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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2019. Attracting Investment at General Aviation Airports Through Public–Private Partnerships. Washington, DC: The National Academies Press. doi: 10.17226/25560.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2019. Attracting Investment at General Aviation Airports Through Public–Private Partnerships. Washington, DC: The National Academies Press. doi: 10.17226/25560.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2019. Attracting Investment at General Aviation Airports Through Public–Private Partnerships. Washington, DC: The National Academies Press. doi: 10.17226/25560.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2019. Attracting Investment at General Aviation Airports Through Public–Private Partnerships. Washington, DC: The National Academies Press. doi: 10.17226/25560.
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3 The U.S. airport industry has a long and storied history of both public and private sectors working collaboratively to build, operate, and maintain the nation’s extensive airport network. For much of the mid-20th century, most large and small airports alike were constructed by cities or counties, with assistance provided from the federal government in some circum- stances. However, as many state and local governments face declining public revenues, many airport sponsors and public officials are increasingly exploring options for attracting private investment in airports. The potential benefits for airport privatization that has been found in larger airports have included (2) • Access to provide capital for development; • The ability to extract an upfront or ongoing payment for the airport asset; • Stimulation of air service and airline competition; • Introduction of more innovation and creativity, including entrepreneurial ideas in the devel- opment of nonairline revenue; • Secured long-term efficiencies in operation and maintenance and enhanced customer service; • Shifted risk of debt, capital development, and/or operations to the private sector; • Acceleration of project delivery and reduction of construction costs; • Reduced reliance on general tax levies and other funding from airport sponsors; and • Depoliticization of airport decision-making. Considerable work has been done examining the privatization of commercial service airports; however, few studies have examined the possibilities of private-sector participation at general aviation airports. General aviation airports are defined as public-use airports that do not have scheduled service or have less than 2,500 annual passenger enplanements (3). General aviation airports form a critically important component of the U.S. aviation network. As of October 2017, 2,564 general aviation airports in the 50 states were providing a critical link to many of America’s smaller communities and towns (4). There are four types of general aviation airport categories: national, regional, local, and basic. As shown in Figure 1, most general aviation air- ports are classified as local airports in the annual National Plan of Integrated Airport Systems (NPIAS). The NPIAS is a congressionally required document that “identifies nearly 3,400 exist- ing and proposed airports that are significant to national air transportation and thus eligible to receive Federal grants under the Airport Improvement Program (AIP)” (4). This plan consists of a 5-year development estimate and is completed every 2 years. A summary of each of these types of general aviation airports, as defined in the NPIAS, is provided in Table 1. C H A P T E R 1 Introduction

4 Attracting Investment at General Aviation Airports Through Public–Private Partnerships Background Although some perceive PPPs as a new tool for delivering transportation infrastructure proj- ects, the practice of a government entity partnering with a private-sector partner to deliver a critical infrastructure asset dates to the early 1800s. The development of the Philadelphia and Lancaster Turnpike in Pennsylvania and many of the nation’s first railroads are a few examples of transportation projects that were financed almost exclusively by the private sector. While some of these early infrastructure negotiations involved certain provisions provided by the gov- ernment, most early transportation infrastructure was financed, constructed, and maintained by private-sector companies. Today, PPPs include a broad scope of contracting, financing, and project delivery arrangements and are used in varying forms around the world (1). For general aviation airports, private investment models can be best viewed as on a spectrum of privatization to varying degrees depending on the amount of risk borne by the private sector. This range extends from the least level of private involvement to a greater level of involvement. Although privatization models can vary, general types of categories are understood to help explain airport privatization: partial privatization, full privatization, and private development, as further explained in Table 2. Although a general aviation airport can be owned or operated by the private sector in many ways, the focus of this synthesis is on partnerships between the public and private sectors. Because of data limitations and the different characteristics, general aviation airports that are developed, owned, and operated entirely by a private sector entity are not included as part of this study. Figure 1. National Plan of Integrated Airport Systems airports by category and role. (Source: USDOT, FAA, Report to Congress, 2017.)

