Panama City Airport Relocation Cost Up By $44 million

Hurricanes, a Gulf Coast building boom and int'l demand for building materials were key factors in bringing the new 2005 estimate to $278 million.

Jan. 21--PANAMA CITY -- In just one year, the estimated cost of relocating the Panama City-Bay County International Airport to West Bay jumped by about $44 million. Hurricanes, a Gulf Coast building boom and international demand for building materials were key factors in bringing the new 2005 estimate to about $278 million, up from 2004's figure, consultants told the Airport Authority's executive board during a workshop Friday.

It was the first financial feasibility report since February 2005.

"What we saw today was kind of a snapshot in time," Airport Authority Executive Director Randy Curtis said.

He said the new pricing for the project was compiled at the end of the hurricane season last year, reflecting subsequent increases in construction labor and materials as well as increased area development and pressure caused by international swells in the price of concrete and steel.

"Hopefully things will stabilize considerably," Curtis said.

One of the bigger jumps in cost, according to Tom Reddaway, project manager for Bechtel Infrastructure Corp., is an estimate for building the primary runway, up from about $27 million to about $38 million.

Board member Bill Cramer asked if the figures could decline between now and the start of construction because they were based on impacts from the hurricanes.

"I hesitate to say 'decline,'" said Reddaway. "I think the rate of increase to this year should be much lower than what we experienced in 2004 and 2005."

Board Chairman Joe Tannehill said he would like to see monthly updating on the estimates, rather than yearly.

"We have got to stay within the parameters of the money that we're going to get and we've got to do a good job protecting that money," Tannehill said. "Things are going to get tight around here.

"We can't sit here come June or July or September and find out we've got another $40 or $50 million increase."

A delay in delivery of the Federal Aviation Administration's final decision on the airport relocation could work in the Airport Authority's favor, Curtis said.

The FAA was slated to issue its environmental impact statement, or EIS, last December as the final step before issuing a Record of Decision that would make the relocation a done deal.

But FAA officials announced recently that the EIS release will likely lag by about five months, with an expected release now in May, to give closer scrutiny to plans for sale of the current airport location.

The delay does not signal reluctance on the FAA's part, Curtis said, but rather its desire to ensure that the EIS is thorough.

The board voted unanimously to push back the deadline to Sept. 15 for requests for proposals for purchase of the more than 700-acre airport site because of the FAA's new timeline.

So far, about 30 entities have expressed interest in the property.

No official appraisals of the property have been completed, though Infrastructure Management Group, or IMG, a consulting firm helping hammer out the relocation deal, placed precursory estimates at about $54.4 million, based on a 2004 study.

Those estimates do not, however, reflect the "best and highest use" of the property, nor are they current, Curtis said.

The board voted unanimously Friday to request that IMG update the review of the property's value, and that new figure is expected at the February meeting.

Some estimates have put the current value of the property at more than $100 million.

"I think the circumstances have changed considerably and we're going to have a lot larger number," Cramer said.


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