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Home My WebLink About20151065 Ver 1_Pre Application Materials_20120918n (Revised 9/14/2012) Proposed Meeting Agenda PTIA Future Environmental Permitting Date: Tuesday September,18, 2012; 10:00 am Location: Stanley Frank Boardroom; Piedmont,Triad International Airport 1000 A Ted Johnson Parkway; Greensboro, NC 27409_ Host: Piedmont Triad Air ort Authorit - evin'Baker, PE, Executive Director, %,Lisa Elmore, Development Coordinator Invitees: U.S. Army Corps of Engineers -MenteMatthews +nnter-im3upervisorRR-aleigh-Regulatory_Field-Office— Andrew Williams, Project Manager N.C. Division of Water Quality Karen Higgins, Supervisor, Wetlands Buffers Stormwater Compliance & Permitting Unit due Homewood, Environmental Specialist WSRO Piedmont Triad Partnership >.David Powell, President Michael Baker -Engineering ' v arty -Allen, PE, Senior Project Manager �Clex Rosser, PE, Project Manager 4chard Darling, Environmental Manager 1. INTRODUCTIONS 2. PTAA MISSION &'PTIA RESPONSIBILITIES • PTIA has unique responsibility as Triad economic engine PTIA is 60% Industria' VCommercial vs. only 40% Passenger • Prepared Presentation 3. PTIA & TRIAD ECONOMICS Triadreliance on PTIA- 4. TIA 4. AIRPORT PROIECTS & ENGINEERING CONSTRAINTS • Types of Projects Anticipated • Airport•& Aviation Constraints • Stormwater Management 5. FAA ENVIRONMENTAL COMPLIANCE • EIS, EA, CatEx. 6. 4044401 ENVIRONMENTAL COMPLIANCE AT PTIA • Status of FedEx 404/401, WSWMP Rule • Jurisdiction_& Projects since FedEx • On -Site Mitigation Success Page 1 of 2 Proposed Meeting Agenda (Revised 9/14/2012) 7. THE FUTURE Airport Master Plan Update <http://airportmasterplan.homestead.com/index.html> Airport Layout Plan Schedule & Priorities 8. ENVIRONMENTAL REGULATIONS (Regulatory Personnel) • Federal 404 Program, NEPA General vs. Nationwide vs. Individual Alternatives Analysis, Public Interest Review, Sequencing, Mitigation Protected Species, Archaeological & Historic Resources Anticipated Changes to Federal Regulations • State 401, 15A NCAC 02B, SEPA, Jordan Buffer, Greensboro Water Supply -watershed Stormwater Management, SB 229 (Section 6. G.S. 143-214.7, c3 & c4) Secondary & Cumulative Impacts Anticipated Changes to State Regulations 9. PERMITTING THE FUTURE (Open Discussion) Preliminary Field Effort (Preliminary Jurisdictional Delineation, GPS Survey, Stream Channel Identification, Stream Quality Assessment, Wetland Classification and Evaluation, Preliminary Protected Species Review, Jurisdictional Verification) — 30% project design Permit Application Development (Pre -Application Meeting, Alternatives Analysis, Cumulative Impacts Analysis, Conceptual Mitigation Plan, Application for Variance to PTAA WSWMP Rules, Application for Variance to Jordan Buffer Rules — 60% design Permit Negotiation (Application for Section 401 Water Quality Certification, Application for Section 404 Permit, Verification of Mitigation Plan Approval, Coordination and Permit Negotiation) — 90% design Page 2 of 2 �-� env auu�vaw� a+ne sns.r+ Ae®Rsm .,.. — ...: ��'_ " _- �'� •= Sr.`r. v: .moi. J'+.u�.� � y J � � ,:wwYA brllYA VMY ril. I.r w +rs w,�•'M�P�.l7►AII�IY '�. i. .� � j AKIAL- A Aa. 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ILM' • m. w 't_..rrrri..sr Economic Impact Analysis of the Piedmont Triad International Airport Impact Type Employment Labor Income Value Added Output On -Airport 7,732 $392,3981558 $582,492,050 $1,254,288,187 On -Airport, Const. 547 $21,803,497 $29,395,683 $60,923,003 Off -Airport 3,969 $120,038,238 $194,643,428 $267,813,560 Off -Airport Dep. n.a. n.a. n.a. $74,300,000 Total 12,248 $534,240,293 $806,531,161 $1,657,324,750 The increased economic activity fostered by PTI produced larger tax collections at the state and local level amounting to $71.3 million in 2010. Of this amount, $12.8 million was in higher property tax collections, $29.8 million in increased sales taxes, and $13.1 million in expanded income tax revenues. W V Estimated Impacts from the Development of the Planned 1,400 -Acre Industrial Site Impact Value Employment 18,419 Labor Income $1,003,4221,327 Value Added $1,515,488,681 Output $31158,7691830 Total State & Local Taxes $113,4731797 Property Taxes $12,650,176 Sales Taxes $48,312,317 Income Taxes $24,819,536 Other Taxes $27,691,769 Report Prepared for the Piedmont Triad Partnership Economic Impact Analysis of the Piedmont Triad International Airport Business and Economic Research G. Donald Jud, Ph.D. Interim Director Center for Business & Economic Research Bryan School of Business & Economics University of North Carolina at Greensboro Greensboro, NC Phone: (336) 294-3655 Cell Phone: (336) 908-1634 Juddon@uncg.edu December 4, 2011 Center for Business & Economic Research, UNCG Piedmont Triad International Airport, EIA Table of Contents Page Number Executive Summary ................ ............................................................................................................. III Introduction............................................................................................................................................. 1 TheEconomy of the Piedmont Triad.................................................................................................. 2 Air Service and Regional Economic Development......................................................................... 5 Airport Economic Impact Methodology............................................................................................ 6 Economic Impact Studies of Airports in Other Areas................................................................... 8 The Economic Impact of the Piedmont Triad International Airport ............................................ 10 A. On -Airport Effects...................................................................................................................... 10 B. Off -Airport Effects...................................................................................................................... 12 C. Off -Airport Dependent Effects................................................................................................. 13 D. Summary of Economic Impacts.............................................................................................. 14 Impact of Future Expansion Plans......................................................................................................... 15 Background of the Principal Investigator.......................................................................................... 