“Our next step was: How can we get this done? We need $720 million in grants and there’s a lot of competition in that area,” says Forister. “It took a lot of time to get everyone convinced that we could do the first project. But once they saw its success, it made it easier to secure additional funding.”
One of PIT’s first sites was at Clinton Commerce Park, where 14 acres of deep coal mines required excavation as did 30 acres of mine spill. The airport cleaned the deep mines, brought in utilities, and updated the storm water system with a $14 million grant. Only then did a local developer agree to build two facilities, totaling 625,000 square feet. Shortly after that another opted to build on the site. “To date we have 725,000 square feet on that property and we’re looking to expand that project,” Forister adds.
To secure funding, Forister says airports need to “think like an economic development agency” and do their due diligence. Leave no stone unturned, he says, and talk to state and local development agencies, seek out grants and loans, and consider TIF or CRA programs too. “You need to forge relationships and think like a real estate developer,” he says. “You have to be able to convince others to invest hard-earned dollars into this.”
Never underestimate the power of your message and who you know; networking, educational and marketing efforts may tip the scales in a project’s favor, according to Forister. PIT received money from the state for site improvements and funds from tax increment financing districts established specifically for the project. “If your plan is well thought out, you stand a good chance of getting financial help,” he says. “Jobs. Jobs. Jobs. If you can show that you’re going to generate jobs, it helps a lot.”
Bring in Key Players
“As metropolitan functions increasingly locate on and immediately around airports, a range of businesses that have historically been concentrated in downtown areas have moved in, even museums, art galleries, wedding chapels, things you would never think of as airport activities,” says Kasarda. “Basically the airport that services the city is slowly transforming into a city itself.”
Business parks, hotels, entertainment options, distribution centers and shopping complexes rank highest among businesses that seem to make sense near airports. “But even technology companies, consulting and marketing firms, financial institutions, and office headquarters are navigating closer to airports,” he says.
The primary advantage an airport location brings is speedy connectivity to suppliers, customers and enterprise partners, he says, noting these things have been the top attractors to the most common businesses found around airports: manufacturing and distribution.
PIT focused its landside developments in five key areas: (1) Warehouse/Distribution, (2) Industrial, (3) Research & Development, (4) Office Space, and (5) Hospitality. Forister adds, “We do not chase retail developments or allow strip malls, shopping malls or anything like that — we just do not see the benefit to the community. We will react to infill types of things, such as we might allow a hotel development, and then a restaurant that wants to build next door. But we won’t allow residential developments because housing and airports do not mix well.”
Kasarda says to perform a careful demand analysis that considers the land’s value to businesses and the region’s demand and need for a specific type of facility, then perform a risk and competitor analysis. If there is a major convention center in the city already, it may be a poor risk to build a second convention center, he explains.
Overall anything goes, as long as it makes sense for the community. “We’ve found in our review of the 25 largest airports a few years ago, that areas within 5 miles of the airport have virtually the same mix of functions as areas within 5 miles of the traditional downtown,” he says.
While they are making money, Forister says it’s coming in slowly. He is quick to add that this is perfectly OK. “A wise man once told me in real estate, you can make a lot of money very slowly or you can lose a lot of money very, very quickly,” he says. “Our strategy has been to make money very slowly.” But from the looks of things, the payoff is coming more quickly than expected and PIT is winning the non-aeronautical revenue game.
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