The Business Journal Q&A
Patrick Wilson, Executive Director, Tri-Cities Regional Airport
When one goes to an airport, one’s mind is generally on the skies. Tri-Cities Regional Airport officials, however, have had their minds very much down to earth for the last several months, a trend that will continue for many more months to come.
The airport is moving a lot of dirt these days, in two separate projects. The project in front of the terminal is getting the most attention, but it’s the one on the far side of the runway that could be an economic difference-maker for the region.
The Business Journal spoke Sept. 18 with Patrick Wilson, executive director of the airport about the work on the front parking area (a little) and at the future Aerospace Park on the far side of the field (a lot).
The Business Journal: Folks who haven’t been to the airport lately would be surprised to see the amount of work being done on the front parking area all the way up to the very front door of the terminal. Obviously the parking situation was never ideal in the past with travelers having to heft luggage down stairs or go out of their way on long ramps. What’s actually being done beyond just aesthetic work?
Patrick Wilson: Well, the work starts right at the front door seal and goes back through the sidewalks. The drop-off/pick-up lane, the merger lane, the outside lane and what used to be the metered spaces. It takes out the old ramps and stairs that used to be part of the old retaining wall and goes all the way through short-term parking. It really covers a number of goals. When you start at the building, the space between the outside doors of the vestibules and the bollards at the front of the sidewalk has been fairly narrow. So the first thing as we move out from the terminal is to get a little more sidewalk maneuvering room so you don’t feel like you’re almost stepping out the front door into traffic.
Our drop-off and pick-up lane was not really wide enough. So people would park there and open their doors and those doors would be out in the drive lane. This will make that lane a much more appropriate width.
Then we move to the merge and through lanes, and those will be much better laid out. It will be more streamlined as you move through. There’s currently a little bump out around baggage claim and then almost a little s-turn. So it doesn’t have a good flow through there. This will sort of round all that off. In doing so, we lose the metered spaces. Those were not really the best layout, having angled metered spaces that kind of back into a drive lane, the through lane. We would see people go all the way down looking for the best metered space, not find it, and start backing up against traffic flow instead. There were also a lot of pedestrian/vehicle traffic conflicts with those metered spaces. And the retaining wall was starting to show some significant deterioration. Rather than having to build another retaining wall that would have to be rebuilt again in another 30-40 years, we decided to do this grading work, which gives us the opportunity to improve the aesthetics by putting in some hardscapes and landscaping. Part of that will be designed to channelize the flow of pedestrians to three specific points versus just a “cross the street wherever you get there” approach.
TBJ: The signs out front say the parking lot work out front will be done in Fall 2015, so that gives you less than three months. Are you on track?
PW: We hope that our short-term lot will be back open prior to Thanksgiving holiday travel. So up to now we have been blessed with good weather and that’s kept us moving. Next week we hope to be able to move some key underground systems – utilities, FAA cabling, things like that – that if those get moved on schedule, then yes, we will still be on schedule. That will get all the obstacles out of the way to do the rest of the grading back to the long-term lot that’s going to stay at existing grade. So we should have the long-term lot available by Thanksgiving and then somewhere in that process the landscaping installation will take place and we’ll do some of the sidewalk work, pushing out the bollards to give more curb frontage. If all that stays on track, the majority of the work will be complete by that November time frame. We may still be wrapping up some stuff depending on how the weather goes. Obviously we’d rather get the landscaping in now versus in spring, but I’m not much of a horticulturalist, so I’ll trust them to plant it when they should.
TBJ: So turning our attention to the other side of the property, to Aerospace Park, you have a lot of flat land that’s an excellent potential site for aerospace businesses to locate literally right next to a runway.
PW: Well, we have some flat land and we have some more land we would like to flatten out, but yes, the idea of Aerospace Park is to take land on the far side of the runway and take advantage of the fact that we have a higher education institute next door, superior infrastructure here, a foreign-trade zone, on-site customs, and create for businesses the only Select Tennessee Certified development with direct airfield access.
If you look at the image (ed.note: top of page), the green-highlighted area, the part that has been graded out on the right, next to the cargo center, there’s about 21 acres that’s flat and ready. Utilities, road, taxiway, everything is ready for access.
