Article/Use Tax Districts to Finance Airport Capital Improvementsr I
TERENCE W. RICHMOND, P.E.
Kalispell Office Manager
Morrison
ENGINEERS
PLANNERS
Maierle Hc.
JJ
SURVEYORS
since 1945
P.O. Box 1057
221 Parkway Drive
'
Kalispell, MT 59901
Office Phone: (406) 752-2216
Residence Phone: (406) 755-5143
USE TAX` DISTRICTS TO FINANCE
,AIRPORT CAPITAL IMPROVEMENTS
Most major airports in the United-,
agency for its amortization payments
States are in need of substantial 'capital'
The landowners accelerate the delivery
of critical improvements at the lowest
improvements
date, the capital needs of the na-
Totions
possible cost with no lien on their prop-
commercial air system have been
erty. The public gets a new highway
years ahead of plans with no new taxes.
financed by a combination of local taxes.
I
Everyone wins
federal grants funded with an excise tax
tickets, and user fees received from
The legislation was passed in 1987.
on
the airlines. But additional revenue
will have to be identified if any
'These programs could
Construction of 14.3 miles of four- and
six -lane roadways, plus three major in -
sources
portion of the massive capital needs of
provide substantial
terchanges, will be completed by the fall
of 1991. The project currently is sub -
America's airport system are to be met.
and reliable annual
stantially under budget and ahead of
One such source of revenues may bed
special taxing districts` centered around,
revenues with
schedule.
airports Such districts offer the poten
which to amortize .
Based upon the success of the Route
tial of generating revenues from they
tax-exempt debt:
28 project, similar districts now are in
commercial and industrial properties"
BY CURT COWARD
formation to build two new highways in
northern Virginia, and to help extend
that derive their value from proximity tq?
that facility. These programs could pro=q
Washington's Metro subway system to
vide substantial and reliable annual rev
Dulles. Additional districts are under
enues with which to amortize tax -ex `
empt debt
legislation that created a new financial
structure for highway construction in
discussion.
The application of this methodology
A model of such a financing scheme
Highway
Virginia involving the creation of a spe-
taxing district along a highway's
to the nation's airport problem makes -
good sense. As with highways, nearby
can be found in the Route 28
Transportation Improvement District in
cial
corridor.
commercial and industrial landowners
know hove vital healthy and efficient air.;.
virgin
In late 1986, a group of commercial
Included among its features was a
provision that such districts could only
ports are to the success of their own en -
terprises. These landowners could be
and industrial landowners along Route
28 met to explore ways in which funds
be created upon petition of a requisite
number (51%) of commercial and indus-
encouraged to participate in a financing
could be found to expand this two-lane
state highway paralleling Washington
trial landowners based upon acreage,
and that any tax levied by the district af-
scheme that requires them to contri -
ute to the capital improvement pro
Dulles International Airport United Air
hub
ter formation could not exceed a statu-
tory_reiling ($.20 per $100 assessed val-
grams of their airport in order to en-
Nance its impact on their properties.
Lines had established a major at
Dulles earlier that vear, and passenger
uation). The bill further provided that
Airport operators could present land
boardings had leaped from 1,681,839 in
1984 to 4,441,384 in 1986. The result-
the revenues only could be used to carry
out the plan of improvements set forth in
owners with a comprehensive improve;
mentplan that would identify aproposed' -
ing surge in local traffic had turned the
the petition and approved by the local
funding program, inclusive of revenues'
from a special taxing district to be,
highway into a major bottleneck.
The landowners were acutely aware
governing body.
Our legislation empowered the dis-
created by the landowners in order ti
that their ability to develop their com-
depen-
trios to enter into contracts with other
for the of services.
accelerate the improvements. In ex=
change, the landowners would sure]
mercial properties was directly
dent upon the immediate expansion of
entities provision
This structure allows the district to con-
want to participate in final design and fr
Route 28, and they were anxious to find
tract with existing government agencies
its
nancing decisions in order to ensure that
they received value for theiL
the estimated $150 million required to
for improvements, funding contrac-
fund those improvements. Working on
behalf of these landowners in concert
tual payment obligation with revenues
received from the local government as a
contnbutio4'
While by no means a panacea, volun-
with the local governments, we drafted
result of the special tax Those govern-
ment agencies then are able to raise the
taryspeoaltaxingprogzamscould make,
an important contnbution to the capnal.
capital necessary to perform under the
needs of our commercial airports. The'
Curt Coward is an attorney with the
contract by using their own superior
success of Virginia's Route 28 project in,'
delivering a major project below cost at
iedit
McLean, VA taw firm of McGure Foods
Battle & Boothe, which helped create the
cr
The proceeds of the contract with
record speed commends the concept as
-
.1,- r;at ti%;no riicrrirt rP;mhurse the
one well worth exploring. ■