$120 Million For Airport: Necessity Or Waste?

Oct. 3--PANAMA -- CITY, Fla. -- Only 13 commercial flights leave the Panama City-Bay County International Airport every day.

Passengers walk out onto the tarmac to board 74-passenger turboprops that deliver them to Atlanta or some other airline hub. The airport's control tower closes at 10 p.m.

That's expected to change now that nearly $200 million in state and federal funding is being used to build a new airport that could become a destination for major airlines and a selling point for future development on thousands of surrounding acres owned by the politically connected St. Joe Co.

Once a titan in the paper mill industry, Jacksonville-based St. Joe now creates housing developments and stands to benefit greatly from the increased value of the land once the new airport is built.

That has outraged some long-time residents and environmentalists who have fought the plan at every step.

"The state of Florida is having to cut budgets and yet they're giving millions of dollars on this airport that nobody wants or needs," said Jimmy Long, a longtime Bay County resident who for decades has hunted near the proposed airport site.

Barring a successful last-minute legal challenge, the new airport will rise from pine forests and wetlands 20 miles from downtown Panama City. The $330 million project has received all its environmental and aviation permits, and the first commercial jetliner could fly off a new 8,400-foot runway in less than three years.

'Shoved Down Throats'

Although Florida lawmakers are grappling with a $1.1 billion budget deficit, it hasn't slowed the flow of state transportation dollars to the Panama City airport project. The state has given the airport $32.7 million for a feasibility study, an airport master plan and an environmental mitigation plan.

The remaining $87.3 million will be approved in phases as construction proceeds, said Bill Ashbaker, who manages the aviation trust fund for the state Department of Transportation. Each payout must be approved by the Legislature.

Federal Aviation Administration officials also are backing construction of the $330 million airport with $72 million in grants. The agency earlier had rejected grant applications, saying the project would provide few aviation benefits.

Although the total airport property will consist of 4,000 acres, the actual airport footprint will be 1,400 acres. It will have one runway, eight gates and a terminal building of about 105,000 square feet. By comparison, Tampa International has three runways, 59 gates and a terminal with more than a million square feet.

The airport remains controversial in Bay County, where hundreds of residents recently gathered at the local community college to protest escalating property taxes. Voters rejected building a new airport in a nonbinding referendum in March 2004.

"This thing's being shoved down our throats by the St. Joe Co. and the Chamber of Commerce," said Diane Brown, a longtime airport opponent. "That's a lot to fight when you don't have much money to get your word out."

The state grant money for the airport comes from taxes on aviation fuel. Ashbaker, with the state transportation department, calls the tax a "user fee."

"There have been concerns expressed that our taxpayer dollars have been going for" the airport, Ashbaker said. "Well if you fly, your taxpayer dollars are going for that. If you're not flying, they're not."

The local airport authority hopes to raise $60 million for the project by selling the existing 700-acre airport on waterfront property near downtown Panama City. The rest of the money will come from borrowing and cash reserves.

St. Joe Makes Case

The quest for a new airport began in 1998 when the airport authority proposed extending its runway to 8,400 feet by filling in part of St. Andrews Bay. State and local environmental groups blocked the plan, saying the extension would destroy important seagrass beds.

A year later, St. Joe offered to donate 4,000 acres in the West Bay area of the county for a new airport. St. Joe, which owns 50 percent of the land in Bay County, was primarily a timber company until the mid-1990s when it entered residential and commercial development.

Peter Rummell, St. Joe's chairman and chief executive officer, made it clear to Bay County leaders that the company needed a new airport to make its planned residential and commercial developments successful.

"It is becoming more and more clear that a replacement airport is a necessity," Rummell wrote the airport authority in November 1999. "Doing nothing is not an option."

Opponents of the project think St. Joe's political muscle greased the way for the state and federal grants. Rummell has made significant contributions to the campaigns of President Bush and his brother, former Gov. Jeb Bush. Rummell was named a "Pioneer" for bundling contributions of $100,000 or more for the president.