Our goal will be to continue to grade this highlighted area out, either in phases, or if the development fairy brings us about $15 million, we’ll have the full adjacent 140-acre site graded and ready. And we are looking for that development fairy anywhere we can, as far as grants or other site development funds.
TBJ: So you are already actively marketing the 21 acres that’s already graded?
PW: I’ll share with you some things from presentations we’ve made to aerospace-related companies.
Since 1999, we have invested about $23 million into the site and infrastructure. That includes grading, airfield access through taxiways, significant ramp, access roads, utilities, stormwater system. All that is in place and will be added to as we move past what we currently have graded. That allowed us to be certified through the Select Tennessee Sites program with the Tennessee Department of Economic and Community Development. We are the only on-airport site that’s certified in the state. There is another site in west Tennessee that may be on airport property, but it’s not necessarily connected, adjacent and ready to be served by the airfield. We are the only airfield site with direct airfield access.
That was a pretty useful process, because to get that certification, we had to do all the environmental work-up, the historical, you name it. So all that has been done for this site. That should give a pretty good level of initial comfort to any prospect we would be talking to, which of course is the whole intent of certification.
TBJ: You’ve put $23 million into getting 21 acres ready. You’re looking for just another $15 million to do the next 140 or so acres of the full 160-acre park. I’m not sure I follow the ratios there.
PW: Well, that $23 million will serve all of the 160. It’s just grading work that we’re looking for the $15 million to cover. Again, stormwater’s in. The access road is going to be useful to the future acreage. The utilities – gas, water, all those things – come in around Hamilton Road, so all that investment will serve the entire 160 acre site. Those utilities are sized to support some pretty significant industrial usage.
When we look at the development history, the 1999 Airport Master Plan is where the concept of intended use for that area was locked in. We started working as we could through state and federal grants to put those pieces in place.
Prior to 1999, nothing existed on what is now the Aerospace Park side of the runway. So our first phase was a taxiway and air cargo center ramp. After that we brought in water and some sewer. We updated our security fencing and went into the next phase on taxiway Romeo. The big key to this thing just got complete last December, though, and it was this last phase or Romeo. Prior to Romeo being in existence, aircraft had to land – and this was important both to our corporate operators and during race weeks at Bristol Motor Speedway – they had to land then turn onto taxiway Alpha, which is on the north side of the runway, come back and then cross the runway again to get to the south side. That justified putting a full parallel on the south side so they could turn directly to that side. That conflicted with the lay of Hamilton Road, so we moved Hamilton Road out to the boundary of our property. The reason all that is important is that the movement of Hamilton Road really opens up the full 160 acres with taxiway fronting all of it.
TBJ: So by pulling Hamilton Road out of the middle of the park area, you were able to provide taxiway access to the full north side of the park and road access along the entire south side of the park.
PW: Yes. Now the grading work that needs to be done I can show you best with what I call the tie-dye exhibit (ed. note: see above). I like it. The guys who put it together did a really good job. I can understand it. The areas that are shown in bright purple indicate a hole, and the areas in bright orange are hills. So if you grade that whole site out, it nets out about level. We’re trying to fill the hole by taking down the hill. The net amount is actually just a little excess. The controlling factor is the taxiway and the steepest grade by design that an aircraft could go over. They can design within that envelope.
It was approached in three phases. We would do the areas up near the airfield first, then come back more along the road. The reality is that we probably won’t do it in just three phases. We’ll chip away on it, or if that big $15 million development grant comes, we’ll do it all at one time. That would give us an outstanding site for aerospace development.
TBJ: It appears from the numbers in your presentation that it gets cheaper the more land gets developed. Is that a function of grade?
PW: That’s a function of grade and a sewer lift station that needs to be relocated. But yes, as you pull the hill down, then you get more acreage per dollar. The next hump we need to get over is actually a hole.
TBJ: Johnson City’s city manager recently stated his support for economic development here, even though this site is in Sullivan County. And flat land is at a premium throughout the region, but what else makes this site advantageous from a regional economic development perspective?
