An emotional Mayor Kasim Reed signs lease to keep Delta here for 20 years
By Maria Saporta
Atlanta Mayor Kasim Reed was overcome with emotion during the public signing of the city’s 20-year lease agreement with Delta Air Lines – a lease that also includes a 10-year optional extension.
The mayor’s voice quivered as he fought back tears talking about one of his closest confidants and friends in Atlanta’s business community – Delta CEO Richard Anderson.
“It was very important to me personally that we finalized this agreement before Richard Anderson retired, which is just a few days from now,” said Reed, who held the signing in the Mayor’s Ceremonial Office. “Our relationship began in this conference room right here, and we had a robust meeting. It was appropriate that it ends here.”
Reed said Anderson would go down in history as one of Atlanta’s “most consequential leaders” along the lines of Mills B. Lane, Robert Woodruff, Roberto Goizueta and others.
“Richard Anderson always took my call,” Reed said. “Today is a very big deal, and this relationship has been a cornerstone of this city going back to (former Atlanta Mayor William) Hartsfield and (former Delta CEO) C.E. Woolman.”
The 20-year lease agreement with Delta requires for the airline to keep its corporate headquarters based in Atlanta for the duration of the lease.
Reed said that when Delta was going through bankruptcy, Anderson could have moved the headquarters to Minneapolis, but he kept Atlanta’s dominant airline in the city.
“Our histories are forever intertwined,” Reed said, adding that Delta had just had its most profitable quarter in its history. “Delta’s decision to remain in Atlanta means that Atlanta will embark on a $6 billion expansion plan (for Hartsfield-Jackson International Airport).”
Anderson described the signing event as a little sad, yet happy. Then said that if he had the power, he would rename the airport to include Reed’s name along with Hartsfield and Jackson.
“We have now laid the groundwork for the next 30 years,” said Anderson, who credited Jackson for designing and building the world’s most efficient airport. “Maynard Jackson passed that vision on to this mayor, and it ensures this airport will remain No. 1 in the world.”
After they had finished signing the lease, the mayor was asked why he had become so emotional during the media event.
Reed said he and Anderson had been texting, and when he saw the Delta CEO was calling from a number with a 713 area code, he said it hit him hard.
“Richard Anderson was here when I started,” Reed said. “If you named it, and the City of Atlanta needed it, he was there.” And then he gave advice to anyone considering to run for mayor. “Find someone like Richard Anderson to be there for you,” Reed said.
And Reed said he understood Anderson’s desire to move back to Texas. “Everybody wants to go home,” the mayor said. “He knows I didn’t want him to leave Atlanta, but he wanted to go home.”
Delta has a history of having an Atlanta mayor on its board. Andrew Young used to be a director of the airline, and then former Atlanta Mayor Shirley Franklin was named to the board in 2011 after she had left office. She is expected to step down from the board in the next couple of years.
Anderson was asked if the airline might name Reed to the board when he leaves office in January 2018.
Anderson, who will become Delta’s executive chairman on May 2, said that decision would be up to the board’s independent directors.
The lease negotiations took about two years to negotiate, and after the legal and executive teams had negotiated about 95 percent of the issues, it was up to Reed and Anderson to work through the toughest remaining issues. They ordered sandwiches and hammered out the rest of the lease over lunch in Anderson’s office.
Reed did say they had wanted to get the lease negotiated by Dec. 31, but it was even more important to celebrate agreement while Anderson was still CEO even though the mayor said he also has had a good relationship with Ed Bastian, who will be succeeding Anderson.
The lease agreement will keep Delta, the largest private employer in Georgia, based in Atlanta. But one question was whether the agreement would be flexible enough to permit Delta’s competitors to rent gates at Hartsfield-Jackson.
“Airport regulations require the City of Atlanta to have a competition plan,” Anderson said. “We support that competition plan… We have accommodated a lot of new entrants at this airport.”
Miguel Southwell, the Atlanta airport’s aviation general manager, said the lease agreement “really is the most far-reaching one” when it comes to competition. The agreement calls for three common use gates that provide a way for new airlines to enter the market. If those three gates are not available, the airport is able to ask the airlines with the lowest-performing gates for use of those gates.
“If they say no, the airport has the ability to go build new gates,” said Southwell, who was confident Atlanta would be able to welcome new airlines.
At the end of the public signing of the agreement, Reed then honored Anderson with a recognition reserved for top leaders – the Phoenix Award.
The mayor did tell Anderson that he needed to share the award with his wife, Sue, who he credited for helping make sure the airline kept its headquarters in Atlanta. She made sure to let her husband know when he became Delta’s CEO that she would be happy for them to be based in Atlanta.