Missouri Airport Investment Study

152 Pages·2007·5.58 MB·English

Missouri Airport Investment Study

Table of Contents
1. Study Overview...................................................................................................1
2. Airport Impact Evaluation Framework..............................................................3
2.1. Airports and Regional Economic Development.....................................................3
2.1.1. Economic Growth Components............................................................................4
2.1.2. Quantifiable Variables..........................................................................................4
2.2. Prioritization Screening Techniques......................................................................6
2.3. FAA Benefit/Cost Approach ..................................................................................7
2.4. Measuring Value-Added Impacts..........................................................................8
2.4.1. Aviation-Dependent Growth Industries................................................................9
2.4.2. Value-Added Impacts in Missouri.......................................................................10
3. Missouri Investment Study Approach............................................................11
3.1. Study Airports......................................................................................................11
3.2. Critical Issues......................................................................................................11
3.3. Project Improvement Factors..............................................................................12
3.3.1. Development Impact Location............................................................................12
3.3.2. Project Types......................................................................................................13
3.4. Impact Approach.................................................................................................15
3.4.1. Airport Infrastructure...........................................................................................15
3.4.2. Regional Economy.............................................................................................16
3.4.3. Economic Development Potential and Return on Investment............................19
4. Monett Municipal Airport – Case Study..........................................................25
4.1. Airport Location and Infrastructure......................................................................25
4.2. Regional Economy and Users.............................................................................29
4.3. Economic Development Impacts and ROI...........................................................33
4.3.1. Runway and Taxiway Extension........................................................................33
4.3.2. Apron Expansion................................................................................................37
5. Creve Coeur – Case Study...............................................................................41
5.1. Airport Location and Infrastructure......................................................................41
5.2. Regional Economy and Users.............................................................................45
5.3. Economic Development Impacts and ROI...........................................................50
6. Eldon Model Airpark – Case Study................................................................55
6.1. Airport Location and Infrastructure......................................................................55
6.2. Regional Economy and Users.............................................................................59
6.3. Economic Development Impacts and ROI...........................................................63
7. Lee’s Summit Municipal Airport – Case Study..............................................67
7.1. Airport Location and Infrastructure......................................................................67
7.2. Regional Economy and Users.............................................................................72
7.3. Economic Development Impacts and ROI...........................................................77
8. Branson West Airport – Case Study...............................................................81
8.1. Airport Location and Infrastructure......................................................................81
8.2. Regional Economy and Users.............................................................................81
8.3. Economic Development Impacts and ROI...........................................................88

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Missouri Airport Investment Study

9. Summary and Conclusion...............................................................................93

Appendix A: EDGE Model Data
Appendix B: Potential User Firm Employment
Appendix C: General Aviation Flight Activity Database
Appendix D: Airport Surveys
Bibliography

Exhibits
No. Title Page
2-1 Airports and Economic Development................................................................................3

3-1 Airport Location and Investment Period..........................................................................11
3-2 Airport Related Economic Development by Impact Location and Project Type..............13
3-3 Airport User Industries....................................................................................................17
3-4 Statewide Tax Impacts – Example Calculation...............................................................21

4-1 Airport Location and Drive Time – Monett Municipal Airport...........................................26
4-2 Regional Airport Facilities – Monett Municipal Airport.....................................................27
4-3 Airport Facilities and Services – Monett Municipal Airport..............................................27
4-4 Aviation Forecasts - Monett Municipal Airport.................................................................28
4-5 Capital Development Costs - Monett Municipal Airport...................................................28
4-6 Employment Growth by Key Sector – Barry County (Monett).........................................29
4-7 Economic Development & Growth Summary - Barry County (Monett)...........................30
4-8 Airport User Industries by Firm Location – Monett..........................................................32
4-9 Key Airport Users - Monett Municipal Airport..................................................................31
4-10 Major Airport Users - Monett Municipal Airport...............................................................33
4-11 Total Firm Jobs and Direct Job Impacts – Monett Runway Improvement.......................34
4-12 Total Firm Jobs and Direct Job Impacts - Monett Runway Improvement........................35
4-13 Return on Investment Analysis – Monett Runway ..........................................................36
4-14 Total Firm Jobs and Direct Job Impacts – Monett Apron Expansion..............................37
4-15 Total Firm Jobs and Direct Job Impacts – Monett Apron Expansion..............................38
4-16 Return on Investment Analysis - Monett Apron Expansion.............................................39