Rummell and other company officers and affiliates contributed $71,000 to the Florida Republican Party from 1998 to 2006, and $14,000 to Jeb Bush's campaigns during the same period. Rummell and his wife gave $20,000 to the Republican National Committee during the 2000 presidential race.

St. Joe owns almost 80,000 acres in the thinly populated West Bay area where the airport is supposed to be built. The company wants to build 5,842 custom homes there, many costing $1 million or more, and 4.4 million square feet of commercial space. Company officials say the airport is vital to those developments.

Don Hodges, a retired engineer who once helped plan Delta airport facilities, rejects the "build it and they will come" philosophy as a poor justification for expending hundreds of millions of dollars in public money.

"It's not an aviation project; it's a land deal," said Hodges, who lives in Bay County.

Grant Approval

Last year, 359,949 passengers flew in or out of Panama City's airport. The number of total passengers will rise to 581,000 by 2038 if a new airport is built, according to a cost benefit analysis prepared by airport consultants.

The consultants also projected that the total passengers at the existing airport would increase to 542,000 during the same 30-year period. Hodges argues that the 39,000 difference in passengers between the existing and new airports could be handled by one 737 jet airliner or two or three smaller regional jets, hardly a reason to expend hundreds of millions in public dollars.

Hodges' opinion about the potential aviation benefits of a new airport were echoed in a May 25 letter from Rusty Chapman, FAA airports division manager, to airport Director Randy Curtis. Chapman said that building a replacement airport would provide "only slight capacity gains."

FAA's Policy Division had similar concerns two years ago when the airport authority submitted a draft cost-benefit analysis in support of an application for a $95 million grant. The FAA analysts saw no positive benefit derived by a new airport in terms of lower fares or a greater choice of air carriers, according to a February 2006 letter to Curtis from the airport's consultant.

The FAA did not accept the airport authority's analysis which forecast "increased service at the new airport due to the longer runway and improved location," the consultant wrote.

Yet the FAA later approved a $71 million grant, citing safety concerns at the existing airport. The 6,300-foot runway is considered too short for regular use by larger jets, and there is not enough room for adequate safety zones to stop jets that overshoot the runway, the FAA said. The airport is constrained by the waters of St. Andrews Bay and by residential neighborhoods.

"We looked at all their needs and concluded that the existing airport does not meet our standards," Chapman said. "We concluded that over several years, some of the work they need to do at the existing airport would come up to the $70 million range."

In other words, the FAA approved the amount of money it would take to alleviate safety concerns at the existing airport, and is allowing that amount to be spent on a new airport.

Future Flights

Curtis, the airport director, said that even if the existing airport's safety problems were fixed, the short runway is an impediment to bringing in new air carriers. He provided letters and e-mail from American Airlines/American Eagle and Allegiant Air saying the short runway might require them to restrict the weight on their flights to take off safely. Both said they would be interested in serving Panama City at the new airport, but neither company made a commitment.

"We have the highest airfares in the region," Curtis said. "The [runway] restrictions make it hard to get the level of competition we need."

Hodges disagrees with the theory that a new airport and longer runway will attract additional air carriers to Panama City. He points out that Tallahassee Regional Airport, with an 8,000-foot runway, lost AirTran service after three years. The low-fare AirTran said it left because it was losing money. Hodges said AirTran is much more likely to return to Tallahassee than expand service into a smaller market in Panama City.

Bay County's population is just more than 160,000, but local boosters expect it to grow substantially as St. Joe's development plans unfold and more wealthy Northerners discover the white sands and turquoise waters off Panama City Beach.

In anticipation of that growth, it makes sense to build a new airport in an area where it has room to expand, said Seth Young, a professor at Embry-Riddle Aeronautical University in Daytona Beach.

"It's not a matter of trying to fix the old airport; it's a matter of creating a facility that can handle the growth over the next 20 years in the region," said Young, whose expertise is airport planning.

"It's not about a short-term fix; it's a long-range plan," he said. "And that's actually not costing that much local money at all. It's mostly FAA and state money."

Researcher Michael Messano contributed to this report. Reporter Mike Salinero can be reached at (813) 259-8303 or msalinero


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