Sunday, December 3, 2023

ILM plans $100M capital budget to accommodate record-setting growth

The Wilmington International Airport Authority and New Hanover County commissioners met Wednesday for an annual update on ILM’s projects and budget. (Port City Daily/Amy Passaretti)

NEW HANOVER COUNTY — Wilmington International Airport director Jeff Bourk told an audience of county commissioners and airport authority members Wednesday the airport is set to see a “record-setting six months” and planning for more growth in the future.

In addition to the $75-million terminal expansion underway, it’s proposing $100 million worth of additional projects in the next five years, including an expanded curb, more hangar space for general aviation, a relocated taxiway and phase two of its business park.

Due to Covid-19 and social distancing protocols, this week’s report is the first time in two years the airport authority shared its annual report with county leaders.

While the airline industry as a whole is down 9% in domestic travel and 15% for international travel, ILM is back to 100% of pre-pandemic levels as of April. Based on the number of seats in the market — ranging from 35,000 to 70,000 — there has been a steady rise in passenger count since the beginning of the year.

“We’re going to set records in terms of enplanements every month going forward through the end of the year,” Bourk said. “I hope.”

A month away from the close of its fiscal year, the airport authority is estimating more than $12.1 million in revenue, 57% over budget. The airport surpassed $12 million for the first time in 2019, and Bourk said he expects this year’s revenue to exceed the record. 

Staff has budgeted $12.2 million in expected revenue for fiscal year 2023, a conservative estimate, according to Bourk. It doesn’t include the $2.6 million in profits from newly signed leases in the business park. CIL Capital, Edgewater Ventures and ILM Hotel Partners announced plans over the past year to bring in business, but the companies will not contribute to the airport’s revenue for 24 months.

With the ILM Business Park nearly at capacity of its 140 acreage, the airport staff is looking at a long-term plan for phase two. According to the ILM annual report, current business park tenants generate more than $830,000 of annual revenue and six leases signed within the last year will add another $1.8 million.

To expand the business park, the airport is looking to work with the FAA to decommission a radar tower on site, around the corner from the new CIL cold storage facility. 

“It sounds scary, but the reality is we don’t need [the tower] here because of the radar towers in other areas, we have good coverage,” Bourk explained.

Currently the tower occupies 175 acres of “good, usable aeronautical space,” which can be converted to allow for additional future tenants.

The airport expects to end the year below budget on expenses at $8.8. million, which includes $11.3 million remaining in debt service.

“This is a low amount of debt for an airport this size,” Bourk said.

Part of the reasoning behind an increase in travelers coming through ILM is the additional seats available. Delta and American Airlines are utilizing larger planes in many cases, increasing seating capacity. The announcement of Avelo, a low-cost carrier offering three new nonstop destinations, will add 189 seats when it launches its first flight July 1. 

READ MORE: ILM adds low-cost carrier, more nonstop routes

To manage continued growth, the $7-million baggage claim expansion in the works, slated to be completed by the end of this year, will double capacity. While there will still be only two carousels, each will be able to handle twice as much luggage.

TSA is also adding a fourth security lane at ILM and installing new equipment to expedite checkpoints. Both are part of the airport’s master expansion plan.

The $75-million, long-term capital project is underway, with the goal to wrap up by 2023. The recently opened new terminal increases the airport’s capacity by 75% and additional projects will continue its momentum.

ILM is proposing a multi-million-dollar capital budget, with the bulk of the finances covered by federal and state grants. In the last five years, ILM has received $95.3 million from federal and state funding and is anticipating an additional $100 million over the next five. The money will fund a five-year plan to incorporate four major projects.

The most impactful, according to Bourk, is a $30-million terminal curb expansion and improvements to Airport Boulevard, the gateway to the airport. The curb refers to the area directly in front of the terminal where cars drop off and pick up passengers.

“We got the terminal built and it’s great, increased capacity to bring in more people,” he said. “But the choke point we have is the curb. It’s got to be one of the smallest for an airport this size because it’s a circular curve.”

Planned upgrades would create a separate lane for commercial traffic, such as ride-share vehicles and buses, and a bypass lane for cars passing through. The strategy will also ensure all the airport parking is inside the “terminal curb loop,” better fortravel efficiency and safety.

“Land is scarce,” Bourk noted. “The loop would go much farther out if it weren’t for long-term parking growth.”

The airport is expected to reach max parking capacity this summer. A short-term lot is planned by the end of the year, with a long-term goal of eliminating the majority of the surface parking and constructing an enclosed deck. Additional financial research and business planning is needed before determining when it should be built, but constructing a parking deck in the future is inevitable, Bourk said.

“If enplanements continue to grow, we’re going to need it sooner than you think,” Bourk said. “You need to [build] it ahead of when you’ll need it.”

A $30-million project planned within the capital budget is relocating the current taxiway (and rehabbing it) to provide more ramp space in front of the terminal.

A $6-million project will install needed infrastructure in the general aviation corridor, which accounts for private aircraft. By establishing the necessary improvements, funded by the airport, Bourk said a private developer can come in and build additional hangar space.

Airport authority chair Donna Girardot alluded to another restaurant wanting to open in the terminal and additional businesses wanting to lease space.

Bourk said the airport will continue to be an economic engine for the county, with an estimated $2.2 billion annual impact.

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