18 Center for Business & Economic Research, UNCG ii Piedmont Triad International Airport, EIA Executive Summary • This report, prepared for the Piedmont Triad Partnership, explores the economic impact of the Piedmont Triad International Airport (PTI) on the economy of the Piedmont Triad Region. PTI is located in the center of the Piedmont Triad region which encompasses a 12 -county area situated in the center of North Carolina. • The population of the Piedmont Triad in 2010 totaled 1,638,213, or about 17% of the North Carolina total. The region is projected to grow 1.0% annually through 2015, faster than the nation but less rapidly than the rest of the state. • Business and governmental leaders have long recognized the importance of high quality air service in promoting local economic growth. Good service enhances the viability of existing firms and increases the attractiveness of a city as a location for new enterprise. Quality air service lowers the cost of business operations by making it easier and less expensive for a firm's personnel to undertake face-to-face contacts with customers and collaborators. • The analysis reported here employs the IMPLAN® (IMpact Analysis for PLANing) model which is an input/output model that divides the economy into sectors, defined by the service or good produced, where the outputs of one sector are inputs of another. IMPLAN is a computer model that contains 440 sectors of the local economy The model is widely used by economic development specialists to assess the economic impact of new industrial and other development. • Directly and indirectly, PTI generated 12,248 jobs in the Piedmont Triad Region in 2010. The total labor income produced by these 12,248 jobs totaled $534.2 million, or $43,619 per job which is 14.1% above the regional average of $38,220. • The total value added by PTI -related activities totaled $806.5 million. This represents the net addition to gross region product because of the economic activity generated directly and indirectly by PTI operations. • Overall, PTI generated increased revenue, or output, for area businesses totaling $1.66 billion in 2010. • The increased economic activity fostered by PTI produced larger tax collections at the state and local level amounting to $71.3 million in 2010. Of this amount, $12.8 million was in higher property tax collections, $29.8 million in increased sales taxes, and $13.1 million in expanded income tax revenues. • Over the next 10 to 15 years, PTI has plans to add 320 acres to its current footprint as part of its longer-term plan to develop a total of 1,400 acres to provide space for additional tenants. The plan is critically contingent on the completion of construction of the I-73 corridor at the airport. The economic impact of the expansion is estimated to be substantially larger than that of the present airport. The expansion is expected to generate annually directly and indirectly $3.2 billion in additional business revenue for the region, 18,419 new jobs, and $1.0 billion in labor income. The new economic activity is anticipated to produce $113.5 million in added state and local tax revenues, including $12.7 million in property taxes, $48.3 million in sales taxes, and $24.8 in income taxes yearly. Center for Business & Economic Research, UNCG iii Piedmont Triad International Airport, EIA Introduction This report, prepared for the Piedmont Triad Partnership, explores the economic impact of the Piedmont Triad International Airport (PTI) on the economy of the Piedmont Triad Region. The airport located mid -way between the cities of Greensboro, High Point, and Winston-Salem (where I-40, I-85 and the future I-73 and I-74 are planned to converge) began operations in the 1920s. The airport's current terminal building was opened in 1982 and the same year its main runway was extended to 10,000 feet, making it the longest in North Carolina. In 1990, the Triad International Manufacturing Corp. (TIMCO), a manufacturing, repair, and overhaul (MRO) facility, was founded and began operations at PTI. TIMCO has grown so that it now occupies 4 large aircraft hanger buildings and serves customers from around the globe. The American Honda Motor Corporation began its aircraft development operations at PTI in 1999. Following the successful market introduction of its new prototype Hondalet aircraft, the company selected PTI for its new world headquarters facility and manufacturing operation. Honda will soon occupy 5 buildings on more than 120 acres of airport property. In 2002, the Airport Authority and Federal Express (FedEx) signed a lease to build a $300 million cargo hub at PTI. Three years later, Comair selected PTI for its Southeastern Maintenance Facility location which opened in 2006. The airport's 4,000 acre site is now the location for some 47 companies and agencies and 3,858 employees. It hosts operations for commercial and general aviation, air cargo carriers, aircraft maintenance facilities, hotels, restaurants, and retail stores. In recent years, the airport has undertaken major investments in a new parallel runway, an expansion of its passenger terminal, and a state-of-the-art security system. Current plans call for PTI to add more than 320 acres of adjacent land to it current property in order to accommodate additional industry tenants. With the acquisition of the extra 320 acres and the completion of the I-73 connector at the airport, PTI has plans to develop an additional 1,400 acres of land for business tenants who need direct airport access. Center for Business & Economic Research, UNCG 1 Piedmont Triad International Airport, EIA Economy of the Piedmont Triad The Piedmont Triad International Airport is located in the center of the Piedmont Triad region which encompasses a 12 -county area situated in the center of North Carolina (Figure 1.). The 12 counties are: Alamance, Caswell, Davidson, Davie, Forsyth, Guilford, Montgomery, Randolph, Rockingham, Stokes, Surry, and Yadkin. Figure 1: The Piedmont Triad Region ��;`•\ URRY \\ ♦\ STbKES?:; `R NGHAhI\' \♦\\\ E rn —GU OR ``\\� \@` 011 ��` � �! l •, olr>�f♦ � • oe IREDE'L / �` WDSO1 , •, ' \�\� ♦\ \\ �j ♦\}\ \ CHATHA ROW N CAB RRiJS \\\'` \\ \♦ \ E STANLY ` ♦�\\\�. �MERY•.; MOORE ` ME KLENBURG The population of the Piedmont Triad in 2010 totaled 1,638,213, or about 17% of the North Carolina total (Table 1). The region is projected to grow 1.0% annually through 2015, faster than the nation but less rapidly than the rest of the state. The population of the region as a whole is slightly older and less affluent than the state and the nation. Through 2015, the growth of household income is projected to lag both the state and the nation. Center for Business & Economic Research, UNCG 2 Piedmont Triad International Airport, EIA Table 1: Piedmont Triad Demographics, 2000 - 2015 Piedmont Triad All Industries Population 1,464,979 1,638,213 1,723,558 1.0% Households 582,666 656,893 