Should Government Airport Used by Google Founders be Closed?

It costs $6.7 million a year to operate.

It's a convenient parking lot for the private jets of two of the world's richest men.

And it's sitting on a prime piece of real estate—the heart of the Silicon Valley—which has some murmuring it should just be sold.

Moffett Federal Airfield
Source: Wikipedia
Moffett Federal Airfield

But, its greatest treasure is a towering toxic nightmare that may cost as much as $50 million to repair and restore.

Moffett Field is a legendary Naval Air Station in Mountain View, Calif. best known for the massive hangars which famously accommodated wartime military blimps. The base was closed in 1994 and taken over by NASA Ames Research Center. Spread over 1,800 acres, the airfield houses important wind tunnels for testing and an Air National Guard wing.

In 2007, NASA signed a contract with co-founders Sergey Brin and Larry Page to give them take off and landing rights at Moffett, the only private jets allowed to do so. The two billionaires now house their personal 767 and two G-5s on site. Brin and Page—not Google —pay annual rent of $1.3 million, much higher than comparable airports. Moffett is close to Google headquarters, and the agreement helped NASA justify keeping the airfield open for military flights (NASA also puts instruments on Page and Brin's aircraft for testing).

But those rent payments are only a small dent in the massive price tag to clean up environmental contamination on the site. It's cost $174 million, so far, and the Navy says it may need $43 million more.

"There's a lot of wasted land over there, nobody's using it." -Silicon Valley Resident, Kathy Woembner

As the government now looks to cut costs, a source tells CNBC's Washington bureau that some federal budget cutters would like to sell Moffett. One of them valued the property at $4 billion. "Egregiously high," responds Mark Russell of CB Richard Ellis. "It's not gonna happen," says commercial realtor Gregory M. Davies of Cassidy Turley CPS.

Both say it's impossible to know what the land is worth, given its environmental costs and what building restrictions may be in place. "We need to understand what we can put there before we can assign value to the land," Davies says. At best, Russell says the property might be worth $4 billion only after being completely redeveloped.

NASA says it costs $6.65 million a year to run Moffett's airfield, which includes about $3 million in fixed costs like fire protection. Rent from Page and Brin covers a fifth of that, but NASA Ames deputy center director Lewis Braxton says rent from other "mom and pop" tenants on the land bring in enough so the airfield is "break even".

But Braxton admits NASA does not have sustainable income for long term costs, like eventually repairing or replacing Moffett's twin three-mile long runways. "It doesn't support our mission" he says of the runways. "To come up with that type of cash is a bridge too far, as we would say."

Braxton attended a community meeting Thursday night seeking solutions. One main issue is what to do about Hangar One, which covers eight acres and is so tall that clouds sometimes form inside. It's shell is filled with toxic materials, and the Navy says it'll cost $26 million to clean and remove it.

The Navy does not want to pay to "re-skin" the hangar, but preservationists are fighting hard for that. On Thursday, NASA formally announced it's asking for $20 million to re-skin the hangar. The local congresswoman, Rep. Anna Eschoo (D-Calif.), is asking for $10 million more. Both items are tucked inside spending bills going before the lame duck Congress. If they fail, Hangar One's fate is unclear.

Lenny Siegel, an environmentalist who founded the Save Hanger One Committee, is hoping that the government will create opportunities for joint ventures with high tech companies for scientific public-private partnerships at Moffett. "What we're trying to do is create a business plan," he says.

Hangar One at Moffett Field
Hangar One at Moffett Field

He's hoping to turn Hangar One into an earth, air and space education center. Google has signed a partnership with NASA to develop 42 acres at Moffett and is currently paying $3 million a year on a 40-year lease. No other major tech company has come forward. But now Governor Schwarzenegger is pushing to bring the World Expo to Moffett in 2020.

"This 2020 Expo a gleam in our eye," says NASA's Lewis Braxton. "We really hope they can make that work." But even he admits eventually selling some of the land is an option NASA may consider.

Who might buy? Realtor Gregory Davies says other tech companies. The deal NASA struck with the Google co-founders "certainly made a few executives in Silicon Valley jealous that they can't have their own airfield."

Residents in the surrounding neighborhood seem split about Moffett. Many do not like the aircraft noise, but they want to preserve Moffett's history. Still, Kathy Woembner says, "There's a lot of wasted land over there, nobody's using it."

But those who grew up here have a soft spot for Hangar One. "I can't imagine landing in San Francisco without looking out the side of the plane, seeing it," says Lenny Siegel. "That's how I know I'm home."