Legal Considerations in the Funding and Development of Intermodal Facilities at Airports (2018)

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31 literature on the subject suggests that if intermodal- ism is to progress, it is reasonably likely that gov- ernment will play a significant role. And the refinement of several federal funding programs seems to support the view that government policy has been moving in a helpful direction. The success of the TIFIA and CIG funding programs, for exam- ple, have encouraged commentators to suggest addi- tional ways in which slight modifications to those programs would make them of even greater assis- tance in developing intermodal facilities. One com- mentator, an lawyer specializing in airport financial matters, David Bannard, has recommended that the federal government allow TIFIA loans to be repaid from multiple sources according to their pro-rata funding; this would allow airports to participate in a total funding package for an intermodal develop- ment and to still satisfy existing requirements for AIP and PFC funding.248 Another suggestion, from a state agency (CalTrans) and an academic, addresses the per- ceived fragmentation of the federal agencies with jurisdiction over the development of intermodal facilities. This perception has several elements. First, although the FAA, FWHA and FTA are all part of DOT, as can be seen from the discussion of the funding used by the airports in the case studies contained in this digest, the department’s approach to intermodalism has been viewed as fragmented and disengaged. Second, commentators have viewed the FAA as a reluctant participant in airport ground access issues. Thus, despite the growing legislative policy toward intermodalism at airports, the CalTrans report points out that the agency has focused more on putting planes in the air rather than getting passengers to and from airports.249 Finally, federal agencies are too often seen as inde- pendent actors, rather than cooperative partners, on intermodal issues. 250 The CalTrans report also points out that issues related to coordination and cooperation among the FAA, FTA, and FHWA create a perceived “planning gap” because regional agencies tend to focus on broader regional issues rather than specific prob- lems involving individual transport facilities at airports.251 As a result, ground access to airports tends to become a low priority for federal, state and 248 Bannard, supra note 192 at 7-8. As Mr. Bannard explains, relaxing the rules regarding the source of the funds used to repay federal loans would provide signifi- cant benefits. 249 Caltrans/Landrum & Brown, Ground Access to Air- ports Study 8-9 (2001) [hereinafter Ground Access]. 250 Id. 251 Id. at 9. will likely be approved on a pro rata basis according to one of the three fund apportionment methods con- tained in the 2016 Notice. VII. SUMMARY OF COMMENTARY REGARDING INTERMODAL DEVELOPMENTS AT AIRPORTS AND CONCLUSION In the 1990s, when the U.S. transportation sys- tem was just beginning to connect airports with city centers, Europe was already integrating its rail and air systems, substituting rail for air transport in order to relieve airport congestion, and establishing high-speed rail connections between airports.245 While a 2013 GAO report of intermodal transporta- tion found that the rate of growth in the United States for rail ridership was 33% higher than that for air travel, it nevertheless concluded that air to rail connectivity in the United States remained “limited.”246 The GAO report went on to state its finding that, although 42 of the 60 large and medium hub airports in the United States were located within 10 miles of Amtrak stations (with half of those stations within five miles of airports), transfer between the rail stations and airports continued to be difficult.247 Historically, government has played a central role in planning, funding and building transporta- tion infrastructure. Government has also been responsible for enacting the rules under which transportation systems operate. The existing 245 Vetroysky & Kanafani, supra note 18 at 1-9. 246 The rate of growth for air travel was 23%, but the growth rate for rail ridership was 55%. GAO Report to Congressional Committees, Intermodal Transportation: A Variety of Factors Influence Airport-Intercity Passenger Rail Connectivity 11 (2013) [hereinafter Intermodal Rail Connectivity]. 247 Only a handful of airports, such as Milwaukee’s General Mitchell Int’l Airport and Baltimore’s Thurgood Marshall Int’l Airport, are what planners consider “co- located” with inter-city rail stations—meaning that they allow for efficient and easy interconnection between air and rail. Intermodal Rail Connectivity at 13. General Mitchell International Airport is six miles south of the Milwaukee city center. Predicated on an air/rail package used by airlines in Europe, an airport rail station was championed by Midwest Airlines as a way to lure passen- gers from Chicago using a single ticket. The MKE Rail Station, which abuts the airport and is served with regu- lar Amtrak service, is Amtrak’s ninth busiest in the nation and the busiest in the Midwest. The station is served by a parking lot, concessions and shuttle buses that operate between the station and the air terminal. A one-way trip from downtown Chicago to the MKE station takes approx- imately 90 minutes, regardless of the time of day. acrp report 118: iNtegratiNg aviatioN aNd paSSeNger rail plaNNiNg, (Transportation Research Board, 2015) at 39–41.

