The City of Philadelphia, Delaware County, and Tinicum Township announced a multimillion-dollar financial settlement Monday in long-simmering tensions between the city-owned Philadelphia International Airport and its municipal neighbors over a massive plan to expand the airport.

The tentative agreement, announced by Mayor Nutter, airport CEO Mark Gale, Delaware County Council, Tinicum officials, and U.S. Reps. Patrick Meehan and Robert Brady, includes funding to ensure "continuity of tax revenues" for the Delaware County neighbors.

Two-thirds of the airport is in Tinicum.

The city also agreed not to acquire 72 Tinicum houses and displace 300 residents.

The airport, through its "aviation fund," will make an annual payment of $1.86 million, to be split among Delaware County, Tinicum Township, and the Interboro School District. Between 1998 and 2007, the airport paid those entities as much as $1.3 million yearly, but because of litigation has not paid them since.

In addition to the $1.86 million, the airport will make a one-time $500,000 payment to be shared by the three entities. It will also pay the township $1 million a year for 20 years, or until the multibillion-dollar airport expansion is completed.

The airport will also lease from Tinicum most of Hog Island Road on the airport's periphery, for a fee of $391,000 a year. It will also pay $5 million for 8.6 acres of the roadway property, for construction of a proposed runway.

Money for the aviation fund comes from fees paid by airlines that use the airport, concessions, and other vendors.

The agreement settles four lawsuits and years of litigation with Tinicum, and paves the way for land acquisition and further talks with United Parcel Service about relocating from 212 acres it owns on Hog Island Road.

UPS said Monday it had not seen details of the agreement, but still has concerns about the proposed expansion.

"As we and other carriers have noted in the past, delay issues at PHL are the product of airspace congestion, not runway capacity," UPS spokesman Mike Mangeot said. "We also have concerns about increased landing fees. It remains our preference to stay at our existing site, which is well-configured for our operation, would allow for future expansion, and poses fewer noise issues to airport neighbors."

"UPS has a long history as a good corporate citizen in Philadelphia, and we certainly understand the importance of economic development," Mangeot said. "However, we just don't believe that any benefits of expansion outweigh the costs."

UPS employs 3,100 people and sorts 95,000 packages and documents per hour at its 681,000-square-foot facility on the Delaware River.

The merged US Airways and American Airlines, which transport about 80 percent of passengers at Philadelphia International, support parts of the expansion, but not building a fifth runway.

The plan also calls for lengthening two existing runways, and adding a new terminal and parking facilities at a cost the city projected to be $6.4 billion.

The airlines, which would foot much of the expense, contend the price would be much higher, about $10.5 billion, and could force them to reduce operations in Philadelphia. A project manager was hired to assess the costs.

American Airlines congratulated the parties to the agreement. But, American spokesman Todd Lehmacher said, "we remain concerned about the cost of the Capacity Enhancement Program, and continue to question whether a new runway is needed now or in the future."

Like UPS, the airlines contend a new runway would not substantially reduce congestion because the big problem is the crowded airspace between New York and Washington.

Tinicum and Delaware County had sued to stop the airport from further encroaching into Tinicum, creating noise and reducing tax revenue for the county, nearby communities, and the school district.

The plan now would save the houses and move UPS's large airfreight operation close to Terminal A and nearly a mile from any homes.



Annual payment to be split among Delaware County, Tinicum Twp., Interboro School District.


One-time payment.


Yearly payment to Tinicum Twp.


Yearly lease of Hog Island Rd.


For 8.6 acres for a proposed new runway.