Determining a Value for National and Dulles Airports for Transfer to a Local Airport Authority

GAO discussed the transfer of federal ownership and control of Washington National and Dulles International Airports from the Department of Transportation (DOT) to an independent regional airport authority. GAO identified three alternate methods for valuing the two airports either separately or as a combined entity, including: (1) obtaining the fair market value of the airports; (2) recovering what the airports cost the government; and (3) transferring the airports at no cost. GAO noted that: (1) traditional fair-market-value methods were difficult to apply to the proposed transfer because existing and proposed restrictions on airport operations and earnings limited all revenues to be used to pay capital and operating costs; (2) an open sale of the airports may not be feasible, since all major commercial airports are owned and operated by cities, states, or airport authorities; (3) the government could determine a fair market value by estimating future earnings and then calculating the present discounted value of those earnings, but the earnings restriction complicated this method of valuation; and (4) comparable market transactions could be identified to determine what users are currently paying for similar services at other airports. GAO found that fair market value could be estimated by using: (1) either the modified discounted future earnings method or the replacement cost approach; or (2) the federal government's unrecovered investment in the airports. GAO noted that applicable law allows an agency to transfer any properties that it has determined are surplus to its needs and responsibilities; however, it is not clear whether the airports could be designated as surplus properties.