Airport industrial complex upgrade proposal doesn't specify tenants
BY BRIAN BARBER World Staff Writer
Wednesday, June 06, 2012
6/06/12 at 7:28 AM
Read the Tulsa Metro Chamber’s white paper about the airport industrial complex improvements.
The Tulsa Metro Chamber after repeated requests from the Tulsa World has released a generic list of airport industrial complex improvements that could be funded by a proposed $329.4 million tax package.
Of that total, $254.4 million would be used for the improvements and $75 million would be used to establish a "deal-closing fund" to offer incentives to businesses that locate and grow in the region.
However, chamber officials, citing nondisclosure agreements, will not detail the level to which each of the complex's four tenants - American Airlines, Spirit AeroSystems, IC Bus of Oklahoma which is owned by Navistar, and the Oklahoma Air National Guard - would benefit.
Also, they will not specify which of the complex's 76 buildings encompassing 6,520,016 square feet and spread across 639 acres would receive which improvements.
"We have said (to the tenants), 'If we are going to come up with a solution to make all of this happen, we have to be able to share information with certain members of both private and public leadership,'" said Jim Fram, the chamber's senior vice president of economic development.
"We have been released to talk about this in general terms. I'm not going to refer to any particular company."
Fram said the white paper given to the Tulsa World and labeled "confidential draft" is the only one, to his knowledge, that elected leaders have seen during discussions about a potential tax package.
The newspaper two weeks ago revealed that a proposal was in the works to, in part, help preserve local American Airlines jobs.
But chamber officials countered that improvements were needed to the complex because the buildings date back to World War II and must be made marketable regardless of the current tenants.
When pressed about the need for secrecy, considering that the buildings are publicly owned and the dollars used would be from taxpayers, Fram said the chamber is going down two pathways.
"We are attempting to upgrade an industrial complex where 11,000-plus people work, but at the same time we are trying to help specific companies grow and be productive and prosper," he said.
"At the end of the day, we probably don't care deeply about the names of the tenants as long as we have them.
"We have to raise our sights and look at the horizon in keeping the facilities marketable and competitive. At the same time, these companies are important to the community. A lot of people work there. We have to keep our eye on that ball as well. It's a complex process."
Sources have told the Tulsa World that the bulk of the improvements would affect the complex's commercial tenants, rather than the Air National Guard, which has a ground lease for its buildings. The guard also pays an annual fee for access to the airfield.
Airports Director Jeff Mulder said he's aware of one project that was being considered for the Air National Guard but doesn't know whether it is included in the chamber's plan.
Fram said discussions about the improvements began taking place with every tenant of the complex long before American Airlines filed for Chapter 11 bankruptcy reorganization Nov. 29.
"I've been with the chamber for four years now, and this has been going on since day one," he said.
"You have to understand that these facilities were all constructed from 1939 to 1945. While they've had some Band-aids put on between now and then, they are still World War II-age buildings."
While Fram wouldn't discuss each tenant's needs, he said they are actively being courted to move elsewhere.
"I can tell you that three of the tenants are getting called on weekly by my peers, by our competition," he said. "They're being offered free land, free buildings, new facilities, cash on the table, you name it."
And the fourth one, Fram said, referring to the Air National Guard, "It's in a way being pursued by other communities because the Air National Guard has announced they're shutting down 19 bases across the county next year."
The tenants turned in lists to the chamber of what needs to be done to the facilities they occupy, Fram said.
The chamber, in turn, hired three independent consultants to go through the buildings to determine whether all of the improvements requested are actually needed and whether the cost estimates were accurate.
"They were right on target," he said.
The consultants were Eliot Lees of ICG SH&E, a Boston-based international aerospace consulting group; Jim Jobes of Ghafari Associates, a Chicago-based international engineering firm that specializes in airport development; and Bart Boatright of Flintco, a Tulsa commercial and industrial construction company.
Lees reported that the improvements are needed to bring the facilities up to modern standards.
"The buildings are well along in their useful lives and require investment simply to remain functional," he said.
Discussions have not taken place with the tenants about how long they would commit to staying in the facilities if voters approve a tax package and the improvements are made, Fram said.
But those negotiations should happen between the tenants and the city and the Tulsa Airport Authority, he said, "before a brick is laid or a nail is driven."
"We would encourage them to have a contract that states the specific incentives and at the same time in that agreement it would contain the number of years the company would be there, the number of people who would be employed, the annual payroll and any other pertinent thing that might be negotiated," Fram said.
The chamber's white paper breaks down $122 million in facility and infrastructure requirements, including heating, ventilation and air-conditioning systems, roof maintenance and replacement, electrical upgrades and replacement, pavement repairs, hangar modifications, utility repairs, environmental capacity upgrades and building remediation, among other improvements.
