Aerospace Park grant application in state’s hands: TDOT’s answer expected this month

By Scott Robertson

The Tennessee Department of Transportation’s (TDOT) Aeronautics Division has all the applications for a one-time Aeronautics Economic Development Fund grant offering in hand, and says it will award those grants this month. Tri-Cities Airport submitted an application for $8,150,000 of that money in December to cover construction costs for Aerospace Park, the airport authority’s planned business park on the south side of the main runway.

Preflight looks good

A side-by-side analysis of the state’s requirements and the airport authority’s application show a project that would appear to be ideally suited for the funding mechanism. “We believe so,” says Patrick Wilson, airport director. “We certainly hope TDOT sees it that way as well.”

TDOT eligibility requirements state that applicants must be local governments or their funded economic development organizations, or airport authorities or comparable bodies and that, “partnerships, collaborative work and leveraging of funds are encouraged.”

In the case of Aerospace Park, the Tri-Cities Airport Authority is the applicant, but it has partnered with five local governments to leverage funds. Bristol, Johnson City and Kingsport have joined Sullivan and Washington counties to match, dollar for dollar, the $8,150,000 being sought from the state. That cooperative effort has been widely hailed as a potential stepping off point for greater regional cooperation on other economic issues as well.

TDOT’s guidelines for funding say each applicant will be evaluated based on the following criteria: Aerospace and related programs/activities, Employment and Capital Investments, and Community need and support.

In Aerospace Park’s case, the relation to aerospace and related programs and activities is that the park will be the only business park in Tennessee with direct access to an existing runway for tenants. In terms of employment and capital investments, the Aerospace Park application states that, “by year five after completion of the site development project, TCAA has established a benchmark goal of MROs or aircraft manufacturers investing $25 million in facility construction and creating 650 jobs.” The community need and support piece is again addressed by the unification of the region’s city and county governments to meet the state dollar per dollar.

This is a reimbursable grant program. That means grantees will spend dollars as agreed upon in the contract for eligible activities, will submit respective receipts and other documentation to TDOT, and will then receive reimbursement from TDOT for allowable expenditures. All expenditures must take place within the timeframe of the grant period as designated by the grant contract. Grants will not be eligible for amendment in scope or amount.

Who’s the competition?

When talk of this grant began in earnest more than a year ago, only two projects were under consideration: Aerospace Park and a general aviation airport for Oak Ridge. Because of the long period of time between the release of the state budget and the opening of the application period Nov. 8, other municipalities and airport authorities have had the opportunity to come up with their own ideas as well.

Were this a tournament, Oak Ridge and Aerospace Park would likely still be considered the top seeds. Both projects check off all the boxes on the TDOT list. Oak Ridge has been working with the FAA and has support from Oak Ridge National Laboratory and lists the Knoxville Metropolitan Airport Authority among its partners. The airport, and its proposed 5,000-foot runway, would sit adjacent to the East Tennessee Technology Center. Oak Ridge City Manager Mark Watson recently told WBIR-TV the project, “looks probable.”

What could go sideways

Politics.

TDOT was the main beneficiary of the revenues from the gas tax increase at the heart of Governor Bill Haslam’s IMPROVE Act in 2017. Northeast Tennessee’s State House delegation voted almost unanimously against that bill. Only Representatives John Holsclaw and Gary Hicks voted aye. So when Northeast Tennessee goes back this year asking for TDOT grant funds, the memory of that vote may still be fresh.

Tennessee Speaker of the House Beth Harwell led a delegation of five of the six IMPROVE Act no-voters from Northeast Tennessee to meet with Haslam Nov. 21 with Aerospace Park as the only item on the agenda. In the press release from Harwell’s office that followed that meeting, Representatives John Crawford, Bud Hulsey, Timothy Hill, David Hawk and Matthew Hill all spoke of the importance of the project. None mentioned the governor’s response. Two Republican sources with knowledge of the meeting have told The Business Journal that the meeting left the delegation with no reassurances.

Harwell, speaking at a Chamber of Commerce function in Johnson City, later said of the meeting, “The governor was certainly open to how critical the project was. I feel like it was a positive meeting. Here’s what I will tell you as Speaker of the House. I work with whomever the wisdom of the electorate chooses to send to the General Assembly, and I will work well with your delegation. The governor has a lot on his plate, as you can imagine, and this is one of many, many things across the state. But I do believe we had his undivided attention, and ultimately I think he will be fair in his review. I do think it was important that we went directly to the governor. I feel good. I do. I really do. I do.”

Harwell credited Sullivan County Mayor Richard Venable and Wilson for providing her with a full slate of talking points to present to the governor in that meeting. “This could be a game changer for this area. It’s a remarkable asset for this area, so I’m very hopeful that you’ll get your grant money this time,” Harwell said. “But if not, we’ll keep working on it.”

TDOT has committed to announcing the grant awards this month and to issuing the contracts in, “Spring 2018.” There is no mention of a grant program being offered in the coming budget year.