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Town of East Hampton Airport Economic Analysis +

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Town of East Hampton Airport Economic Analysis + 1. TOWN OF EAST HAMPTON AIRPORT ECONOMIC ANALYSIS Town of East Hampton New York + February 2002 BAST HAMPTON AIRPORT ECONOMIC ANALYSIS February r 2002 Prepared for Town of East HamPton, NY a planning grant from the Federal Aviation Adminisiration ement Act of 1982 and the New York Department of i as developed with the airport sponsor and do not necessarily k State. Acceptance of this report by the FAA and NYSDOT York State to participate in any does not in any way constitute a commitment on the part of the United States or New environmentally acceptable in development depicted t¡eie¡", nor does it indicate ftrat ttte proposed development is accordance with applicable public laws. Prepared by McFarland-Johnson, Inc. 49 Court Street Binghamton, New York 13902 607',123-9421 In Association With: R. A. Wiedemann & Associates,Inc. and Shumaker Consulting Engineering P.C. PO Box 621 and Land SwveYing, Georgetown,KY 40324 320 NoIth Jensen Road 13851 502 535-6570 Vestal, NY 607 798-8081 TABLE OF COruTENTS I INTRODUCTION 1 1.1 Study Issues 1 1.2 Objectives and Desired End Products J 1.3 Report Outline . 4 2. BACKGROUNDANDMANAGEMENTSTRUCTURE 5 2.1 Historical Mission of the Aþort 5 2.2 Historical Performance Meeting the Mission . 6 2.3 Aþort Management Structure 6 J EXISTING AIRPORT CHARACTERISTICS 7 3.1 Existing Activity and Facilities . 7 3.2 Future Airport Land Use l3 3.3 MarketAnalysis... 20 4. BASELINE FINANCIAI AND ECONOMIC OUTLOOK 25 4.1 Historical Revenues and Expenses 25 4.2 Baseline Forecast of Revenues & Expenses . 28 5. ECONOMIC ANAIYSIS ALTERNATIVES 31 5.1 RevenueEnhancement 31 5.2 Intangible Assets 33 5.3 Cost-Effrciency/lvlanagementStructureOptions 36 6. FINDINGS OF THE ANALYSIS 38 6.1 RecommendedManagement/AdministrativeActions 38 6.2 Revenue Enhancement Recommendations 39 6.3 Intangible Assets 4t 6.4 Co st-Ef ficiency Recommendations 42 7 SUMMARY OF ECONOMIC ANALYSIS FINDINGS 43 7.1 Timetable and Trigger Points 44 8. ECONOMIC IMPACT ASSESSMENT 46 8.1 Goals and Methods of Analysis 46 8.2 Results of Analysis 47 8.3 Non-monetary Impacts . 47 TABLE OF CONIENTS (Cont') LIST OF TABLES Table 1 - AirPort Land Use Areas Plan (ACIP) Table 2 - Aþort Capital Improvement ...23 Table 3 - Facility Comparisons'''' ')? Table 4 - Service ComParison ...24 Table 5 - Rates and Charges Comparison East HamPton AirPort ' . ...25 Table 6 - Historical Operating Revenues ...27 Table 7 - Historical Operating Expenses : East HamPton Aþort AirPort . ...28 Table 8 - Baseline Forecast of Revenues: East HamPton HamPton AirPort ...30 Table 9 - Baseline Forecast of Expenses: East ...34 Table 10 - Potential Revenue Changes by Year 2005 onTotalRevenue Forecast . .''' 35 Table I I - Revenue Enhancement Strategy Impact Airport 44 Table 12 - Action Plan Trigger Points: East Hampton Impacts .48 Table 13 - Direct,Indirect, and Induced Economic LIST OF FIGURES .....8 1-LocationMaP Figure 9 Figwe2-ExistingAþort Layout ....14 Figure 3 - Surrounding Land Use ....t7 4 - Future Airport Land Use ' ' Figure . ...21 Figure 5 - Airport ServiceA¡ea''''' . .....36 Figure 6 - Strategic Impact of Market Factors onRevenues .' East Hampton Municipal Aìrport Economic Analysìs Februøry,2002 A n a ry s i s E a s t H a mp ro :tt'i",i ?Ï; -i c "T#"#àJ " 1. INTRODUCTION lTt anairPorteconomic analYsis I goals' KeYtounderstanding I ents are adamant about a no- growth policy at the Airport. The policy is interpreted to mean that any development or ,nuoug"*"nt action which would increase the number of aircraft operations is opposed' Mindful of this policy, the economic analysis must examine the operation and business practices at the Airport and iuggest improvements that will benefit the local area without noticeably increasing the level of activity or noise associated with the Airport's operation. 1.1 Study lssues The Economic Analysis examined a number of Airport issues including: maintenance and upgrading of existing facilities, potential development of Airport property, strict interpretation of laws and regulations, and continued convenience for all existing users. There is a balance".ruiron-"ntal that can be maintained between the perception of costs and benefits associated with the Airport. In this regard, the Airport is approaching self-sufficièncy in covering both operational costs and the local share of long term capital projects. In addition, public service activities and the use of Airport property to benefit local residents is viewed positively. o Maintenance ønd Upgrading of Existing Facílities: The Airport represents a significant investment in air transportation infrastructure. For this reason and in order to upgrade safety margins at the Airport, a program of pavement rehabilitation is underway that will result in the upgrading of one of the runways and a significant portion ofold apron area' o Porenfial Development of Airport Property: The new Master Plan is considering the implications of an FAA release of 73.5 acres of Airport property for non-aviation uses. These uses would be compatible with the Airport and would serve as a buffer