for strategic aeronautical purposes.”

The PPA now holds an 11-month agreement to run the garages while airport officials launch a competitive hunt to find a new operator. Redfern said airport officials are excited to develop a new parking program soon and are “looking forward to working with the PPA during the transition.”

Unless the parking authority wins a competitive bid to become the airport’s next parking operator, it will get the boot sometime in 2022.

But the PPA isn’t giving up without a fight.

Spokesperson Marty O’Rourke said the agency plans to apply once the airport requests proposals for a new parking operator, aiming “to protect family-sustaining jobs for our dedicated employees that provide excellent service at the airport.”

Teamsters Union Local No. 115, the union that represents the PPA workers at the airport, cast the power shift as a bad omen for future travelers.

“The expensive takeover of the parking operations is worrisome, given the demonstrated inability of PHL leadership to continue providing affordable and accessible parking and transportation services to passengers,” said Robert Freiling Jr., a business agent for the local.

Losing the airport operation would not impact the PPA’s already strained annual contributions to the city and cash-strapped school district, as those payments are tied solely to on-street parking revenues. PPA revenue generated at the airport is limited to financing airport operations and administrative costs associated with the authority’s aviation wing, a spokesperson said.

The parking authority’s presence at the airport dates to 1974, when it began developing its first parking garage at the rapidly growing metro travel hub. Under the arrangement, the city leased land to the PPA to finance and develop parking garages, which the agency could then run. Since then, the parking authority has used bonds to expand its empire to include seven garages and lots with more than 19,000 parking spots at its peak.

The airport has long had the option to pay off the PPA’s bonds and take control of the parking operation itself.

The PPA’s land lease with the city was set to expire in 2029, according to PPA financial documents. And in 2020, the city signaled interest in paying off the PPA’s bonds and removing the agency from the airport equation.

The reasons leading up to the decision were not clear on Sunday. The PPA attempted to negotiate a deal to retain its 100-member workforce, according to people familiar with the discussions. Under the new arrangement, however, PPA staff will continue operations only until the end of this year, with an option to extend the agreement if needed.

Discussions about lot ownership started after the pandemic began shifting the airport’s relationship toward its parking supply.

Before March 2020, the PPA’s aviation division amounted to a $63 million annual operation, employing as many as 150 people. But demand plummeted after the coronavirus decimated the travel industry. The parking authority’s most recent financial statement reported a nearly $10 million loss in operating income at the airport.

At the same time, airport officials have been eyeing a new future for the once-lucrative parking spaces.

The airport closed its popular, $13-a-day economy parking lot at the beginning of the pandemic, removing about 7,100 parking spaces. While originally billed as a temporary closure, it became permanent last year. Officials announced plans to redevelop the site to expand cargo shipping services — part of a multiyear plan to lure more shipping business to the airport.