Opportunities for Economic Development Airports and the Economy April 3, 2013

1. Opportunities for Economic Development Airports and the Economy April 3, 2013

2. ECONOMIC IMPACT STUDY GOALS Special Study of the Airport System Plan • Quantify economic contribution of 75 airports • Use FAA approved methodology • Provide airport promotional materials • Educate State/Community Stakeholders

3. ECONOMIC IMPACT IS MEASURED: • Employment • Payroll and benefits • Output (value of goods and services produced)

4. ECONOMIC IMPACT COMPONENTS • Direct Impacts: • On-airport businesses/government • Indirect Impacts: • Visitors using the airport • Induced Impacts: • Multiplier impacts from spending in the local area • Non-quantitative benefits: • Related to health, welfare, and safety

5. STUDY PROCESS • Collect Airport Information • Site visit, telephone, mail survey • 50 out of 75 airports visited • Gather information on airport • Employment • Payroll • Output, including history of capital projects • Get list of on-airport business/government tenants • Direct Impacts: On-airport businesses/government • Indirect Impacts: Visitors using the airport • Induced Impacts: Multiplier impacts from spending in the local area • Non-quantitative benefits: Related to health, welfare, and safety

6. STUDY PROCESS • Collect Airport Tenant Data • Site visit, telephone, mail survey • Employment • Payroll • Output, including history of capital projects • For non-responding tenants • Employment estimated • Airport manager • Business databases • On-site inspection • Extrapolated impacts • Idaho airport tenant data • Data from other states • Direct Impacts: On-airport businesses/government • Indirect Impacts: Visitors using the airport • Induced Impacts: Multiplier impacts from spending in the local area • Non-quantitative benefits: Related to health, welfare, and safety

7. STUDY PROCESS • Gather Visitor Spending Data • Number of visitors • Expenditures by category • Lodging • Food & beverage • Ground transportation • Retail & entertainment • Other • Length of stay • Direct Impacts: On-airport businesses/government • Indirect Impacts: Visitors using the airport • Induced Impacts: Multiplier impacts from spending in the local area • Non-quantitative benefits: Related to health, welfare, and safety

8. STUDY PROCESS • Visitors Using Airlines • Passengers at all 7 commercial service airports surveyed • Visitors Using General Aviation • FBOs distributed surveys to transient pilots • Direct Impacts: On-airport businesses/government • Indirect Impacts: Visitors using the airport • Induced Impacts: Multiplier impacts from spending in the local area • Non-quantitative benefits: Related to health, welfare, and safety

9. Direct Impacts: Tenants Gov. agencies Indirect Impacts: Airline visitors GA Visitors Multiplier Effect • Direct Impacts: On-airport businesses/government • Indirect Impacts: Visitors using the airport • Induced Impacts: Multiplier impacts from spending in the local area • Non-quantitative benefits: Related to health, welfare, and safety STUDY PROCESS TOTAL ECONOMIC IMPACTS + = Total Impacts Direct and Indirect Impacts Induced Impacts

10. STUDY PROCESS • Direct Impacts: On-airport businesses/government • Indirect Impacts: Visitors using the airport • Induced Impacts: Multiplier impacts from spending in the local area • Non-quantitative benefits: Related to health, welfare, and safety • Non-Quantitative Benefits Difficult to Measure • Air ambulance flights • Firefighting flights • Law enforcement flights • Search and rescue flights • Businesses that depend upon aviation but are not at the airport

11. ESTIMATED IMPACTS • Total Jobs – 23,000 • Total Payroll – $718 million • Total Output – $2.0 billion

12. ESTIMATED IMPACTS

13. Aerial Applicator Benefits • Commercial agriculture benefits from aerial applicators • Application of fungicides, herbicides, and insecticides • Aerial applicators deliver chemicals: • More quickly than ground-based systems • Without damaging existing crops like vehicle-based systems

14. Aerial Applicator Benefits During a Typical Year • Aerial applicators spray 841,000 to 1.3 million acres • Total crop values are $1.1 billion to $2.6 billion • Aerial applicators protect $42.7 to $276 million • Aerial application added value of 4% to 10% • Range of values due to variance in crop yields, pestilence outbreaks, commodity prices, need for aerial application, and effectiveness of chemical applied

