Okaloosa County BOCC — July 21, 2015 — Final Presentation for the Proposed Conveyance of Federal Land for VPS Airport — reading text

Dec. 2010, Vision ends 70 service Nov. 2004, Vision starts New 110K service 60 sq. ft VPS Dec. 2001, AirTran stops service Terminal 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Daily Per JUA Daily Operations – w/ predicted airline(s) loss from rising CEP 70 60 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Actual MP Fcast. Rev. Fcast Airline Attrition 11  Benefits of Conveyance Near-term benefits: Lower operating costs to retain airline service Improve the airport’s competitive position vis-à-vis the other airports in the region competing for the same market catchment area Long-term benefits:  Sustaining air-service  Assuring adequate interest in land for continued Federal funding (AIP, PFC)  Securing payment of debt-service obligations  Facilitating the issuance and refinancing of general airport revenue bonds (GARBs)  Diversified and optimized airport related operating revenues from third-party financing of new businesses to support and complement airport operations  Strengthening the partnership with Eglin AFB 12  Conveyance is a Win-Win Strategy for the County and Eglin AFB  Will ensure that Eglin Air Force Base, the Air Force and the County continue to benefit from commercial air- service  Will save VPS an estimated $45 million over the next 50 years, and: • Enhance the Airport’s competitive position • Reduce and hold down airline operating costs to retain air service • Increase asset valuation / debt service coverage • Improve bond ratings /reduce cost of financing • Provide for FAA grant assurance eligibility 1. Grant Assurance 4, Good Title. Requires the County to hold good title to the airport satisfactory to the FAA or to give satisfactory assurance to the FAA that good title will be acquired. 2. Grant Assurance 5, Preserving Rights and Powers. The County cannot take any action that may deprive it of its rights and powers to direct and control airport development and comply with the grant all other assurances.  An added benefit – the ability to diversify and optimize airport and aviation related facilities for additional operating revenue sources to support airport operations. 13  Land Rent Paid I. Escalated Annualized Rent Paid to Date = $5,042,957 II. Teel & Waters FMV Appraisal 7/6/15 = $6,555,000, say $7M III. Humphrey & Associates FMV Appraisal 7/13/15 = $4,500,000, say $5M IV. Mid-point of two independent FMV Appraisals = $6M 14  Requesting Conveyance of Land from Air Force • Federal statute (49 USC § 47125) authorizes the conveyance of Federally-owned land to a public agency for airport operation and future development • Statutory language first adopted as part of Federal Airport Act of 1946 • Modeled after provision in Federal Highway Act of 1921 • Requested conveyance must be “consistent with the needs” of the transferring agency • Implicit public interest standard “when necessary to carry out a project under this subchapter at a public airport, to operate a public airport, or for the future development of an airport under the national plan of integrated airport systems.” 15 Process for Requesting Conveyance 1. Public agency desiring conveyance 3. FAA evaluates the receives request. authorization to make request through 4. FAA informally resolution or discusses request with ordinance. Federal agency controlling relevant land. 2. Public agency submits detailed request to FAA that 5. If FAA finds that the includes copy of request meets the resolution or ordinance requirements of section and shows: (a) eligibility 47125, FAA issues a and basic information letter of request to the about the public agency Federal agency. and proposed use of land; (b) that the request is reasonably necessary for operation 6. Within 4 months, of public airport; and (c) Federal agency that property interest determines whether request will be required the request is to accomplish this consistent with its 16 purpose. needs.  Revenue Optimization Land for Airport Total Land Fut. Dev • ECP • 4,000 Acres • 3,000 Acres • PNS • 1,211 Acres • 350 Acres • VPS • 131 Acres • 18 Acres 17 Recommendation and Way Forward  VPS is facing great competitiveness challenges  Key to success is an acknowledgement for the need to act to meet emerging challenges  Conveyance provides an opportunity to control costs  The County and Air Force need to work together to contain costs and increase revenues in order to keep the existing airlines and develop new service at VPS • Progress towards conveyance: • Brief Board Members Individually  • Seek BCC approval to present the case  • Brief/Coordinate with key Eglin AFB Officials  • Presentation to BCC w/ recommendation  • Seek Congressional Delegation Support  • Forward the request formally through the FAA  18