IBJOpinion

EDITORIAL: Airport victory just a warm-up

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IBJ Editorial

Not all success stories are flashy. Witness the quiet resurrection of the former United Airlines maintenance facility at Indianapolis International Airport.

When United announced in 1993 it would build its 1.7-million-square-foot, state-of-the-art repair base here, it was billed as one of the biggest economic development victories in the city’s history.

A decade later, the celebratory mood of the early 1990s was a distant memory. United, which was in bankruptcy reorganization, walked away from the facility and the promise to employ 6,300 highly paid aircraft maintenance workers there by 2004.

The $800 million project, which sucked up $300 million in state and local incentives, was officially a bust.

But the Indianapolis Airport Authority, which was saddled with the mammoth property, didn’t panic—or hang a for-sale sign in front of a building it had little hope of selling. The quasi-government agency that runs the airport instead went quietly and effectively about the business of finding new tenants. Seven years later, the airport authority is looking savvy for what it has achieved.

Though the property employs only about 1,400—not half of the 3,000 who worked there at its peak—the 12-hangar building is substantially full, and there’s even talk of expanding it.

The anchor tenant is Chicago-based AAR Corp., an aircraft parts and maintenance company that took a chance when it agreed to lease one hangar there. It now occupies 10 hangars full of a hodgepodge of jets being repaired for a host of domestic carriers and the U.S. Marines.

The balance of space in the building houses repair operations of locally based Republic Airlines, a drug packaging and shipping facility and a logistics firm that ships pharmaceuticals between Europe and Indianapolis.

The maintenance center isn’t just full; it’s eking out a profit. Operating expenses have been slashed from $15 million a year when United was running the show to $8.3 million under the airport authority. Revenue for 2010 is projected at $8.8 million.

The maintenance facility’s resurgence is a testament to the effectiveness of the airport authority, which now faces a challenge even more daunting than an empty, cavernous maintenance center.

Later this month, the airport authority will release a land use plan that will guide the development of 80,000 acres of airport property for the next 30 to 50 years. Included in the plan are the land and buildings vacated two years ago with the opening of the midfield terminal.

The challenges—and the opportunities—are immense. Decisions the airport authority makes over the next few years have the potential to put the airport on sound financial footing for years to come and could convert relics of the city’s aviation past into a magnet for economic growth.

We hope the rebirth of the maintenance base is a hint of what’s to come.•

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To comment on this editorial, write to ibjedit@ibj.com.

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