693,104 1.1% Median Age 36.3 38.9 39.6 0.4% Avg. Household Income $51,533 $61,716 $68,563 2.1% $100,000 & over 9.1% 12.9% 17.0% 5.7% Avg. Annual Wage $30,160 $38,220 n.a. n.a. North Carolina Source: NC Employment Security Commission and US Bureau of Labor Statistics Center for Business & Economic Research, UNCG 3 Population 8,049,313 9,552,054 10,345,227 1.6% Households 3,132,013 3,761,099 4,088,898 1.7% Median Age 35.3 37.6 38.1 0.3% Avg. Household Income $51,225 $63,346 $70,818 2.3% $100,000 & over 9.4% 15.0% 20.0% 5.9% Avg. Annual Wage $31,044 $41,132 n.a. n.a. U.S. All Industries Population 281,421,906 311,212,863 323,209,391 0.8% Households 105,480,101 116,761,140 121,359,604 0.8% Median Age 35.3 37.0 37.3 0.2% Avg. Household Income $56,644 $70,173 $79,340 2.5% % $100,000 & over 12.3% 18.8% 24.7% 5.6% Avo. Annual Waae $33,587 $44,410 n.a. _n.a. Source: ESRI The economy of the Piedmont Triad has long been dominated by goods -producing industries. Despite the severe employment losses sustained by the region's manufacturing industries since 2000, goods -producing employment still accounted for 19% of total employment in the region in 2010, making it substantially more goods -producing intensive than either the state or the nation (Table 2). Largely because of the loss of goods -producing jobs over the past decade, total employment in the region has declined more rapidly than the state and the nation. Since 2000, total regional employment has fallen 1.2% annually. Table 2: Piedmont Triad Employment, 2000 - 2010 Piedmont Triad All Industries 743,088 658,579 -1.2% Goods -Producing 223,100 127,833 -5.4% North Carolina All Industries 3,871,210 3,788,397 -0.2% Goods -Producing 1,026,100 639,974 -4.6% U.S. All Industries 131,785,000 129,818,000 -0.2% Goods -Producing 24,649 17,755 -3.2% Source: NC Employment Security Commission and US Bureau of Labor Statistics Center for Business & Economic Research, UNCG 3 Piedmont Triad International Airport, EIA The unemployment rate in the Piedmont Triad in September 2011 was higher than both the state and nation (Figure 2). The unemployment rate stood at 10.2% in the Piedmont Triad Region compared to 10.0% in North Carolina and 8.5% nationally. Figure 2: Unemployment Rates in the Piedmont Triad (September 2011, not seasonally adjusted) Source: NC Employment Security Commission Passenger air traffic at PTI has been in secular decline for much of the past 10 years (Figure 3), and the decline was worsened by the recession. Recently, the volume of passenger air traffic has begun to rise a bit as the economy of the area has started to pick up. Traffic has risen 0.9% over the past 12 months through September 2011. In contrast, cargo shipments through PTI are up substantially from pre -recession levels (Figure 3). However, over the past 12 months, shipments have fallen 3% through September 2011. Figure 3: Passenger and Cargo Traffic at the Piedmont Triad International Airport (monthly totals seasonal) adjusted ;0011 1 120000 110000 Source: NC Employment Security Commission Passenger air traffic at PTI has been in secular decline for much of the past 10 years (Figure 3), and the decline was worsened by the recession. Recently, the volume of passenger air traffic has begun to rise a bit as the economy of the area has started to pick up. Traffic has risen 0.9% over the past 12 months through September 2011. In contrast, cargo shipments through PTI are up substantially from pre -recession levels (Figure 3). However, over the past 12 months, shipments have fallen 3% through September 2011. Figure 3: Passenger and Cargo Traffic at the Piedmont Triad International Airport Center for Business & Economic Research, UNCG 4 Piedmont Triad International Airport, EIA (monthly totals seasonal) adjusted 120000 110000 100000 PassengerBoardings (right scale) 90000 80000 n y 8500000 m 70000 m 0 8000000- 000000 0 °60000 -60000 Q CD 7500000 Air Cargo Shipments m 7000000 (left scale) 6500000- 500000600000055000002004 6000000- 5500000- 20042005 2006 2007 2008 2009 2010 2011 Center for Business & Economic Research, UNCG 4 Piedmont Triad International Airport, EIA Air Service and Regional Economic Development The volume of air traffic at any airport is a direct function of the level of employment and population in the area served by the airport. However, business and governmental leaders have long recognized the importance of high quality air service in promoting local economic growth. Good service enhances the viability of existing firms and increases the attractiveness of a city as a location for new enterprise. Quality air service lowers the cost of business operations by making it easier and less expensive for a firm's personnel to undertake face-to- face contacts with customers and collaborators.' This is especially significant in industries where the exchange of detailed, technical information is important. Within the literature on regional economic development, transportation infrastructure has long been recognized as important in explaining regional growth and development patterns. For example, Douglas North's classic 1981 book, Structure and Change in Economic History, documents the importance of canals and railroads in the development of the American Midwest .2 In a widely cited article in the American Sociological Review, Michael Irwin and John Kasarda analyze the relationship between employment growth in 104 metropolitan areas and the structure of the nation's air passenger network from 1950 through 1980.3 They report that a city's position in the nation's airline network strongly influences its future employment growth. A 1999 study by Keith Debbage reports that airports in the Carolinas which recorded significant gains in air passenger volume, like Charlotte and Raleigh, also recorded comparable increases in administrative employment .4 In a follow-on study, Debbage and Dawn Delk look at administrative employment and air passenger traffic in 50 metro areas from 1973 through 1996.5 They conclude that airline service and economic development are very closely associated, especially in metro areas where knowledge-based industries predominate. Kenneth Burton, et al. examine the relationship between high-technology employment and the presence of a large airport using a sample of more than 300 metropolitan areas (MSAs).6 They report that having a large airport is positively related to the level of high-tech employment. Jan Bruckner, in an article in Urban Studies in 2003, reports the development of an econometric model that controls for the simultaneous causality between employment growth and air passenger traffic.' That is, while increased air traffic may increase employment, higher employment will also raise passenger air travel. Bruckner estimates the model using data from a sample of 91 MSAs that include Greensboro/High Point. The model shows that a 10 -percent increase in passenger enplanements in an MSA results in about a 1 -percent rise in service sector employment. On the other hand, it also shows that air traffic has no impact on goods -producing employment. A similar study published by Richard Green in Real Estate Economics in 2007 finds that passenger activity at the nation's 100 largest airports is a significant predictor of area 1 Jacco Hakfoort, et al., "The Regional Economic Impact of an Airport: The Case of Amsterdam Schiphol Airport," Regional Studies (200 1) vol. 35, no. 7, pp: 595-604. Z Douglas C. North, Structure and Change in Economic History (New York: W, W. Norton & Co., 1981). 