Panama City-Bay County Airport Move Still Possible

Aug. 5--Airport relocation is still feasible, but securing grant commitments, maintaining construction costs and schedules, and timing the sale of the existing airport are critical to any move, an Infrastructure Management Group Inc. official said Thursday.

During a Panama City-Bay County International Airport Authority workshop, board members listened to an IMG presentation on airport relocation project financing and discussed scenarios for the sale process of the existing airport property.

Sasha Page, IMG's vice president of project finance, delivered an update of a 2003 airport relocation feasibility analysis, based on assumptions developed in 2004 and 2005.

IMG has projected the cost of relocation at $277.4 million, including $156.5 million in construction costs.

Page said the key message to come from the financial feasibility review is that funding from the existing airport property sale has to occur during the new airport's construction period.

Before the meeting adjourned, Airport Authority Chairman Joe Tannehill cautioned everyone that there are still major thresholds to cross in the relocation process.

"You all realize we do not have an agreement with St. Joe yet?" Tannehill said, referring to the proposed donation of about 4,000 acres in the West Bay area from the Jacksonville-based company to the Airport Authority.

After the meeting, Tannehill said he was meeting with St. Joe Co. officials today at 8 a.m., with a couple of additional meetings scheduled for next week.

He said after the two sides reach an agreement on the donation, the agreement goes to the Federal Aviation Administration for approval, a process that could take 30 to 60 days.

Tannehill said he is confident the airport and St. Joe will come to an agreement that will gain FAA approval.

With the St. Joe negotiations occurring simultaneously with environmental permitting processes, including the issuance of the FAA's final Environmental Impact Statement, Tannehill said there are a lot of factors that could delay the relocation schedule.

Inflation and rising costs of construction materials are other probl.ems facing the airport, Tannehill acknowledged, but he reaffirmed what he called the deliberate process of those involved.

"It needs to be done right, period," Tannehill said.

Assumptions that Page cited Thursday for the relocation feasibility analysis included the beginning of new airport construction in the first quarter of 2006, following the FAA's Record of Decision, as well as a property sale of the existing airport netting at least $54.5 million through competitive tender.

In addition to the property sale, funding for the relocation will include Florida Department of Transportation grants totaling $97.7 million and $63.8 million in FAA Airport Improvement Program, or AIP, grants.

Page said about 20 percent of the total financing needs to occur during the construction period. He said the AIP letter-of-intent grant may be disbursed during an 8- to 10-year period, and added that disbursements after the construction period could be funded with an AIP-backed grant anticipation bond.

Tannehill asked Page if Panama City or Bay County would have bond obligations related to relocation. Page replied that only the Airport Authority would be obligated.

Page said the analysis would be updated as assumptions are periodically reviewed.

Board members also heard from Matt Taylor, a representative from Orlando-based Real Estate Research Consultants, on Thursday. He said consulting firm Post, Buckley, Schuh & Jernigan Inc. had brought him on to serve as a real estate advisor for the existing airport's sale.

Taylor presented several sales scenarios and ways to structure the sales process to board members.

He said he had not personally valued the 713-acre property and did not know if it was worth more or less than its estimated value of $54.5 million.

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