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Airport authority trims executive ranks in cost-cutting move

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The Indianapolis Airport Authority has eliminated three executive positions, a move its board president says reflects a return to a more conventional and efficient corporate structure.

“You never like to do this but we need to streamline,” said President Michael Wells.

Wells didn’t like the executive structure put in place by former airport CEO John Clark, whose three-year contract wasn’t renewed in March.

Since Clark’s departure, interim CEO and airport veteran Robert Duncan has been reorganizing the way the airport is structured as it faces financial challenges

IBJ reported May 12 that the airport recorded a $31.3 million operating loss in 2011 due in part to airline restructuring, a sluggish economy and debt costs from the $1 billion midfield terminal project.

The three executives eliminated were Mark Hedegard, senior director of business development; Mark Kratky, controller; and Patzetta Trice, chief communications officer.

Duncan, in a memo to airport employees, said the changes were part of a process to ensure “that our organizational structure was efficient and supported our goal of reducing bureaucracy and refocusing on our core aviation mission.”

“With these changes, the chief communications officer, senior director of business development and the controller are no longer positions within the IAA organization,” he said.

Wells said the executive-level communications post wasn’t necessary. Trice, who was hired in 2005, is well known in community circles and had worked previously for Indianapolis-based Allison Transmission Inc.

Kratky's duties will be handled by existing staff.

Hedegard, a former Simon Property Group executive hired in 2010, had extensive retail experience. The airport will broaden the business development position to include economic development and responsibilities in working with surrounding counties and municipalities. The new post being created will also further revenue development from such operations as parking.

Parking generated $39 million last year, up 1 percent, and is the second-largest revenue generator at the airport, trailing only the $50.3 million from terminal revenue, which fell 2 percent.

Wells, president of real estate company REI Investments, was appointed in January by Mayor Greg Ballard, who wasn’t satisfied with the pace of development at the airport.

Wells and Duncan want more action on redeveloping the former terminal and in generating revenue from other sources.

The midfield terminal, which opened in 2008, added nearly $40 million a year to the airport’s debt service. The airport’s operating income was dinged further by a $44 million depreciation charge on the new terminal in 2011.

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  • Who should I call now?
    I was about to call Hedegard to open a business in the airport- who will handle his responsibilities in the interim? For all of you naysayers; the new airport is beautiful and upscale. Stop with your complaining and enjoy Indy as a hidden gem in the midwest!
  • Idea for Mr Wells
    Maybe they should have sold the naming rights to the new airport terminal, instead of giving it away for nothing to honor some obscure politician.

    Rolls Royce Terminal sounds nice, and $10 million a year licensing fee sounds pretty good right now.
  • Good Investment
    The old airport terminal was a complete dump that was a patchwork of "fixes" over the decades with a confusing and frustrating maze of roads leading to it.

    The new airport terminal is well worth it.

    It is the first and last impression anyone coming from any real distance remembers of our community.

    It is an essential service that is used everyday, unlike the $750 million football stadium.
  • New Airport Waste of Money
    The new airport was a waste of money and it was a "legacy" project for Bart Peterson. BAA, the former airport operator, did a complete study showing that if the airport spent $275 million on the old terminal, the airport would be better positioned for the future, financially. Bart Peterson and Melina Kennedy felt differently and with the help of Patrick Dooley, then airport director, they set out in spending the money to build the new terminal. No taxpayer money is used to operate the airport, but we all pay for the new and old airport facilities through higher fees.
  • YEP, COMPLETE WASTE OF $ NO DIRECT FLIGHTS ANYWHERE
    New airport, new Lucas Oil Stadium, expanded convention center, $30,000,000 Pacer gift, Stupid City Way Project, Broad Ripple Parking Garage $ Giveaway, Money blown on lethal bike lanes. The list is endless..

    We have complete morons in City Government with grafter buddies sitting in the wings also stealing parking meter revenue. Go to www.adavceindiana.com and read about Chicago Parking Meter Corruption.

    It's all theft of taxpayer resources and complete lack of financial stewardship and devoid of integrity.

    I would just like for basic city services please.
  • Wasn't Needed
    While I am usually all for shiny new things, the new airport was not needed and a huge waste of taxpayer money. Everytime I drive past the old airport on my way to the new one it angers me! Less convenient & more expensive is never a good combination.

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  1. The $104K to CRC would go toward debts service on $486M of existing debt they already have from other things outside this project. Keystone buys the bonds for 3.8M from CRC, and CRC in turn pays for the parking and site work, and some time later CRC buys them back (with interest) from the projected annual property tax revenue from the entire TIF district (est. $415K / yr. from just this property, plus more from all the other property in the TIF district), which in theory would be about a 10-year term, give-or-take. CRC is basically betting on the future, that property values will increase, driving up the tax revenue to the limit of the annual increase cap on commercial property (I think that's 3%). It should be noted that Keystone can't print money (unlike the Federal Treasury) so commercial property tax can only come from consumers, in this case the apartment renters and consumers of the goods and services offered by the ground floor retailers, and employees in the form of lower non-mandatory compensation items, such as bonuses, benefits, 401K match, etc.

  2. $3B would hurt Lilly's bottom line if there were no insurance or Indemnity Agreement, but there is no way that large an award will be upheld on appeal. What's surprising is that the trial judge refused to reduce it. She must have thought there was evidence of a flagrant, unconscionable coverup and wanted to send a message.

  3. As a self-employed individual, I always saw outrageous price increases every year in a health insurance plan with preexisting condition costs -- something most employed groups never had to worry about. With spouse, I saw ALL Indiana "free market answer" plans' premiums raise 25%-45% each year.

  4. It's not who you chose to build it's how they build it. Architects and engineers decide how and what to use to build. builders just do the work. Architects & engineers still think the tarp over the escalators out at airport will hold for third time when it snows, ice storms.

  5. http://www.abcactionnews.com/news/duke-energy-customers-angry-about-money-for-nothing

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