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KCI Air Logistics Hub & Aerotropolis A KCI Air Logistics Hub and Aerotropolis: Vision, Rationale and Development Guidelines John D. Kasarda, Ph.D. Director Kenan Institute of Private Enterprise The University of North Carolina at Chapel Hill Chapel Hill, North Carolina 27599 U.S.A. Email: [email protected] April 2005 ____________________________________________________________________________ Study prepared for the Kansas City Department of Aviation and Platte County Economic Development Council Table of Contents Chapter 1 Regional Challenges and Strategic Response: The Air Logistics Hub/Aerotropolis Potential ................................................................................... 4 I. Introduction .............................................................................................. 4 II. Business Rationale for an Air Logistics Hub at KCI................................. 8 E-Commerce and Fast-Cycle Supply-Chain Management............... 10 V. Airports as Office, Commercial, and Professional Worker Magnets ..... 13 VI. High-Tech and Urban Economic Impacts ............................................ 15 VII. The Rise of the Aerotropolis ............................................................... 17 VIII. Aerotropolis Development and Planning Principles ........................... 19 IX. Emerging Air Logistics Hub/Aerotropolis Examples............................. 20 Ontario, California ............................................................................ 20 Alliance, Texas................................................................................. 21 Rickenbacher, Ohio.......................................................................... 24 North Carolina Global TransPark ..................................................... 26 Development History .................................................................... 26 Challenges and Hurdles to GTP Progress.................................... 30 Southern California Logistics Airport ................................................ 31 Asia’s Air Logistics Hubs and Aerotropoli Hong Kong International Airport............................................................................................... 31 Incheon: Korea’s Winged City .......................................................... 33 Singapore Changi International Airport ............................................ 35 X. European Experiences.......................................................................... 37 Kansas City Air Logistics Hub/Aerotropolis Potential—Credibility, Viability, and Transferability of Successful Experiences Elsewhere ........................ 38 Chapter 2 KCI Air Logistics Hub/Aerotropolis Infrastructure and Facilities Guidelines .......................................................................................................... 52 I. Existing Infrastructure and Facilities....................................................... 52 II. Forming the KCI Airport City and Greater Aerotropolis ......................... 54 1 The Site............................................................................................ 56 Development Potential ..................................................................... 58 III. Designing the Commercial Driver: A KCI Air Logistics Hub.................. 62 IV. Basic ALH Infrastructure Design and Configuration............................. 63 Central Cargo Area Design .............................................................. 68 Guidelines for Central Cargo Area Design ....................................... 69 Flexibility........................................................................................... 69 Targeted Mechanization................................................................... 71 Expandability/Phased Growth .......................................................... 72 Intermodal Interfaces........................................................................ 75 Guidelines for On-Site Transportation Connectivity.......................... 75 Guidelines for ALH Connectivity....................................................... 76 Guidelines for EDI Design ................................................................ 77 KCI ALH Planning Integration Strategy ............................................ 78 Designing for Future Tenant Business Needs.................................. 80 Chapter 3 KCI Air Logistics Hub Business Plan Guidelines ............................ 100 I. Introduction ......................................................................................... 100 II. Business Resource Needs ................................................................. 100 III. Functional Requirements of the KCI ALH/Aerotropolis...................... 103 IV. Critical Success Factors for the KCI ALH/Aerotropolis ..................... 109 V. Marketing Strategy for the KCI ALH/Aerotropolis............................... 112 VII. Conclusion ....................................................................................... 121 Chapter 4 Guidelines and Recommendations for a KCI ALH/Aerotropolis Implementation Plan ........................................................................................ 131 I. Introduction ......................................................................................... 131 II. Infrastructure Phasing and Industrial Development Timetable ........... 131 Stage I............................................................................................ 132 Stage II........................................................................................... 133 Stage III.......................................................................................... 134 2 Stage IV ......................................................................................... 135 III. Providing Appropriate Investor Incentives ......................................... 135 V. Coordination and Harmonization with Similar Facilities Elsewhere.... 138 VI. Institutional and Management Plan for the KCI ALH Development and Operation ................................................................................................ 140 Promoting and Developing the KCI Aerotropolis ............................ 145 Getting the KCI ALH Started .......................................................... 149 VII. Summary Recommendations and Action Steps............................... 150 3 Chapter 1 Regional Challenges and Strategic Response: The Air Logistics Hub/Aerotropolis Potential I. Introduction Platte County and the greater Kansas City metropolitan area are at an economic crossroads. Strategic decisions and development initiatives taken today will determine the future direction the area goes in terms of industrial mix, business competitiveness, job creation, and citizen quality of life. Critical issues are at stake. Will the County, Kansas City and the greater region continue to transition successfully to “new economy” high-tech, R&D, and information-intensive business services sectors? Will both their traditional manufacturing and newer high-tech and white-collar service industries be able to compete effectively, domestically and worldwide, in the globally integrated, speed-driven marketplace? Will the metropolitan area fully capitalize on its excellent international airport and rich multimodal transportation infrastructure to attract more investment and create high quality jobs? Finally, will commercial development near the airport and throughout Platte County be economically efficient, attractive, and environmentally sustainable, becoming an enduring magnet for workers and residents alike? All these issues, of course, are inextricably interwoven. Taken together, they will help determine the economic fate of the Platte County, Kansas City and the greater metropolitan area. It is therefore imperative that they be addressed with both strategic vision and coordinated action. This requires, first, a solid understanding of the new drivers of 21st century business competitiveness, job creation, and economic development. Second, Kansas City International Airport (KCI) in partnership with the Platte County Economic Development Council, the Kansas City Area Development Council, and other regional government and 4 business organizations must implement an integrated set of strategies, policies, and programs to harness and leverage these new competitive drivers for the entire region’s commercial advantage. Apropos the above, it is already clear that an increasingly fast-paced, globally networked economy is changing the rules of industrial competition and business location. These rules are being altered by a catalytic convergence of digitalization, globalization, aviation, and time-based competition. Speed, agility, and connectivity have become the mantra of many of the world’s most successful firms. The combined importance of these factors is creating a new economic geography with major commercial airports driving and shaping business location and urban development in the 21st century as much as highways did the 20th century, railroads in the 19th and seaports in the 18th. Today, these airports have become key nodes in time-critical manufacturing, distribution, and commercial systems and engines of a local economic development, attracting air commerce-linked businesses of all types to their environs. These include among others, just-in-time manufacturing and distribution, e-commerce fulfillment and third-party logistics firms; hotel, tourist, and exhibition complexes; and office buildings that house
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