15 September 2014

IRS Code Prohibits Sleeping Pods at Anchorage Airport

Plans to install sleeping pods at Ted Stevens Anchorage International Airport have been grounded by, of all things, Internal Revenue Service codes.

The pods, which were planned for the airport's C concourse, would have contained two to three bunks each for weary and laid-over travelers to get some cheap rest before boarding their next flight. Their installation would have made Anchorage's airport one of the first in the nation to utilize the so-called "micro hotels" and would have increased the airport's already growing nonflight revenue.
But after going through an IRS audit a few months ago, airport bond managers noticed a prohibition in the tax code covering allowable uses for tax-free bonds against building lodging facilities.

And there's the catch. The main terminal and C Concourse have been renovated (beginning in 1999) with a combination of AMT tax-free bonds and private equity bonds. With more than $500 million still outstanding on the tax-free AMT bonds, the airport is bound by IRS codes that are meant to prohibit public bonds from being used to compete with private businesses.

The restaurants, shops and even a beauty salon that already exist don't violate IRS code because they are for the sole use of airport travelers and employees. It seems obvious that sleeping pods would also be used only by the traveling public, since they would be on the other side of the TSA security screening area. However, IRS code section 142.C.2.a specifically forbids "any lodging facility" from being built when tax-free bonds are still outstanding. There may be a workaround to the problem, but airport officers didn't want to take any chances with the tax man.

"It's complex," said Keith Day, the financial controller for the Alaska International Airport System, which includes the Anchorage and Fairbanks airports. "We made the determination that the most conservative approach was to not take any risk with it."

Follow the link for the rest of the story.

"Couldn't let us profit. Wouldn't be civilized." ~ Capt. Malcolm Reynolds, Firefly


ProudHillbilly said...

I can think of a couple trips where I would have welcomed one of those pods. You can't lay down on the seats and laying down on the ground doesn't seem like a good idea. But you are so tired you are desperate to lay down.

Rev. Paul said...

Agreed, PH. The article names a couple of airports where they're already in place, but that doesn't help Anchorage. So many of our flights in/out are between midnight & 2 a.m.