NEWPORT NEWS, Va. – The Peninsula Airport Commission has reached a $2 million agreement with TowneBank over a loan dispute.
The Peninsula Airport Commission used an excess of $5 million in state, local and airport public funding to in part, as collateral to guarantee a TowneBank “Draw Down Line of Credit” issued to People Express Airlines, and help satisfy the defaulted loans of People Express Airlines at Towne Bank.
In June, the Virginia Department of Transportation recommended the Peninsula Airport Commission reimburse the Commonwealth of Virginia more than $4.5 million they say was used for unauthorized purposes.
Prior to the completion of the review from VDOT, Secretary of Transportation Aubrey Lane said that the Peninsula Airport Commission used the state’s money improperly and asked the state to suspend state money going to the airport.
The Commission says it properly and legally used state funds, according to a press release from the airport.
Lane says the money was only supposed to be used for capital improvements of the facilities.