3 Michael D. Irwin and John D. Kasarda, "Air Passenger Linkages and Employment Growth in U.S. Metropolitan Areas," American Sociological Review, 56:4 (August 1991): 524-537. 4 Keith G. Debbage, "Air Transportation and Urban -Economic Restructuring: Competitive Advantage in the US Carolinas," Journal of Air Transport Management 5 (1999): 211-221. 5 Keith G. Debbage and Dawn Delk, "The Geography of Air Passenger Volume and Local Employment Patterns by US Metropolitan Core Area: 1973-1996," Journal of Air Transport Management, 7:3 (May 2001): 159-167. 6 Kenneth Button, Somik Lall, Roger Stough, and Mark Trice, "High -Technology Employment and Hub Airports," Journal of Air Transport Manangement, 5:1 (January 1990): 53-59. 7 Jan K. Brueckner, "Airline Traffic and Urban Economic Development," Urban Studies 40:8 (July 2003): 1455-1469. Center for Business & Economic Research, UNCG 5 Piedmont Triad International Airport, EIA population and employment growth.$ The study also reports, however, that cargo activity at an airport is not a good predictor of regional growth. Airport Economic Impact Methodology A study undertaken for the Federal Aviation Administration suggests that the overall economic impact of any airport like PTI can be summarized in four dimensions;9 A. On -airport effects represent activities that would not occur if the airport did not exist. These include the operations of airlines, fixed base operators (FBO), government, and other tenants located at the airport or directly dependent on the airport. They also include airport management and others employed directly by the airport. B. Off -airport effects encompass transactions that occur off-site. They primarily arise from spending by visitors. Off -airport businesses benefit from additional revenue because of the airport, but many would still exist if the airport were not there. The primary measure of off -airport direct impacts is the expenditures made by air travelers who visit the region from outside the area. Such expenditures include those for food, lodging, transportation, and retail purchases. C. Off -airport dependent effects stem from the operations of area businesses that are dependent on the airport for just -in -time shipping, corporate travel, or specialized airport facilities and services such as U.S. Customs, etc. These businesses would not be located in the area if airport services were not available. D. Multiplier effects arise as the direct spending generated by 1-3 above is recycled through the local economy. Each dollar spent generates additional business receipts (output), value added (equivalent to gross regional product), employment, labor income, and taxes through successive rounds of re -spending within the area economy. The effects of this re -spending are termed multiplier effects. The multiplier effects are estimated using the IMPLAN model. 8 Richard K. Green, "Airports and Economic Development, Real Estate Economics, 35:1 (2007): 91-112. 9 S. Butler and L. Kiernan, Estimating the Regional Economic Significance of Airports (Washington, DC: Federal Aviation Administration, Office of Airport Planning, 1992). Center for Business & Economic Research, UNCG 6 Piedmont Triad International Airport, EIA Figure 4 illustrates how the airport affects the regional economy through the spending it generates. Figure 4: Calculation of the Economic Impact of the Airport On -Airport Off -Airport Off -Airport Effects Effects Dependent Effects IMPLAN Model (Multiplier Impacts) , _"L Total Economic Impact of the Piedmont Triad Airport on: 1. Business Receipts (Output) 2. Value Added 3. Employment 4. Labor Income 5. State & Local Taxes The IMPLAN® (IMpact Analysis for PLANing) model is an input/output model that divides the economy into sectors, defined by the service or good produced, where the outputs of one sector are inputs of another. IMPLAN entails a computer model that contains 440 sectors of the local economy and reflects the existing structure of the economy using data from the U.S. Department of Labor, Bureau of the Census, and the Bureau of Economic Analysis. IMPLAN was originally developed by the U.S. Forest Service and the University of Minnesota and is now available from the Minnesota IMPLAN Group, Incorporated. The IMPLAN model is widely used by economic development specialists to assess the economic impact of new industrial and other development. The IMPLAN model separates the multiplier effects into 1) indirect effects and 2) induced effects. Indirect effects arise as the direct spending leads to additional rounds of spending in supplier industries. The indirect purchases (or indirect effects) continue until leakages (imports) from the regional economy stop the re -spending cycle. The re -spending by various supplier industries also induces higher income and spending in the household sector as employment and payroll in the supplier industries increase. The induced effects reflect the changes in spending by households as household income increases as a result of the increased production in supplier industries. Center for Business & Economic Research, UNCG 7 Piedmont Triad International Airport, EIA Economic impact is measured in terms of 1) the total output (business receipts, or revenues) of all industries in the region, 2) total value added in the region (the total production of final goods and services), 3) total number of new jobs created, 4) the total amount of additional labor income, and 5) total additional state and local tax revenues. Economic Impact Studies of Airports in Other Areas This section examines previous studies of the economic impact of airports in other areas. The intent is to develop benchmarks to gauge the economic impact of the Piedmont Triad International Airport the Piedmont Triad Region. Table 3 lays out the principal results of four past studies. Table 3: Economic Impact Studies of Airports in Other Metro Areas ImpactMetro Area Direct Impact Total Impacts Multiplier Charlotte, NC - 200510 $4,120,110,530 $9,735,141,708 2.4 Business Receipts $1,636,982,106 $5,162,448,874 3.2 Labor Income 20,072 100,716 5.0 Employment Memphis, TN - 200411 $10.7 billion $20.7 billion 1.9 Business Receipts n.a. $6.0 billion n.a. Labor Income n.a. 166,000 n.a. Employment Richmond, VA - 200812 $479,800,000 $801,300,000 1.7 Business Receipts n.a. n.a. n.a. Labor Income 5,814 9,178 1.6 Employment n.a. $24,400,000 n.a. State & Local Taxes Wichita, KS - 200313 n.a. n.a. n.a. Business Receipts $787,440,122 $1,630,079,797 2.1 Labor Income 15,006 41,634 2.8 Employment n.a. $297,929,251 n.a. State & Local Taxes Edd Hauser and Nicholas Swartz of the Center for Transportation Policy Studies at the University of North Carolina at Charlotte examined the economic impact of the Charlotte Douglas International Airport in 2005. Their study did not utilize an input/output model like IMPLAN. Instead, they attempted to directly survey local business to assess the impact of the airport. The direct impact stemming from the operations of airport tenants, general corporate and general aviation and operators, and airport contractors was estimated to generate $4.1 billion in business receipts, $1.6 billion in labor income, and some 20,072 jobs. Indirect impacts emanating from the off-site operations of hotels and travel agents, local businesses dependent on the airport for travel and transport, and visitor spending was estimated to increase the total economic impact of the airport to $9.7 billion in business receipts, $5.2 billion in labor income, and 100,716 jobs. 10 Edd Hauser and Nicholas ]. Swartz, Economic Impact Assessment of Charlotte Douglas International Airport, (Charlotte, NC: The Center for Transportation Policy Studies, University of North Carolina at Charlotte, 2005). 11 Sparks Bureau of Business and Economic Research, The Economic Impact of the Memphis International Airport, (Memphis, TN: Center for Manpower Studies, University of Memphis, 2005). 12 Chmura Economics & Analytics, The Economic Impact of Richmond International Airport, (Richmond, VA: Chmura Economics & Analytics, 2008). 13 Janet Harrah, Anne Gallagher, and Mary Jane Townsend, Wichita Mid -Continent Airport Economic Impact, (Wichita, KS: Center for Economic Development and Business Research, W. Frank Barton School of Business, Wichita State University, November 2003). Center for Business & Economic Research, UNCG 8 Piedmont Triad International Airport, EIA A 2005 study of the Memphis International Airport by the Sparks Bureau of Business and Economic Research in the Center for Manpower Studies at the University of Memphis estimated that the direct impact of the airport in 2004 was $10.7 billion in business receipts (or total revenue). 14 This total included cargo and passenger operations and construction expenditures at the Memphis airport. As these monies were re -spent throughout the local economy, the total economic impact of the airport was multiplied. In total, the airport was estimated to generate $20.7 billion in business receipts for local businesses, $6.0 billion in labor income, and 166,000 jobs. The business receipts multiplier for airport operations was estimated at 1.9, meaning that one dollar of additional business revenue at the airport produced $1.90 in total revenue for area businesses. The total impact of the airport was huge when measured in terms of total employment. The total impact of 166,000 jobs amounted to 27% of total employment in the Memphis MSA, or more than 1 out of every 4 area jobs. A 2008 study of the Richmond International Airport conducted by Chmura Economics & Analytics estimated the airport direct economic impact on the Richmond MSA at $479.8 million in business receipts and 5,814 jobs. This study made use of the IMPLAN input/output model. The total impact after accounting for the multiplier effects was estimate at $801.3 million in business receipts and 9,178 in total employment. This study estimated that the business receipt multiplier was 1.7 and the employment multiplier was 1.6. Total state and local tax receipts were estimated to be $24.4 million higher (or $2,667 per job) because of the operations of the airport and the additional economic activity it generates. A unique feature of the Richmond study is its estimate of the off -airport dependent impacts of the Richmond Airport on businesses in the Richmond area. These impacts, which are usually not included in studies of airport economic impact, arise because the presence of the airport lowers the operating costs of area businesses. For some businesses, these effects are so important that they would not locate in an area if the airport were not there. The Richmond study estimated that if area business travelers were forced to drive to alternative airports in neighboring areas, the resulting loss in productivity would amount to almost 800,000 hours per year, or $51.8 million in lost revenues because of increased travel costs. Janet Harrah et al. of the Center for Economic Development and Business Research at Wichita State University examined the impact of the Wichita Mid -Continent Airport on the economy of the Wichita MSA in 2003. Their study used the Regional Input -Output -Modeling System (RIMS II) developed by the Bureau of Economic Analysis of the U.S. Department of Commerce. They estimated the direct impact of the airport as resulting in $787 million in labor income and 15,000 jobs. Because of the multiplier effects of this spending, the total impact of the Wichita airport was estimated at $1.6 billion in labor income and 41,600 jobs. The multiplier for labor income was 2.1, and the employment multiplier was 2.8. The study further estimated that the airport generated nearly $200 million in state and local taxes, or about $4,800 per job. 14 The study did not discuss the methodology used to develop the impact measures. Center for Business & Economic Research, UNCG 9 Piedmont Triad International Airport, EIA The Economic Impact of the Piedmont Triad International Airport This section examines the three-dimensional impact of the Piedmont Triad International Airport (PTI) on the economy of the Piedmont Triad Region. As discussed above (Figure 3), PTI generates 1) on -airport effects, 2) off -airport effects, and 3) off -airport dependent effects on the economy of the region. A. On -Airport Effects On -airport effects arise because of economic activity that takes place at the airport. These effects include airport management and others employed directly by the airport, They also include the operations of airlines, fixed base operators, government, and other tenants located at the airport. An employment survey conducted by PTI staff revealed that 3,858 persons were employed at the airport in 2010. The