Director Optimistic About MidAmerica Airport

Call it "Extreme Makeover," the Airport Edition.

MidAmerica Airport's metamorphosis into an air cargo hub is supposed to wrap up its final stage in July. That's when a new building to house a team of U.S. Bureau of Customs Enforcement inspectors is scheduled to open for business.

And when that happens, watch out, according to airport director Tim Cantwell.

"When I get this customs building up, then OK, everybody, we are one-stop shopping," Cantwell said. "Let's go."

By then the elements will be in place -- including a new 50,000-square-foot warehouse with 37 truck docks -- to turn the chronically underused airport into a magnet for international cargo flights.

Cantwell's forecast calls for the $310 million federally funded airport to continue losing money in 2006, a fact of life since St. Clair County officially opened it in April 1998.

Still, Cantwell's assessment of the airport's future follows a trajectory across blue skies. The coming months will bring more passenger flights and more revenue, along with the first of many wide-bodied cargo-haulers operating out of the $7 million warehouse, Cantwell predicted.

Cantwell compared the proposed customs bureau building -- which the county will pay $300,000 to design and build, plus another $105,000 annually to staff -- to the long pole of a circus tent.

"As soon as the long pole of the tent goes up," he said, "here it is, we got it set."

But aviation consultant Bill Oliver shares none of Cantwell's optimism.

After all, big freight carriers have been flying in for years at St. Louis-Lambert International Airport, Oliver said.

"Nobody's going to move from St. Louis, from Lambert field to MidAmerica," said Oliver, a consultant for the Boyd Group Inc., of Evergreen, Colo. "Nobody's ever going to do that. It's just not going to happen."

Cantwell, a former Air Force fighter pilot, is used to taking this sort of flack from airport naysayers. He remains undaunted.

In his view the airport he oversees stands at the edge of a great, untapped opportunity.

"The St. Louis region has not seen international cargo fly directly into it, period. We're in a sort of vacuum for that," he said. "We are very well positioned to be a tremendous distribution point."

Cantwell's enthusiasm has been buoyed by a series of positive milestones in recent months:

County leaders are in the final stages of negotiations with a "significant tenant" for the cargo warehouse. "Negotiations are closing out and I think by the end of summer, for sure, we'll have operations going on there," said Cantwell, who declined to identify the prospective tenant.

The number of passengers flying both in and out of MidAmerica soared to more than 50,000 in 2005, compared to just 7,000 in 2004. And this year the passenger count is expected to rise to as many as 70,000, helped in large part by Allegiant Airlines' expansion of flights a year ago to Sanford-Orlando, Fla., and to Las Vegas, Nev., its home base.

The airport in 2005 began charging a $3-per-head passenger facility charge by virtue of the fact it had at least 6,500 commercial enplanements that year. As a result, the airport is generating at least $6,000 in new revenue per month, Cantwell said.

Nonetheless, these developments are happening across a backdrop of continued operating deficits for the airport -- shortfalls the county plugs each year by dipping into its special cash reserve fund.

The county covered airport losses in 2004 by transferring $3.8 million. This compares to the $4.65 million it transferred in for 2003, county audits show.

Mark Kern, the county board chairman, acknowledged in a written statement that operating deficits "have long since been of concern."

But with the Department of Defense's announcement of plans to keep open neighboring Scott Air Force Base, along with increases in air travel and the airport's marketing program, "prospective airlines and tenants seem to have more confidence in our airport and region for their operations," Kern wrote.

And once cargo operations get going, Kern continued, "the revenues from these operations will also contribute toward payment of the fixed operational costs of the airport."

But the county goal of a profitable airport faces stiff challenges in the years ahead. That's because of the county's repayment schedule on more than $60 million in bonds, payable over 30 years, the county issued in 1999 to finance its share of airport construction.

In 2006 St. Clair County is scheduled to make payments on interest and principal totaling $1.13 million, according to county audits.

By 2008 the annual debt payment will increase to $1.74 million. And between 2009 and 2015 the county must pay back an average of $3.8 million per year, county audits show.

The reserve fund to pay back this debt started at $50 million, but has since shrunk to about $31 million.

If the airport continues to operate at a loss by 2016, then things could get real interesting.

Between 2016 and 2029, the county will be expected to pay back more than $106 million in interest and principal on the original debt -- an average of about $7.6 million per year.

Some Republican leaders have already sounded alarm bells about the ballooning debt.

In an October 2003 interview, former County Board member Joe Behnken, a certified public accountant, warned that when the bonds come due, the airport cash reserves needed to cover losses "... are gonna melt like an ice cube in July.... Then watch your taxes go up."

Republican County Board member Steve Reeb, of Shiloh, echoed the same point, warning that "The piper's going to come calling pretty soon. I don't see how it can't be a problem."

Dan Maher, the chief of staff for Kern, has repeatedly stated that controls baked into the airport's financial operations will prevent tax increases. Maher did not return calls seeking comment for this story.

Cantwell acknowledged the many challenges confronting MidAmerica Airport.

But the optimism is "coming right now," he said, "and it will be here by the end of the year, and it's called international cargo."

Belleville News Democrat


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