PW: Well, you have an existing aerospace cluster in the region. Bell Helicopter is the flagship of that. And we would like to add to that growing aerospace footprint. In addition to Bell and Aeronautical Accessories, which is another Textron company, Eastman has done some acquisitions that have moved them into the aviation lubricant line. Aerojet Rocketdyne is down in Jonesborough. There’s NN, there’s a lot of helicopter focus.
Then there’s the education initiative at Northeast State. That’s pretty significant. It gives us a differentiating factor when we go out to talk to aerospace company.
TBJ: It’s not just land. It’s workforce.
PW: Exactly. We had the opportunity to go with Dr. Janice Gilliam, the president at Northeast State and an executive from Bell Helicopter down to Alliance Airport just outside Dallas-Fort Worth because a community college there had a program a few years ahead. It’s a college on an airport. It has similar programs in aviation technologies all the way up through pilot training.
You mentioned flat land. Well if economic development was only about flat land, the whole world would move to Texas. They have plenty of it. There are a lot of pieces to successful economic development and this brings a significant piece to us.
We think that by bringing additional companies in, we can make Northeast’s programs stronger. That will help the existing aerospace cluster, and firms like Bell, even more, because it just locks in the stability of that workforce flow.
TBJ: Obviously economic development is important all the time, but tell me about why you’re pushing so hard to get this done now.
PW: Well, a lot of things are coming together in the industry. Aerospace advanced manufacturing is a target market for all the players in economic development right now. The ECD has it as a target market. TVA has it as a target market. NETWORKS has it as a target market.
We have worked aerospace projects where we have included both NETWORKS and the Washington County Economic Development Council in the effort. I know Mitch Miller in Washington County is very familiar with our product. We work with Clay (Walker at NETWORKS Sullivan County) very closely.
Within aerospace itself there are a lot of different market segments. Manufacturing has several categories. There are completion centers like Bell operates here. You find fixed wing manufacturers may produce planes somewhere else, then fly them into completion centers.
We would love to have a full assembly center, but we know that those facilities don’t move around too much. Completion centers do have a little more growth potential, as do delivery and training centers and the whole maintenance, repair and overhaul segment. If you ever hear me say MRO, that’s what I’m referring to.
Our research into the growth of aerospace as an industry shows in commercial jet manufacturing some degree in new aircraft that will add to the total fleet, some degree of replacement aircraft and some retained. As all of those grow, they create a need to completion centers, delivery centers and MROs.
TBJ: Folks don’t think in terms of aircraft manufacturing that much because there are so few major commercial manufacturers.
PW: Well, on the commercial side you have Boeing, Airbus, Bombarier and Embraer. Those are the four major airline-sized commercial aircraft manufacturers. When you start looking at the business jet sector, though, you have Cessna, Beechcraft, Dassault Falcon, Hawker, Gulfstream, Honda, you’re widening the market a bit. Off the top of my head I would say there are 10 in that group. Even with those it’s difficult, but not impossible. Actually, the impossible thing did happen when Boeing moved to South Carolina. Still to entice airframe manufacturing to move from Wichita is kind of a long shot. But we look for every opportunity. You know, before they went to Greensboro, Honda Jet looked at our site. But the best opportunities again are in completion centers and MROs, which still bring a large number of good technical jobs and economic opportunity.
An aviation technician’s annual wage is $61,530 according to the US Department of Labor’s Bureau of Statistics. An aviation engineer makes $103,000. We’re going after a market that has very good growth potential to it today.
Mark Canty, who works at the foreign trade zone, pulled up an interesting bit of data recently. The two biggest geographic areas for major investment in aerospace manufacturing right now are Singapore and the Southeastern United States. It follows the same trend as automobile manufacturing. We put together a map of 15 sites in the Southeastern U.S. and about 75 percent of them had located here in the last 10 years and probably for all the same reasons. We have right to work states with good labor markets and low costs of living.
TBJ: If you can’t get the $15 million in one chunk, what’s a goal that can still make a real difference?
