AirGlades

03/20/2014

A new international airport in Clewiston could become Florida's next big air freight hub

BY ROGER WILLIAMS

rwilliams@floridaweekly.com

HENDRY COUNTY, THE POOREST OF FLORIDA'S 67 counties by some standards, could find its fortunes transformed before the end of this decade but only if county officials and private investors working in tandem can convince the Federal Aviation Administration to go along with the deal they're pushing.

Is it too good to be true?

Here, Florida Weekly describes the proposed deal, one that could turn a sleepy county-owned airport surrounded by sugar cane northwest of Clewiston into a privately owned international cargo hub, with a brand new 12,000-foot runway costing as much as $400 million, new water and sewer infrastructure, an efficient nearby highway transportation system, extensive warehousing and more.

The hub, to be known as Airglades International Airport, would take the huge import trade in cut flowers, fish and other perishables now flown into Miami International Airport from South and Central America, inspect and secure the goods, warehouse and refrigerate them only as long as necessary, and deliver them by truck and even train to states north and west of Florida.

Clewiston about 50 of the 1,000 daily flights that MIA now hosts. COURTESY PHOTO In the official-ese of Hendry County Attorney Mark Lapp, who pitched the deal to FAA officials first in late 2010, the county sees Airglades Airport as a logical place to establish a supplemental air cargo trans-shipment center as a reliever to Miami.

MIA handled 71.2 percent of all U.S. perishable air imports in 2012, 90.2 percent of imports to the nation in flowers, 72.7 percent of fruit and vegetable air imports, and 57.5 percent of all fish imports by air, according to U.S. Department of Commerce trade data provided by officials at MIA.

ROGER WILLIAMS / FLORIDA WEEKLY The dealmakers and county officials say that business imported to Hendry County would provide hundreds if not thousands of jobs for those living in Hendry, Palm Beach and Lee counties, not to mention such job-needy towns as Immokalee, in northeastern Collier County.

It would also open MIA to increased and more lucrative passenger traffic, and help clean up the environment and congestion in Miami-Dade County by taking thousands of trucks off the road that now have to fight their way out of MIA some 80 miles to the southeast, before heading north or west on I-95 or I-75.

And that could change the economic and cultural face of the southern peninsula forever.

It has the potential to be a generation changer, and at build-out it could be an international player with direct ties to Central and South America, and with many subsidiaries the offshoot fingers that will allow smaller distribution centers and hundreds of thousands of square feet of warehousing, says Hendry County Commissioner Karson Turner.

COURTESY GRAPHIC Mr. Turner was born and raised in this sprawling, 1,200-square-mile county of about 40,000 residents, like his boyhood friend, Andrew Couse.

My entire life there was always something coming, says Mr. Couse, vice president of First Bank in Clewiston. Some deal, somebody was going to build something or do something and we weren't just going to be a little agricultural town growing sugar cane and cows and oranges, anymore it was always going to transform us. And we would always laugh and say, ˜Here we go, this is the next big thing.'

MIAMI-DADE AVIATION DEPARTMENT But Mr. Couse isn't laughing now, he admits, because this might really be the next big thing.

I'm optimistic about this. I love the idea. The impact of this is incalculable what it would mean in terms of jobs, an infusion of the housing market we'd have our own housing market spike.

But those sugar-plum visions are still years away, with predictions about breaking ground ranging from two to three to five years.

Meanwhile, Hendry County sports the highest unemployment rate of 67 counties in Florida the only county in double digits. And the county shows one of the highest rates of medically uninsured residents in the United States.

The dealmakers

That's a dubious and ironic status, since two of the wealthiest agricultural concerns in the state headquarter in Clewiston U.S. Sugar Corp., and Hilliard Brothers, a diversified agricultural operation.

Both companies, along with a third Florida Fresh Produce, formed and led by a long-time air transportation official and consultant named Fred Ford have joined forces as AIA, the private investor in the plan. Mr. Ford's outfit holds 49 percent of the investment company, he says, and U.S. Sugar with the Hilliard Brothers together hold 51 percent.

The plan is already three years in the making, one of only two airport plans listed as active in the FAA's Airport Privatization Pilot Plan. Although the FAA established that program to open the door to deep-pocket private enterprise in air transportation in 1997, it has never approved or seen through such a deal.

And so far, no sign of the work in the flat fields just west of Lake Okeechobee scores of meetings between the investors and public officials, basic engineering, permit seeking and the like exists on the ground here.

Instead, things look pretty much the same as they have for a few decades.

Distant columns of dark smoke rise languorously into the creamy blue skies of late January, towering above the sugar cane fields owned by U.S. Sugar and the Hilliards.

Those fields surround both the town and the Airglades Airport.