largest airport employer was TIMCO with 1,398 employees, followed by American Honda Aircraft with 600. The smallest employer was the Shoe Shine Parlor with 1 employee. Table 4 shows the distribution of on -airport employment by sector. Table 4: On -Airport Direct Employment by Sector, 2010 Sector Employees Aircraft manufacturing 600 Automotive equipment rental and leasing 177 Educational services 29 Electronic and precision equipment repair and maintenance 1,444 Fitness and recreational sports centers 12 Food services and drinking places 40 Hotels and motels 110 Other Federal Government enterprises 236 Other state and local government enterprises 119 Personal care services 1 Retail stores 20 Transit and ground passenger transportation 108 Transport by air 962 Total 3,858 To generate this level of employment, the business enterprises and government agencies located at PTI spend money on employee wages and salaries, utilities, and a wide array of various other inputs necessary for the provision of services and the manufacture of aircraft products. The economic impact created by the spending associated with the operation of the various firms and agencies located at PTI is shown in Table 5. Center for Business & Economic Research, UNCG 10 Piedmont Triad International Airport, EIA Table 5: Economic Impact of On -Airport Activity Impact Type Employment Labor Income Value Added Output Direct Effect 3,858 $241,192,602 $327,220,292 $823,817,092 Indirect Effect 1,459 $61,480,371 $95,593,010 $167,297,466 Induced Effect 2,416 $89,725,586 $159,678,747 $263,173,629 Total Effect 7,732 $392,398,558 $582,492,050 $1,254,288,187 Multiplier 2.0 1.6 1.8 1.5 The 3,858 people employed at PTI generated additional jobs throughout the region, as area employment was stimulated by the expansion of supplier industries and the higher spending by employed workers. In total, 7,732 jobs were created in the region because of the operations of the firms and agencies located at the airport. The employment multiplier is 2.0, indicating that for every one job created directly at the airport a total of 2.0 jobs were created throughout the Piedmont Triad Region. A total of $241.2 million in labor income was generated by the 3,858 on -airport jobs, or an average of $62,518 per job, which is substantially above the regional average of $38,220. As this money was re -spent throughout the region, a total of $392.4 million in labor income was created in the region. The total valued added (or the addition to area's gross regional product) by the on -airport activity is estimated at $582.5 million. On -airport activity fostered additional business receipts (or output) for area businesses totaling $1.25 billion. The output multiplier for on -airport activity is 1.5, suggesting that that for every one dollar of new business receipts (or revenue) received by on -airport enterprises, a total of $1.50 of new business revenue was generated in the region. The on -airport firms and enterprises continued to expand and grow in 2010 necessitating additional expenditures on the construction of new and expanded facilities. In total, $35.5 million was spent on new construction at the airport in 2010. This new construction spending generated expansionary effects on the regional economy. Table 6 shows the economic impact of on -airport construction spending in 2010. Table 6: Economic Impact of On -Airport Construction Spending Impact Type Employment Labor Income Value Added Output Direct Effect 318 $12,572,047 $14,286,998 $35,500,000 Indirect Effect 94 $4,216,392 $6,177,642 $10,708,306 Induced Effect 135 $5,015,058 $8,931,042 $14,714,697 Total Effect 547 $21,803,497 $29,395,683 $60,923,003 Multipliers 1.72 1.73 2.06 1.72 The $35.5 million in construction spending fostered a total of $60.9 million in new business revenues (output) for area businesses, and it created a total of 547 net new jobs. Because of the spending of on -airport enterprises and government agencies for business operations and new construction, state and local tax revenues are estimated to be higher by $46.4 million in 2010, including $20.0 million in sales taxes, $10.1 million in personal and corporate income taxes, and $5.2 million in property taxes. Center for Business & Economic Research, UNCG 11 Piedmont Triad International Airport, EIA B. Off -Airport Effects Off -airport effects arise primarily from spending by visitors who visit the region from outside the area. Such expenditures include those for food, lodging, transportation, and retail purchases. In 2010, 836,958 commercial airline passengers deplaned at PTI. Based on surveys conducted at other similar airports around the country, it is estimated that 360,589 (43.1%) of these passengers were from outside the region.15 In addition to commercial airline passengers, area visitors also arrived on general aviation flights. In 2010, there were an estimated 40,277 transient aircraft arrivals at PTI. Multiplying this number by 2.5 yields an estimate of total general aviation visitor arrivals,16 Thus, the number of visitors arriving by general aviation in 2010 was 100,691 (2.5 X 40,277). In total, in 2010, there were an estimated 461,281 (360,589 + 100,691) area visitors who arrived at PTI. The North Carolina Division of Tourism estimates that the average North Carolina visitor in 2010 spent $435.59 per visit. 17 It further estimates that visitor spending was divided as shown in Table 7. Table 7: Distribution of Visitor Spending, 2010 Category Percentage Entertainment 6.2% Food & Beverages 18.3% Gasoline 14.5% Groceries 6.2% Lodging 32.6% Shopping 11.4% Transportation 10.8% Total 100.0% Source: North Carolina Division of Tourism The economic impact of off -airport visitor spending is shown in Table 8. Spending by visitors arriving at PTI is estimated to generate a total of $267.8 million in revenue for local business and 3,969 jobs. Table 8: Economic Impact of Off -Airport Visitor Spending Impact Type Employment Labor Income Value Added Output Direct Effect 2,830 $76,157,767 $119,374,196 $141,362,294 Indirect Effect 397 $16,338,297 $26,234,806 $45,651,287 Induced Effect 742 $27,542,174 $49,034,425 $80,799,979 Total Effect 3,969 $120,038,238 $194,643,428 $267,813,560 Multipliers 1.40 1.58 1.63 1.89 15 Among the airports included here are Athens -Ben Epps Airport, Charlotte -Douglas International, Newport News -Williamsburg International, Norfolk International, Richmond International, Wichita Mid - Continent Airport, and others. 16 Sharon P. Kane, Victoria S. Russell, and Nancy Stator, Assessing the Economic Impact of Athens -Ben Epps Airport (Athens, GA: Business Outreach Services, Small Business Development Center, Applied Research Division, The University of Georgia, June 2003), p. 11. 