Airports have the potential to become powerful engines of local economic development, according to Dr. John Kasarda, professor at the Kenan-Flagler Business School at the University of North Carolina-Chapel Hill, who coined the term “Aerotropolis” to describe an aviation-oriented economic region that is cornerstoned by an airport.
Following their overseas counterparts, many U.S. cities have embraced the Aerotropolis vision as a way to infuse growth into – or revitalize – their local economy. Yet, problems remain on how airports are generally viewed in the United States.
According to Dr. Kasarda, “In Asia and the Middle East, airports tend to be treated as the primary infrastructure asset for their cities and nations to compete in the globally-connected, speed-driven economy. In the U.S., airports are often treated as nuisances to be controlled – an unfortunate view that places our own cities and metro areas in economic peril.”
In the interview that follows, Dr. Kasarda, a leading expert in airport-driven economic development, explains the Aerotropolis concept, and how U.S. cities might benefit from incorporating this structure into their long-range plans.
MuniNet: Let’s start with the basics. What exactly is an Aerotropolis?
Kasarda: The term Aerotropolis refers to a new urban economic form that we’ve seen emerge over the past decade as commercial activities are increasingly drawn to airport areas, creating city-like business environments. This process is transforming many city airports into airport cities. Analogous in shape to the traditional metropolis made up of a central city and its rings of commuter-heavy suburbs, the Aerotropolis consists of an airport city and outlying corridors and clusters of aviation-linked businesses and associated residential development.
MuniNet: Beyond the obvious – getting passengers and cargo in and out of a city – how can airports boost economic development?
This process is transforming many city airports into airport cities.
Kasarda: Airports have become key nodes in global production and enterprise systems, offering speed, agility, and connectivity to the cities they serve. This has made them major magnets for time-sensitive manufacturing and distribution; hotel, entertainment, retail, convention, trade, and exhibition complexes; and office buildings that house air-travel intensive executives and professionals. Such development is positioning airport areas as catalysts of renewed urban economic growth, typically complementing and enhancing downtown development by providing reinforcing businesses and services.
MuniNet: With airport lease rates historically higher than in other commercial areas, how can businesses make money in airport venues?
Kasarda: Air passengers also typically have incomes much higher than the national average. Combine that with the huge volumes of passengers (in the tens of millions annually for many airports) passing through airline terminals, retail sales per square foot average three to four times greater than shopping malls and downtown shops. Hence, airports can garner higher lease rates than say, the average retail mall. Many people don’t realize that more than twice the number of air travelers pass through Atlanta’s Hartsfield-Jackson International Airport each year (some 90 million) than visit Disneyworld, Graceland, and the Grand Canyon combined.
MuniNet: Has the recession had a positive, negative, or neutral effect on plans to use airports as an anchor for economic development?
Kasarda: The recession has had some depressing impact, as it has on all commercial real estate development; however, when the economy recovers, as it always has, we may expect airport-linked commercial development to resume its prior rapid growth.
MuniNet: What U.S. cities have incorporated the Aerotropolis concept into their urban planning process?
Kasarda: The Aerotropolis vision has become an integral part of “Memphis Fast Forward,” Memphis’ long-range planning initiative. Recognizing the economic potential of the Aerotropolis, Memphis International Airport plays a key role in the area’s development plans.
Detroit is currently implementing the Aerotropolis concept as a way to turn around the economic challenges currently plaguing the region.
Dallas-Fort Worth International Airport is moving rapidly forward with both inside-the-airport-fence and outside-the-airport-fence commercial development.
Many people don’t realize that more than twice the number of air travelers pass through Atlanta’s Hartsfield-Jackson International Airport each year (some 90 million) than visit Disneyworld, Graceland, and the Grand Canyon combined.
Indianapolis International Airport is considering plans for land use and development around the former terminal site due to its proximity to several plots of land, good road connectivity, and large commercial facilities at the airport.
Mesa, Arizona is planning substantial development on large parcels of land surrounding its airport following Aerotropolis principles.
MuniNet: Is it possible for an Aerotropolis to reverse an economic trend? Where would a cash-strapped city like Detroit come up with the funds it would take to cover the investment?
Kasarda: The vast majority of Aerotropolis investment is private-sector driven. The City of Detroit and Wayne County provide traditional infrastructure to support the fast and efficient movement of passengers and cargo between the city and the airport. This maximizes the value of the airport to the city.
MuniNet: What makes the Aerotropolis concept more viable in some cities than in others?
Kasarda: An Aerotropolis requires a well-served passenger or cargo airport. Those cities that have vibrant, growing airports are much more viable places for an Aerotropolis to develop. It also helps to have open, developable land near the airport.
MuniNet: The Aerotropolis concept relies on the notion of “intelligent growth.” What does that mean?
Kasarda: Aerotropolis development and sustainable “smart growth” can and should go hand in hand. Intelligent growth refers to the strategic infrastructure and urban planning that brings together airport planning, regional planning, and business site planning in a synergistic manner so that future Aerotropolis development will be more economically efficient, aesthetically pleasing, and socially and environmentally sustainable.
The real question is not whether Aerotropolises will evolve around major airports (they surely will). It’s whether they will form and grow in an intelligent manner, minimizing problems and bringing about the greatest returns to the airport, its users, businesses, surrounding communities, and the larger region it serves.
About the Expert
John D. Kasarda is considered the leading developer of the Aerotropolis concept, which positions airports as 21st century drivers of business location and urban economic growth.
He is the Kenan Distinguished Professor of strategy and entrepreneurship and director of the Frank Hawkins Kenan Institute of Private Enterprise. He also directs the Kenan Institute’s Center for Air Commerce and the Kenan Institute-led Carolina Entrepreneurial Initiative.
An expert on aviation infrastructure, logistics, demographics, urban development, and commercial real estate issues. Fast Company magazine captured Kasarda’s passion for the aerotropolis, which in turn led to writing a book, Aerotropolis, scheduled for 2010 publication. Read more about his research at www.aerotropolis.com.
Kasarda served as a consultant to the Carter, Reagan, Bush and Clinton administrations and has testified numerous times before U.S. Congressional committees on urban and economic development.
He was elected as a fellow of the American Association for the Advancement of Science for his research on demographics, job creation, and economic development. He is a senior fellow and trustee of the Urban Land Institute.