Introduction 5 NPIAS Category Description National (89 airports) National airports are located in metropolitan areas near major business centers and support flying throughout the nation and the world. These airports provide pilots with attractive alternatives to the busy primary airports. In fact, FAA has designated 65 of these facilities as relievers for primary airports. National airports have high levels of activity with many jets and multiengine propeller aircraft. Four national airports—Fort Lauderdale Executive, Phoenix Deer Valley, Centennial Airport in Denver, and Gillespie Field in San Diego—have more than 700 aircraft based at the airport. Two airports—Oakland County International in Pontiac, Michigan, and Morristown Municipal in Morristown, New Jersey—have limited air carrier service. National airports average about 250 total based aircraft, including 30 jets. Regional (350 airports) Regional airports are also in metropolitan areas and serve relatively large populations. These airports support regional economies with interstate and some long-distance flying and have high levels of activity, including some jets and multiengine propeller aircraft. About 50 of these airports have limited air carrier service. FAA has designated 151 regional airports as relievers for primary airports. Six regional airports—Mesa Field in Phoenix, Arizona; Whiteman Airport in Los Angeles, California; Livermore Municipal Regional in Livermore, California; Montgomery Field in San Diego, California; Zamperini Field in Torrance, California; and Arlington Municipal in Arlington, Washington—have more than 400 based aircraft. Regional airports average about 100 total based aircraft, including three jets. Local (1,261 airports) Local airports are a critical component of the nation’s general aviation system, providing communities with access to local and regional markets. Typically, local airports are located near larger population centers. These airports also accommodate flight training and emergency services. These airports account for 38 percent of all NPIAS airports and have moderate levels of activity with some multiengine propeller aircraft. About 76 of these airports have limited air carrier service. Four local airports have more than 200 based aircraft: Nampa Municipal in Idaho, Birchwood Airport in Alaska, Corona Municipal in California, and Grants Pass in Oregon. Local airports average about 34 based propeller-driven aircraft and no jets. Basic (831 airports) Basic airports fulfill the principal role of a community airport, providing a means for private general aviation flying, linking the community with the national airport system, and making other unique contributions. In some instances, the airport is the only access to the community and provides emergency response access such as emergency medical or fire-fighting and mail delivery. These airports have moderate levels of activity with an average of 10 propeller-driven aircraft and no jets. Unclassified (256 airports) These airports tend to have limited activity. Of the 199 publicly owned unclassified airports, 122 have between 0 and 3 based aircraft, and 78 have between 4 and 8 based aircraft. Thirty-five privately owned general aviation airports that have never received an AIP development grant are also unclassified. In addition, 22 privately owned reliever airports do not meet criteria for AIP funding. Source: USDOT, FAA, Airport Categories. Table 1. National Plan of Integrated Airport Systems airport categories. Privatization Description Partial privatization Strategies with partial control and at least a portion of ownership remaining with public airport owner Full privatization Strategies with the complete control and/or operation of entire airport vested with private entity Private development Strategies with an airport planned, built, and operated entirely by a private entity Source: S. Ernico et al., ACRP Research Report 66: Considering and Evaluating Airport Privatization, 2012. Table 2. Major airport privatization strategies.

6 Attracting Investment at General Aviation Airports Through Public–Private Partnerships Study Approach The purpose of this research study is twofold: first, researchers aimed to gain a better under- standing of the experiences of general aviation airports with public–private partnerships. Second, researchers sought to determine what possible lessons learned from these experiences might be used to help general aviation airports attract private sector investment. To accomplish this, researchers 1. Reviewed relevant literature on public–private partnerships and general aviation airports; 2. Assembled a contact list of general aviation airport and industry professionals; 3. Developed and administered an online screening survey and a full survey to general aviation airport officials; 4. Where relevant, conducted phone interviews with key airport professionals; and 5. Prepared a final report that summarized the findings from the literature review and survey results. Researchers began this project by first conducting a review of federal, state, local, and inter- national experiences with PPPs in the airport sector and elsewhere. Although most of the available literature pertaining to these experiences in the airport sector were reports published in the Transportation Research Record and funded through the Airport Cooperative Research Program, other studies were published by the Congressional Research Service and the Govern- ment Accountability Office. Additional literature on PPP best practices and contracting models common among U.S. airports was also included as part of this study; however, most literature found to date focused almost exclusively on larger, commercial service airports. To the extent possible, lessons learned from these larger airports were included in this analysis of smaller general aviation airports as well. In addition to the literature review, researchers compiled a list of contacts within the general aviation industry. This list included all state aviation directors, selected airport managers, FAA field offices, state aviation association leaders, and aviation industry group representatives including the American Association of Airport Executives (AAAE), the Aircraft Owners and Pilots Association (AOPA), the National Air Transportation Association (NATA), and the National Business Aviation Association (NBAA). In addition to general aviation airports, the scope of the study included non-primary com- mercial service airports, of which there are currently 127 in the most recent NPIAS. Of the 127 non-primary commercial service airports, 60 are in Alaska. Ultimately, the list of contacts was developed for the purpose of distributing a screening survey to assist in identifying air- ports that have been involved in PPPs in the past 5 years. The research team developed two surveys for use in this study: a screening survey and the primary survey. Together, the case examples and the findings that emerged from the literature review form the primary material on which this synthesis was prepared. Any lessons learned that emerged from the literature review and survey results are included in the findings and are presented in the final chapter of this synthesis. This synthesis report is organized as follows: 1. Introduction (including an overview of PPPs in transportation and general aviation airports); 2. Private investment at general aviation airports; 3. Industry practices for attracting investment at general aviation airports; 4. State of the practice and case examples; and 5. Conclusions and future study. The screening survey and primary survey instruments are provided in Appendix A and B of this synthesis, respectively. Additional information regarding the airports that participated in the survey is presented in Appendix C.

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Although general aviation airports have historically been funded by federal, state, and local entities, the private sector is increasingly playing a larger role. This involvement has ranged on a continuum from service and management contracts to singular projects at airports that involve leasing mechanisms to long-term leases and the whole-scale private development of general aviation airports.

In an era of declining resources and increasingly scrutinized public expenditures, private-sector involvement is and will likely need to continue to play a larger role to fill an ongoing and increasing gap between the existing infrastructure and the infrastructure that is needed.

Airport Cooperative Research Program (ACRP) Synthesis 94: Attracting Investment at General Aviation Airports Through Public–Private Partnerships explore public–private partnerships (PPPs) at general aviation airports in the United States over the past five years.

For the purpose of the synthesis, these PPPs are defined by the World Bank as long-term contracts between a private party and a government entity for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance

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