Midfield Terminal and Indianapolis International Airport and Indianapolis Airport Authority and Development/Redevelopment and Airports and Government & Economic Development and Transportation, Distribution & Logistics

Airport ready to embark on redevelopment plan

February 17, 2010

Indianapolis Airport Authority CEO John Clark revealed Tuesday evening that he is ready to proceed with a plan that could transform the airport's former terminal site into a hub for urban development.

Speaking to members of the City-County Council’s Municipal Corporations Committee, Clark said he will ask the Indianapolis Airport Authority board at its Friday meeting to approve hiring a team of consultants to work on the study.

The aim of the plan, which the consultants would finish by year’s end, is to identify what types of development might best complement the airport’s new, $1.1 billion terminal, which opened in late 2008.

Clark declined to divulge which consultants are under consideration, or how much it might cost to complete the plan. But he said a combination of firms likely would be hired that separately would study different areas of development, such as commercial, residential, aviation and transportation.

Since August, the authority has received 14 responses to a national request for information from firms interesting in evaluating the airport property and recommending what to do with it.

Clark said the airport will hire John D. Kasarda, a professor of management and director of the Kenan Institute of Private Enterprise at the University of North Carolina, to advise the authority as the redevelopment plan moves forward.

Kasarda, who has worked with airports around the world, is a proponent of what is known as “Aerotropolis,” an airport city with well-planned outlying corridors and clusters of aviation-linked business and residential development. He presented the concept to the authority last month.

Successful implementation of an Aerotropolis requires integrated planning with other government and community entities outside the airport.

Clark said local economic development organizations and Hendricks County officials have been included in the process. The large distribution centers that have popped up near the airport in the neighboring county are a direct result of the airport, he said.

Other cities, such as Memphis, Denver and Dallas-Fort Worth, also are embarking on the “Aerotropolis” concept.

But Indianapolis already has several advantages, such as a number of large plots of land, good road connectivity and big commercial facilities at the airport, such as FedEx’s No. 2 U.S. package hub.

The biggest motivation to develop the airport’s 8,000 acres is to create an alternative source of revenue, Clark said.  

The authority earlier this year projected a $15 million budget shortfall, blaming the recession. With fewer passenger and cargo flights, the authority now collects millions less in landing fees, parking revenue and concession income.

Further, the authority this year began paying on the $40 million in annual debt service on the new terminal, at a time when passenger boardings are down 11 percent year-to-date over the same time last year.

“Passenger airports are very dependent on the people that come through those terminals,” Clark said. “That model has to be modified. We’ve got to find other ways to generate revenue.”

Council committee members largely were receptive to the plan. Republican Robert Lutz, who represents the 13th District directly north of the airport, said he’s pleased the process is beginning.

“That was my frustration; there was no plan,” he said. “I like this concept of where we should be in 40 to 50 years.”

Clark urged patience with the plan, saying the authority only has one chance “to do it right.”

“We’re really excited about this,” he said. “It’s not too often that you have an airport that is not already encumbered and landlocked.”

A steering committee consisting of 25 to 50 people who have a stake in the development will be formed to get additional public input, Clark said.

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