In many buildings, Fram said, the roofs leak and some don't have any heat or air conditioning.
"Back in World War II, those might have been acceptable working conditions, but today they are not," he said.
The white paper also breaks out $132.4 million equipment upgrade and replacement requirements, including a variety of improvements to make it possible for some of the facilities to host the testing and repairing of larger airplane parts.
Fram said "equipment" is kind of a misnomer, adding, "We are not buying anyone tools that can be carted off."
For example, one of the expenses in this category is a $15 million engine test cell upgrade, which is essentially a larger concrete room where airplane engines can be tested.
"The test cells they have out there now would be dwarfed by the engines they are putting in new aircraft," he said, adding that the aviation-based businesses are having to plan for a future with bigger aircraft.
Together, the $122 million and the $132.4 million make up the $254.4 million improvements portion of the potential tax package.
At some point, Fram said, the chamber might be free to release something more substantial than a consolidated list of the improvements.
"But a whole lot of water has to go under the bridge first," he said.
Chamber, county, city and area leaders are grappling with what sort of Tulsa County tax package, if any, should be put to voters on the Nov. 6 ballot.
Chamber officials originally floated the possibility of a four-tenths-of-a-cent sales tax increase, while County Commissioner John Smaligo suggested an extension of the Vision 2025 tax, so there wouldn't be a net tax rate increase.
In response, Councilors G.T. Bynum and Blake Ewing have offered up a $90 million proposal for consideration involving the county using a 0.167 cent sales tax share the city is now collecting.
Theirs does not include a "deal-closing fund" provision. Bynum and Ewing have come out against the idea.
Chamber spokeswoman LToya Knighten said discussions are continuing.
"We are taking all of the ideas that have been made public and coming up with new ideas and putting everything on the table," she said.
"No one plan is right or wrong. This is about figuring out what's best for the region and what plan of action to move forward."
$254.4 million in airport industrial complex improvements
Of that total:
$122 million for facility and infrastructure requirements:
$132.4 million for equipment upgrade and replacement requirements:
- $15.2 million for heating, ventilation and air-conditioning
- $23.5 million for roof maintenance and replacement
- $13.5 million for electrical upgrades and replacement and lighting upgrades
- $19.7 million for pavement repairs and replacement (aircraft ramps, roads and parking lots)
- $11.4 million for hangar modifications and building repairs (exteriors)
- $4.5 million for utility repairs and upgrades (facility water lines)
- $21.5 million for environmental capacity upgrades (plating shop and waste water)
- $10.3 million for building remediation and demolition
- $2.4 million for other equipment upgrades and replacements (docking, tooling, bridge crane)
- $15 million for engine test cell upgrades
- $60 million to build next-generation engine test cell (supports next-generation GENEX engines for Boeing 787)
- $9 million for next-generation engine tooling and training
- $5.6 million for machining equipment (for engines, landing gear, machine shop)
- $4.7 million for component repairs (avionic test equipment, electric generator test cell)
- $2.6 million for wheel and brake center (replace antiquated and inefficient equipment)
- $6.9 million for landing gear equipment (replace antiquated, obsolete and inefficient equipment)
- $1.2 million for auxiliary power unit test equipment (expand capabilities)
- $0.5 million for LCFM engine test equipment (needed for disc inspection)
- $8.5 million for avionics test equipment (allows in-house testing of later-generation aircraft)
- $18.4 million to consolidate and expand composites repairs (next generation aircraft/technology)
AIRPORT INDUSTRIAL PARK COMMERCIAL TENANTS
The facility fabricates Boeing 737NG, 747-8, 777 and 787 wing
components as well as floor beams for the 777 and 787. Military programs
include the E3 AWACS radomes, engine cowls and rudders.
2,700 TULSA EMPLOYEES
The company is the nation’s largest integrated manufacturer of
school buses and a wholly owned subsidiary of Navistar Inc.
1,100 TULSA EMPLOYEES
Oklahoma Air National Guard
Sources say the bulk of the improvements would affect the complex’s
commercial tenants, rather than the guard, which has a ground lease
for its buildings. It also pays an annual fee for access to the airfield.
462 TULSA EMPLOYEES
The carrier’s local base is the city’s largest employer and the largest
maintenance facility in the world, serving as the airline’s global maintenance
and engineering headquarters.
7,000 TULSA EMPLOYEES
Original Print Headline: Unveiling a flight plan
Brian Barber 918-581-8322
Clockwise from top left: The IC Bus facility, The Spirit Aerosystems facility, An American Airlines maintenance facility, The Tulsa Air National Guard base. MATT BARNARD/Tulsa World