The Raleigh City Council has entrusted me with the privilege of representing the City of Raleigh on the Airport Authority’s Board of Directors since 2012. This position has given me an insider’s look at the funding challenges RDU faces in its efforts to keep pace with our region’s exponential growth, as well as the options being considered by airports of all sizes across the country.
At yesterday’s City Council meeting I had the opportunity to hear the public comments and discussion surrounding the Authority’s lease of 105 acres of land to Wake Stone Corporation for mining purposes. It’s important our community fully understands what’s at stake.
RDU is facing dire funding challenges and its financial situation is not unique. Airports nationwide have a $100 billion shortfall for infrastructure upgrades through 2023. A thriving airport is essential to the economic success of the Research Triangle area.
The airport has a $12.6 billion annual economic impact, supporting 5,000 jobs on campus and more than 86,000 in the region. In 2018, 12.8 million passengers flew through RDU and that number continues to increase. In fact, 10 percent growth is projected again this year.
RDU has $3.7 billion in infrastructure needs over the next 15 to 20 years, including replacing the main runway and opening new gates to accommodate larger planes and farther destinations. So how do we pay for all of this? First, there are some things to consider.
Many people think the airport is taxpayer funded, but it is not. The airport does not have taxing authority and only receives $12,500 from its four owning bodies each year – the City of Raleigh, Wake County, the City of Durham, and Durham County. The state has started investing in commercial airports, but that’s not enough.
The federal government is not investing in infrastructure like it once did. RDU, along with peer airports, is currently asking Congress to increase the Passenger Facility Charge, a small user fee travelers pay when flying through an airport. That charge hasn’t increased in nearly 20 years.
Federal law requires RDU to pay its own bills with revenue generated from its property and facilities. But current revenue streams will not cover the large price tag associated with maintaining current assets and building for the future.
These budget shortfalls require us to think outside of the box. We’re employing innovative ideas to pay for infrastructure, like selling pouring rights that would allow us to exclusively sell either Coke or Pepsi products in the terminals. That’s expected to produce up to $1 million annually for the airport. RDU also expects to generate revenue from its first public-private partnership, a new General Aviation Campus.
Additionally, after years of careful consideration, the Airport Authority Board of Directors decided to allow Wake Stone to lease airport property for mining operations, which is projected to produce at least $24 million in airport revenue over the next 25 years. The board understands environmentalists and mountain bikers want more land for recreation and trails, but RDU — by law — has to use its land to help fund airport operations.
As individuals who also work, live and play in this community, we negotiated with Wake Stone to provide $3.6 million for a third party to lease 151 acres of airport land for mountain biking recreation. It’s also why the board has questioned why Umstead Park won’t allow biking trails, despite having more than 5,500 acres of available land designated for recreational use. Umstead Park is the most logical place to accommodate off-road cycling.
The Airport Authority board has to make smart, responsible decisions for the airport, but as appointees from each owning body, we’re doing it with the Triangle’s economy, resources and growth in mind.