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Camp Pendleton International Airport? The Economics

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Camp Pendleton International Airport? The Economics
Camp Pendleton International Airport? The Economics GUESTS:Glen Brodowsky, marketing professor, Cal State San Marcos Chris Gillespie, student, Cal State San Marcos Rosemary Reed, student, Cal State San Marcos

Glenn this latest report is one of a series studying the airport needs of the region. Give us some idea of what those previous reports look like. Yes this is the third year of our project in the first year we were looking at three proposed sites. One at [ Indiscernible ] Mesa, one at [ Indiscernible ] and one of Camp Pendleton. During that phase of the study the students were based on some previous studies that had been done by consultancy groups and after the end of their phase and their analysis showed the only reasonable and feasible site would be Camp Pendleton. I stepped into the project last year with the next group of NBA students and when we looked at -- MB a student and when we look at the development of the Camp Pendleton sites and how it would affect local transportation needs and how it would affect the economy during construction, we also looked at many groups and political groups that might be stakeholders and influence the decision and we presented our research next year. -- Last your. And we were asked to look at potential and alternative funding sources, we also looked at the benefits for the tracting a hub airline to the region and right now the only hub airline's domestic southwest airlines. We don't have a hub that calls San Diego home. And then we looked at the travel patterns to and from the airport which would bring in potentially 1 million travelers a year from East Asia and how that might have a ripple effect through the economy. To back up to last year, one of the things we looked at once we had chosen the Camp Pendleton location it really opened up the discussion to look at this as a tricounty. And I do want to talk more about that. One of the things I know you looked at though was airport capacity. What did you find out about how our existing airports will be able to hand out -- handle traffic to the 21st century? That was the thing that became clear this year. All of the new airports in the world in the century have been built outside of the United States. All of our airports are 20th-century. And we really had the infrastructure that was [ Indiscernible ] of the world. Like everything else it is aging and were investing in retrofitting a lot of airports around the country. Most of the major airports were on the eastern seaboard because during the 20th century, most trade was transatlantic. Our analysis this year shows that most of the travel and trade that is going in -- going on his transpacific. And the shortest distance between Asia, the booming economies there and North America is the West Coast. And based upon our estimates, the current airport infrastructure with LAX, Seattle, San Diego will not be able to meet the growing demands of transpacific travel within the next 15 to 20 years we are going to be at capacity without adding new facilities. So Chris, you looked at not just the San Diego region but you actually looked at the entire Pacific Coast to see how we were going to be able for how those existing airports were going to be able to deal with the increase in tourism and in business traffic from the Pacific is that right? Absolutely. Throughout this project we used five benchmark airports Denver, Seattle, San Francisco, San Diego, and LAX. And those were the ones that we looked at as the major international hubs and what could they bring to the table as far as capacity into the future. And what we are seeing as well is outside of the US the major airports that are being built you look at the Dubai project, Mexico City they are very forward thinking with looking forward in seeing what the demands for the future are going to be. Mexico City for instance a few billion dollars more than what today's dollars would cost to build as CIA Southern California international Airport today. So it's a larger project and therefore thinking and they'd be able to handle travel for the next several decades. And SCIA is what you're calling the proposed airport for the Camp Pendleton? Yes Southern California international Airport. And Rosemary that brings me to what Glenn was talking about when he said you are looking this as a tricounty economic engine. What does this report find that an international airport in the North County of San Diego could generate in terms of economic impact? We found that the economic impact is going to be substantial. We believe it's between 2.5 and 5.8 alien dollars is what we were expecting. And that's going to be -- billion dollars and what we were expecting and that will be on real tell us retail envelopment foreign investments and those are just some of the things we expect for economic impacts and just the initial construction of SCIA. Which we are expecting to be under 10 billion Which we are expecting to be under $10 billion to build but that substantial for the North County area. And then you have the ongoing support services that are going to be needed for the duration of the airport which will be significant. Now Glenn what makes Camp Pendleton as viable as a good site for the international airport? That location is dead center for the economic growth that is happening in Southern California. We look at Southwest, Riverside County has been booming for the past several years. We've had a downturn. The population is growing there. so even though when we first looked at it and it was on the northwest corner of this county, you see that there is a tricounty reason and reach in terms of education, business development and in terms of where people live. And the substantial population in the tricounty area is not within 50 miles of a major hub airport. And that is really shocking because a large percentage of the US population lives within 50 miles of such a facility. With millions of people who are currently underserved. That location and again of all the places to choose from this one on Camp Pendleton and whether or not Camp Pendleton, but a big question certainly in terms of the need economically that is the location in the vicinity of where an international airport would do the most good and have the biggest impact to the most people of the region. But that location on Camp Pendleton is a bit of a problem. Is a military facility and it's of course owned by the US government. They would have to agree and is there any indication, did you do research into whether the Marine Corps would be willing to cede five or 6000 acres for the zillion -- for a Sicilian -- civilian airport That was last year's report and we did many interviews with people on Camp Pendleton and in local governments around the area and it's going to be a long negotiating process. We don't expect to just say sure here it is. That's not going to happen that way. But I think those negotiations are going to happen among business, civic, and government leaders and military leaders to look at what will do the most good for the most people. And I think having this facility there also with two runways, we only have one at Lindbergh Field and it's a small runway, will enable us to handle the larger aircraft that are being built now and being favored by carriers as well as the military would have some use of that second runway for transporting of personal into and out of the region. So you're thinking of a dual use airport perhaps? That could be negotiated. I'm not going to be the negotiator but I think there's a lot of benefits we could see for both all of the stakeholders. Now Christie out -- report outlines -- Chris the report outlines financing airports in the 21st century and it's not about voter approved bond projects the way the 20th century airports got built that it's more public and private and I spoke with the director of Lindbergh Field and are upgrading their airport and thinking of getting public and private partnerships and getting airlines involved in the financing. Is that part of your research as well? That's one thing we were looking at. Obviously first for new construction, typically in the past US airports are as you identified funded through bonds and those are backed by promise of future revenues that would be generated from the airport. But what we have seen and especially in salt lake city, as they are read -- revamping their airport using the same rounded -- runway but building rounded they brought a lot of cash to the table and when you are able to do that it lowers the debt load and makes the model for the airport a lot more viable in the long run. So private and public partnerships and some of the examples of that could be having a bidding war for the right to open certain business on the property of the airport and the cash that is generated from that and being able to use that up front instead of [ Indiscernible ] funding which gives a heavy debt load. The last you mentioned this in your research report the last airport built in the United States was Denver international in the mid-90s. If I recall correctly that was plagued with problems from beginning to end. It was. Cost increases and so forth did you look at that and how the actual process of building an airport gets messed up along the way and how becomes more elaborate and more complicated and do you think San Diego has the will and determination to see a major project like that through? We did. To answer your first question and we did look at Denver international Airport and what took them to over a 200% cost increase and they ended about $4.8 billion was their final cost. The biggest thing that we recommend is that SCIA has to partner with airlines early on in the development of the airport and that's one of the areas that Denver was lacking. They waited too long to get the airlines involved and ended up with a lot of changes and additions so an expansion of the scope of work was one major issue and they did have some construction flaws with faulty concrete laid on the runway and things like that but I believe that was a smaller portion of the overall cost increase. And to your second question as far as if San Diego is ready, I think today was a fortunate timing for our project with the opening of the Tijuana passenger bridge and that is a perfect example of private and public partnerships and that is a bridge crossing in an international border ants if we can cross an international border and tie together the United States with the Tijuana airport then I think it certainly feasible that we could have a symbol interaction with Camp Pendleton. Quickly I'm last -- my last question to Glenn what happens to the report now? Will present the report to the community this evening and it will hopefully wind up in the hands of some of our great civic and business leaders who will use this to inform and opened the questions of what this 21st century airport is going to be. And we hope to continue working with them into the future. I want to thank you all for explaining that to us.-Speaking with Perth -- Professor. Glen Brodowsky with Cal State San Marcos and the students involved preparing this report fiscal escape and Rosemary. Think you all very much. Thank you for your time.

