Lambert St. Louis International Airport could not attract enough airline business to become a hub airport even while they continued to build its massive new runway at the expense of taxpayers and a loss of entire communities. Now that they are sitting with a $1 billion concrete slab with a large for-rent sign, Lambert is desperate to attract any paying customer to land on their shiny new and gently used runway. After all, according to the St. Louis Business Journal, Lambert is still facing $1.4 billion in debt. Attracting a Chinese air-cargo hub would, in theory, help them pay off their debts and make that runway appear to be a regional necessity.
The problem is, Chicago, Dallas and other mid-American cities have already done their homework on attracting Chinese air-cargo shipments. St. Louis leaders and Missouri legislators have not been forthcoming with that information, instead insisting that our region somehow holds a key to that particular market.
From an article on the St. Louis Post-Dispatch website today with a discussion with Greg Lindsay, who wrote the book on Aerotropolis and global markets:
The free-market Show Me Institute published a critical study, and an air cargo consultant said St. Louis would never be a cargo hub. Backers have tended to cast them as narrow thinkers who just don’t get the Aerotropolis concept.
That argument definitely doesn’t fit Lindsay — who coined the term in the first place. He wrote “Aerotropolis: The Way We’ll Live Next” with John Kasarda, a professor at the University of North Carolina. Since the St. Louis folks co-opted his title, they ought to be interested in Lindsay’s opinion.
Lindsay hadn’t spoken publicly about the St. Louis effort until last week, when he criticized it on Twitter. He tweeted that “calling some cargo flights and warehouses an aerotropolis doesn’t make it one” and then, more bluntly, “I don’t think it will work.”
The middle part of the country has plenty of cargo capacity elsewhere, and other cities are way ahead in the Aerotropolis game.
What does it take to build an Aerotropolis? “You have to create a market where the cost is lower or the access to market is better, and neither of those is really the case in St. Louis,” Lindsay said.
Local leaders are making their pitch on the cost side. Our airport has plenty of unused capacity, and the tax credits would make it cheap for freight forwarders and warehouse operators to set up shop. Why won’t that work?
“I think they could lure the Chinese, but the history of airlines and subsidies indicates that they can leave the moment the subsidies run out,” Lindsay said.
The message of “Aerotropolis,” the book, is that a few global cities now revolve around their airports, rather than the other way around. With rare exceptions, however, they were global cities before they became Aerotropolises. Chicago and Singapore have long been important trading hubs; St. Louis, not so much.
Read more: http://www.stltoday.com/business/columns/david-nicklaus/article_a377c6bd-a005-57a2-a63d-227599165b77.html#ixzz1SOF50mcv
Its possible that the Chinese could come. First, we would need to put forth large amounts of cash towards unbridled developing for shipment warehousing and infrastructure surrounding the runway. Yet, if we face the pattern that Lindsay suggests is typical with Chinese carriers, we would finance a multi-million dollar, tax-fueled gamble to lure an industry known to flee to another market at the slightest increase of local fees. Operating on a glimmer of hope for generating regional economic growth while saving face for the runway expansion is a risky investment for the region in the long term.
In St. Louis, we have seen a number of Wal-Mart stores leave one municipality for lucrative TIFs and incentives offered by legislators in a neighboring township down the street. In their wake, the originating municipality is left with a large, vacant box and a dying local economy as the smaller businesses move on to find other big anchor markets. Wal-mart and other box stores exist on TIFs and other local incentives. They pull out when local subsidies begin to run dry and leave local micro-economies in disaster. Perhaps the irony here resides in the cheap Chinese goods we’re looking to have land in St. Louis are the very goods that fill these roving big box stores. The reality is, our region cannot afford for this same scenario to play out on the grand global scale, leaving St. Louis a developed shell that nobody would come and lose smaller industries in its wake.
Maybe it is time we finally accept our position as a minor city and live within our means. Instead of gambling away the house for those narrow odds of winning the funds for a bigger house, we need to factor what we have and what industries we can realistically attract, and work with that. Lambert made a gamble when they built the W-1W runway. They failed to attract the necessary business to support its use and they are now struggling to pay off the loans. Mid-America Airport just across the river in Illinois is a fully functioning airport that has been trying to attract regional cargo for decades, with almost zero payoff. If Mid-America, an airport with highway access and no need to compete with passenger flight schedules, cannot attract air cargo, what does it say about Lambert’s abilities? Why should we once again reward Lambert and the City of St. Louis astronomical funds to support yet another short-sighted goal? Lambert failed to prove to the region that ANY airline would be committed to creating a hub while building W-1W, yet they continued to build that runway with the region’s monetary blessing. Lambert and the City of St. Louis is again failing to prove that they can attract the businesses they need for their air cargo goals by failing to present us with any Chinese carrier even slightly interested in our region for a long-term commitment. The experts are speaking out, but once again Lambert is ignoring the voice of reason.
I have said before that, if the project would create jobs and bring our region’s economy back into a real global game, then I would support Lambert to convert its peripheral land and create the shipping hub. However, the writing on the wall is clear that Lambert once again wants something unrealistic, and is willing to use public funds to get it.
If Lambert International and the City of St. Louis again gets its way, instead of vacant houses, the land of Carrollton may soon be filled with brand-new vacant warehouses sitting next to a vacant runway. (Yes, Lambert uses the runway. Just because they use it doesn’t mean they need to.)
Read Full Post »