4 Keys to Helping Economic Development Soar through Airport Investment District Planning

See the article that Jim Brogan and I wrote about the keys to leveraging economic development at and around airports. Jim is an Executive Vice President of Cambridge Systematics and a widely recognized expert in transportation planning. We see that there are tremendous opportunities in some settings but it requires a joined-up business strategy between airport development, regional planning and economic development. There seems to be increasing interest in this topic but few have yet to merge into a well-define business plan. We’re interested in your views and experiences.

Four Keys to Helping Economic Development Soar through Airport Investment District Planning

Airport Investment + District Planning = Economic Development

Airports support a range of business needs for their communities, including long distance professional travel, access for local shippers and customers to national or international markets, and even serving as centers for regional collaboration and training activities. Yet transportation planning and regional economic development activities often exclude or under-emphasize airports.

The fact is, statewide and metropolitan mobility plans must accentuate the links between transportation investments and economic development strategies, so planners need to understand how airports fit into the freight transportation system and how airport investments, when strategically conceived and implemented, can help integrate vital transportation, trade, and economic goals. So here are the four points that planners and economic development professionals must keep in mind about the relationship between airports and economic development.

#1 Airports Play Critical Roles in High-Value Global Supply and Distribution Chains

Airports and air cargo services play an increasingly crucial role in a range of dynamic global supply chains. Air cargo typically tends to transport relatively high-value and small or lightweight goods, products that generally require advanced skill input and thus provide high-impact economic development targets. These supply chains require high velocity transport and seamless, reliable logistics. Some of the products well-suited for air cargo include electronics, pharmaceuticals, medical devices, automotive, industrial machinery and aerospace components, and apparel. These sectors may overlap; for example, the Korean-made touch capacitive electronic screens used in Ford Explorers leave Korea in the morning, land in Anchorage, Alaska for a technical stop and then go on to Chicago, in all, within 17 hours, including the truck-to-plant transportation. As high-value inventory items, these screens require near just-in-time importation to avoid the unnecessary cost of carrying onsite inventory.

Lesson learned: certain supply chains prize proximity to air service, making a location near an airport with direct or connecting service an economic development asset. Not every airport can serve as a cargo or major cargo facility but, for those with the capacity and access to markets, becoming a major cargo airport could provide further economic opportunity. For smaller markets, expedited or contract carrier service can offer connections that are critical for economic opportunities such as attracting high-value manufacturing. Though major load center airport represent valuable investment locations, for a variety of reasons not every company will need or want to be located at or around a major cargo gateway, so understanding the value and limitations of feeder-connectivity to international cargo service is vital.

#2 An Efficient, Well-Connected Airport Supplies a Competitive Advantage

Because they provide feeder and direct air service connections, national and global economies benefit from airports as integral economic development elements. Site selection and supply chain sourcing professionals gain tangible competitive advantages from inbound and outbound air service to key markets. This value especially impacts business sectors that need or require seamless connections between key supply chain markets. Many of today’s most valuable supply chains–such as movement of auto parts between Seoul and Atlanta, pharma between Indianapolis and Birmingham, UK, and even fresh lobsters between Bangor, Maine and Paris, France–require frequent and predictable connections. With an understanding of how an airport fits within national and global supply chains, in the context of other regional competitive factors such as the business climate and workforce, we can support growth of air service route development while delivering strong intelligence to help attract investment at and near airports. Air connections between markets, as well as efficient surface transportation links from airports to critical locations and facilities, impact development of both cargo and passenger investment.

#3 Start with the Airport City

With industry’s (sometimes very fast) changing demand drivers, we can gain competitive advantage by artfully integrating transportation connectivity and infrastructure, along with an investment attraction strategy, into a regional freight planning/economic development effort. Some regions have begun to recognize this potential, but the work is mostly at the conceptual stage. Planning circles have begun to discuss airport city strategies, which incorporate consolidated business and planning strategies.

Although airport city planning strategies remain largely planning exercises, they offer good starting points. Through such work in Denver, Atlanta, and Dallas, airports and their surrounding regions are beginning to identify how to integrate the joint objectives of airport planning, air service development, infrastructure planning, and economic development. While examples already exist of economic centers emerging around or near airports, some now talk about taking this to a distinctly new level. The Washington Metropolitan Airports Authority, for example, looks to build out from the substantial high-tech/aerospace/government contracting business base around Dulles International Airport, to produce investment sites that could support a far broader range of businesses than now populates the Dulles Toll Road. In Birmingham, UK there are plans to integrate high-speed rail investments with land development planning, airport growth and onsite investment attraction. And well-passed the planning stages, many people will have read about Dubai’s World Central project which takes planning, development and transport to an entirely different level.

A thoughtful airport-vicinity development plan can help trade-oriented investment attraction, increase technology employment and attract high-value real estate investment for hotel, attraction, office, and international industrial/trade uses. Regions that adopt airport city strategies can realize economic benefits extending throughout the major metropolitan region and surrounding towns.

#4 Use it or lose it

Many airports sit on underutilized land assets that are ripe for development, for both aviation and non-aviation uses. While airports exhibit justifiable caution about approving long-term uses, many businesses prize airport locations and this demand will increase. When developing this land into commercial or industrial real estate that supports industries relying on air cargo, it is vital to enhance truck access and to improve traffic and travel times with corresponding improvements to the transportation corridors moving in and out of the airports. This represents an opportunity to grow airport revenues as well as generate economic opportunity, but only when the airport and its regional partners collaborate on these activities. Beyond on-airport assets, there are even wider opportunities for assets near the airport. Though likely not quite as valuable as on-airport sites, these properties also can prove highly strategic.

Tomorrow’s global commerce picture increasingly necessitates strong links between transport and economic development. The question is, how can we create the necessary linkages among regional transportation investments, regional economic development strategies, and airport planning?

• Economic developers must identify the key competitive niches of their markets and of the goods moving to, from, and through their regions today.
• Transportation and land use planners must better understand how the existing and potential regional industry mix views the importance of efficient air service, as well as the current performance and needed improvements of the airside and landside system. Strong regional leadership is required to develop business partnerships among airports, economic development organizations, municipalities, metropolitan planning organizations, and the private sector, so each party can contribute to developing airport districts as business hubs.
• Global growth in the business sectors that require speedy connections between important supply chain and business hubs will go beyond connections to the largest load center markets like New York and Paris. Air connectivity can equalize facility location options so other markets can compete for investment in new ways. The four key concepts outlined above can help to realize the full market potential and competitiveness of a region. Use this framework to build a strong business case for enhanced passenger and cargo service as well as onsite and off-site investment attraction opportunities. The relationships are in place to pursue these opportunities to maximize economic growth potential.