Saturday, June 09, 2007

More holes in reporting on Betsy Johnson

The Willy Week piece wildly speculating about Betsy Johnson's introduction of Senate Bill 807 appears to be missing some major pieces of the puzzle--especially context.

While SB 807 was introduced by Johnson at the request of the Oregon Aviation Business Association, the WW piece contains no references to who actually wrote the bill--nor does it appear that WW interviewed the bill's author.

Enter Aron Faegre.

Aron Faegre is an architect and engineer. And the author of SB807. Faegre has also written in response to Willy Week's speculation--and to explain the need for the bill. Two versions of this op-ed were done: one called the "internet version" and another for the papers. Below is the "internet version".

Op-ed: Senate Bill 807 Helps Airports but more importantly their Communities

[Longer Version with More Information 1461 words – internet version]

June 9, 2007

In today’s world, a business with internet access and a good local airport can compete on a global basis. That is good news for Oregon (a rural state) and Oregon’s smaller rural communities. Senate Bill 807 would allow a city or county to set up a tax increment financing district around its local airport as one option for ensuring that the airport infrastructure piece of this equation is given a strong financial base. The Oregonian and Willamette Week have published incorrect information about the legislation and how it works. As the principal author of the bill, I’d like to clear up these issues.

First to dispel unfounded fears – here are some corrections: 1) the airport district can only contain airport-related properties. No residential, farmland, normal industrial or normal commercial can be in the airport district. 2) Any funds spent in the district have to be spent on airport infrastructure that serves the public. No funds can go to developer’s pockets, or their own buildings. 3) Finally, an airport committee decides what the money can be spent on, and the city or county has a representative there. Only things that get 100% agreement can be funded. So the city or county representative (who could be the city mayor for example) has 100% control. Now for the reasons for the legislation, and why it helps Oregon.

This is legislation to provide for a useful and responsible economic development tool for use by over 75 public airports around our state. It would fund only airport infrastructure that serves the public. It does not funnel money back to developers. It uses the same basic “urban renew” model used by cities for urban renewal and other special projects of benefit to the city and the community. It allows a portion of increases in airport related property taxes to be put back into basic airport infrastructure. It does not allow tax money to be taken from surrounding residential or non-aviation business.

For the past 20 years I’ve been privileged as an airport planner to work on over 30 airports located all around the United States. Most of these airports have been in rural Oregon. While meeting with airport advisory boards, ports, city councils in Hood River, Condon, Prineville, Madras, Lexington, Chiloquin, Ashland, Powers, Albany, Independence, Scappoose, Aurora, and many other communities, I learned that many of these communities have been hindered in using their airports to promote local businesses. These result from two things: 1) an FAA governmental attitude that is not “business friendly”, and 2) a lack of funds for the basic airport improvements needed by businesses at their airport.

The four airports thriving airports in the state that could serve as a model for the rest of the state’s airports in terms of rejuvenated community economic development are Prineville, Aurora, Scappoose, and Ashland. Prineville Airport had been in the doldrums for many years. While working on their airport master plan several years ago, I asked their airport commission during a public meeting: “Not much was happening at your airport over the last 10 years, but now there is a major growth in businesses basing at the airport. Why is that?” The Chairman of the airport commission said, “It’s very simple. We have adopted Les Schwab’s motto. When a potential airport user comes to us, we say What can we do to help?”

At Aurora Airport, the lesson learned was that a public-private partnership approach is particularly successful. The FAA has for many years promoted a policy that hinders airports in terms of promoting community economic development through normal private business investment methods. Yet airports attract people who are by their nature interested in innovation, understand new technologies, and have the leadership skills and interests to create new businesses. Airports are natural places for a community to use to encourage creation of businesses that use aviation for their success. Aurora Airport has excelled in this regime simply because it has a mix of public and private properties. This mixture of public and private has fostered innovation and creativity, such that there are now somewhere around 600 aviation related jobs at that airport, and it is contributing probably $400,000 a year in property taxes to the county.

This brings up an important point learned at the Scappoose Airport. Many small airports in Oregon pay no property taxes under an exemption in ORS 307.120. While attending community meetings in Scappoose and St. Helens about the Scappoose Airport, I heard loud and clear from City Council members, “If airport development on public airport property provides no taxes, while airport development on private airport property does provide taxes, the choice is simple: we prefer the airport development to be on private property.” Senate Bill 807 requires that a community electing to utilize the tax increment financing model presented in the legislation voluntarily relinquishes their exemption and starts being an active contributor of taxes to the community.

Finally, it was at the Ashland Airport that I learned how not acting to help airport businesses, can seriously hurt our state as a whole. I came across a company – Sky Research Inc. – based at that airport that has created astounding new aerial mapping technologies for finding unexploded land mines and ordinance, as well as for integrating aerial data to help fight forest fires. I was distressed to find out that their staff of 50 was going to be expanding by the hiring of four new Ph.D’s, but since they couldn’t get the airport to move fast enough to allow expansion of their building, they were going to open a branch office in Colorado instead. This wasn’t just a loss of jobs, but a loss of people who might also have been adjunct professors for Southern Oregon University to teach in programs about computers, remote imaging systems, and other new technologies. Oregon lost out on that one. This is what we stand to lose at other airports without adequate funding and a good business attitude.

It is easy for those in the Portland area to pooh-pooh the use of airports for economic development, because we have PDX and take it for granted. We need to remember that actually PDX was the first airport in the nation to develop the innovative idea that an airport could be a fun place to be, with shops promoting our private local businesses. This approach also provided a whole new revenue source for the airport. The PDX model shows that a creative mixture of public and private businesses at an airport is not a security risk. Oregon is a place known for innovation. That idea spread like wildfire to the rest of the nation and the world.

Senate Bill 807 provides small communities with a simple economic development tool commonly used in large metropolitan areas. The larger airports don’t need this bill because they are in large cities that already have their redevelopment agencies and large staffs who can use the more complex system of urban renewal districts at their airports. During its first hearing in the Senate Committee on Business, Transportation and Workforce Development, one senator referred to Senate Bill 807 as “urban renewal light.” Yes, but it requires a plan ensuring the funds only go to improvements serving the public. It also requires unanimous approval of all of the taxing agencies and requires approval of the city or county. Also, it allows inclusion only of lands that have aviation-related uses. Unlike “heavy” urban renewal which takes 100% of the increase in taxes, Senate Bill 807 shares tax increases 50-50 so that the reward of airport business growth is shared between the airport and the community.

The legislation received the unanimous approval of two senate committees. It received the unanimous endorsement of the State Aviation Board. Additionally, amendments initiated by Senator Bruce Starr resulted in it receiving the consensus approval of representatives from the Oregon League of Cities, Oregon Counties, and the City of Wilsonville. Those who question the bill are encouraged to read it for themselves so that they know what it actually says.

A recent Willamette Week blurb presented that there are some who have suggested that Senate Bill 807 is a secret plan to allow creation of a casino or giant industrial complex next to Aurora Airport. It is not. To provide additional assurances that this is not the case the bill sponsors are recommending an amendment to the bill saying that if this bill were ever used at Aurora Airport, the airport tax increment financing district can only include the present airport properties.

This legislation provides rural communities throughout the state significant economic development potential when such options are very limited or non-existent. It will allow these small Oregon communities with airports an exciting, innovative way to create new jobs and increase tax bases.

[Aron Faegre is principal of his small architecture and airport planning company in Portland. He is also a pilot. He is a volunteer with the Oregon Aviation Business Association that has brought the bill forward with the goal of creating increased aviation jobs and tax base for Oregon.]