THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Monday, September 5, 1994 TAG: 9409020637
SECTION: BUSINESS WEEKLY PAGE: 8 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY MAC DANIEL, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: Long : 151 lines
Driving into the long, rural entrance of Chesapeake's Municipal Airport for the first time, you'd expect to find a row of rickety dust croppers.
Instead, the airport is trying to lure some of the nation's top wheeler-dealers with a new terminal, a plush air-conditioned conference room and a red carpet painted on the pavement.
In Suffolk, the main runway at the municipal airport recently served as an active drag-racing strip. But after a $1 million resurfacing, the airport is enticing owners of corporate flying machines to settle here, offering an incredibly low $1-per-plane property tax and some of the region's cheapest jet fuel.
Don't think these improvements are mere niceties. These two South Hampton Roads miniairports are looking to the future and the skies for corporate manna. They are lengthening runways, adding hangars and sprucing up their regional standing to lure planes away from major fields like Norfolk International Airport and into the remote-yet-taxable back yards of Chesapeake and Suffolk.
The bottom line is business. ``Corporate decision-makers don't come by Greyhound bus anymore,'' said Ken Wiegand, director of the state Department of Aviation.
State figures show that for every dollar invested into a local airport, $2 goes back to the local economy. ``The leverage,'' said one state aviation official, ``is substantial.''
In the Hampton Roads countryside, though, the leverage might not appear soon. While Suffolk and Chesapeake are emphasizing cost-savings, business people tend to want accessibility, service and storage - all of which Suffolk and Chesapeake lack.
But don't count them out. The two city-owned airports have some advantages over larger airports like Norfolk.
As Suffolk cuts its tax rate to $1 per plane and Chesapeake considers doing the same, Norfolk charges a rate of $3.20 per $100 of assessed value on a plane. The Norfolk City Council doubled that rate last year from $1.60 per $100. Chesapeake's is higher at $4.08 per $100 assessed value. With a new Lear jet costing upwards of $10 million, either city stands to gain a lot of tax money from housing one at its airport.
The Suffolk and Chesapeake airports also offer low overhead costs. By comparison, Piedmont Aviation Services at Norfolk International Airport pays a large monthly fee to the airport authority for the right to work there.
In turn, Piedmont operates a substantial business. It employs about 100, stays open 24 hours a day every day and has 40 T-hangars and three bigger corporate hangars.
While these are expensive services, Oscar Barber considers items like hangars to be the backbone of a successful airport.
Barber heads Delaware Corp., an industrial construction, manufacturing and government contracting firm based in Chesapeake. He's one of two corporate clients who use the Chesapeake Municipal Airport, although his plane is based in Middlesex County.
For Barber, low property taxes and longer runways are not the reason he flies to Chesapeake.
``We went to Chesapeake because there was a hangar available when we needed it,'' he said, ``and there was maintenance and fuel.''
One drawback, he said, is the location. ``The airport is very inconvenient to us because it's so far out in the country. It's a real pain.
``The thing that attracts an airplane owner is, you need somewhere to store it,'' said Barber, who owned an aviation service for 20 years.
``The next thing is being able to pull it up to the hangar and get in your car and know that someone will fuel it and put it in the hangar. It's all of those things,'' he said. ``A low personal property tax would be great for the guys with the jets that hire a company pilot. They would be very thankful, but that would not be a contributing factor.''
Thus far, these local initiatives have had little net effect on the corporate competition, said Jim Hopkins, general manager of Piedmont Aviation.
Piedmont has about 15 corporate clients. Some are flying to Suffolk for cheaper fuel, a move that caused Piedmont to offer some corporate clients price corrections. Thus far, Hopkins said, no corporate client has abandoned Norfolk as a base.
``I would suggest to both Suffolk and Chesapeake that their money would be better spent on industrial development,'' Hopkins said. ``Just because you have a nice airport doesn't mean you're going to get the airplanes. So many times we go in there and spend a lot of money on something and that need just isn't there.''
John M. Beaulieu, president of Horizon Aviation, a private firm that runs Chesapeake's Municipal Airport, agrees. ``Until we get the infrastructure, there's no way of getting that business.''
Beaulieu sees the airport as the city's future front door. ``And like any front door, you want it to look attractive,'' he said. ``If you look at cities of our size, you have to have a general aviation airport to lure corporate clients.''
In Suffolk, in addition to lowering the property tax, the city has approved building 30 new T-hangars over the next five years at the airport, located south of downtown off U.S. 13. This year, about 30 corporate clients have used the airport, said Joseph E. Love, airport manager.
Richard Hedrick, Suffolk's outgoing city manager, said the city's main goal is to make the airport a viable business.
``Airports are a long-term investment,'' he said. ``You have to make investments today before you start to see the true end results. And I think that's what we're doing here.''
Hedrick has been cited by many state aviation experts as a catalyst behind the success of the Chesterfield County Airport, considered one of the best general aviation airports in the state. That airport's success stems from an adjoining industrial park and a road network that allows easy access to the airfield.
And with the construction of the southwest leg of the U.S. 58 bypass nearby, Suffolk's airport should have instant access to a major highway. The city plans to continue to buy land adjacent to the airfield for an industrial park.
Chesapeake's Municipal Airport, the closest local airport to North Carolina, is seeking permission to extend the runway from 4,200 feet to about 6,000 feet to allow larger corporate aircraft to land. The plan awaits environmental approval.
Once the expansion is approved, the city plans to tap federal sources late this year or early in 1995. A federal program will cover 90 percent of the cost of the runway if the state and city split the remainder. The project could cost Chesapeake about $100,000, city officials said.
Chesapeake also plans to lower the personal property tax on airplanes and build new hangars. Officials, still basking in the glow of the year-old, state-built terminal, are even talking of installing 24-hour fuel pumps for late-night flights and trying to get a sophisticated instrument landing system.
As plans progress to expand nearby U.S. Route 17 into a major corridor between Raleigh and Norfolk's ports, Chesapeake's airport expansion takes on an increased urgency.
Love isn't willing to admit to trying to lure corporate jets from Norfolk to Suffolk. ``But if somebody wanted to base their jet here,'' he said, ``I wouldn't complain.'' ILLUSTRATION: Small airports, big plans
Municipal airfields in Chesapeake and Suffolk have launched an
agressive effort to lure corporate clients.
On the cover: Photo by MICHAEL KESTNER
Staff maps
Chesapeake Municipal Airport
Suffolk Municipal Airport
[Color photos]
MICHAEL KESTNER
ABOVE: Suffolk Municipal Airport plays host to both corporate jets
and small planes.
LEFT: A painted "red carpet" welcomes visitors to the terminal
building at Chesapeake Municipal Airport.
by CNB