Strategies for Reuse of Underutilized or Vacant Airport Facilities (2011)

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47 CHAPTER THIRTEEN SPRINGFIELD–BRANSON NATIONAL AIRPORT—ADAPTIVE REUSE OF FORMER TERMINAL uses. The former terminal was leased relatively quickly to Expedia Inc. and to the Missouri Army National Guard, and both tenants moved in within 15 months after the terminal became vacant. This case study is one of the few successful reuses of a passenger terminal that did not involve exten- sive modification of the exterior envelope of the facility. The focus here is on lease terms and upgrades that were needed to reuse the terminal. BACKGROUND SGF is a small hub airport on 3,500 acres located in south- western Missouri. It has two runways that are 7,003 ft and 8,000 ft. Four airlines (American, Allegiant, Delta, and United) serve the airport to 11 destinations. In 2009, the air- port enplaned 398,025 passengers. Over the past 15 years, passengers have grown by approximately 4% per year. The airport serves as a gateway to the Missouri Ozarks and a tourist destination to Branson, Missouri, which attracts more than 7 million visitors annually. The steady increase AIRPORT SPONSOR AND INTERVIEW PARTICIPANTS Airport Name Springfield–Branson National Airport (SGF) City, State Springfield, Missouri Airport Sponsor City of Springfield Person Interviewed Shawn Schroeder, A.A.E., Assistant Director of Aviation—Operations THE SITUATION In May 2009, Springfield–Branson National Airport moved into its new Midfield Terminal. This left the former termi- nal vacant (Figure 39). The airport worked with the eco- nomic development staff of the Chamber of Commerce to develop tenant leads and with the FAA to keep them posted on progress and to obtain concurrence for nonaeronautical FIGURE 39 Springfield–Branson National Airport former terminal.

48 in passengers resulted in design and construction of the new Midfield Terminal. The airport broke ground for the new ter- minal in May 2006 and moved in 3 years later. TENANT RECRUITMENT AND LEASE NEGOTIATION ISSUES Both new tenants for the former terminal had existing opera- tions in the area. Expedia Inc. had an off-airport location and the Missouri Army National Guard was already based at the airport. Expedia liked the concept of occupying an air termi- nal and elected to keep much of the terminal décor (e.g., signs, gates, and basic spaces). The company leased approximately 59,000 ft2 of the terminal. However, a large factor in the com- pany’s decision to relocate at the airport was the space avail- able for vehicle parking. The Missouri Army National Guard leased approximately 25,000 ft2 of the former terminal for administrative offices that supported the armory that is cur- rently located in Springfield. (This use of the former terminal was considered an extension of existing aeronautical activity for the Army National Guard at the airport.) Expedia Lease To establish a market rate for Expedia (nonaeronautical use), the airport contracted with three appraisal companies to establish a value for rent. The airport divided the terminal space into functional categories as shown in Figure 40. Values for each type of space were established. The air- port took the median per square foot rent for each category based on the three appraisals. The FAA approved the lease rates before executing the lease. The terms of the lease were the same for Expedia and the Missouri Army National Guard, but the square footage rates were lower for the National Guard because it was an aeronautical use and the Guard’s presence provided additional security for the former airport terminal, which now has a significantly lower law enforcement officer presence than when it was operated as a terminal. In addition, the airport established a common area main- tenance (CAM) charge that included proration of real estate taxes, building insurance, maintenance of building systems (escalators, elevators, and HVAC), window washing, snow and trash removal, utility charges, landscaping, and security costs. CAM rates were $3.64 per square foot per year (as of 2010). The airport hired an additional employee to main- tain the facility, and that position is paid through the CAM charge. Below is a summary of the major lease terms: • A total of 59,000 ft2 was leased to Expedia Inc. for nonaeronautical purposes; 25,000 ft2 were leased to the Missouri Army National Guard for aeronautical use (see Figure 41). • CAM charges are assessed annually to both tenants based on projected expenditures. Increases are capped at 3% per year. • The lease term for Expedia is 5 years with five 3-year options for renewal at $4 per square foot base rent. • The lease term for the Army National Guard is 1 year with five 1-year options for renewal at $3 per square foot for aeronautical use and a $3.34 CAM discount because the Guard is not responsible for elevator maintenance. • The airport board reserves the right upon 30 months’ written notice to terminate the lease. • Each lease contains a war or natural emergency clause that is similar to a preemption clause. One of the biggest surprises for the airport was the impo- sition of new ADA requirements. These were triggered because of a change in use of the 1964 terminal facility. Key areas of noncompliance included— • Accessibility to parking and a clear passageway to all entrances: New ramps with accessible routes were required for entrance doors, all public areas in the building, accessible restrooms, identification signage with proper symbols and Braille, elevator controls, and cab size. FIGURE 40 Categories of terminal spaces for reuse and market value.

49 • Life safety systems: fire sprinkler protection, alarms and strobes, proper signage, and visibility from occu- pied areas. • Egress components: exit stair handrails, guards, treads and risers, exit arrangements for remoteness. ADA compliance was not originally budgeted by SGF to ready the facility. New bathrooms turned out to be a major additional cost that was paid for by the airport. Despite unexpected additional upfront costs, the city of Springfield experienced significant benefits from Expedia’s use of the former terminal. Expedia relocated 500 jobs to Spring- field, adding approximately $17.5 million in new payroll. Missouri Army National Guard Expansion Springfield–Branson National Airport has an existing lease with the Missouri Army National Guard. This lease consists of approximately 122 acres at the airport for repair of Army National Guard helicopters and avionics. A key element of the reuse of the former terminal was to establish a larger presence of the Guard on the airfield. Because the two ten- ants occupied the former terminal, a secure separation of the tenants was vital to both of their operations. LESSONS LEARNED The reuse experience of the former passenger terminal at SGF demonstrates a few important principals for reuse: • Coordination with the local economic development agencies and Chamber of Commerce is beneficial as these groups are regularly contacted by companies considering relocation and they can help potential ten- ants obtain available tax credits and other economic development incentives. • Work with the FAA throughout a reuse project so that the agency can review plans for nonaeronautical ten- ants and proposed market lease rates. • Consider hiring an expert in code compliance to per- form an assessment of the property. In this way, addi- tional costs for ADA upgrades, security, and other safety issues can be anticipated and budgeted. FIGURE 41 Remodel of former terminal for office space.