15. Tax Impacts Airports/Aviation Activity Generates Taxes for Idaho • On-airport businesses pay sales taxes • Employees of on-airport businesses pay sales taxes • Visitors using the airport pay numerous taxes • State sales tax • Local option sales tax • Travel and convention tax (lodging) • Rental car tax • Visitor-supported employees pay sales tax • Aviation-related employees pay state income tax • Aircraft owners/operators pay state aviation fuel tax

16. Tax Impacts Airport/Aviation Activity Generate $87.7 million • On-airport tenants paid $33 million (38% of total) • Visitors paid $33 million (38% of total) • Employee sales, income, and aviation fuel tax collected $21.7 million (24% of total)

17. Qualitative Aviation Benefits • Air Ambulance flights • Firefighting flights • Law Enforcement flights • Search and Rescue flights • Personal and Recreational flights

18. Qualitative Business Benefits • Businesses - not based on an airport Derive Value from the use of an Airport • Survey of 1,000 Idaho Businesses found: • 91% use commercial airline service. • 78% of respondents use air cargo/package express on a regular basis • 71% have customers or suppliers who travel, by scheduled airline service, to visit the surveyed company. • 58% average one trip per month on a commercial airline. • 23% own, lease, charter, or have fractional ownership of a general aviation aircraft.

19. QUALITATIVE BENEFITS Business Location Factors • Highway access • Trained workforce • Tax incentives • Commercial service airport • Proximity of suppliers • Universities and R&D centers • Raw materials • Urban business district • General aviation airport • Historic location of business • Rail transportation facilities • Water transportation facilities

20. Total Economic Impact Summary • Total Jobs – 23,000 • Total Payroll – $717 million • Total Output – $2 billion • Aerial Applicator – $42.7 to $276 million • Tax Impacts – $87.7 million • Qualitative Benefits • Life-saving flights - Business Owner Access • Firefighting flights - Business Customer Access • Search and Rescue - Cargo/Package Express • Recreational flights - Premiere Business Location

21. Use’s of Economic Impact Data • Educate Owners on Value and Potential • Educate Tax Payers on Potential and Benefits • Educate Businesses on Uses and Development Potential Available • Encourage State/Local Economic Development Agencies of Opportunities at an Airport • Show Airport Tenants potential for growth and business expansion • Show public funding agencies justifiable design modifications for projects

22. Target Audience • Airport Owners – Idaho Cities and Counties • Community Businesses and Customers • Aviation Tenant/User Businesses • Flight Instruction CFI • Aircraft Sales Aircraft Repair • Oxygen Aircraft Rental • Aircraft Storage Avionics Repair • Air Taxis to Backcountry Airports

23. Target Audience • Non-Based Aviation Uses • Air Cargo • Aerial Photography • Fire Fighting Support • Environmental Patrols, Fish & Game • Law Enforcement • Non Commercial Visitors • Emergency Medical Services • Real Estate Tours • Regional/World Wide Buyers • Developers and Entrepreneurs • State/Local Business Development Groups

24. How To Implement - Examples Maintain Eligibility and Justification for Public Financed Infrastructure Projects but include Economic Development Enhancements • Runway maintenance – add lighting or navigational aids to support Business aircraft • Apron repair – add space and ground access for freight and visitor transfer • Airport Planning – include a section discussing Economic Development opportunities and goals • Secure funding from State/Local Economic Development agency for on-airport business development, while ensuring that infrastructure complies with design requirements • Include Local Business’/Developers on Airport Boards, and during planning, design review, and zoning implementation

25. Take-Away from Airport Economic Study IF YOU DON’T KNOW THE ECONOMIC IMPACT AND VALUE OF YOUR RESOURCE, HOW CAN YOU HOPE TO; • Convince Owners to Support it • Convince the Tax Payers of its Value • Convince Business’ that it has great potential • Secure Funding approval to modify projects to include elements for Economic Development • Secure design/budget approval for enhancements

26. THAT’S JUST THE BEGINNING Idaho Airport System Plan is available on the Aeronautics Web Page at: • http://itd.idaho.gov/aero/Publications/08SystemPlan/IDAirportSystemPlan.htm • The Economic Impact Analysis • is Appendix B of the Idaho Airport System Plan • and is available at: • http://itd.idaho.gov/aero/Publications/08SystemPlan/Technical_Reports/TecReports.htm • I can be reached at: • Bill.Statham@itd.idaho.gov