New Florida Airport Won't Be Built On 'Backs' Of Regional Carriers

Panama City, Fla., is eyeing a May 2006 construction start and clearing the way for the first new regional airport to be built in almost a decade.

Panama City, Fla., is on track to complete the federal and state permit process in the next month, clearing the way for the first new regional airport to be built in almost a decade.

As the airport authority eyes a May 2006 construction start, airport officials don't envision asking its airline tenants to pay for the $275 million faculty. "From the beginning, we have been planning not to build this on the backs of the airlines as so many other airports do today," said Randall Curtis, the executive director of the Panama City-Bay County International Airport. "Our landing fee is at $1.07 - where they were set in 1995 and have not changed in that time. We don't see any significant increase coming about."

The federal and state governments will pick up two-thirds of the tab with the local airport authority responsible for the remaining third - about $91 million.

The new facility will replace the current airport in Panama City with its 6,300-foot runway fronting West Bay, and a second, smaller 4,884-foot crosswind runway. Bordered by the bay, the current airport on 713 acres is surrounded by residential and commercial areas.

Delta Connection and Northwest AirLink provide daily flights to five cities. With the exception of a 66-passenger ATR 72 flown for Delta by Atlantic Southeast Airlines (ASA) [SKYW], Curtis said all the service is provided on regional jets.

The length of the airport's longest runway has hindered the airport in drawing additional carriers, he said. "We have talked with other carriers, but the runway length makes service uneconomical," he said. "There are some weight restrictions in the summer months. We [would need to] have a 6,800-foot runway to operate without weight restrictions."

While the airport's longest runway would need only 500 additional feet to hit the 6,800-foot mark, the airport's location has hampered any runway extension plans. Precluded from extending the runway into the bay because of environmental restrictions, Curtis said an extension in the other direction would require the purchase and demolition of 300 to 500 homes and businesses, which local politics precludes.

As planning progresses for a new airport on a 4,000-acre parcel, Curtis said the current airport would be sold to underwrite the bulk of the local tab. The property can be redeveloped for waterfront condos and commercial property. Curtis said the airport could be sold for $55 million to $100 million.

"As long as they don't have to pay for it, the airlines are happy about a new facility," Curtis noted. "We are the exception with our ability to pay for the new airport with the sale of the existing airport."

If the airport needs to pitch in more - the $275 million tab is based on a Spring 2005 estimate - it has an untapped revenue bond authority. The airport's $4.50 passenger facility fee has been dedicated to paying off revenue bonds. While the old bonds have been paid off for several years, the airport continues to levy the fee on each ticket.

The New Airport

If the environmental permits are granted - and not contested - construction could begin next May on a 1,500-acre facility located on the 4,000- acre parcel. The airport could open in late 2008 or early 2009.

The new Panama City-Bay County International Airport would be situated on 4,000 acres donated to the airport authority by the St. Joe Company. The airport authority late last month cleared the way for the land transfer. The site, now covered in pine trees, has been valued at $40 million.

The Jacksonville, Fla.-based St. Joe Company is the largest owner of undeveloped land - mostly tree farms for its paper mill operations - in Florida. The bulk of the land is in the Panhandle area; its holdings include 346,000 acres along the Panhandle coast that is highly prized for development.

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