April Airport update

Submitted by Suanne Z. Thamm

Reporter - News Analyst

April 17, 2017 11:00 a.m.

Fernandina Beach City Manager Dale Martin reports that to date the city has received applications from 35 people interested in serving as airport manager. The posted deadline for applications is April 14, 2017.

Martin has also released a new ground plan and a revised project schedule for the proposed airport welcome center/terminal. Passero and Associates, the city’s airport consultants, revisited plans after the initial bids for the project came in significantly higher than anticipated.

While the corsair design is being retained, the project and associated parking will be sited differently, meaning that the project can be completed in one phase as opposed to two, resulting in significant cost savings (around a million dollars). Because the original plans would have infringed upon the leasehold of McGill Aviation, that portion of the property would have been off limits to contractors until March 2018. The two-phased approach was more costly and could have limited the number of bids received on the project.

Brian Echard, owner of 8 Flags Aviation, the new Fixed Base Operator (FBO), recently sent a letter to the City Manager with copies to the City Commissioners, outlining some of the economic benefits of the new welcome center/ terminal. In his letter dated April 12, 2017, Echard addressed what he saw as the importance of the terminal design and its economic benefits to both the airport and local businesses. Echard wrote: “The new terminal will be welcomed in the general aviation community, especially for the many pilots who have told me that they avoid our airport due to the poor terminal conditions, high fuel pricing and lack of services at FHB. The new terminal will support additional fuel sales and give transient pilots the amenities they expect at a modern general aviation terminal.”

The remaining information in this article was taken from Echard’s letter.

New Revenue Sources Beyond Fuel Sales

A key component of 8 Flags Aviation’s business plan involves marketing the new terminal and its adjoining meeting space to pilot groups throughout the country. I have already been in discussions with several organizations that have expressed interest in flying to Fernandina Beach for educational and entertainment programs. Such groups are always looking for a new and interesting place to visit, and the design of the new terminal has a broad appeal to aviators, military veterans and history buffs. Our beautiful beaches, historic downtown and friendly community already make Fernandina Beach a great vacation visit. The new terminal will certainly add to that appeal for aviators.

“Fly-ins” are routinely held at other Florida airports and provide economic benefits to those communities. While FHB does not currently have an appropriate terminal or meeting space to attract such events, the new terminal will support my business plan to have 10 “fly-in” seminars each calendar year.   Following is a conservative economic impact projection for these events:

• 10 fly-in events per year- average attendance of 25 aircraft        250 additional aircraft/year
• Average spend per event per airplane - $1200 (lodging, food, fuel, etc.) $300,000/year
• Total impact to local economy over 30-year lease $9,000,000

These events will be complementary to the other annual events being held at the Airport.

Increased Lease Revenue for Airport Fund

8 Flags Aviation will significantly increase the amount of revenue that the City currently receives from Fixed Base Operations (FBO). While minimum standards for FBO space at FHB is 3,200 sq ft, 8FA will lease approximately 7,000 sq. ft. to accommodate the projected activities resulting from the terminal design and increased marketability. This is a significant increase in rent revenue for the City Airport, which is currently receiving approximately $7,500 annually from the current FBO.

8FA will lease approx. 7,000 sq. ft. at $10.00 per sq. ft.               $70,000/year

8FA will ground lease approx. 174,240 sq. ft. at $.20 per sq. ft.  $34,848/year

1-Year Total               $104,848

Total over 30-year lease                  $3,145,440

 Increased Tax Revenue for City Airport

Fuel sales will increase with the additional airport activity, and fuel taxes paid to the city airport by 8FA will increase accordingly. The airport will receive 8 cents for each gallon sold for the fuel flowage fee. Last public report of gallons sold by current FBO was 225,978 gallons in 2013.

Fuel Flow Projections                   City Airport Revenue         

Year 1 – 350,000                  $28,000

Year 2 – 450,000                  $36,000

Year 3 - 500,000                  $40,000

Year 4 – 550,000                  $44,000

Year 5 – 600,000                 $48,000

Year 6-30 = 600,000/year  $1,200,000

Total Taxes for 30 year lease          $1,396,000

Increased Revenue for City Golf Course

Other City enterprise funds will benefit from the new terminal. While the increased fly-ins and functions to be held at the new terminal will result in additional revenue for the airport, additional revenue will also be realized at the city golf course. The city golf course is located adjacent to the city airport and 8FA intends to utilize the golf course’s restaurant as the primary caterer for these special events. With the addition of the meeting space and observation deck, the catering revenue for these events will help to support the Golf Course Enterprise Fund.

Fly-in events are typically held on a Friday – Sunday with training and entertainment held at airport facilities. The catering assumption is to have 2 catered breakfasts, 2 catered lunches and 1 welcome reception with dinners being held at local restaurants.

• 10 fly-in events per year- average attendance of 25 aircraft (50 attendees)
• 2 catered breakfasts ($15/pp); 2 catered lunches ($20/pp); 1 welcome reception ($25.00 pp)
• $4,750 additional golf course restaurant revenue per event = $47,500 per year

Total impact to Golf Course Enterprise Fund over 30-year lease with 10 events/year = $1,425,000

Total projected economic impact directly related to new terminal:          $14,966,440

New jobs and business growth

Above and beyond the financial benefits projected are new jobs that will be created to support the increased activity. It is my opinion that the Airport’s lack of a modern terminal with private meeting space has inhibited growth at the Airport, as well as in the City of Fernandina Beach. The first thing that corporate executives see when they arrive at FHB is an outdated terminal lacking in modern conveniences. The poor appearance is typically construed as representative of the general infrastructure of Fernandina Beach.

This paints a negative view of Fernandina Beach and is not representative of our beautiful Island.

It is a fact that corporate executives utilize regional airports to conduct business. They expect amenities such as private meeting rooms and updated facilities. When selecting an airport or a city in which to invest in commercial activities, a modern airport infrastructure is often a deciding factor in the location selection. The City airport has a great infrastructure to support additional growth; however the facilities do not currently represent the assets of our community.

Fernandina Beach is surrounded by communities and regional airports that have invested in modern terminals, such as Lake City and St. Augustine in Florida, and St. Simons, Brunswick, and Waycross in Georgia. All of these communities have a professional airport terminal that invites corporate executives and investment into their communities.

In summary, the above economic impact numbers are very conservative and only look at the known financial benefits to the city airport and golf course.   Additional revenue will be realized by local businesses as the additional pilots fly to our island, eat at local restaurants, and spend money at local retailers.

The sleek terminal design evocative of a historic WWII aircraft will not only lift the Airport up to modern aviation standards, but will distinguish FHB from a crowded field of traditional airport terminals.   The design will be the reason that additional aviators choose to come to Fernandina Beach.

View of airport welcome center from airfield

The iconic landmark will also be in keeping with the City Airport Mission Statement, “ . . . to provide a safe, attractive, and well-maintained airport facility: to support the economic development of the community….”

Editor's Note: Suanne Z. Thamm is a native of Chautauqua County, NY, who moved to Fernandina Beach from Alexandria,VA, in 1994. As a long time city resident and city watcher, she provides interesting insight into the many issues that impact our city. We are grateful for Suanne's many contributions to the Fernandina Observer.