Panama City airport okayed; hurdles loom

The state's biggest developer has said the airport is key to its plans for the area.

Published September 16, 2006

The Federal Aviation Administration approved a new $300-million airport on Friday 20 miles north of Panama City on land donated by the state's biggest developer, despite opposition from many local voters.

The airport would be the first to be built since the Sept. 11, 2001, attacks. It would cover 4,000 acres, making it larger than Tampa International Airport.

When it would open is unclear because of uncertainties surrounding the project, including federal permits needed to destroy 2,000 acres of wetlands and the possibility of environmental lawsuits.

Supporters say the airport would help generate growth in the sparsely settled Panhandle. Opponents dislike it for the same reason.

The site is so remote that its nearest neighbor is the 6,900-acre Pine Log State Forest. Until a few years ago it was leased to the state as a wildlife management area. But the St. Joe Co., the state's largest private landowner, has said the airport is essential to its plans for the surrounding countryside: homes, stores, offices, hotels, bars, schools, even a barge port.

"Definitely St. Joe will benefit," said Randy Curtis, executive director of the Panama City-Bay County Airport Authority. "But they're a major part of our community, and this is going to be a major benefit for the whole community."

State officials say that the current airport on St. Andrews Bay is vulnerable to hurricane storm surge and that the runways are too short to handle big jetliners.

State officials also like that St. Joe pledged to preserve thousands of acres if the airport is built.

Gov. Jeb Bush, in a statement that did not mention St. Joe, saluted the FAA's decision: "Relocating the airport expands economic development and tourism in the region and protects thousands of acres of environmentally sensitive lands in the Florida Panhandle."

In a nonbinding referendum in 2004, Bay County voters rejected the airport relocation proposal 54 percent to 46 percent even though the ballot wording said it would not cost taxpayers anything. In fact, state and federal tax dollars would be used.

Critics have blasted the project as more of a boondoggle than a boon.

The airport, based in a county of 161,000 residents, is so quiet now that the control tower shuts down every night at 10.

It offers a dozen daily commercial flights - half the number it had five years ago.

Linda Young of the Clean Water Network in Tallahassee called the FAA's decision "one of the biggest corporate welfare scams of the year."

"We're going to spend $300-million on an airport that's completely unneeded just so St. Joe's land values will increase," she said.

Panama City resident Don Hodges, a retired Delta Air Lines executive who has repeatedly questioned the project, said, "If we really need a new airport - and many people are not convinced - there must be a better site than this."

St. Joe executives issued a terse statement Friday, noting the FAA decision and saying it has agreed to donate land for the airport "when all permits and funding for relocation are in place." Executives of the Jacksonville company did not return phone calls for comment.

Business analysts say the FAA's decision is a big boost for a company that recently announced it is laying off 200 employees because of the real estate downturn.

"There are no comparable land sales to point to in order to highlight the potential value of Joe's land around the airport, as it is unprecedented for one landowner to own all the developable acreage around a new airport," said business analyst Sheila McGrath of Ryan Beck & Co. She predicted the new airport will open the door to broader markets for St. Joe's resort projects throughout the Panhandle.

St. Joe chief executive office Peter Rummell has previously told stockholders the airport was "essential" to spurring development on more than 70,000 acres of St. Joe land around the airport site. In a 2002 interview he said that without the new airport, the company's plans might never bear fruit.

In that same interview, Rummell said he personally lobbied the governor to put taxpayer money behind the project. Florida Department of Transportation spokesman Dick Kane said Friday the state has budgeted $97-million for the new airport over the next five years.

But last month company spokesman Jerry Ray contended St. Joe's plans do not rely on the airport.

"We don't assume there's an airport in our business plan," he said. "It has never been in there."

St. Joe salesmen have used the proposed airport as a selling point for buyers.

Ryan Fleming, sales manager for a St. Joe development called RiverCamps at Crooked Creek, told prospective buyers in mid August, "They'll start construction on the new airport in 2007, and the first flights will take off in 2009."

Those dates are not that firm.

One question mark is money. To finance the move, Bay County hopes to sell the current airport site for at least $50-million, said Curtis, the airport authority's executive director. The rest of the cost is to be borne by state and federal taxpayers. A shortfall in the sale of the airport could pose a problem for financing the relocation.

Last spring the FAA published an environmental impact statement that said moving the airport to the St. Joe site appeared to be the best alternative. The Natural Resources Defense Council, however, responded that the FAA had failed to take into account redevelopment plans for the existing airport or planned development adjacent to the proposed site.

Defense Council attorney Melanie Shepherdson said Friday the FAA did not reply to its concerns.

Shepherdson said it's premature to suggest that her group might sue. But the council, the Sierra Club and other environmental groups last year persuaded a federal judge to halt construction on several St. Joe projects because of flaws in the wetland destruction permit issued by the U.S. Army Corps of Engineers. The airport requires a separate wetlands permit, which has not been approved.

In the past 30 years, only four new commercial airports have been built: in Dallas-Fort Worth, Denver, Fort Myers and Fayetteville, Ark. Each took decades of planning and study.

Since Sept. 11, 2001, the airline industry has been buffeted by financial woes. Northwest and Delta have cut back the number of seats available for flights at the current Panama City airport.