How Does an Airport Change a Town?

Panama City Beach Convention & Visitors Bureau

The first international airport built in the U.S. since 9/11 opened this May in Panama City Beach, Florida. But this new airport isn't just an airport; it's the heart of a plan to create an economic center attracting businesses, residential property and tourism to the Florida Panhandle.

The $318 million Northwest Florida Beaches International Airport replaced the 61-year-old Panama City-Bay County International Airport, positioned in a location vulnerable to hurricane storm surge.

The new airport was built in spite of opposition by those who feared growth would bring a negative change in the quality of life, those who had environmental concerns and those who doubted the need for a new airport. Already it is showing indications of success beyond its projections, despite the recession and the publicity surrounding the Gulf oil spill.

It all started in 1998, when the St. Joe Company, the state's second largest private landowner, agreed to work with the Airport Authority to identify a suitable site for relocation and offered to donate 40,000 acres of land on the north shore of St. Andrews Bay, which flows into the Gulf. The company saw an opportunity to attract businesses and build homes, and commercial property, shops, hotels and recreation facilities.

Proponents of change said the old 6,500-foot runway was too short to handle fully loaded 747s and, hemmed in on three sides by residential property with environmental issues blocking expansion into the water, the airport was stalemated.

Panama City Beach Airport

Panama City Beach Convention & Visitors Bureau

Environmental concerns were raised repeatedly in the early stages of planning, and detailed plans for wildlife and wastewater management were approved. An Environment Mitigation Plan was built into the proposal, setting aside 41,000 acres for preservation, designates 41,000 acres including 33 miles of shoreline around the West Bay, where permitting only light recreational use is permitted.

In fact, the Audubon Society had approached St. Joe to make plans for a center in the area, but the recession caused these to be halted, at least temporarily. Green concerns also impacted the construction the 120,000 square foot terminal, which meets LEED silver criteria and uses sustainable materials exclusively.

Some residents, including Don Hodges, a retired Delta Air Lines executive, went on record as being doubtful that a new airport was needed, and in 2004, Bay County voters opposed the airport relocation proposal by 54 percent, although the ballot indicated that taxpayers would not have to pay for the new facility.

Ultimately, the $330 million for the first stage construction in Panama City came from federal grants, state funds, approximately $35 million in low interest loans from the state infrastructure bank and between $51 and $56 million from the sale of the old airport (the final number depends on the cost of environmental clean-up). The remainder of the local share will come from airport cash reserves, according to Randall S. Curtis, executive director, of the Panama City-Bay County International Airport.

Janet Watermeier, executive director of the Bay County Economic Development, said the airport has reconfigured the economic landscape. "If you put a pin in the center of the runway and drew a 60-mile radius, the Bay County area has about 170,000 people, but the new labor shed has a population of over 570,000 people, binding together the rural communities that look to Panama City as a center," she said. "However, the old airport was only about six miles from Panama City; the new one is a 25-30 minute drive."

"We were spoiled," said Panama City Mayor Scott Clemens, "having the airport so close. And you have to understand Panama City and Panama City Beaches are two separate municipalities and Panama City feels comparatively little direct impact of tourism; however, over time we will see the benefits, as well."

Watermeier, who moved to the area from Ft. Myers, said she had seen the same opposition there when the new airport opened there in 1983. "People were afraid their lives would change for the worse," she said. "But I'm sure few would want to go back now. You can grow and develop in good ways."

A key element in the airport's success was the entrance of Southwest Airlines, which added eight daily nonstop flights to Orlando, Nashville, Baltimore and Houston to those already served by Delta to Memphis and Atlanta. Clemens noted that the flights to Baltimore Washington International Airport are particularly important to expand the presence of defense contractors working with local military installations at Tyndall Air Force Base and the Naval Surface Warfare Center, since they must go back and forth to the capital constantly.

Watermeier commented, "Panama City had an emerging port, two military bases and military research and defense work, defense contractors coming in, beautiful beaches, a branch campus of Florida State University. The piece missing was the ability to fly in and out at a reasonable rate."

Panama City Beach Convention & Visitors Bureau

To bring in Southwest, St. Joe guaranteed that the airline would not lose money for the first three years. The beginning has been encouraging, far beyond the most optimistic projections, despite the recession and the publicity surrounding the Gulf oil spill, which prompted Panama City to set up video billboards to show its clean white beaches.

Curtis said figures for July showed a daily average of 1,837 seats scheduled on departing flights. In comparison, Tallahassee, the state capital, had 1,336 seats. "We were at the bottom of the list last year with only 508 average daily seats available, Curtis added. The first month of operation, June, brought 83,000 total passengers, nearly triple the number for June 2009. Clemens said results "far exceeded our original expectations, despite the oil spill and the economy."

The airport's current Stage I includes 1,400 acres of the total 4,000 donated by St. Joe and encompasses the terminal and a 10,000-foot runway capable of expansion to 12,000 feet, another bone of contention for opponents, who didn't accept the need for such a long runway.

Curtis said the plan was to have a facility that could handle any aircraft in the foreseeable future, in virtually any weather. "Denver has a 16,000 foot runway," he added. "We want to have air service without restrictions." The second phase could include another, parallel 8,400-foot runway.

The new airport is built for today and the future. It has now has seven gates, one large enough for 747s and potentially for A380s; the check-in was designed to accommodate 14 gates and the seven-gate concourse can be doubled. Likewise, the security checkpoint has two lanes, with room for two more.

A spring marketing blitz leading up to the airport opening was funded partly by a 5 percent bed tax on hotels and rentals. Dan Rowe, president and CEO of the Panama City Beach Convention and Visitors Bureau, visited cities from New York, Baltimore, Washington, D.C., and Houston to Nashville and Orlando, finding that a large part of the area's market was unaware of the beautiful beaches that earned the region a place in Frommer's 2010 top 12 travel destinations worldwide.

"This is a springboard year for us," Rowe stated. "The First Lady summed it up when she said these beaches are a national treasure."

Meanwhile, future development is at the heart of The St. Joe Company's plan. In 2011, the company is relocating its corporate headquarters to VentureCrossings, the first 1,000 acres adjacent to the airport offered for development.

After 75 years in Jacksonville, St. Joe will move into a 50,000 square foot multi-tenant office building there next year, consolidating offices from Jacksonville, Tallahassee, Port St. Joe and South Walton County into the new location.

VentureCrossings is designed with approximately 100 acres for office, retail and hotel use, 300 acres for light industrial companies, and 600 acres for manufacturing and other use. There are a number of companies attracted by the 'through the fence' location to the 10,000-foot runway," Watermeier observed. She added, "The 71,000 acres that St. Joe owns within the West Bay Sector Plan probably represents the largest mixed use master plan today. Although there are as yet no firm commitments from other companies, a number are considering participation."

Kevin Johnson, vice president of economic development for The St. Joe Company, said the company is taking a "patient, but aggressive" stance in building a diverse economy. "We're off to a good start, cautiously optimistic," he said.

Looking at the current success despite the expected challenges with local opposition and environmental issues, as well as the unexpected ones -- the recession and the negative publicity generated by the oil spill -- Rowe agreed, adding, "Our best days are still in front of us."

Florida Governor Charlie Crist likened the project to Tampa International Airport, which opened in 1971. "It's so much the right thing to do," he said. "It sells itself. The timing couldn't be better. Thank God it got going when it did." His comments at the opening praised the new airport as "a national model of economic transformation and environmental preservation."

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