EVERETT — Plans for passenger air service from Paine Field appear dead, at least for now.

Las Vegas-based Allegiant Air, the primary carrier interested in flying from the Snohomish County-owned airport, did not agree to the county’s financial terms for building a passenger terminal. The airline instead offered to build the terminal but wanted the land for free, without a lease.

“We can’t do that,” said Peter Camp, an executive director the county, at a County Council committee meeting Monday.

Allowing one airline to build and operate a terminal could give it a competitive advantage over any others that come in afterwards, and it opens the door to a host of other problems, Camp said. The three County Council members at the meeting agreed.

If Allegiant were to somehow run the terminal to its advantage over other airlines, the county could be found liable, under federal law, for discrimination, Camp said.

“A fundamental principle of operating the airport is that the playing field be level,” he wrote in a memo to the council. “The county has a legal obligation not to allow its airport to be used in such a way as to give one airline an advantage over another airline.”

Under the plan pitched by Allegiant, the county would not have control over construction, maintenance or concessionaire’s leases, but would still have to make sure all of these are up to county standards and would have to mediate any disputes, Camp said.

The county offered to build the terminal, estimated at $3 million, and be reimbursed through revenue from parking fees and concessions. If Allegiant were to commit to service, and then withdraw, the county wanted the airline to agree to reimburse the county for any uncovered costs.

“It is what it is. They can take it or leave it,” Councilman John Koster said.

A couple of years ago, “we received a pretty strong statement from the (Federal Aviation Administration) that they did not want the carrier to build the terminal, they wanted us building the terminal,” Councilman Dave Gossett said.

Alaska Airlines, which also had expressed interest in flying commuter planes from Paine Field, said it could agree in principle to the county’s terms, Camp said. Alaska, however, also stuck to its recent position that it would not serve Paine Field unless it was first served by another airline.

Alaska officials weren’t keen on the idea of another airline being allowed to build and run the terminal, Camp said.

“After a long pause, the response was, ‘We have deep concerns,’” he said.

That’s correct, Alaska spokewoman Bobbie Egan said Monday.

“We feel it’s important for there to be a level, competitive playing field and that the county is an appropriate entity to build and an operate a new terminal at Paine Field,” she said.

Allegiant spokeswoman Jessica Wheeler said Camp’s characterization of the airline’s position is “mostly accurate,” but wouldn’t discuss details.

“There’s not a lot we can say publicly,” she said. “Commercial service at any airport is extremely competitive so we tend to hold these negotiations as close to the vest as we can.”

Wheeler wouldn’t rule out an agreement of some kind, but wouldn’t say what form it could take.

“I think we’re going to continue to talk with county officials and airport officials and see what possibilities are there,” she said. “But the door on that proposal has likely closed.”

Councilman Brian Sullivan also attended the committee meeting. With three of the five council members present and unanimous in their position, there would be no need to take the matter to the full council, Camp said.

Under federal law, the operator of any airport large enough for commercial air service is required to make space available to airlines for that service. It is not obligated, however, to pay for any needed improvements.

County Executive John Lovick attended the meeting. He said afterward that he agreed the county should stick to its original terms.

“What’s most important is that we fulfill our legal and financial obligations,” he said.

Allegiant in 2008 proposed to start running four flights per week from Paine Field and increase that to about 20 each week over the first five years.

Alaska said it wanted to run 140 commuter flights per week from the airport. The total would come out to an average of 23 flights per day.

Commercial air service has been strongly opposed in south Snohomish County cities, particularly Mukilteo, where people say noise could erode property values and quality of life.

Mukilteo Mayor Joe Marine welcomed Monday’s news but stopped short of celebrating.

“It’s like the vampire, it’s never dead,” he said of the possibility of commercial flights. “It can always come back to life. If it delays it for another decade, I’m happy with that. I want to see every square inch of Paine Field used for manufacturing in some way, it’s the highest and best use by far.”

He said Mukilteo would still pursue its lawsuit over a recent federal environmental study that concluded that the number of flights proposed by Allegiant and Alaska would not significantly increase noise or pollution in communities near the airport.

That study took three years to complete. In its lawsuit, filed in the ninth U.S. Circuit Court of Appeals, Mukilteo contends that a larger scale environmental study should be done that takes into account the possibility of more flights beyond those originally proposed by the two airlines.

The lawsuit would be applicable to any air carriers’ overtures in the future, Marine said.

“I don’t think this is the last we’ve heard of the airlines,” he said.

Those who support commercial flights, including members of the county business community and others, tout the convenience of being able fly from Everett as opposed to getting to Sea-Tac Airport or Bellingham and back. They say this convenience could bring jobs and help the county’s economy.

Todd Brunner, owner of Brunner Construction in Lynnwood and co-chairman of Citizens Right to Fly from Paine Field, said his group isn’t giving up hope.

“It’s an ongoing battle,” he said. “It’s a market driven issue right now. When the market’s right, it’ll happen.”

Bill Sheets: 425-339-3439; sheets@heraldnet.com.