Time to Revisit New Airport?
Like a homeowner who chose to remodel their current home instead of buying new, the Twin Cities decided — sometime in the ’80’s — to update and expand its current airport rather than build a new one.
In today’s economic environment, it makes sense to revisit that decision, for the following three reasons:
One. It’s a lot cheaper.
Twenty years ago, developers laid claim to practically every sizable parcel of land within 50 miles of the Twin Cities. Then, beginning a decade ago, the ethanol boom kicked in, driving prices for crop land higher.
As a result, assembling a parcel big enough for a second Twin Cities airport would have been prohibitively expensive.
Today, of course, the real estate boom has played out (to say the least). Even though gas prices are dramatically below their peak last Summer(!), no one knows for how long. That uncertainty, plus a severe recession, makes the economics of the exurbs much less compelling.
Combined, all these factors suddenly reduce the land costs associated with building a new airport by as much as one-third.
Two. The other major cost associated with building a new airport, labor, is also “on sale” now.
State unemployment is now well over 8%, and real estate construction projects all over the Twin Cities are either stalled or simply not getting off the ground.
As a result, thousands of skilled construction workers are idle at the moment. Instead of depleting state funds to pay unemployment benefits — or simply watch as people lose their jobs and possibly, homes — put them to work!
Done well, a long-term capital project like a new airport is stimulus spending at its best: in the short run, it creates high-skilled, high paying jobs that boost the economy; in the long run, the community gains a long-lived asset that truly is an investment in the future (it pays back more than its cost, including the debt that will inevitably be used to fund it).
Three. Today is the right point in the economic cycle.
The time to plan and build a new airport isn’t when you need it — it’s 15-20 years before. Even the most pessimistic economists project that today’s recession will lift by 2012 (the optimists say later this year), and that home prices will begin to recover in the next few years.
Meanwhile, according to the Metropolitan Council, by 2030 the Twin Cities will likely be pushing 4 million, and have 30%-40% more jobs than today. Air traffic by then could easily double from today’s depressed levels.
With foresight and long-term planning, the Twin Cities could be cutting the ribbon on a brand, new state-of-the-art airport just as the area needs it most.