No state bond for Dixie airport

St. George city is saying thanks, but no thanks, to a $40 million state bond to build its new airport — and a polite denial to pay the state $250,000 "for getting nothing."

So says St. George Mayor Dan McArthur, who maintains the city couldn't wait for internal haggling on the state level and had to move forward alone with self-financing its share of the new airport.

State Treasurer Richard Ellis, whose office issues state bonds, says his office did move as fast as possible, considering legal constraints written into the airport bonding deal by lawmakers themselves in the 2008 session.

In any case, the whole St. George airport/state bond deal ended up a mess, with charges of questionable motives going on behind the scenes and a player program needed to understand who was doing what when.

House Speaker David Clark, R-Santa Clara, a Washington County lawmaker, says he believes that the treasurer's office and the board of the Governor's Office of Economic Development "dragged their feet" and went "beyond the level required by the legislation" in a possible attempt to stall the effort for reasons unclear to him — a charge denied by those on the state's end of the failed deal.

In addition, sources said that the law firm of the chairman of the GOED board did the bond counsel work on the airport bonds — a questionable connection.

"There appears to be some nepotism, or whatever, in all of this work," McArthur said, adding that St. George city shouldn't be expected to pick up all the costs associated with the failed state bond issuance.

But that is not the case, said Blake Wade of Ballard Spahr Andrews & Ingersoll. That law firm was picked two years ago as the state's bond counsel, and so does work on all state bond issuances. Ballard Spahr was the state's bond counsel before the St. George airport bond bill was passed late in the 2008 Legislature — and so was not picked specifically for the airport deal.

Bond counsels only get paid when bonds are sold, but with a AAA bond rating, Utah bonds almost always sell easily in the financial marketplace. While this one did not sell, Wade said they still hope to get paid for their work.

GOED board chairman Jerry Oldroyd, also an attorney with Ballard Spahr Anderson & Ingersoll, said he didn't do any work personally on the bonding part of the airport. But as an outside attorney, he did some work for the attorney general's office on the airport deal.

Oldroyd said GOED didn't stall the airport deal, because the GOED board was only supposed to read (and hopefully approve) a consultant's report on the deal. That consultant was hired by the treasurer's office, not GOED. But that report never got to GOED, because St. George pulled out of the deal before it was finished.