What if the Marines were to give some 5,000 to 6,000 of their 125,000 acres at Camp Pendleton for a dual-runway international airport that would serve San Diego, Orange and Riverside counties?

How much of an economic difference would the construction and operation of the airport and the availability of direct flights to Asia and Latin America make to the region?

Quite a big difference, according to a study by a group of California State University San Marcos MBA students.

Marketing professor Glen Brodowsky and his students conducted the two-year analysis, supported by San Diego businessmen and philanthropists Irwin Jacobs and Malin Burnham.

The study examined predicted demand for air travel within the next 15 years and the capacity of current area airports (Lindbergh Field, John Wayne and even LAX) to meet it. (They won't.) The students then looked at feasible locations for a new Southern California airport and determined there was just one: Camp Pendleton.

“That location is dead-center of where the economic growth is happening in Southern California,” Brodowsky told KPBS Midday Edition on Wednesday. “Southwest Riverside has been a booming population.”

Brodowsky said the majority of people in this region don’t live within 50 miles of a major airport, even though the majority of Americans do. He described the region as underserved.

If an airport is located in the southwest corner of the Marine base, parking and other facilities would be in Oceanside.

The economic impact an international airline hub would have on housing, retail and tourism in the region looks to be considerable as is the effect from such airport operational charges as passenger fees and gate leases.

“We found that the economic impact is going to be substantial,” said Rosemary Reed, a student working on the project. She said the economic impact to the region could be anywhere from $2.5 billion to $2.8 billion.

The last international airport built in the United States was Denver International in 1995.