A hope diamond in the rough, as officials and investors see it, Airglades lies roughly a mile west of U.S. 27 down a slender lane flanked by a single sizeable satellite dish. Visitors now will find a tiny terminal office, a few hangars, a handful of parked private airplanes and perhaps the chatting members of a skydive club, sitting around under an open parachute in a hangar with a view of the little 5,600-foot paved runway stretching northwest to southeast, and known as 13/31.

The deal

All of it is situated on roughly four sections of county-owned land a total of 2,560 acres.

On paper, that property carries an assessed value of $28.2 million.

But county officials have agreed to sell it to AIA, the investment group, for $13 million, says Charles Chapman, the county administrator because of the potential upside.

Some people were thinking we should force AIA to pay a premium price. That there should be a cash exchange.

But our mode of thought is, ˜Let's cut this deal in a way that's advantageous to private industry, so we can get through and get this thing built. It'll mean jobs, high-paying jobs. It'll put Hendry on the map as the new hub for importing perishable cargo in the United States.

So, our payout was an investment in future growth.

AIA, which has already spent several million in planning, the investors say, would depend on FAA approval and money at least $150 million in federal funds, if not more, as part of a $400 million effort to build a 12,000-foot runway.

That would accommodate the largest cargo planes in existence.

One of the obstacles that hasn't been worked out yet, says Greg Gillman, the head of the Economic Development Council in Hendry County, is basic infrastructure.

The FAA really holds the cards they could come in tomorrow and tell us they won't support it. But I don't think that will happen. I don't consider the FAA the biggest challenge, I consider them the lynchpin.

Our challenge may be infrastructure issues. We have limited infrastructure, water and sewer and electricity. Before we go and do all this, there has to be millions of dollars of infrastructure. Who pays? The county or the investors or a federal government grant? That's the challenge.

One federal grant application to help pay for infrastructure was turned down last year, he admits.

The laborious process

The process of proposals, counter proposals, investigations and inspections by the FAA and the Florida Department of Transportation, which must also sign off on the deal, is years long.

Until that is complete, FAA officials in both Washington and Orlando said they would not comment.

By Mr. Ford's account, The first thing the FAA asked us when we started this is, ˜What will the neighbors think?' And I said, ˜They must like it, they bought into it, he recalls.

Neither senior managers at U.S. Sugar Corp. or Joe Marlin Hilliard of the Hilliard Brothers responded to telephone and email requests for comments about ways the deal could change a community where they have lived and prospered for decades.

A U.S. Sugar spokeswoman, Judy Sanchez, said Mr. Ford would act as spokesman for the group, AIA.

Florida Cargo Fresh took the original trip-to-Vegas risk and together we have somewhere a little south of $10 million in the deal so far, with another $4 to $6 million to go, Mr. Ford says.

We probably have another year to go before we get a final blessing from the FAA and FDOT and the users. The users (freight carriers) have to agree that they will put some of their operations up here (in Clewiston), and that use must support the cost of operation and any debt. Then the FAA will bless us, the FDOT will bless us again, and that will allow us to construct.

Incentives and high hopes

By the terms of the deal between the county and AIA, for every 100 jobs actually created, AIA will get a million-dollar discount up to $8 million, which would be 800 jobs.

It will work like this, explains Mr. Lapp, the county attorney:

AIA is to estimate at closing how many jobs they will create and thus the discount they think they'll be entitled to, and place this amount in a letter of credit that will be available to pay the county for all or whatever portion of the job discount they're not entitled to if they fail to create the estimated number of jobs.

The maximum discount available for job creation is $8 million, meaning that at least $5 million will be paid to the county.

So, Hendry would take in $5 million at a minimum, and its tax base would increase significantly. To date, the county has only been able to sell fuel and charge for other services at the airport, and any monies accrued were required by old federal rules to be poured back into the airport.

Others might begin to use the airport, as well.

Asked about a rumor that United Parcel Service, the number one freight carrier at MIA, might be on the verge of making a deal to move its hub to Clewiston, Mr. Ford responded this way:

We are purposely not approaching UPS or Fed Ex they're known as integrated carriers.

Neither of the two integrated carriers are a target. We anticipate, however, that we will accept federal funds, and we may be so efficient that they will come to us and say, ˜This makes sense.' But there is no dialogue between us now.

I have purposely stayed away from them because I don't want Miami and Fort Lauderdale and Fort Myers (Southwest Florida International Airport) to think we're trying to steal something from them. So, fish and cut flowers that's its own little community. Miami's not going to suffer financially by the relocation (of freight companies that import them). We think it's 30 to 50 flights a day, out of a thousand flights a day that go into MIA every day. That's what makes it unique it's a niche.

Skeptics

At MIA, however, the view of moving cargo to any inland hubs is a lot more sober.

