Jay Leno sits in a 1930 Duesenberg to sell airport revenue bonds to help fund the Hollywood Burbank Airport renovation.
How would you describe Jay Leno? Your first instinct might be to call him a comedian, especially due to his time hosting NBC’s “The Tonight Show with Jay Leno.” But for many of us, “car enthusiast” is likely also on the list of terms we’d use to describe the celebrity.
Leno has a YouTube channel, Jay Leno’s Garage (1), with video topics ranging from classic cars to automotive repair projects. He’s launched his own line of vehicle care products (2). He even has a famous collection of at least 181 cars and 160 motorcycles in his “Big Dog Garage,” located in Burbank, California.
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So it makes sense that Leno was selected to represent the Hollywood Burbank Airport in a new video about financing its terminal relocation project. And that his love of cars was worked into the video.
In the marketing video, Leno sits at the wheel of a 1930 Duesenberg at the terminal’s construction site to inform the public about the project’s progress and sell airport revenue bonds to help fund the terminal’s completion.
Why Jay Leno and the airport are selling revenue bonds
The Hollywood Burbank Airport is about 33 miles from the Los Angeles International Airport (LAX) and close to many employees of big networks and studios, such as NBCUniversal, Netflix, Nickelodeon, and The Walt Disney Company, says Bloomberg (3).
In the video, Leno describes Burbank as “an oasis” in Los Angeles, calling LA a “crazy city with homelessness and crime and taxes.”
The airport is relocating and renovating this terminal to meet present-day Federal Aviation Administration (FAA) safety standards. It will be 355,000 square feet, have 14 gates, and include up to 6,637 parking spaces (4).
Los Angeles officials expect a lot of travelers to use the terminal in the next few years – the city will host the Super Bowl in 2027 (5) and the Summer Olympics and Paralympics in 2028 (6). The new terminal is expected to be ready this October.
The project is expected to cost over $1.3 billion (7). According to the City of Burbank government website, “The investment required to pay for the new terminal will be paid for by the FAA, the airlines and airport users (8).”
Jay Leno is trying to help the airport gather part of that $1.3 billion by selling approximately $379 million in airport revenue bonds.
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How airport revenue bonds work
An airport revenue bond is a type of municipal bond, or “muni.” States, cities, counties, and government organizations issue municipal bonds to finance projects such as building schools, sewer systems, or airports (9).
With airport revenue bonds used to build a new terminal, the debt is secured by airport activities, such as landing fees, concessions, and parking fees (10).
You can buy municipal bonds with terms of up to 30 years. The longer the term, the higher yield you’ll earn (11).
Fitch Ratings (12), one of the three main bond rating agencies in the U.S., gives the Burbank-Glendale-Pasadena Airport Authority’s bonds an A- rating (13). Municipal bonds can have much lower ratings, and A- is considered “investment grade.” Lower-rated bonds are labeled “non-investment grade” and referred to as high-yield or junk bonds (14).
The higher a bond rating, the more likely it is that the issuer will be able to make interest payments to investors and repay the debt upon maturity. Also, higher-rated bonds pay lower yields, because there is less risk. Lower-rated bonds — in the B, C, or D range — pay higher yields because they’re riskier (15).
In most cases, you don’t have to pay federal taxes on the interest from municipal bonds. You’re also often exempt from state and local taxes on the interest if you live in the state where the bond is issued (16).
The airport’s marketing video featuring Jay Leno includes a disclaimer that it’s meant to provide information, not serve as investment advice.
Are airport revenue bonds a smart investment?
Airport revenue bonds, and municipal bonds in general, can be strong tools for diversifying your investment portfolio.
That being said, if you’re new to investing, they’re probably not the first thing you want to pour your money into. If your employer offers a retirement plan — especially one with a company match — that’s a good place to start. Consider investing in mutual funds, exchange-traded funds, and individual stocks through an IRA as well. If you’ve covered these bases, then you can start thinking about revenue bonds (17).
Revenue bonds are usually best for people nearing retirement who want lower-risk investments and tax-exempt income. These tax-exempt investments could also be a good fit for people who live in states with high tax rates (18).
Before investing in municipal bonds, find the bond’s rating on Fitch Ratings or one of the other two bond rating agencies, Moody’s (19) or Standard’s & Poor’s (20). The higher the rating, the smarter and safer the investment should be.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
YouTube (1); Leno’s Garage (2); Bloomberg (3); City of Burbank (4),(8); LA Super Bowl Host Committee (5); LA28 (6); Elevate BUR (7); U.S. Securities and Exchange Commission (9),(16); Investopedia (10); FMS Bonds (11); Fitch Ratings (12),(13); Fidelity (14),(15),(17),(18); Moody’s (19); S&P Global (20)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.