As the much-quoted 1989 Kevin Costner film encourages: “Build it and they will come.”
The Tulsa Airport Authority decided five years ago to build its own field of dreams out of 250 acres of undeveloped land on the north end of the Tulsa International Airport property as a show of good faith that they’re ready to accommodate new tenants.
One problem: The 250 acres – roughly the size of 242 football fields – had no airfield access.
This May, however, construction of Taxiway November, a half-mile long access point to the airfield for the north end of airport property, was completed.
The Perfect Storm
The City of Tulsa was awarded $10 million this May as a shot in the arm to the local aerospace industry from the State of Oklahoma Opportunity Fund. The gift is projected to help create 600 high-paying, high-tech jobs for Tulsans.
“When you’re talking about an industry that, on average, is about 83 percent higher as far as pay of what the state’s annual average is, that’s pretty good,” said Mary Smith, vice president of economic development at the Tulsa Metro Chamber of Commerce.
The $10 million will be used for two projects: the construction of a new aircraft maintenance hangar in what has been coined the North Development Area, and the rehabilitation of Airforce Plant #3 into aircraft manufacturing space for Spirit Aerosystems.
“This will enhance their ability to grow their work, their room, and also add jobs,” Smith said.
Of the approximately 4,000 acres of land at the airport, about 20 percent, or 800 acres, stands undeveloped.
“All our small and large aerospace companies are growing,” Smith said. “Opening up 200 acres by constructing Taxiway November is a big plus.”
The local aerospace industry began to improve and grow rapidly in 2005. Globally, and in general, the industry is growing, she said.
“Many of the [commercial] airplanes that are flying are coming to a place where they all need a major maintenance overhaul,” she said. “Since we have the world’s largest commercial maintenance, repair and overhaul operation – American Airlines here in Tulsa – obviously, there are all kinds of opportunities.”
“We have all three legs of the aerospace industry – commercial, military and general – growing like crazy,” she said. “If we could just do what we need to do to take advantage of this window for the state and for the city – being competitive with other cities and states that are putting lots of money on the table trying to entice their existing companies to grow or to bring new companies to the state or to the city.”
“I’m afraid that’s where Tulsa is. We need to step up to the plate.”
She hopes the combined efforts between the city and the chamber “makes things better.”
“It’s a way to grow a land-locked industry,” she said. “There are no facilities available – but, we have land.”
The Airport Authority staff that endeavored to build Taxiway November to the North Development Area applied for and received federal funding to help pay for the project.
The Taxiway November project cost about $4 million. Federal grants comprised 90 percent of the costs of the project, five percent came from state funds, and five percent were airport funds.
Though land at the airport is sought after, runway access is key to signing tenants.
“That’s the important part, because there are certainly companies and tenants whose businesses requires them to have airfield access,” said Jeff Mulder, director of airports at Tulsa Airport Authority. “We have other property around the airport that doesn’t have airfield access, but this does.”
In the Assessment & Action Plan for 2007 for the Tulsa Airports Improvements Trust and the Tulsa Airport Authority, the property development section details that the Authority issued a Request for Qualifications in 2006 for private developers to develop airport property. The Authority is currently negotiating a development agreement with a private developer to lease airport property and construct facilities to meet the needs of the aerospace tenants.
Airport staff is now talking with tenants interested in space along the new taxiway. One year ago, TUL began discussing with American Airlines the possibility of an additional hangar.
Part of the funding for the hangar – $4.3 million – is coming from the Third Penny sales tax, passed last May. When the State Opportunity Fund awarded $10 million to aviation in Tulsa, the Airport Authority designated $5.7 million for American and its hangar.
In a TAA board meeting July 12, the Airport Authority approved a lease agreement for about seven acres in the North Development Area to Tranalliance Development Group, which will build an air cargo facility on the property.
Estimating the economic impact of the project is difficult, “but what it will do is that any company in Tulsa or any company that comes to Tulsa looking to expand their business – we’ll be able to show them this 250 acres with the airfield access. It’s not something that we say we’ll build for them. It’s already there.”
At this point, the Airport Authority has not made an agreement with a master developer for the property.
“We’re in negotiations,” Mulder said. “The way we’re approaching it is, as we have opportunities come up, we are working with the individual companies that may have a need for space.”
Diversifying from Flying
Taxiway November and the North Development Area are both efforts by the Airport Authority to diversify the revenue stream at the airport with non-airline revenue.
“Our goal is to try to keep our airline costs in Tulsa flat so that we have an efficient business environment,” he said. “But, our costs keep going up. So, how do we cover those costs?”
One possible way to diversify income at the airport is land development, Mulder said, which could prove a good option for the land-rich Tulsa International Airport.
“The more property we can develop and get lease revenue from, that helps us keep our airline rates level,” he said.
Airlines pay two fees at Tulsa International: a landing fee applied at each landing and rental space in the terminal building. These fees generate about $10 million per year for the airport, which has a total yearly budget of about $34 million – leaving $24 million to be made up in non-airline revenue.
Highway to Possibility
“It was a fairly straightforward project,” said Jeff Hough, deputy airports director, engineering and facilities.
Garver Engineers provided the design for Taxiway November, and Keck Construction served as general contractor on the project. Dewberry Design performed construction inspection.
Hough noted, however, that a unique aspect of the project was that as of now, the taxiway goes to nowhere.
“It’s kind of one of those ‘built it and they will come’ things. We’ve known for a lot of years that we have interest by different companies wanting to come do something at the airport. But largely, we didn’t have any land left that had access to the airfield for them to build on.”
Naming the new American Airlines hangar and the TransAlliance cargo facility already leased in the North Development Area, “already we’ll have a couple of tenants out there,” he said. “Without that taxiway in place, we didn’t have any place to put American Airlines in a hangar that they wanted us to build. We didn’t have anyplace for a cargo operator to build another facility.”
Development of the land at the airport doesn’t end here, Hough said.
“It’s part of a master plan that looks for development on the airport out for the next 20 years, roughly,” he said. “The same master plan has the potential for us to build a third runway between Mingo Road and Highway 169 and develop a whole industrial complex over there.”
“That one is probably a ways down the road, but that’s something airports all over the country look for – they’re planning their growth.” ?