Google to manage Moffett Federal Airfield, including Nasa's Hangar One

The U.S government has picked a Google subsidiary to run and renovate a federal airfield that is frequently used for the personal flights of the Internet company's billionaire executives.

The decision announced Monday clears the way for Google's Planetary Ventures LLC to take over management of the 1,000-acre Moffett Federal Airfield, a former U.S. Navy based located four miles from Google's Mountain View, Calif., headquarters. The airfield, which was built in the 1930s, has been managed by Nasa's Ames Research Center for the past 23 years.

Financial terms of the new arrangement still must be worked out among Google, Nasa and the General Services Administration.

As part of the deal, Google Inc. must renovate the airfield's three hangars, including one that is a Silicon Valley landmark because of its massive size and location off a major highway. Google also has agreed to upgrade a golf course located next to the airfield.

"We are delighted to move ahead in the selection process and we look forward to working with both GSA and Nasa to preserve the heritage of Moffett Federal Airfield," Google said in a statement Monday.

Government officials hailed Google's selection as a boon for taxpayers. Besides covering the day-to-day expenses for managing the airfield, Google is also paying for expensive repairs unlikely ever to be financed by the government.

Restoring the airfield's most prominent structure, the 200-foot-tall Hangar One, will be particularly expensive. Hangar One's original siding was removed because of contamination from toxic lead and asbestos, raising the risks that the historic edifice might eventually have to be torn down. The cost of covering the now-skeletal hangar is expected to be more than $40 million.

"Nasa's partnership with the private sector will allow the agency to restore this treasure for more efficient use," said Dan Tangherlini, administrator of the General Services Administration.

The decision to entrust Moffett's fate to Google comes just two months after Nasa's inspector general issued a report that raised questions about whether the company's three most powerful executives had been given a sweetheart deal while flying their personal jets and helicopters from the airfield.

The audit found out that seven jets and two helicopters owned by Google co-founders Larry Page and Sergey Brin and Executive Chairman Eric Schmidt had received improper discounts on fuel that saved the three billionaires up to $5.3 million on flights dating back to 2009. The Google executives own the aircraft through a company called H211, which has been paying $1.4 million annually since 2007 to lease hangar space at Moffett.

Although H211 and Planetary Ventures are separate entities, a frequent Google critic said the U.S. government is rewarding "unethical and wrongful behavior" by awarding the Moffett management contract to the company. "This is like giving the keys to your car to the guy who has been siphoning gas from your tank," said John Simpson, privacy project director for Consumer Watchdog.

Google beat out one other competitor for the Moffett contract, which went up for bidding last May. Ames Research Center spokeswoman Jessica Culler declined to identify the other bidder.

The current lease allowing Page, Brin and Schmidt to fly their aircraft from Moffett is scheduled to expire in July. It's unclear whether the executives will seek to renew the lease because they are working with a private contractor to build another space for their planes at the Mineta San Jose International Airport located about 10 miles from Moffett.