17 North Carolina Division of Tourism, 2010 North Carolina Visitor Profile (Raleigh, NC: NC Department of Commerce, May 2011), pp. 7 & 14. Center for Business & Economic Research, UNCG 12 Piedmont Triad International Airport, EIA Because of the spending by visitors arriving at PTI, state and local taxes are higher by some $24.8 million, including $7.6 million in additional property tax revenues, $9.9 million in extra sales taxes, and $3.0 million in additional income taxes. C. Off -Airport Dependent Effects Off -airport dependent effects arise because the operations of some area businesses are dependent on the airport for the special services it offers. As one example, convenient access to air transportation allows firms to move personnel easily and quickly from various locations, saving valuable time and increasing productivity. For some businesses, these savings are so important that they would not locate in the Piedmont Triad if they could not obtain the travel - time savings. In the absence of a detailed survey of area business, it is difficult to know precisely the regional businesses that are so dependent on the airport that they would not operate in the region were it not there. Because of this, off -airport dependent effects are not usually included in airport economic impact studies. However, a few studies have tried to quantify this impact. A survey of area businesses in the Charlotte area estimated that 9.6% of Charlotte area businesses were airport dependent.18 A similar study in Richmond estimated that airport dependent businesses generated directly and indirectly some 4,700 jobs and $498 million in business receipts.19 The approach taken here is to estimate the productivity savings to local business provided by PTI. Although this may not quantify the full magnitude of off -airport dependent effect, it does show how the airport makes an important contribution to the productivity of area business. The approach is to estimate the savings in business travel time to business travelers traveling through PTI. Without PTI, business travelers would have to go through Charlotte -Douglas International or through Raleigh-Durham International. The average saving in round-trip travel time amounts to 3.3 hours. In 2010, 843,995 passengers boarded a plane at PTI. The National Household Travel Survey estimates that 40.6% of all air travel is for business purposes. Applying this percentage, reveals that some 342,745 (843,995 X 40.6%) business travelers boarded at PTI. Assuming 56.9% of these business travelers were local, suggests that there were 195,080 local business travelers using PTI in 2010.20 If each of the 195,080 local business travelers saved an average of 3.3 hours by traveling through PTI rather than going through Charlottte or Raleigh, the productivity saving accruing to local businesses amounts to 643,763 hours of work time. Data from the US Department of Commerce, Bureau of Economic Analysis revels that the average worker in the Piedmont Triad Region generates about $71 in revenue per hour, so that the direct productivity saving accruing to local business because of the availability of air travel through PTI amounted to some $45.6 million in 2010 alone. The IMPLAM model shows that the overall output multiplier for the Piedmont Triad Region is 1.63. Applying this multiplier to the direct travel time savings indicates that the overall productivity savings generated for area businesses amounted to $74.3 million in 2010. 'SEdd Hauser and Nicholas J. Swartz, Economic Impact Assessment of Charlotte Douglas International Airport, (Charlotte, NC: The Center for Transportation Policy Studies, University of North Carolina at Charlotte, 2005). 19 Virginia Department of Aviation, Richmond International Airport: An Assessment of Economic Impacts (Richmond, VA: 2004). 20 This percentage is based on surveys of visitor traffic at other similar airports. Among the airports included are Athens -Ben Epps Airport, Charlotte -Douglas International, Newport News -Williamsburg International, Norfolk International, Richmond International, Wichita Mid -Continent Airport, and others. Center for Business & Economic Research, UNCG 13 Piedmont Triad International Airport, EIA D. Summary of Economic Impacts Table 9 provides a summary of the economic impact of PTI on the economy of the Piedmont Triad. Directly and indirectly, the airport generated 12,248 jobs. The total labor income produced by these 12,248 jobs totaled $534.2 million, or $43,619 per job which is 14.1% above the regional average of $38,220. The total value added by PTI -related activities totaled $806.5 million. This represents the net addition to gross region product because of the economic activity generated directly and indirectly by PTI operations. Overall, PTI generated increased revenue, or output, for area businesses totaling $1.66 billion in 2010. Table 9: Summary of Economic Impacts Impact Type Employment Labor Income Value Added Output On -Airport 7,732 $392,398,558 $582,492,050 $1,254,288,187 On -Airport, Construction Off -Airport 547 $21,803,497 $29,395,683 $60,923,003 3,969 $120,038,238 $194,643,428 $267,813,560 Off -Airport Dependent n.a. n.a. n.a. $74,300,000 Total 12,248 $534,240,293 $806,531,161 $1,657,324,750 The increased economic activity fostered by PTI produced larger tax collections at the state and local level amounting to $71.3 million in 2010. Of this amount, $12.8 million was in higher property tax collections, $29.8 million in increased sales taxes, and $13.1 million in expanded income tax revenues. Center for Business & Economic Research, UNCG 14 Piedmont Triad International Airport, EIA Impact of Future Expansion Plans PTI currently occupies a site of approximately 4,000 acres. Some 18 different enterprises operate on about 433 acres of airport land away from the main terminal. Figure 5 shows the location of the 18 airport tenants.21 Over the next 10 to 15 years, PTI has plans to develop an additional 1,400 acres to provide space for additional tenants. This section explores the economic impact of the planned expansion, assuming that the additional land is developed in a manner similar to the existing tenant space. Figure 5: Map of Airport Tenants " 4. IN 2 16 y - a 1 - n5 iz"4 - j .. p,p ,�fl �.`� �pyo ! •• � � l l...er" .',.r i� i . -` .. _f Y •` f )`s'G.•�"1�lttlw.:r1- -�.�7� Excluding the car rental companies (sites 12-13 and 15-16 in Figure 5) and the Marriott Hotel (site 18), PTI has 13 tenants occupying 405.1 acres and employing 2,703 workers. These 13 tenants are listed in Table 10. 