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Orange County board pauses Clay Lacy’s John Wayne Airport financing plan after heated policy debate
Summary
After two years of negotiation and a day of intense questioning, the Board of Supervisors voted to continue consideration of Clay Lacy Aviation’s request to use private-activity (tax-exempt) bonds to finance a new FBO at John Wayne Airport, directing staff to return with added default protections, transparency and revenue‑sharing options.
The Orange County Board of Supervisors on Aug. 12 voted to continue for up to 90 days consideration of a proposal that would let Clay Lacy Aviation use private-activity tax-exempt financing to build a new fixed-base operator facility at John Wayne Airport.
Supervisor Don Wagner led a vocal opposition, saying the county would be “picking winners and losers” if it allowed one private operator exclusive access to the financing mechanism. Wagner warned the move could set a precedent and urged the board to hold Clay Lacy to existing lease terms instead of extending a special financing benefit. “That’s not our role as the government,” he said during a lengthy exchange.
Supporters, including Supervisor Katrina Foley and representatives from Clay Lacy and its financing team, argued the structure is a long-established tool in the municipal finance market, does not obligate county taxpayers and will bring substantial private capital and county-owned improvements. “This is a private activity bond, and it does not burden the taxpayers,” Foley said, adding the project includes a new Orange County Sheriff’s Department facility and that the county will ultimately own the completed buildings.
Financial and legal advisers from Wells Fargo, bond counsel and the California Municipal Finance Authority described the proposed structure as standard in airport financing and said the issuance would be a minor fraction of the national municipal market. Clay Lacy’s CFO noted the company has invested tens of millions to date and pledged more private investment to complete the facility.
The board’s motion to continue was accompanied by explicit directions to staff: return with draft lease amendments or contract language that would (1) strengthen the county’s authority and procedures in the event of a default or assignment, including whether and how the county could run an RFP for replacement operators; (2) outline options for revenue sharing or a post‑construction reappraisal of ground/percentage rent; (3) supply a list of comparable municipal/private financings and the demonstrated market impact; and (4) ensure the airport director and other key staff are present when the matter returns.
County counsel and airport staff indicated the current lease already allows assignment and lists reasonable grounds for the county to withhold consent, but they said they would work with Clay Lacy and bond counsel to draft any additional protections the board requests. Deputy county counsel said the board could add language if the parties agree.
The board’s decision to continue leaves the project in limbo while staff and the applicant negotiate potential lease changes and additional public benefits the supervisors sought.
