Sunday, August 30, 2009
Aerotropolis Waiting On Tarmac For Clear Take-off
Aerotropolis had a bumpy take-off and encountered immediate turbulence at Memphis City Council over a request for $2.3 million for a beautification project for the roadway that leads to Memphis International Airport.
While it’s clear from the comments of Council members that they need more information and better communications about aerotropolis, the problem may have been connected more to the absence of strong attachments by elected officials to the operations of the airport, which they often liken to a private club with privileges for only a few.
And truth be told, many people can be forgiven for little enthusiasm for a more beautiful entry into an airport where Memphians pay heavily for the privilege of being an airport hub. In addition, some Council members questioned why the Airport Authority itself didn’t pay for these improvements – which would cost about $140,000 a year in debt service for bonds – out of its $127 million budget.
In fact, over the years, the Airport Authority has prided itself on never asking city and county governments for money (it has its own significant sources of revenues from landing fees, concessions, etc.) except when it asked for help in paying for customs facilities and the international concourse required for the direct flight to Amsterdam. Despite promises that aerotropolis would transform the airport area, some Council members were dismayed that the first request for funding would be to beautify the approach to the airport rather than to improve conditions or infrastructure in the adjacent areas.
The Four R’s
As one Council member put it, at this point, there are a lot more questions than answers about aerotropolis. We suspect that even many of the people working on the project have the same feeling, because that’s the nature of a project that has no real ground rules and has to be customized for each city chasing it.
That said, there’s reason to be hopeful that it could work in Memphis, but clearly, there needs to be a well-communicated vision for the aerotropolis and a specific plan of action shared by decision-makers in both public and private sectors. In a city often hypnotized by our own hyperbole, some key members of Greater Memphis Chamber have already suggested that the new brand for our city should be: “Memphis: America’s Aerotropolis, Where Runway, Road, Rail and River Merge.”
We've written before that while it's a catchy slogan for this plan, it's not the city's brand, and we're pleased that there has been push-back on this notion. We have a disproportionate debt to logistics and distribution here, and we think that in focusing on attracting and retaining talent, our stronger brand - if it's related to this industry - is that we are the place where modern global commerce was invented.
That speaks to our streak of innovation and entrepreneurship, and the generation of workers that we are trying to keep here are the most entrepreneurial generation every. At any rate, “America’s Aerotropolis” is a good moniker for a specific part of our economy. We just hope no one rushes to make it the city’s brand and to start putting it on signs welcoming visitors to Memphis.
Already, the aerotropolis derby is getting crowded. Detroit has embarked on an aerotropolis plan that involves two airports and 25,000 acres of developable land, backed up by the ubiquitous economic impact report promising incredible results. Meanwhile, a prominent developer in Atlanta with deep pockets has announced the beginning of an aerotropolis there. Dallas-Fort Worth has been talking about it for awhile, and Phoenix has heard the sirens’ call.
Then, there are aerotropolis plans centered on the Piedmont International Airport and the area transportation network in Greensboro/Winston Salem. In each case, there is the promise of untold riches foretold by John Kasarda, creator of the aerotropolis concept.
His concept was inspired by Asian “airport cities” that have fueled dreams in American cities. It’s hard to remember a concept that has had as much build up as quickly as the notion that Memphis can be the home of North America’s first true aerotropolis.
It’s difficult to imagine how our version – or any U.S. version for that matter - can really emulate the Asian models that inspired it. Bangkok’s Suvarnabhumi Airport will have shopping malls, office buildings, hotels, hospitals, an international business center, conference and exhibition space, warehouses and even a residential community. Singapore’s Changi Airport has movie theaters, saunas and a swimming pool. As it’s prone to do, Dubai took the concept and went one better. Its World Central International Airport will have office towers, hotels, a casino, golf course and one of the world’s largest malls.
Despite those daunting examples, American cities remain committed to the aerotropolis concept, and yet, we are different than other major cities - at the bottom for airport hubs in the number of passengers boarding and deplaning and at the top in the amount of freight. The ultimate question is how a fully successful aerotropolis can be built here around an airport known for its multitude of boxes rather than its multitude of bodies.
There are also concerns by some elected officials that aerotropolis is merely the latest concept designed to enrich the real estate industry rather than help people in the declining areas near Memphis International Airport or buttress a Whitehaven that deserves much more care and support. Based on what we know about some key leaders for the aerotropolis project, we expect these concerns to be heard fully and handled sensitively.
Actually, the greatest challenge in the long run may be that it is heavily dependent on fossil fuels, and there is little that we can do about it but to have alternate plans. That’s particularly true of airlines, which are one of the fastest-growing sources for greenhouse gases. Dipping oil prices are encouraging but likely temporary, doing little to mitigate the looming crisis caused by the fact that the business model for many airlines essentially doesn’t work when oil sells for $135 a barrel.
Already, in Europe, the high cost of fuel is changing public opinion about air travel, with protesters shaming airline passengers and reflecting a growing feeling that flying is synonymous with ignoring the imperative to reduce greenhouse gases. There are even the first signs of legislative support for higher taxes on air travel and opposition to any new runways.
Finding The Niche
Back here, predictions that U.S. passengers will be cut in half and that there will only be 50 major airports in less than 20 years (roughly 85% fewer than today) are no longer discounted as inconceivable. Such is the seriousness of the crisis facing the airline industry and the cities that depend on it for major economic activity and employment.
Here, the risk is felt in spades since most of the logistics industry here is built on a foundation of fossil fuels. All of these issues need serious deliberation and research, because the continued dominance of our local economy by logistics and distribution is the economic equivalent of betting all of our chips on our hand. As a result, this isn’t the time for the normal cheerleading about all things airport-related that comes from the chairman of the Airport Authority, but serious discussion about scenarios for the future. If the aerotropolis can help us do that, it would have made a major contribution to our economic agenda.
We are confident that this discussion is in good hands, because we don’t think there’s anyone smarter in our city that Tom Schmitt, FedEx executive, who’s guiding this discussion. FedEx didn’t invent modern global commerce by failing to ask the tough questions, evaluate options and make tough decisions, and we know that he brings this to his civic work as well.
We suggested several years ago that our city should consider the aerotropolis model as part of our economic development agenda, so we are supportive of the idea, but we are equally anxious to hear more data and facts about it. Most of all, we hope that it emulates the approach of the Bioworks Foundation which crafted a distinctive niche for our city from our unique set of assets.
There no part of urban affairs that is more faddish than economic development, so it's important to separate our specific opportunity from a general head-long pursuit of something that will ultimately be replaced by the new new thing.