SPECIAL REPORT: Hotels, industrial park, offices part of mix at Gulfport/Biloxi airport
by Ted Carter
Published: August 1,2014
In his slightly more than two years on the job, Clay Williams has picked up where retired predecessor Bruce Frallic left off in seeking to make the most of Gulfport/Biloxi International Airport’s assets.
So far, property controlled by the Gulfport/Biloxi Airport Authority has added a pair of hotels, a Fixed Based Operator which invested $12 million in its facilities, an industrial park and an office park that is on the verge of expansion.
“One of the things we have tried to do at Gulfport/Biloxi is really make sure we have a good mix of both public and private investment,” Williams said in an interview last week. “We go after FAA funds for safety, security and airport enhancements. We also have tried to bring in private investment.”
Two years ago, developers put up $52 million for the hotels, one a Hilton Garden Inn and the other a Marriott Extended Stay. In exchange for a long-term ground lease, the developers give the Airport Authority a cut of money the hotels generate. “These were something that were greatly needed,” said Williams, a former government relations specialist with Washington-based Capitol Resources who also served on the staffs of former Sen. Trent Lott and U.S. Rep. Chip Pickering.
“These hotels are very popular with the flight crews and feed of the volume of general travel,” he said.
The hotel investment came after completion of a terminal remodel and expansion to 160,000 square feet and the building of a new control tower. Together with contributions from the Federal Aviation Administration, the Airport Authority funded the projects with a $38 million bond issue. Last month, the Authority refinanced $27 million remaining on the bond issue down to 3.81 percent from 4.85 percent, according to Williams. Bond repayment comes from a $4.50 fee on tickets.
On land set aside for the industrial park, the Authority used FAA money after hurricane Katrina to build a 40,000 square foot cargo facility, half of which offers refrigerated storage. A main tenant, Gateway Air America, has a large irridiation operation that is used to kill bacteria in oysters. The building includes 6,000 square feet of office space.
The 50-acre park in the south-central area of the airport has ramps and a pair of taxiways and is designed to accommodate aviation-related business offices and aviation industrial tenants. It’s among the 5,000 acres situated along the state’s coast at airports, water ports and industrial parks designated as the Mississippi Coast Foreign Trade Zone.
Goods coming into the into the FTZ from out of the country are generally considered part of international commerce and not officially entered into U.S. commerce. Thus, duties charged on the cargo can be deferred until all or part of the shipment is distributed for U.S. consumption. Tariffs are waived when goods are re-exported from the zone.
The nearby business park so far has four class A buildings with a tenant lineup that includes government agencies, an insurance company, engineering firm and a law firm. A developer has leased an additional seven acres across from the office park and is ready to add more office space once a principal tenant is signed, Williams said.
Fixed Based Operator Million Air built a 52,000 square-foot general aviation facility that includes a customs office to process international travelers arriving on private flights. Million Air also supplies fuel to commercial airlines at Gulfport/Biloxi International.
Katrina destroyed the facilities of the previous FBO, Atlantic Aviation. Million Air operated out of portable trailers for several years before putting up its own building.
Williams, the airport chief, said success converting the Airport Authority’s assets into revenue has helped the airport rebound from such disappointments as the 2009 loss of Air Tran, a discount commercial carrier which pulled out after area casinos ceased their subsidies of the Gulfport/Biloxi route. Today, the airport is served by Delta Airlines, American Airlines, United Airlines and U.S. Air.
“The more we are able to diversify our income streams the better off we are going to be,” Williams said. “We have tried hard to develop additional tenants and a diversity of tenants so if we’re down in one area you aren’t (down) in another area.”
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