21 One of the companies, the Vanguard Service Center (no. 14 in Figure 4) is no longer in operation, and sites 8 & 9 in Figure 4 are occupied by the same company, TIMCO. Center for Business & Economic Research, UNCG 15 Piedmont Triad International Airport, EIA Table 10: Major Tenants Outside the Main Terminal No. Company Employees Acres Employees/Acre 1 American Honda Aircraft 600 43.0 14.0 2 Atlantic Aero 119 28.1 4.2 3 Cessna Citation Service Center 95 7.9 12.0 4 Dynamic Airways 75 4.1 18.4 5 Federal Express (FedEx) 234 165.1 1.4 6 let Stream Air 8 1.3 6.3 7 Koury Aviation 20 3.6 5.5 8 Landmark Aviation 56 23.3 2.4 9 Lincoln Financial 6 1.2 5.1 10 Tradewinds (Skylease I) 30 4.2 7.2 11 GTCC Aviation Center 20 7.4 2.7 12 Comair Hangar 42 3.7 11.4 13 TIMCO 1,398 112.2 12.5 Total 2,703 405.1 6.7 The economic impact of the 13 major PTI tenants listed in Table 10 is shown in Table 11. The total economic impact of the airport's 13 major tenants amounts to $914 million in business revenue for the region and 5,330 jobs with a total labor income of $290 million, or $54,474 per job. On a per acre basis, each acre of land devoted to the 13 tenant enterprises generates an average of 13.2 jobs, $716,730 in labor income, and $2.26 million in business revenue for the region. If the planned 1,400 acre site is developed in an analogous way, it is reasonable to anticipate that the economic impact of the expansion on a per acre basis would be similar. Table 11: Estimated Impact of Major Tenants Outside the Main Terminal Impact Type Employment Labor Income Value Added Output Direct Effect 2,703 $188,874,285 $267,350,157 $628,916,435 Indirect Effect 836 $34,962,514 $52,778,020 $89,993,665 Induced Effect 1,791 $66,510,618 $118,389,298 $195,102,514 Total Effect 5,330 $290,347,418 $438,517,475 $914,012,613 Multipliers 1.97 1.54 1.64 1.45 Total Effect/Acre 13.2 $716,730 $1,082,492 $2,256,264 The expanded economic activity fostered by PTI's major tenants produced larger tax collections at the state and local level amounting to $32.8 million in 2010. Of this amount, $3.7 million was in higher property tax collections, $14.0 million in increased sales taxes, and $7.2 million in expanded income tax revenues. Dividing these estimates by the size of the site (405.1 acres) currently occupied by the 13 PTI tenants reveals that, on a per acre basis, the current 405.1 -acre site generates $81,053 in state and local tax revenues each year. Of this annual amount, $9,036 accrues in extra property taxes, $34,509 in sales taxes, and $17,728 in income taxes. Over the next 10 to 15 years, PTI has plans to add 320 acres to its current footprint as part of its longer-term plan to develop a total of 1,400 acres to provide space for additional tenants that need direct runway access. The plan is critically contingent on the completion of construction of the I-73 connector at the airport. The construction work involves the relocation of Bryan Boulevard which is critical in order to allow more land with direct runway access to be developed. Center for Business & Economic Research, UNCG 16 Piedmont Triad International Airport, EIA Table 12 shows the economic impacts anticipated from the development of the planned 1,400 - acre site. The economic impact of the expansion is substantially larger than that of the present airport. The site is expected to generate annually directly and indirectly almost $3.2 billion in additional business revenue for the region, 18,419 new jobs, and $1.0 billion in labor income. This new economic activity is anticipated to produce $113.5 million in added state and local tax revenues, including $12.7 million in property taxes, $48.3 million in sales taxes, and $24.8 million in income taxes yearly. Table 12: Estimated Impacts from the Development of the Planned 1,400 -Acre Industrial Site Impact Value Employment 18,419 Labor Income $1,003,422,327 Value Added $1,515,488,681 Output $3,158,769,830 Total State & Local Taxes $113,473,797 Property Taxes $12,650,176 Sales Taxes $48,312,317 Income Taxes $24,819,536 Other Taxes $27,691,769 Center for Business & Economic Research, UNCG 17 Piedmont Triad International Airport, EIA Background of the Principal Investigator G. Donald Jud is Professor Emeritus of Finance in the Bryan School of Business and Economics at the University of North Carolina at Greensboro and interim director of Center for Business & Economic Research in the Bryan School at UNCG. He has taught courses in economics, finance, and real estate. Dr. Jud received his Ph.D. from the University of Iowa and MBA and BA degrees from the University of Texas. He is author of over 80 academic articles and three books. Dr. Jud is a NAIOP Distinguished Fellow and a past president of the American Real Estate Society (ARES). He is a fellow of the Homer Hoyt Advanced Studies Institute and the American Real Estate Society. In 2003, he was named a Burns Fellow at the University of Denver. Dr. Jud has served on the editorial boards of the Journal of Real Estate Finance and Economics and the Journal of Real Estate Literature and is a member of the Appraisal Journal's academic review panel. He is a past editor of the Journal of Real Estate Research and continues to serve as a member of its editorial board. Dr. Jud's research has appeared in numerous academic and professional journals including the Appraisal Journal, American Real Estate and Urban Economics Association Journal, Journal of Real Estate Finance and Economics, Journal of Real Estate Research, Journal of Housing Economics, Journal of Financial Education, Journal of Real Estate Portfolio Management, Journal of Real Estate Practice and Education, Real Estate Issues, Journal of Property Research, Journal of Financial Economics, Land Economics, and Urban Studies. A recent article entitled "The Internationalization of Real Estate Research," by Kam C. Chan, Wiliam G. Hardin III, Kartono Liano, and Zhenf Yu. (Journal of Real Estate Research, vol. 30, no. 1 (2008), pp. 91-124) ranks Dr. Jud 7th in a global ranking of real estate researchers publishing in top -tier academic real estate journals. Dr. Jud has been a research consultant to Wachovia Bank, NC Department of Commerce, the Piedmont -Triad Partnership, the National Association of Realtors®, the NC Association of Realtors®, the Greensboro Chamber of Commerce, Downtown Greensboro, Inc., the Greensboro Regional Realtors® Association, the City of High Point, the Town of Boone, the North Carolina Association of Electrical Cooperatives, CME Merchant Energy, Home Builders Assn. of Burlington -Alamance County, Triad Real Estate and Building Industry Coalition (TREBIC), the Triad MLS, the Carroll Companies, the Homebuilders Association of Fayetteville, The Reynolds Companies, Wood Partners, Cone Mills, RMIC Corporation, Guilford Technical Community College (GTCC), and Cone Health. Center for Business & Economic Research, UNCG 18 Piedmont Triad International Airport, EIA