Those airports that would try this don't know what they're asking, says Ernie Rodriguez, MIA's marketing director.

One day they get up in the morning and say, ˜We want to bring cargo to our airport.' They need to understand business and industry. Once they understand, they will realize it will take years to develop. Why is MIA number one in the United States? Because we've been working 35 to 40 years on our infrastructure.

For any airport to consider cargo, you need to have your infrastructure in place before you go out there and sell.

If you don't have it, you won't be able to convince a freighter or an exporter or importer to come to your airport.

Cargo itself, he adds, can be defined either as freight carried on freight aircraft or as belly cargo, coming in on passenger aircraft. Being able to ship it either way, if necessary, appeals to users. But that won't be an option at Airglades.

Let's say you have two tons of fresh tilapia coming in from (South America), but the freighter breaks down, explains Mr. Rodriguez. If you have American Airlines flights coming in, you'll move your two tons with American.

Every day, he says, passenger aircraft transport produce, animals such as monkeys or snakes, gold bullion, and countless other items in the bellies of passenger aircraft, unbeknownst to the passengers.

Don Browne, a public affairs blogger and resident of LaBelle in western Hendry County, remains skeptical for entirely different reasons.

This whole thing was a way to get investors going, and it didn't make sense that Mr. Ford was organizing the whole thing, he says.

Part of the problem, in his eyes, was Mr. Ford's record in Lakeland, where he was hired on as a consultant to boost business at the city's airport in 2006 and left with some disappointed city leaders three years later.

By 2009, Mr. Ford had been paid $216,000, but no new tenants existed, according to reports in The Lakeland Ledger.

I don't think Ford has a good track record, Don Browne concludes.

But that failure may not reflect reality. Both recession and bad airport management caused the no-business results in Lakeland, Mr. Ford has suggested previously. And Lakeland City Manager Doug Thomas did not return telephone calls asking about the disappointment.

Experience, and excitement

Meanwhile, Mr. Ford's resume shows more than four decades of experience in air transportation, dating back to the 1960s.

Born and raised only a few hundred yards from the end of a runway at Boston's Logan Airport, he says, he is a veteran of the Marine Corps.

He served in past decades as director of Chicago-Rockford International Airport and general manager and COO of Dallas/Fort Worth International Airport. And he was a member of the team that planned and operated that airport when it was the world's largest, in the late 1970s.

In private business, he spent 20 years as a consultant and vice president of Raytheon/Washington Group International, before forming Florida Cargo Fresh in 2009.

He has created cargo services before, he says, and that's what he aimed to do with his company, starting in 2009 and 2010.

We looked at all these sites near U.S. 27 it already has a lot of cargo trailer trucks that want to avoid I-95. And there are 2,000 to 4,000 trucks a day going through Clewiston on 27, with cargo going to and from Miami.

So I thought, at some point, the federal and maybe the state government will want to divert some of the commercial vehicles that clog the roads. We need to find an airport site along that road.

Among the advantages at Airglades, he says, are the newly improved or under-construction highways (both State Road 80 and U.S. 27 are going to four lanes throughout); the fact that U.S. Sugar owns two rail lines, one running within a mile of the airport, on which aviation fuel could be more safely transported than in trucks; the fact that only two owners U.S. Sugar and Hilliard Brothers own the land almost all the way around the airport; and the additional fact that airspace is almost completely uncluttered at the Airglades airport.

That's why we oriented the runway north-south and we have to build an entirely new one, Mr. Ford explains so airplanes can fly high over and drop down without flying the circuitous routes which could put them in the airspace of surrounding airports such as Palm Beach or Southwest Florida International.

That will keep emissions down, too. We went through all these analyses you couldn't find a better site.

But none of it except dreaming and planning and in the case of the dealmakers, laying out the up-front money has happened yet.

Ultimately, concludes Commissioner Turner, this will come down to good old-fashioned capitalism. The free market will look at Airglades from a logistical analysis, and they will see it makes sense.

If Airglades can show (potential users) on paper where the FAA will guarantee that they have a home for perpetuity in Hendry County by building them the 12,000-foot runway that will drive the market, he argues.

Asked what he wants readers to understand in the end, he offers this:

People should know, we're not talking about an environmentally sensitive project this is a project that will take four sections of land that has been in cane fields and hayfields, and land that has sat idle because it's an old dump, and has already had a general aviation airport on it, forever. We want to take that and develop it. It's a completely logical place for this to occur.

And it has the capacity to be a reliever on so many levels of the megalopolis of southeast Florida. And as an emergency reliever any plane could land there.

If the government will help a few private investors and a handful of very hopeful officials get it done.

We're not recreating a model, Commissioner Turner says.

We're saying, we have rail, air and truck capacity, so allow us to use it fully. ¦