As airports across the country grow they are increasingly looking toward a new engine to drive the growth: private investment.
Overseas, many airports are run by investor-owned companies, including London Heathrow, Frankfurt, Paris - Charles DeGaulle, Osaka and Sydney.
“There’s certainly a long-term, 30-year global trend that’s continuing,” said Bob Poole, director of transportation policy at the Reason Foundation and an advocate of airport privatization.
Airports are facing expensive expansion projects to add terminals and gates for a growing number of travelers.
This year, Congress as part of a broader Federal Aviation Administration reauthorization bill passed legislation for private investment in all or part of an airport through long-term leases, expanding beyond a federal pilot program for airport privatization. Privatization would still require airline and FAA approval.
In St. Louis, Missouri, city officials are studying whether to privatize St. Louis Lambert Airport. Other airports including New York’s John F. Kennedy and LaGuardia, and Los Angeles International, have struck smaller public-private partnerships for terminal upgrades or for a new automated people-mover train.
“One of the trends is to say, ‘Well, maybe I can get the upfront money from a private entity, and I will turn that asset over to them for a period of time, and at the end of that period they will turn that back to me in good condition,” said Steve Van Beek, head of North American aviation at consulting firm Steer.
At Hartsfield-Jackson International, officials have spent years planning a few smaller public-private partnership projects, including a hotel next to the terminal, a recycling and composting facility, and a cargo facility.
But those projects have taken years longer than expected to complete.
The idea of an airport hotel has been in the works since 2014. By late 2015, a winning team, Majestic Carter Atlanta Mixed Use LLC, was chosen for the contract with plans to build an InterContinental Hotel.
In early February 2016, then-Atlanta Mayor Kasim Reed said the hotel would be completed in about two years. Later that year, Reed, airport officials and the developers held a press conference to lay out plans for the “grand facility.”
Now, 34 months after February 2016, the hotel has not yet begun construction.
Current airport general manager John Selden says the project is awaiting work by the private development team.
“We’re waiting on their due diligence for their financing,” Selden said. “They’re on their third extension.”
Developer Majestic Realty said it has secured financing and is “on track to break ground next year,” according to a statement from senior vice president Barry McCabe.
The composting and recycling facility project, known as Green Acres, has been in the works since at least 2013. At the time, it was expected to take at least until 2015 to complete the composting facility.
It took four attempts to successfully attract proposals from firms for a contract award.
In October 2017, the airport selected Green Energy and Development Inc., to develop the Green Acres facility with a 30-year lease. Construction has not yet begun.
The challenges lie with the “new technology. You’re talking about indoor recycling, composting, creating fertilizer, creating feed with waste from the airport,” Selden said. “It’s a challenge. You’ve got to make sure you have the right business model.”
For the cargo facility development project, the airport plans to prepare the site and soon solicit private firms interested in designing, building, operating and maintaining a cargo facility.