between the Airport and residential neighbors. Cunent Airport property uses include a business incubator facility, a sound stage for movie production, an LTV facility, along with a number of small business and community-friendly projects. o Strìct Interpretation of Environmental Laws; All environmental laws and regulations are strictly enforced by the Town. This facet of the overall vision for the Aþort is meant to create trust between the Town leaders who manage the Airport and the community. This principle, however, is two-edged in that economic development often requires some trade-offs. A zero-growth policy, for example, McFarland-Johnson, Inc., ín assocìølìon wìth R.A. lYíedemann & Associales, Inc., & Shumaker Consultíng EngÍneers, P.C. I Easl Hampton Municipal AirPort February,2002 Economic Analysís precludes some increases in revenues that would occur with greater aviation activity. o Continued Conveniencefor All (Jsers: Despite a desire to limit growth and activity at the Airport, there is á genuine desire to serve all airport users. The Airport to Sponsor is very aware that many of the area's wealthiest citizens use the Airport access is access their homes on weekends during the spring/summer season. That often by jet or helicopter, which contributes to the noise issue. However, it is believeã ihut *itho,rt the availability of the local Airport, many of these high-profile some residents would not have convenient access to their homes. Without access, values in residents might move elsewhere, diminishing the exclusivity and property the local u."ã. Th,rr, in some respects, the Airport adds an important transportation value and convenience that contributes to the identity of the "Hamptons." o Development of Publìc Servíce/Intangìble BeneJits of Airport: The Town desires the to capitalize on as many good public relations activities as possible for Airport. For example, the.6" oiÃi.port property for a cellular tower permits greater police and fire piotection forihe Town. Other examples include the use of non- "ou"rug" gun aviation Airport property ior a rehabilitation center, a movie sound stage, and a club shootiù rung". Ali of these community-friendly projects need to be included in an educãtionãl and awareness-building context to adequately frame the contribution of the Airport to the local area' These issues are There are a number of specific issues that were addressed by this analysis. varied but all carried a theme of improving Airport financial performance and area economic development, while contributing to the greater benefit of the community: o Airport Føcítíty Improvement: The need for Airport facility improvements is diffrcult to promote to some members of the community because there is suspicion to that airport capacity will be increased. It is reasoned that more capacity will lead *or" uir"ruft ãperátions and thus, more noise. Therefore, to maintain the physical infrastructu." óf th. Airport, a careful community information program must be implemented that accurately describes the need and results. Currently, there are a number of planned Airport improvements such as runway and apron repavement, obstructior¡- removal, a-nd new automated weather observation station (AV/OS)' Also, there is a desire on the part of Airport users to develop more hangar space without increasing airport capacity' (Jses: acres o Release of Airport Property For Non-avíation Currently, 73.5 of Airport property have beãn ailocated for non-aviation purposes, but must be formally released to conform with FAA structured for oPtimumbenefit to that moneY earned from AirPort communitY. In this regard, acco money comes from and where it is spent' McFarland-Johnson, Inc., in assocìatíon with 2 R.A. lhiedemann & Associates, Inc., & shumaker consultíng Engineers, P.c. Eøst Hampton Municipal Airport Economìc Analysìs February,2002 o Recenr fncreases in Jet and Helícopter Operalions.' There has been a surge in fractional jet and helicopter ownership and use at the East Hampton Airport. This increase in operations creates more perceived noise impact. Most of the users of these jets unã h.li"opters are wealtþ residents of the area. The desire of some community members to limit or cap operations for jets and helicopters far below capacity is in opposition to the FAA's policy of non-discrimination and unrestricted use of facititiós that have received federal funds. Because of these competing interests, the issue of any increases in aviation activity at the Airport is highly charged- To respond to resident concerns about Airport noise, there are noise reduction plans that include consideration of new abatement procedures for aircraft ' operations. o Publíc Involvement ín Aírport Matters: A local ordinance requires that public hearings be granted for any changes to the Airport Layout Plan, Master Plan, Capital Improvements, Grant Applications, or the relocation of Daniels Hole Road. The purpose of this law is to provide an opportunity for all interested parties to be heard and to give the Town Board information it needs to balance competing interests and thereby preserve and protect the safety and comfort of both residents ofthe town and users óf the Airport.
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