COVER
Reviving Galveston
After 50 years of neglect, Scholes Field gets new life via economic development
By John F. Infanger, Editorial Director
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.
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.
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."