32 The FAA’s 2016 Notice is viewed as a step in the direction of liberalizing the PFC rules applicable to the funding of intermodal facilities at airports. Never theless, it has also been proposed that the rules pertaining to the use of airport revenue should be amended to include a greater number of projects and to allow their use for airport ground access proj- ect capital and operating costs substantially related to the movement of passengers and cargo by air transportation without requiring that an airport own or operate the intermodal transportation facili- ties.259 The theory is that maintaining a demonstra- bly close relationship between airport revenue and air transportation will prevent the diversion of air- port revenue and that other methods (such as long- term service agreements) can provide a safeguard that an airport will continue to receive the benefits from the expenditure of airport revenue.260 In any case, there seems to be a growing view that not mak- ing any changes to federal airport funding programs will result in fewer opportunities to develop better projects that more closely relate funding to airport passenger use. In other words, doing nothing makes it more likely that airports will see fewer, better projects. And there is, at least, general consensus that relaxing restrictions on the use of PFC funds (as proposed in the FAA’s 2016 Notice) is the most feasible short-term solution for continuing support for the development of intermodal facilities at airports.261 259 Bannard, supra note 192 at 7. 260 Bannard, supra note 192 at 7. 261 Intermodal Rail Connectivity, supra note 246 at 33-34. airport sponsors.252 As a result, Mr. Dempsey has proposed that DOT should allow its Office of Inter- modalism to play a larger role in planning and funding intermodal projects and the consolidation of all planning, funding and regulatory oversight for intermodal facilities into that single federal office.253 A single federal office responsible for inter- modal development would have the authority to coordinate the efforts of airports, transit operators, planning organizations and highway authorities in order to ensure that airport ground access projects make use of the maximum number of transport modes and provide assistance to airports and air- port sponsors navigating the complex menu of funding programs.254 The Office of Intermodalism would also have control of (or at least significant influence over) an incentive scheme to further encourage intermodalism.255 Finally, the enact- ment of regulations providing that an Intermodal Impact Statement (similar to an Environmental Impact Study) be required as part of the planning process for all major transportation projects would ensure that transportation projects could not pro- ceed without at least some consideration of the available modal alternatives.256 Also, there is little question that the rules regard- ing AIP and PFC funding affect the design, efficiency and ease of use of airport intermodal facilities.257 In some circumstances (such as the BART develop- ment at SFO) it is not unreasonable to conclude that these rules affect decisions to even construct inter- modal facilities at airports. The exclusive use requirement, for example, limits the areas from which such systems may draw passengers and gen- erally limits the usefulness of fixed rail systems such as those developed at JFK, PDX, and SFO. The exclusive use rule also hindered the development of “one-seat” ride options at airports like JFK and SFO and limits the efficiency of fixed-rail systems by frustrating the design of through-track systems such as those found at National Airport, Minneapolis, and the system proposed for Dulles Airport.258 252 Id. 253 Intermodal Transportation, supra note 10 at 32-33.i 254 Ground Access, supra note 249 at 2. 255 Id. at 18. 256 Intermodal Transportation, supra note 10 at 35. 257 Changing AIP and PFC funding rules is also neces- sary in order to overcome the inherent disincentive that exists against airport development of intermodal facili- ties—26% of airport revenue is generated by parking and car rental operations. See generally, loiS kramer, airport reveNue diverSificatioN, acrp SyNtheSiS 19, (Transporta- tion Research Board, 2010). 258 PFCs as a Funding Stream at 7.

ACKNOWLEDGMENTS This study was performed under the overall guidance of the ACRP Project Committee 11-01. The Committee was chaired by DAVID Y. BANNARD, Kaplan Kirsch & Rockwell, Boston, Massachusetts. Members are ROD C. BORDEN, Columbus, Ohio; JAY HINKEL, City of Wichita Kansas; CLYDE OTIS, Post, Polak, Goodsell, and Strauchler P.A., Roseland, New Jersey; DANIEL S. REIMER, Denver Inter- national Airport, Denver, Colorado; and ELIZABETH SMITHERS, Charlotte Douglas International Airport, Charlotte, North Carolina. DAPHNE A. FULLER provides liaison with the Federal Aviation Administration, TOM DEVINE pro- vides liaison with Airports Council International–North America, ROBERT J. SHEA, provides liaison with the Transportation Research Board, and MARCI A. GREENBERGER represents the ACRP staff.

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