A guest column written by the Raleigh-Durham Airport Authority Board of Directors outlines a new land-lease agreement with Wake Stone Corporation and how it will fund critical airport infrastructure projects, including replacement of the airport’s primary runway, in support of regional economic growth. The News & Observer (Raleigh, N.C.) published the column, “The RDU land deal will support improvements,” in its Mar. 3 edition.
The RDU land deal will support improvements
BY FARAD ALI AND JOHN KANE
Raleigh-Durham International Airport is a critical driver of job creation, prosperity and quality of life throughout the Research Triangle, and our economic impact in the community continues to grow.
Our region is growing at an unprecedented rate. With that growth, the demand on our airport facilities continues to increase. The result? The airport must secure funding for a replacement runway, more gates and better amenities for its 12.8 million annual customers.
Our vote Friday to generate new revenue through a land-lease agreement will help fund these necessary capital projects. Additionally, under this agreement, Wake Stone will provide $3.6 million to help a third party lease 151 acres of airport property for recreational use.
RDU’s passenger traffic has increased 42 percent since 2010, and it is projected to grow another 9 percent in 2019. This substantial progress has propelled RDU’s master plan, Vision 2040, eight years ahead of schedule and accelerated our timeline to fund necessary infrastructure to keep pace with demand.
Federal law requires RDU to pay its own bills with revenue generated from its property and facilities. Financial projections show the airport’s traditional funding sources – grants, parking, airline service fees, rents and concessions – will not cover the capital expenses needed to accommodate passenger growth, new flights and larger aircraft while maintaining our ability to borrow money at a reasonable rate.
If RDU is to continue serving the region as a vital economic engine, we must do everything we can to keep airfares reasonable for our customers, while also demonstrating sensible business practices to retain airlines and attract new routes. To keep airline costs competitive, we have to be creative in seeking other sources of revenue to operate our airport.
Two years ago, we solicited public proposals to begin exploring new revenue sources. Wake Stone Corporation submitted the only proposal that met the bid requirements and proposed to lease part of our land for a quarry. After evaluating their offer, we took a step back to carefully consider our revenue options and the community’s needs.
We encouraged Wake Stone to seek additional input from local governments, the community, and groups with concerns about how airport land should be used. This week’s mineral lease agreement is the result of that good work. Their new proposal went even further than expected, with dedicated funding for a recreational lease to allow mountain biking on airport land.
The 25-year quarry lease of 105 acres to Wake Stone Corporation is projected to generate at least $24 million for long-term airport improvements and commits an estimated $3 million for site restoration. Wake Stone will also contribute an additional $3.6 million for a willing partner to lease 151 acres of airport land next to Umstead State Park for recreational use. Wake Stone’s obligation under this agreement to provide funding for a recreational lease will help resolve the problem of bikers currently trespassing on airport property.
As board members, we are required by law and entrusted by our public owners to manage the airport’s assets for the sole purpose of operating and maintaining the airport. This agreement meets our legal obligations to ensure the economic wellbeing of the airport, while protecting our region’s enviable quality of life.
As local citizens who frequent RDU and value the Triangle’s abundance of commercial, natural and recreational offerings, we believe the agreement is a best effort to integrate the community’s transportation, financial, economic and recreational priorities.
Competition for economic development and travel choices are fierce across North Carolina, the United States and the world. We must build to accommodate the region’s future growth while maintaining affordable prices for our customers.
Raleigh-Durham International Airport is the Research Triangle’s gateway to the globe. This agreement will help the airport generate crucial revenue for airport capital projects to serve the rapidly growing aviation needs of the Research Triangle region and beyond.
Farad Ali is the Raleigh-Durham Airport Authority Board chairman, City of Durham. John Kane is the board’s vice chairman, Wake County. Seven of the RDU Authority Board’s eight members signed this op-ed. The board member who did not sign the op-ed was recused from the vote due to a conflict of interest.