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

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.

While the initial development of the new airport is currently confined to two runways, including an 8,400-foot primary runway, and terminal facilities on a 1,500-acre parcel, Curtis said the entire 4,000-acre site would be able to handle long-term growth plans. A 12,000-foot runway has already been sited on the airport's master plan. By comparison, the new Panama City airport would encompass the same acreage as New York's JFK.

The airport has attempted to get as much of its 40-year building plan permitted at this time since environmental impact and mitigation review processes can take decades, Curtis said. Under the state review process, Curtis said the airport is able to seek permits for almost 95 percent of the full site. The state permit is expected this month, he added. The federal review rules will not allow regulators to grant approvals for projects long into the future. Curtis said the airport now anticipates a preliminary ruling from the Federal Aviation Administration (FAA) by Nov. 4.

As part of the environmental review process, the airport has agreed to turn over to Florida 10,000 acres to replace any wetlands that the new airport may disturb.

In a first for development projects in the Florida Panhandle area, the airport authority and St. Joe have submitted a 72,000-acre parcel to local authorities for extensive zoning and land use controls. (The parcel is 20 percent larger than the District of Columbia.) St. Joe controls 40,000 acres surrounding West Bay. All of the waterfront land - on which 16,000 housing units could have been built under its old zoning - will be placed into a conservation easement. The 10,000 acres that would be used to replace any wetlands are part of this easement.

Curtis said because such a large area is now undeveloped, the airport has been able to implement safety and buffer zones around the airport. The land use plans call for only light commercial and industrial development around the airport. All future residential communities would be located away from the airport to mitigate noise problems. "It is very unique to be handed a clean sheet of paper and to design a new airport and to do it right," he said.

The Northwest Arkansas Regional Airport in Bentonville, Ark., which opened in 1998, was the last "clean slate" airport to be built.

In these turbulent economic times for airlines, Curtis said it is unreasonable to expect to new carriers to commit to start service in 2009. Nevertheless, airline engineers have been examining the airport's plans with an eye on designing the most efficient operations, he said. The designers will begin working on the blueprints for the terminal building in about six months.

>>Randall Curtis, Panama City airport, (850) 763-6751.

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