Summer Issue 2021 - 47

airport
communities
tional cargo that often flies with passengers. Many
airports are doubling down on serving the air cargo
and logistics industry to speed their recovery and
provide post-pandemic incremental income. They
likely will recover more quickly than those that are
waiting for the passenger sector, particularly the
international business traveler, to return. Beyond
cargo, retail sales at most airports have ground to a
near halt. One unintended consequence of airports
focusing on hiring local vendors to operate shops
and restaurants, which was beneficial to providing
local jobs and providing a local flavor to the passenger
experience, is that small local businesses often
don't have the financial resources to survive. Most
airports have been thoughtful about helping local
entrepreneurs where they can, but it still has been
painful for many.
CHRIS LeTOURNEUR: Airports have been severely
impacted by the COVID-19 pandemic. In the first
months of the pandemic, passenger movements
declined by as much as 90 percent, with airport revenues
dropping equally. However, airports that had
already proactively planned their lands for commercial
and industrial development, including logistics, have
done quite well. E-commerce growth has skyrocketed.
Some say that eight years of projected e-commerce
growth has occurred in eight months. Cargo integrators
including Amazon, FedEx, and UPS are the arteries that
facilitate e-commerce fulfillment, transporting goods
that arrive in containers by ships and rail [and] then
are dispersed by air and ground for regional distribution
by trucks. Airports are at the nexus of this supply
chain. At the same time, health care and bio-life science
logistics, personal protective equipment and
vaccine deployment, and perishable food distribution
have further driven demand for warehouse and logistics
development. Airports have embraced this boom
in logistics as a means for repositioning and diversifying
their revenues through the strategic development
of their properties.
What trends do you see in the funding of
airport development?
FORRER: The private sector has a boatload of capital
to invest in airports. COVID-19 has highlighted
the fact that private-sector investors and developers
can make a meaningful difference at airports,
whether in cargo, retail, or terminal development.
The federal government's ongoing proposed infrastructure
bills should have some funds for airports,
but they likely won't result in the funding levels that
will be required for their full recovery, so we see private
investment in airports continuing to grow due
to the pandemic.
LeTOURNEUR: A number of years ago, airports had
to become financially self-sufficient and operated
by local cities, counties, or airport authorities. This
responsibility involves generating revenues to offset
operating costs. This is why airports have taken
an interest in commercial development, including
retail, hotels, convention centers, offices, entertainment
centers, logistics, advanced manufacturing,
and technological innovation. Because the traditional
primary role of airports is to move passengers
and cargo, most airports have not been experts in
developing land. Airport land development is further
challenged by federal aviation restrictions and the
fact that airport lands are typically developed by
way of land lease tenure. As result, progressive airports
are engaging development professionals and
investment/operating partners to optimize and position
their properties for commercial development.
SMITH: During the pandemic, many of the airports
have received financial assistance from different
levels of government. In some cases, this was
accompanied by requirements for more sustainable
operations. We have been very conscious about
spending. In addition, we have issued a number of
requests for proposals for development related to
air cargo. We have built new partnerships with cargo
companies and freight forwarders.
TERRELL: Before COVID-19, there was a significant
lack of space and gates at airports, but after passenger
traffic dropped, many of the capital programs
for expansions of terminals and construction of new
terminals were put on hold. Typically, an economic
downturn such as this one is a good time to build
capital programs and facilities, but in this case, even
as passenger traffic fell, there was no corresponding
drop in the cost of materials and labor. On the
SUMMER 2021
URBAN LAND
47
Summer Issue 2021

Table of Contents for the Digital Edition of Summer Issue 2021
