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44 CHAPTER TWELVE RICKENBACKER INTERNATIONAL AIRPORT--MILITARY BASE REUSE AIRPORT SPONSOR AND INTERVIEW PARTICIPANTS CRAA has taken an active role in developing nonaero- nautical land within the airport property and has acquired Airport NameRickenbacker International Air- land in the area for development or resale. The Rickenbacker port (LCK) area has numerous industrial parks, several individual com- mercial property owners, more than 150 companies, and City, State Columbus, Ohio more than 39 million square feet of development. As of 2010, the airport was generating enough revenue to break even Airport SponsorColumbus Regional Airport operationally; however, there is a need to develop a long- Authority (CRAA) term revenue surplus for capital projects. Persons InterviewedRod Borden, Senior Vice Presi- This case study examines the historical context for reuse dent and Chief Operating Officer of this military air base. The discussion is divided into three John Byrum, Vice President and time periods: base closure and transfer, transition period, Chief Financial Officer and current business model and activity. Base Closure and Transfer THE SITUATION In 1978, the Air Force announced Rickenbacker was to be Rickenbacker Air Force Base, originally the Lockbourne closed and that the Strategic Air Command functions would Army Air Base, is considered to be one of the best conver- be transferred. At the time, the base consisted of approxi- sion efforts in the United States of a military air base to a mately 5,000 acres, including an estimated 265 buildings public airport. Today, the airport serves as a dedicated cargo with approximately 3.7 million square feet of floor space. airport, a multimodal logistics hub, a charter passenger ter- In April 1980, Rickenbacker Air Force Base closed, and the minal, and a U.S. foreign-trade zone (FTZ; see Figure 37). facility was turned over to the Ohio Air National Guard and In addition, the airport remains host to the Rickenbacker Air renamed Rickenbacker Air National Guard Base. National Guard. The Guard base and several other military units remain in a "cantonment area" on the airport where the At the height of the Vietnam War in 1967, the population U.S. Department of Defense has retained ownership. on the base peaked at 18,000 service people. The Franklin County Commissioners recognized that closure of the base would have a "significant impact on the central Ohio area, and ... early reuse of the base would be in the best inter- est of these communities." As a result, the commissioners formed a steering committee in late 1978 to propose alterna- tive ways of using the military property. In March 1979, the committee proposed that the county commissioners create a port authority to receive and redevelop the property released by the military. The following month, the Franklin County Board of Commissioners voted to establish the Rickenbacker Port Authority (RPA). The mission of RPA, as defined in the resolution, was to receive and redevelop any land released for civilian use and to enter into a joint-use agreement with the Air Force to maintain the operation of the airfield. The commissioners envisioned that the property would be a good FIGURE 37 FedEx aircraft on Rickenbacker apron. site for an industrial park.

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45 The full transfer of the base to the RPA took several its other locations. Because of the way the partnership was years. In 1982, the RPA and the federal government entered structured, taxpayers had to pay for the remaining balance into a joint-use agreement to permit civil aircraft to use the due on the ramp bonds. airfield. The RPA agreed to assume responsibility for air- field operation and maintenance by January 1987. Under Several other milestones occurred during this transition this agreement, the Air Force was to be airfield manager period: and RPA a tenant until the transition to RPA control, when these roles would be reversed. The government agreed to In 1987, LCK established FTZ No. 138, which was par- coordinate the operation of any military aircraft with sched- ticularly effective as long as personal property taxes uled civil operations, except in the event of the need for were exempt within the FTZ. (This exemption no lon- prompt military aircraft movements. The military was to ger exists.) provide fire protection for both military and civil operations, After 1991, much of the rehabilitation of the base was but only as long as such services were needed for military paid for through federal conversion grants under the activity. As reimbursement for the government's costs, RPA Military Airports Program. agreed to pay a joint-use fee of $150,000 per year plus any Ten years into the Turner Construction lease, the RPA expenses incurred for fire fighting and other services. In bought out the remaining portion of the lease for $2 October 1990, the Department of the Air Force transferred million (four $500,000 annual payments) and took full control of the airport to RPA. However, as early as 1984, control of base redevelopment. the RPA had already begun to prepare the base for rehabili- To assist with development at Rickenbacker, the tation, reuse, and development (http://www.rickenbacker. Franklin County Commissioners and RPA created the org/about/history.asp). Franklin Community Improvement Corporation in 1994 as a private, nonprofit corporation. Transition to Full Public Control Current Business Model and Activity It took approximately 5 years to transfer the land manage- ment to RPA. In that time, little preventive maintenance was During the early years of reuse, LCK ran at a loss up to $4 done to runways, buildings, or other facilities. In 1984, the million annually. Today, LCK breaks even operationally. RPA was able to begin redeveloping LCK. Many buildings Nevertheless, the RPA realizes that not only does the airport were in poor condition. Some had serious environmental have to break even, but also a goal of $3$5 million surplus hazards. For example, the cost of demolishing the base hos- is needed per year to take care of ongoing capital replace- pital, which contained asbestos and polychlorinated biphe- ment and maintenance needs. Without a revenue stream nyls, was estimated to be $1 million. from passenger service, Rickenbacker strives to (1) lever- age its assets; (2) redefine itself through a comprehensive, The RPA faced some hard decisions to determine which long-term plan; and (3) find alternative means for generating buildings would remain and which would be torn down. It additional revenues. prepared an initial master plan. Ultimately, more than 50 buildings were demolished to ready the property for devel- In 2002, the city of Columbus, Franklin County, and the opment. Because the RPA had received the property as a Columbus Municipal Airport Authority approved the merger transfer of surplus government property, the deed stipulated of RPA and the Columbus Municipal Airport Authority, that even with a master plan in place, it had to go through forming the new CRAA, which became effective January 1, the release process with the FAA. Because the size of the 2003. Under the new authority, LCK has engaged in a num- property was large, 5,000 acres of land at Rickenbacker, the ber of land development initiatives to release process of a small portion of the acreage for demoli- tion of buildings proved noncontroversial for the FAA. Acquire additional land adjacent to the airport for development and/or resale, and To initiate development of the property, Franklin County Engage in publicprivate partnerships where CRAA solicited for a master contract to develop LCK. In 1985, it can provide raw land, improved land, or actually con- entered into a long-term lease with Turner Construction struct a building and sell or lease it. that gave exclusive rights to develop the entire airport for 75 years. In 1986, a publicprivate partnership was negoti- Within the CRAA system of airports, LCK has become the ated between the RPA, Turner, and Flying Tigers to build an de facto cargo and charter passenger airport. The authority is all-cargo hub and bulk-freight sorting facility. The county improving land to build out the Rickenbacker Global Logistics raised $22 million in special purpose bonds to construct a Park. In 2008, the CRAA collaborated with Norfolk Southern ramp, and Flying Tigers was offered free landing fees for 10 Corporation to build and open the Rickenbacker Intermodal years. However, in 1989, Flying Tigers was sold to FedEx, Terminal adjacent to LCK (Figure 38). The intermodal ter- which closed the cargo hub and consolidated operations at minal is based on an "inland port concept" where rail, air,