Taking Flight: A Florida developer helps Panama City court airlines

by Les Shaver

Back in the ’90s, the Panama City–Bay County Airport Authority had a problem. It wanted to attract major airlines to serve the area. But in order to accommodate full-size jets, the landing strip would need to be extended. So the Authority attempted to lengthen it by more than 6,000 feet. The problem: On one side
was a single-family residential neighborhood; on the other was St. Andrews Bay, home to a rare endangered sea grass.

Panama City wasn’t alone in this dilemma. The City of Denver tried the same thing with the former Stapleton International Airport in the early 1990s. “They expanded the runways at Stapleton onto what used to be the grounds of the Rocky Mountain Arsenal,” says Thomas J. Gleason, vice president at Forest City Stapleton and former press secretary for then-Mayor Wellington E. Webb.

Eventually, city officials decided they could no longer expand and eventually opened the new Denver International Airport. The Panama City–Bay County Airport Authority came to the same conclusion. So it turned to Th e St. Joe Co., a Jacksonville, Fla.,-based developer, to find a new home for the airport. The developer, the largest private landowner in the state, donated 1,600 acres to relocate the airport 8 miles from its original location. “We were able to do something that probably couldn’t be done by almost anyone else,” says Jerry Ray, a senior vice president with St. Joe.

But enlisting St. Joe wasn’t enough to push the project over the finish line. There were legal and community issues to face. And the Authority still needs to lure airlines to the new facility. If the project is successful, St. Joe will demonstrate how a large stakeholder in an area can help establish an economic infrastructure that benefits the region and also attracts consumers who may be future St. Joe land owners. “[Our] interests and the interests of those that work, live, and raise their families there are in alignment,” Ray says.

THE PUSH
The spot St. Joe contributed for the new landing strip was a 150-year-old industrial pine forest surrounded by protected woodlands. “It’s situated so that approaches to the airport are on conserved land that will never be built on,” Ray says. “It can be a 24/7 operation. There are no noise issues. Most, if not all, of the noise is contained on the airport footprint.”

The new location also helped alleviate safety concerns about the airport’s original runway, which was only 6 feet above sea level. During storms, portions of the older runway would be under water for days, damaging the electric equipment on the runway. “This piece of infrastructure is too important for it to be compromised,” Ray says. “It’s located outside of all surge zones and hurricane-evacuation zones.”

Still, these logistics were minor compared to the other pre-construction challenge—lawsuits. Environmentalists filed six different suits against the Authority. Eventually, the suits were settled with
the creation of the West Bay Preservation Area, a 40,000-acre conservation site around West Bay. Meanwhile, the airport is scheduled to open in 2010 and will have a 10,000-foot runway with the ability
to add another 8,400-foot runway. It’s capacity was not available at press time, but critics of the project say the old airport could have handled the estimated 580,000 passengers projected to go through Panama City by 2038.

THE STAKES
That’s good news for Northwest Florida— an area of the state in transition. The area’s traditional industries, such as fisheries, have slowed over recent years, says Harrison Higgins, a professor of urban
and regional planning at Florida State University in Tallahassee, Fla. Even the steady defense industry is threatened by possible base closings. So tourism is one of the few remaining economic drivers.

Buddy Runnels, the chairman of Coastal Vision 3000, an organization representing tourism and economic development interests in the counties of Okaloosa, Walton, Bay, Santa Rosa, Escambia, and Gulf, contends that 10 million people a year in a six-hour radius drive to his market. “In order for tourism to be natural for people from the Upper Midwest [or] Northeast, then I think you need air travel,” Higgins says. “That’s how people get around [today], especially with gas over $4 a gallon.”

But groups such as Runnels’ are aiming higher—even trying to penetrate markets in Europe. Runnels admits that most Europeans think only of Miami when they consider Florida, but if he can change this attitude, the area could tap into a lucrative market. “The international traveler generally goes two weeks on their stay, and they prefer an area with eco-tourism,” he says. “They’re just not going to travel to Atlanta or Houston and change flights anymore.”

Right now, the Authority and other groups are targeting travelers from Chicago and Baltimore. Coastal Vision 3000, for one, would like to offer those visitors discounted airfare and other perks.

But tourists aren’t all there is to import. The area can also be a gateway for trade, says Al Wenstrand, president of Florida’s Great Northwest, a group of business, academic, and economic development leaders from the 16 Northwest Florida counties, including Panama City and Tallahassee. “We’re really looking at it as an air cargo portal into the United States,” he says. “Miami and most of the major cargo facilities are at capacity. You can cut down a lot of the transportation costs to get into the Midwest by coming to Panama City.”

THE PITCH
Unfortunately—though construction has begun and local groups are excited about the tourism potential—the Authority needs to find airlines to fly into the new airport.

Convincing the airlines to take root will take education. Th anks to the early lawsuits, most providers weren’t even aware of the new airport. The city must promote the airport’s appeal to potential passenger carriers such as Southwest Airlines or shipping companies such as FedEx. Right now, planners hope Delta,
Northwest, and U.S. Airways will return service to the area. “Once that education was done, the response was positive,” Wenstrand says. “The companies are excited, but they haven’t done the due diligence prior to this time.”

If this plan comes together, Gregg Logan, managing director of the Orlando office for RCL Co., a real estate advisory firm based in Bethesda, Md., thinks the airport can be quite a boon to Northwest Florida. He points to the success of Denver’s airport, the most recent international airport built. Stapleton created 10,000 jobs in a recession. And since the Denver airport’s 1995 redevelopment, the seven-county Denver metro has realized a $5.7 billion economic and fi scal impact through 2005, according to Development Research Partners, a research firm in Littleton, Colo.

Without the airport, Gleason of Forest City Stapleton says, “Stapleton was going to really stunt Denver’s economic growth.”

Logan says a similar resurgence will happen in Panama City. “The area will benefit from the new airport as an economic development engine,” he says. “Having a newer airport that can accommodate bigger planes and international flights will broaden the market.” And that has developers such as St. Joe looking to capitalize on potential new buyers landing in their backyard.

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Plan of Action
Consider these tips for working on large-scale infrastructure projects.

There are tons of hurdles to overcome when advocating new public infrastructure components such as an airport. Jacksonville, Fla.-based developer The St. Joe Co. found this to be the case when it helped move the Panama City– Bay County Airport. Here is what the company learned in the process:

1. Think Long-Term. You have to keep your eye on the horizon in order to deal with all the challenges of such projects. “This is a long, complicated process in which there was a lot of public debate about … this airport,” says Jerry Ray, a senior vice president with St. Joe. “You have to have staying power.”

2. Work Together. With such large projects, the process can be intense, and developers can’t just push through the paperwork. “Any time you embark on a public works project of this size—one that will change the future of the region—it is prudent to get public input,” Ray says.

3. Look for Help. The $330 million airport project was financed in thirds from the federal, state, and local governments. Ray says localities normally don’t contribute that much, but since St. Joe donated the land for the new airport, everything the city made on selling the old airport site—which had gorgeous views of St. Andrews Bay—was pure profit. “That money will be used to finance construction of a new airport,” Ray says.