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Coffee With Phil Sunderland
The long-time Alexandrian talks about the airports, the little-understood airports authority, and the involved process of extending Metro rail to Dulles International Airport.
Phil Sunderland recalled an extraordinarily interesting and diverse career. He was Alexandria’s City Attorney for 14 years, its City Manager for five years and Chief of Staff to former Congressman Jim Moran for two years. He retired in February 2020 as Senior Vice President and General Counsel after 12 years with the important, but not widely understood, Metropolitan Washington Airports Authority (MWAA).
The common theme to his professional positions was public service, but not in an elected position. In each job he dealt with very different constituencies and cultures. He never ran for elective office because of “the human demand and the human cost” and observed that, “if you wanted to get into that arena, it requires one heck of a lot of Teflon®, and I never wanted to test that proposition.”
MWAA: What It Does and Why It Matters
The airports authority is not an agency or department of the federal government or of a state. According to its governing documents, MWAA is an autonomous “public body politic and corporate” created in 1987 by an interstate compact between the District of Columbia and Virginia and approved by Congress. As a result, MWAA became responsible for the improvement, operation and maintenance of Reagan National and Dulles International airports. (The U.S. Department of Transportation operated Reagan National from its opening in 1941 and Dulles from its opening in 1962.) Congress also authorized a long-term lease to MWAA of the federally-owned land occupied by the two airports.
The authority’s 17-member Board of Directors is appointed by the Governor of Virginia (7 members), the Governor of Maryland (3 members), the Mayor and City Council of the District of Columbia (3 members) and, subject to Senate confirmation, the President (3 members). The current board includes former Alexandria City Councilor David Speck. More information on the MWAA is available
Sunderland said that the public’s relationship with MWAA is “unique … People’s experience with airports is usually a nice one; they’re going to see their grandparents; they’re going to see their grandkids. It’s a trip, it’s fun, and its infrequent, unlike the ongoing day-to-day relationship the public has with most government bodies.” He also noted that MWAA conducts extensive surveys and social media analyses to determine the level of satisfaction with the public’s airport experience.” As you can imagine,” he said, “All kinds of comments come in.”
According to Sunderland, the future of the airports, including any additional expansion, is in the hands of MWAA, a responsibility it assumed under its land lease with the federal government. With the Washington region now served by three airports, he said, “Starting up an airport in a new location today in this region would be extraordinarily difficult in light of the region’s many established residential neighborhoods and the impact that noise generated by a new airport would have on those neighborhoods.”
Dulles and Reagan National Airports Compared
Sunderland dealt extensively with the operations at Reagan National and Dulles during his time at MWAA. There were more than 26,000 workers at the Dulles campus in pre-pandemic 2019, mostly employees of MWAA, the airlines, concession businesses, various government agencies, and companies providing on-airport services to airlines and ground transportation to passengers. In 2019 slightly under 20,000 people worked at the Reagan National campus.
Sunderland said, “Dulles and Reagan National are roughly aligned in their passenger numbers.” Each served between 23 and 25 million passengers in 2019, but their footprints are vastly different. He said, “Dulles has a campus of over 11,000 acres and has a substantial capacity to expand.” Reagan National, which recently opened a new north terminal to replace the widely-disliked Gate 35X and its shuttle buses to planes, is on a space-constrained campus of only 860 acres.
The new Reagan National terminal, he noted, will be used entirely by American Airlines and, under an agreement with MWAA, American was responsible for the majority of the costs to build the new facility and will be responsible for future operating costs.
Sunderland believes the next major improvement at Reagan National will be a renovation of the original main terminal. Any such work, he felt, would likely be years off, and almost certainly would be designed to maintain the building’s historic character.
Sunderland said that major improvements at Dulles will depend significantly upon a decision by United Airlines—presently, Dulles’ dominant carrier—to continue to operate its Dulles hub. Since Dulles improvements would be primarily used by United, MWAA would look to United to finance most of them.
MWAA Takes Control of the Dulles Toll Road to Help Bring the Silver Line to Dulles
Sunderland said that MWAA’s responsibilities to operate and maintain Reagan National and Dulles expanded in 2006 when MWAA—to ensure the extension of the Metro rail system to Dulles—took on the construction responsibilities for the Silver Line extension and replaced the Virginia Department of Transportation as operator of the Dulles Toll Road. Sunderland said that when the federal government acquired real estate for Dulles in the late 1950s, it included a wide swath of land running 13 miles between the location of the then-planned airport and the future location of Interstate 66 in Arlington. This land was for dedicated roadway to Dulles, now the Dulles Access Road, and a right-of-way for mass transit, now the new Metro Silver Line route to Dulles.
Sunderland observed that the assumption of operational control of the Toll Road required a change in MWAA’s internal workings and culture. In its role as airport operator MWAA encountered its flying customers infrequently and did not directly charge them taxes or fees. However, in its new role as Toll Road operator, MWAA served tens of thousands of drivers daily and set the tolls. Sunderland noted that tolls had to be increased from time to time to finance the Metro rail expansion. As a result, he said, “MWAA became, candidly, a more open and communicative organization, expanding its communications and customer service operations to address complaints of Toll Road users, and establishing new ways to keep those customers informed of MWAA’s proposals for roadway operational changes, construction activities and toll increases, and to encourage their participation in MWAA’s decision making processes.”
The lawyer in Sunderland noted that MWAA’s takeover of the Toll Road was controversial. Ten years of litigation followed MWAA’s initial toll increases in 2009. Multiple lawsuits challenged MWAA’s authority to set the tolls that generated revenue not just to fund Toll Road improvements but also to substantially fund the Metro rail expansion to Dulles.
MWAA prevailed in all the lawsuits which Sunderland characterized as “presenting a number of fascinating legal issues that lawyers typically don’t have a chance to deal with.” He observed that these cases establish an important precedent: in certain circumstances, authorities that operate more than one form of transportation may assess user fees to raise revenue for purposes not exclusively related to the revenue source.
Where MWAA Gets Revenues to Run and Improve the Airports
MWAA lacks the power to tax. Thus, MWAA’s operational costs at the airports are largely paid by revenues raised from airlines, airport concession businesses, rental car companies and ground transportation operators, and parking garages. The large majority of MWAA’s construction costs are supported by revenues from “passenger facility charges” (a fee embedded in the cost of a plane ticket), and federal grants. Sunderland says that the costs airlines pay to operate at an airport are typically less than five percent of their overall operating costs.
In its airport and Toll Road operator roles, MWAA issues tax-exempt bonds to finance its construction programs. MWAA’s aviation bonds are secured solely by revenues from the two airports, and its rail bonds are secured solely by Toll Road revenue. MWAA currently has about $4.3 billion in outstanding aviation bonds, and about $3.3 billion in outstanding in rail bonds. Sunderland estimates that a little over 50 percent of the Metro Silver Line extension’s final cost will be financed by bonds.
Sunderland derived his most professional satisfaction in working on the complex transactions that enabled MWAA to take over the Toll Road and build the Silver Line extension. His focus was on, “making sure all transactions fell within MWAA’s powers, ensuring all MWAA procurements were validly performed, participating in the drafting and administration of major construction contracts and the issuance of rail construction bonds, and overseeing 10 years of litigation that challenged MWAA’s authority to use revenues from the Toll Road to finance the Silver Line construction,” activities that helped to make what he called “an extraordinarily important new arm of the Metro system” a reality.