Air Service Development
How does an airport reduce the cost of flying when an airport does not sell or price airfare? It reduces the cost to operate for the airlines to fly out of that airport. Our airport leads the way in innovation, which has led to generating more seats and more flights with the business environment that we create for the airlines.
We have an opportunity greater than ever before to be able to diversify costs to the airlines through revenue generated for the operation, development, and maintenance of the airport from leased airport property. This opportunity would generate additional revenue and diversify costs to the airport, as well as to the airlines operating at TVC, by nearly 10 percent. Reducing operating costs could translate into lower fares, more seats, and more flights.
A 60-acre parcel adjacent to the main airline terminal has been a part of the airport property since the inception of the Traverse City Airport in 1935. Since 1967, this area has been designated in the master plan as future Airport Industrial Park. The Northwestern Regional Airport Commission (NRAC), developed in 1972, was re-established in 1990 by its “owners” Grand Traverse and Leelanau counties for the purpose of acquiring, establishing, constructing, enlarging, improving, maintaining, equipping, operating and regulating the Cherry Capital Airport and aeronautical facilities and property incidental to its operation. The NRAC may lease space, make improvements and grant concessions for aeronautical purposes, or purposes incidental to the operation of the airport, all of which are subject to the provisions of the Michigan statues. The FAA considers an airport’s development of leasehold revenue as incidental to the operation of a public airport, so long as such use will not negatively impact the operations of the airport.
The Costco opportunity and other opportunities like it improve the ability to maintain a self-sufficient airport, which currently does not require local taxes or contributions from Leelanau or Grand Traverse counties. Any leaseholder would be subject to property tax despite its location on airport property, creating a win for both the City of Traverse City and Grand Traverse County.
This type of opportunity is a community win. An economic development opportunity such as this creates a “public good” through improved air service resulting from increased efficiencies in airline operations at the Cherry Capital Airport. As a community, we must work together to develop a path to “land” businesses like Costco on our airport. The Airport Commission has lead the way for this great opportunity to “takeoff” within our community. We sincerely hope the local government and the community will board this flight in order to prevent and/or delay this economic opportunity for our region.
Since 1977, the NRAC has leased airport land in a manner compatible with commercial zoning established in the Traverse City Zoning Ordinance – specifically, a car dealership that is partially constructed on airport land under a lease agreement with the Airport Commission for car sales and automotive parking. The lease was directly entered into by the Airport Commission with the full support of the City of Traverse City. In 1998, another car dealership negotiated a lease agreement with the NRAC to extend automobile parking north of its location on the south side of an existing airport runway clear zone. This lease agreement calls for the use of property that is directly contiguous to the airport and the existing car dealership property, which coincidentally is located on Garfield Road.
These previous examples of leadership between our local governmental entities demonstrate the action needed to bring this business to Traverse City that offers so much public good. We need to continue to follow the model of success that the Airport has demonstrated to our community to be safe, secure, and self-sufficient, all while improving and attracting air service when other communities have lost it.
Kevin C. Klein is director of Cherry Capital Airport in Traverse City.