PW: If we can grade 60 acres, that would put us in a category that’s very competitive. With an 8,000 foot runway and our taxiway system we have what I call big airport facilities but we’re not in a big airport environment. We don’t have aerospace congestion issues or noise issues or environmental issues. We’re an easy environment to operate in but we have a big airfield. We can accommodate big aircraft and a lot of growth. Our facilities should be of significant interest. The bigger the site is, the bigger fish we can go after.
TBJ: When you are out searching for the $15 million fairy, or even the Enough-money-to-grade-60-acres Fairy, where do you look?
PW: Historically 90 percent of the improvements we do on the airport are either from federal or state sources, so that’s where we focus. Unfortunately with some changes in the state tax structure that went into effect last April, they’ve reduced the amount of development funds available to airports (ed. note: TN HB1147 and SB 982 cut that funding by 50 percent).
I have been appointed by the governor to a task force that will start looking at that very issue. We are supposed to begin meeting in October. It’s called the Tennessee Aviation Funding Task Force. What happened was there were some tax caps put in place on aviation fuel that ended up capping the amount of revenue that comes into the state grant program for airports. It will affect the carrier airports and general aviation airports in that it will reduce by maybe a little more than half the amount of funding that can go into airport infrastructure.
For about a five-year run there, we were getting about $2 million a year out of that program. With those state dollars we do a lot of things. We do part of our match for our federal dollars. Then we do stand-alone state/airport projects that maintain the pavement and infrastructure. Then we do capacity and infrastructure projects where we do new things, adding grading, adding taxiways, adding hangars. So when that money gets reduced, we start getting into just a maintenance role. So since our dollars first have to go to the federal match, then to maintenance, we were hoping to be able to do those things, then be able to put a couple of million dollars into the grading each year. This has really taken that option away from us.
We’re adjusting from the shock of that and starting to rethink about how we can still do this. So we are reaching out to other grant sources. We’ve applied for a TVA opportunity we did not get, and we will continue to look for any opportunity we can find for new development funding.
TBJ: But with the industry hot for the Southeast right now, this would seem to be the worst time to have to pump the brakes on this project. Anything that puts you back to just maintenance is a recipe for decline, because you have competing facilities that are doing more than just maintaining, so by definition, you’re falling behind.
PW: Well, that’s the point that we as air carrier airports have tried to make. I happen to be president of the Tennessee Air Carrier Airport Association, so I went to the capital and spoke to committees at both the house and senate about the impact of the tax cap on the system. Some smaller general aviation airports will be impacted to the point of being unable to fund even maintenance of their existing infrastructure and they’ll face some tough choices. We’ll be impacted as well in that our development will be much slower. We’ve had to look at our capital improvement five-year plan and start pushing projects out.
Unfortunately, some of our grading efforts are affected, making it hard to take advantage of this hot aerospace market right now.
TBJ: Since you’ve taken a seat on the task force, it naturally follows that you believe you may be able to make a difference in the short term. But how much?
PW: I just don’t know. Part of my mission for being there is to make sure the political leadership on the task force understands the importance of having a strong airport system. My focus is on the commercial side. Some people evidently believe that we are so big we don’t really need the funding, that it’s not really that vital to us. My goal is to let them know what an economic engine the airports can be for their regions. Our ability to generate new sources of revenue to replace what was capped has yet to be seen. Once we have our first meeting, I hope we’ll see that we have some good political minds that can understand the need and can convert that into a way to meet it and generate economic activity to move forward. You don’t want to fall behind.
TBJ: So the story is that there’s a great opportunity here, but you’re having to do everything you can just to make sure it doesn’t end up passing by.
PW: That’s pretty accurate. The thing I would want to make sure no one gets confused about, though, is the fact that we do have land that is ready to go. We have something right now. We want to fill that and go beyond that.
By the time a company would come to us with interest in a site, they are probably within six months to a year of being ready to start. Product life cycles don’t allow for a two-year lead time anymore. We could get somebody in 20 acres tomorrow. We could get them in on 30 acres within six to 12 months. But if we have someone looking for a 60-80 acre site, even if we put what’s currently available to us in grants toward that, we are still a few years down the road.
The site we have right now is a great site. It’s just that we want to go beyond the scale of that greatness.