5-1 Airport Location and Drive Time – Creve Coeur Municipal Airport..................................42
5-2 Regional Airport Facilities - Creve Coeur Municipal Airport............................................43
5-3 Airport Location - Creve Coeur Municipal Airport............................................................43
5-4 Airport Facilities and Services - Creve Coeur Municipal Airport......................................44
5-5 Aviation Forecasts - Creve Coeur Municipal Airport.......................................................45
5-6 Capital Development Costs - Creve Coeur Municipal Airport.........................................46
5-7 Employment Sector Growth – St. Louis County (Creve Coeur)......................................46
5-8 Economic Development & Growth Evaluation Summ. - St. Louis Co. (Creve Coeur)....47
5-9 Key Potential Airport User Firms by Industry Type – Creve Coeur Airport.....................49
5-10 Primary Airport Users – Creve Coeur Airport..................................................................48
5-11 Total Firm Jobs and Direct Job Impacts – Creve Coeur Runway Extension...................51
5-12 Total Firm Jobs and Direct Job Impacts - Creve Coeur Runway Extension...................52
5-13 Return on Investment Analysis – Creve Coeur Runway Improvement...........................53

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Missouri Airport Investment Study

6-1 Airport Location and Drive Time – Creve Coeur Municipal Airport..................................56
6-2 Regional Airport Facilities – Eldon Model Airpark...........................................................57
6-3 Airport Facilities and Services – Eldon Model Airpark.....................................................57
6-4 Aviation Forecasts - Eldon Model Airpark.......................................................................58
6-5 Capital Development Costs – Eldon Model Airpark........................................................58
6-6 Employment Sector Growth – Miller County (Eldon Model)............................................59
6-7 Economic Development & Growth Summary - Miller County (Eldon Model)..................60
6-8 Key Potential Airport User Firms by Industry Type – Eldon Model Airpark.....................62
6-9 Major Airport Users – Eldon Model Airpark.....................................................................61
6-10 Direct Job Impact Requirements – Eldon Runway Extension.........................................64
6-11 Breakeven Economic Impact and Tax Collections – Eldon Runway Extension..............65
6-12 Return on Investment Analysis – Eldon Runway Extension............................................66

7-1 Airport Location and Drive Time – Lee’s Summit Municipal Airport................................68
7-2 Regional Airport Facilities – Lee’s Summit Municipal Airport..........................................69
7-3 Airport Facilities and Services - Lee’s Summit Municipal Airport....................................69
7-4 Aviation Forecasts - Lee’s Summit Municipal Airport......................................................70
7-5 Capital Development Costs - Lee’s Summit Municipal Airport........................................71
7-6 Employment Sector Growth – Jackson County (Lee’s Summit)......................................72
7-7 Economic Development & Growth Summary – Jackson County (Lee’s Summit)...........73
7-8 Key Potential Airport User Firms by Industry Type – Lee’s Summit Municipal Airport....75
7-9 Major Airport Users – Lee’s Summit Municipal Airport....................................................76
7-10 Key Airport Users – Lee’s Summit Municipal Airport.......................................................74
7-11 At-Airport Job Impacts – Selected Airports.....................................................................77
7-12 Direct Job Impact Requirements – Lee’s Summit Runway Extension............................78
7-13 Breakeven Economic Impacts and Tax Collections – Lee’s Summit Runway Ext..........79
7-14 Return on Investment Analysis – Lee’s Summit Runway/Taxiway/Tower Imprv.............80

8-1 Airport Location and Drive Time – Branson West Airport................................................82
8-2 Capital Development Costs – Branson West Airport.......................................................83
8-3 Employment Sector Growth – Branson West Airport......................................................84
8-4 Economic Development & Growth Summary – Branson West Airport............................85
8-5 Key Potential Airport User Firm by Industry Type – Stone County (Branson West).......86
8-6 Direct Job Impact Requirements – Branson West Airport Development.........................89
8-7 Breakeven Economic Impacts and Tax Collections – Branson West Airport Dvlp..........90
8-8 Return on Investment Analysis – – Branson West Airport Development........................91

9-1 Evaluation Summary.......................................................................................................95

Wilbur Smith Associates iii November, 2007
Missouri Airport Investment Study

Wilbur Smith Associates iv November, 2007
Section 1:
Study Overview
Missouri Airport Investment Study

1. Study Overview
State or Federal funding is typically awarded/allocated to public use airports based on how
project “need” or “justification” relates to one of several factors:
• Safety
• Efficiency
• Capacity
• System “standards”
• Environmental impact mitigation
• Economic development
Projects that fall into the safety, efficiency, capacity, standards, or environmental categories
typically stand on their own merit. Such projects typically fare better than economic
development projects in terms of garnering funding from the Federal Aviation Administration
(FAA). FAA has a process to prioritize investment in all Federally eligible airports. Within this
project funding priority system, the FAA does not consider a project’s economic development
potential.1 Perhaps one reason economic development criteria are not included is that no
convenient method exists to estimate a project’s potential economic return.
The Missouri Department of Transportation (MoDOT)-Aviation Section recognizes the
importance of planning as a proactive approach to ensure aviation continues its role in the
statewide transportation system. An update of the State Airport System Plan (SASP) provided
insight to changes in Missouri’s airport system as well as the overall aviation industry. Further,
the SASP included an extensive airport economic impact analysis that quantified the economic
value of Missouri’s airports to the state. Specifically, the airport economic impact analysis
evaluated the jobs, earnings and output associated with at-airport operations, off-airport impacts
associated with visitors who arrive by air, and the multiplier impacts associated with aviation
suppliers and the respending of earnings.
While the results of the airport economic impact analysis are extremely useful in illuminating the
importance of Missouri’s aviation industry – and impressive with over 149,500 jobs attributable
to aviation (directly or indirectly) – the previous work does not shed light on the potential return
on investment (ROI) of capital improvements at different airports; specifically, the new jobs and
output that such investments may generate at the state and local level. To more effectively plan
and prioritize future airport investments in Missouri, MoDOT-Aviation Section commissioned this
study to develop a framework to evaluate the potential ROI from airport investments.
The study’s purpose is to provide MoDOT with insight to the potential ROI for airport
investments in terms of economic development. To do so, this study addresses two central

1 The FAA does have a Benefit/Cost (B/C) methodology that evaluates operational and time savings
benefits, as addressed in Section 2.3. However, this B/C methodology excludes economic development
impacts.

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Missouri Airport Investment Study

objectives: first, an approach to evaluate airport investments; and secondly, an investment
evaluation of five diverse general aviation airports. Review of past airport economic evaluation
approaches provides a framework to assess the potential economic returns, while at the same
time addressing the difficult issues that complicate the analysis.
Faced with increasing demand for limited financial resources, state aviation administrators
desire a means to prioritize, or at least evaluate, investments between airports based on
potential economic impact. A common question that arises is: “What is the return on
investment?” While this question is straightforward, the answer is complicated due to how one
defines and measures impacts, and one’s perspective. This study evaluates economic
development impacts resulting from capital investment at an airport, measured in terms of jobs,
earnings and output. In doing so, the study is primarily concerned with how off-airport users
benefit from the investment in terms of expanded business activity.
This perspective varies greatly from typical airport economic impact studies that measure jobs
and expenditures at an airport associated with visitors who fly into/out of an airport, and the
related multiplier impacts. The intent of this study is to assess how airport investments might
best help Missouri’s overall economy (i.e., the businesses that ship time-sensitive cargo and/or
fly management and technical personnel via general aviation airports).
This analysis primarily concentrates on general aviation airports because commercial
passenger airports typically obtain funding directly from the FAA, can generate funds through
Passenger Facility Charges (PFCs) and other sources not available to general aviation airports,
and typically enjoy a significantly greater degree of financial autonomy than do general aviation
airports.

Wilbur Smith Associates 2 November, 2007
Section 2:
Airport Impact Evaluation Framework
Missouri Airport Investment Study

2. Airport Impact Evaluation Framework
This section presents background discussion on the role of airports in economic development
and methods of evaluating airport investments from an economic development perspective.
The review begins with a discussion of how the rising demand for goods and services generates
economic development and the need for airports. Various prioritization techniques used to
evaluate the investments between airports are then presented in Section 2.2. The benefit/cost
approach used by the FAA in their economic evaluation of investment decisions is then
discussed in Section 2.3.
2.1. Airports and Regional Economic Development
As regional business markets become more national and even global in scale, airports are
increasingly seen as catalysts for local economic development. The ability of airports to retain
and attract new business (and the associated jobs) is often used to justify public investment.
However, the rationale that one can stimulate regional economic development by simply
investing in airport infrastructure is misleading because it overlooks a basic economic principle.
While transportation is essential in the operation of a market economy, airport infrastructure
does not stimulate local development, nor does local development stimulate airport investment.
Rather, both are stimulated by regional increases in demand for goods and services.
Essentially, rising demand for goods and services stimulates economic development and airport
infrastructure investment. Therefore, airport investment must be seen as a facilitator of growth,
not the origin of growth. The inter-dependent relationships between goods and services,
economic development, and airport development are illustrated in Exhibit 2-1.
Exhibit 2-1
Airports and Economic Development
Missouri Airport Investment Study
Rising Demand for
Goods & Services
Economic Airport
Development Development

Source: Wilbur Smith Associates

Wilbur Smith Associates 3 November, 2007