Tuesday, April 18, 2017

Rick Karl: Build a regional asset near Daytona Beach International Airport (KDAB)

— Rick Karl is the director of the Daytona Beach International Airport and the Volusia County Department of Aviation and Economic Resources.

Volusia County is pursuing a more enlightened form of economic incentive.

With the general disdain in Tallahassee for what some have called “corporate welfare,” Volusia County is pursuing a more enlightened form of economic incentive — one that could help the state bolster its chances of growing Florida’s space industry without providing handouts to specific companies.

The county owns property south of the Daytona Beach International Airport, between the south parallel runway and Beville Road, that represents the greatest opportunity for the airport to generate revenue — and provide an ideal location for large aviation and aerospace companies that will employ hundreds of high-paid workers and engineers. The county has already invested $1.2 million in the new traffic signal and entrance to the airport property on Beville Road across from Pelican Bay, but we need millions of dollars to make the property “shovel ready” to attract new aviation and aerospace companies. Our economic development team has competed for several large prospects recently, and the lengthy and expensive process of site engineering and environmental permitting have made it difficult for the airport to succeed without significant financial incentives from the state of Florida.

This session, we’re seeking $10 million from the state to offset the costs of developing the south airport property. Hopefully, this will come in two $5 million grants in fiscal year 2018 and fiscal year 2019. This state support will improve county-owned real estate and create a platform for our economic development professionals to recruit large regional employers and foster significant capital investment in the community. State funding for infrastructure improvements will support our airport as a regional economic engine. This is responsible government and sound public policy.

We think we have a good shot, and key lawmakers have agreed. The county-owned Daytona Beach International Airport has an economic impact of $1.1 billion and is at the core of East Central Florida’s economic vitality. Embry-Riddle Aeronautical University – the leading aviation and aerospace university in the world — is on airport property. The airport is collaborating with the university on a wide variety of initiatives, from FAA’s NextGen program to connecting the new MicaPlex to the airfield with a new taxiway project. In addition, 374 acres of the Daytona International Speedway are on airport property. With the development of One Daytona, the airport is at the center of the most important economic development activities the county has seen in decades.

While the airport is strong financially, there are risks to its financial independence. During the past seven years, we have seen a 67 percent increase in passenger traffic, and more passengers are traveling through Daytona Beach International Airport than at any time in the past 20 years. Airport revenues are up, and a comprehensive terminal renovation is being planned. However, there are many things outside the control of airport management that can cause an unexpected and precipitous decline in passenger traffic. These risk factors include the price of jet fuel, economic recession, and the impending pilot shortage. In fact, other airports of similar size are struggling to maintain air service, and 29 comparable airports have lost all commercial service since 2013. The airport is an enterprise fund and receives no ad valorem tax dollars to operate, so it must diversify its revenue portfolio to maintain its financial independence during these times of passenger traffic decline.

Airport management has been working diligently to develop new opportunities to generate revenue from the large real estate holdings owned by the airport. These include the new Outback Steakhouse and Houligan’s restaurants on ISB, as well as other projects that are being reviewed. But parcels as uniquely attractive as the south airport property are rare — and with state help, this land could become an economic asset with a value that reaches far outside Volusia County’s boundaries.

Original article can be found here:  http://www.gainesville.com/opinion

No comments: