Reviving Galveston: After 50 years of neglect, Scholes Field gets new life via economic development

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Reviving Galveston

After 50 years of neglect, Scholes Field gets new life via economic development

By John F. Infanger, Editorial Director

Galveston, TXGALVESTON, TX - An old joke among general aviation airport managers is that one either repaves the pavement or mows it more often. At Scholes International Airport here, lawn mowers have ruled for decades when it came to pavement maintenance. No more. With a new political climate and an emphasis on economic growth across this island city some 50 miles south of Houston, the airport is undergoing a revitalization that will soon kick into high gear, following enactment of a tax increment reinvestment zone that is projected to generate some $12-15 million for the airfield over the next 30 years.

The obstacles facing airport management at Galveston go beyond the stereotypical lack of support from the community. They include being blackballed by the Federal Aviation Administration and the Texas Department of Transportation, which operates under the block grant program, for infrastructure development. The reason: The city failed to live up to a commitment to match Airport Improvement Program funds, losing an FAA grant and essentially leaving the airport in limbo on any initiative to rebuild the airfield. Even worse, it brought on an audit by the U.S. DOT Inspector General's office. In turn, that led to documentation that the city was failing to pay rent on facilities it was utilizing at the airport. In other words, revenue diversion.

All that, as they say, is water under the bridge. Today, Scholes Inter-national is on its way to becoming a first-class business airport, which considering its level of business-related activity is perhaps where it should have been all along.

For despite the lack of infrastructure development and maintenance through the years, Scholes Field has maintained an impressive level of business activity, spurred primarily by oil patch operations in the Gulf of Mexico.

At the same time, the politics of Galveston have changed significantly in recent years, as the local populace has sought to reinvigorate the economy which for a long time had been somewhat stagnant. It is, in retrospect, an extension of the economic growth that has been occurring throughout South Texas over the past two decades.

Hud Hopkins
Hud Hopkins

A History of Activity
Despite the lack of infrastructure development at this airport for some 50 years, its proximity to the oil rigs in the Gulf along with its location on an island that carries with it much history has kept the field somewhat vibrant in spite of political winds that often failed to appreciate the role the airport played in the local economy.

According to airport director Hud Hopkins, who arrived here in 1994 fresh out of Texas A&M University, seven offshore oil companies are based at Scholes Field, with some 50 based helicopters and more than 200 fixed wing aircraft. In all, the airport handles some 104,000 operations annually.

Says Hopkins, "We're turning and burning with helicopters out here. We have everything from a 206 to F91s." He estimates that between 70 and 80 percent of all operations are helicopter related, serving the rigs that drill for oil and gas offshore.

Yet, Hopkins points out that minimal attention was paid to maintaining the airfield since the late 1940s, primarily due to the political climate that saw little need to invest in the airport. However, in the mid-1990s, the political winds began to change for the community as a whole, as new economic development initiatives began to take hold.

The Turnaround
Since becoming director, Hopkins has focused on educating the city, which owns and operates the airport with the assistance of an advisory committee, and community groups about the value of the airport. Along with the matching funds debacle and subsequent DOT Inspector General's audit (see sidebar), the city has come to recognize the role the airport plays in ongoing business activity on the island.

A central catalyst to the economic revitalization of Galveston and Scholes International Airport is Moody Gardens, a $250 million, 242-acre entertainment facility that sits adjacent to the airfield on airport property. Moody Gardens includes more than 200,000 square feet of convention and meeting space; a 300-room hotel; a 10-story Rainforest Pyramid; an aquarium; and, the Discovery Museum and IMAX Ridefilm Theater.

Explains Hopkins, "The progress at the airport has occurred in the past four to five years. There was a change in the political climate, and we started educating the public and the city council why we have an airport. It's not just for the person who has a private aircraft. We service the University of Texas medical branch, the Shriner burn center, the offshore industry. We're the busiest heliport in the state of Texas.

"We also worked at communicating with the neighborhood associations around the airport. I explained to them what the helicopters were doing, what the jets coming in early in the morning were doing. These are businesses moving back and forth, and bringing in burn patients for the trauma burn center. I realized that the biggest thing with the neighbors was they were just wondering what was happening. They just wanted to be made aware, to be educated."

An Economic Catalyst
Today, Hopkins is directing the rebirth of his airport. Runways and taxiways are being resurfaced, drainage - a critical element when water surrounds the facility - is at last being modernized, and a $1.4 million air traffic control tower is under construction and scheduled to open this summer.

The airport operates with a surplus, generating some $1.2 million a year in revenue versus some $940,000 in expenses. There are some 44 businesses operating on airport property; 24 of them are non-aeronautical, including a $250 million entertainment complex, Moody Gardens, and an 18-hole golf course. Of the 1,200 acres of airport property, some 65 acres are available for development, according to Hopkins.

But the key catalyst for the future development of the airport, explains Hopkins, is the tax increment reinvestment zone (TIRZ) initiative scheduled to be enacted this spring. With a TIRZ, according to Hopkins, an area targeted for development takes tax dollars from new commercial activity and reinvests it into the infrastructure within the zone.
"What the TIRZ is going to encompass is approximately eight miles worth of property [around the airport]," explains Hopkins. "Any type of development that happens there - be it residential, commercial - we would capture those new tax dollars that come in. All the tax money that the city and the county are receiving now will continue.
"The new revenue will go into a pool and will be divided up for certain infrastructure projects.

"We've done other tax increment reinvestment zones in other parts of the city. We did one on Broadway [Avenue], which helped bring in Home Depot and Target. They're doing another one on the east end of the island. They actually have worked quite well because the money that's generated there will stay there to use for improvements. That includes any improvements we do on the airport; any incremental taxes will go into the TIRZ."

Hopkins says some $40 million in improvements have been identified for the airport. Monies from the TIRZ will play a central part in making up the airport's matching fund requirements, he says.

An I.G. Audit Serves as a Catalyst

In 1996, the DOT Inspector General's office performed an official audit of Scholes Field in Galveston, after the city's inability to meet its matching grant commitment for an AIP grant.

According to Hud Hopkins, current director at the airport and then the number two administrator, the airport had received a $3.5 million Airport Improvement Program grant from FAA. The Texas DOT was ready with its 5 percent matching grant; however, the city reneged.

"When it came time to provide the funding," recalls Hopkins, "the city was going through the point of bankruptcy and said they couldn't provide the funding. FAA became upset; the Inspector General came down and did the audit. Some of its findings included that the city wasn't paying rent for the property it was using - public works, golf course, utilities (based on airport property)."

The audit was settled in 2000, he says. The result was increased revenues for the airport.

"What happened at that point," he says, "was we were able to get back into the programming with TXDOT for the capital improvement plan. We had been completely knocked out of it. We were not even on the list. At that point, the last project done out here was probably in about 1946."

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