Airpark experts see promise in aviation activity

By Connor Dziawura

The Scottsdale Airport and surrounding area were doing well in the 2019 fiscal year.

According to Sarah Ferrara, aviation planning and outreach coordinator for the Scottsdale Airport, aviation activity at the airport and airpark brought in $688 million in economic benefits for the region, supporting 3,979 jobs amounting to $241 million in income. Spin-off airpark activity, unrelated to aviation, added $10 billion in economic benefits.

“It really is no joke what an airport can bring to a community, and so a lot of people don’t realize that it impacts some of the industrial area around it. It brings businesses,” Ferrara says.

Following such fruitful activity, however, the COVID-19 pandemic hit—which did bring with it some consequences.

Ferrara discussed these topics at the Scottsdale Area Chamber of Commerce’s Scottsdale Airpark Forum, which was broadcast via Zoom on October 30. In addition to Ferrara, the event featured keynote presenter Jim Keeley, founding partner and designated broker for Colliers International—as both presenters could be considered experts in the area’s business landscape.

According to Ferrara’s presentation, in April, early in the pandemic, although local traffic at the airport increased, traffic took a hit in itinerant, instrument flight rules and overall operations. Turning the focus to itinerant operations—or visiting aircraft—Ferrara cites an approximately 20% decrease in visiting corporate and private jets from April to June of this year versus last year, followed by a 25% rebound increase in July through September.

“We’re still not where we normally are, but again, very positive numbers for us,” Ferrara says, adding that September’s itinerant operations alone were up approximately 14%. “So, we’re kind of swinging up and hoping that continues to happen.”

But she says operations are overall doing well and things are now looking up. While some events have been affected, Ferrara says a busy fall and winter are expected—albeit maybe not as busy as last year.

“But all in all, we’re finding that corporate and general aviations are recovering better than our partners at the commercial airports,” she says.

Lucky for the airport, projects weren’t impacted, according to Ferrara.

With Jet Aviation coming on board as a third fixed-base operator (FBO), a new facility, planned for a winter opening, will have a 30,000-square-foot hangar with a 27-foot door to accommodate larger jets. There will be 850 square feet of leasable office space including five offices with hangar access; and 8,470 square feet of FBO office space will have a pilot’s lounge, conference room and main lobby.

Because of Jet Aviation’s arrival, the Scottsdale Airport also got CARES Act funding for a project called Delta Apron Phase 2, a new connector for the third FBO.

“It’s been a long time since we’ve had three FBOs,” Ferrara says. “There was a short stint where we actually had three FBOs on the Scottsdale Airport airfield, but what’s encouraging about this is that there’s the feeling that there’s enough business to go around to have a third FBO here.”

Portions of the airport are also being redeveloped.

That includes the new North General Aviation Box Hangars, of which Ferrara says the first phase was about 60% finished as of the forum. A second phase of construction is planned to be completed in September 2021. Each phase costs about $4.5 million, supported by Scottsdale’s Aviation Fund; however, the airport will recoup the costs with long-term leases already secured for the 14 box hangars.

And with only one runway, Ferrara says it’s time that it be rehabilitated. Airport officials are coordinating a 45-day project and resulting full closure (though helicopter operations will remain active) to begin in July. The $12 million project will be funded by FAA and ADOT grants and city funds. Officials plan to work with tenants and surrounding airports to help mitigate any issues and potentially find temporary spaces to base. For more information, use the search bar at scottsdaleairport.com.

“We’ve done overlays and we’ve patched it up, but this time we’re really going to dig in there, do the whole runway in one shot,” Ferrara says, acknowledging that no weight capacities or aircraft types will be altered.

Taking the helm, Keeley—one of the leading commercial real estate experts in the Scottsdale Airpark and the Deer Valley Loop 101 employment base, among numerous other professional roles—explored the recent standing of the business landscape.

Especially over the last two years, he highlights, more apartments have been going up on the east side of the runway, by the Loop 101. Previously, he says there were a “great number” of apartments going up on the west side of the runway—by developments like Kierland Commons and Scottsdale Quarter.

Regarding a common inquiry on which side of the airpark is “better” for businesses, he offered benefits to both—the freeway side could provide quicker access to the region, while Scottsdale Road features more amenities like retail shopping and restaurants.

And acknowledging confusion regarding the airpark over the years, he says it’s getting better—citing the planned Raintree Drive Extension, which will connect the Loop 101 and Scottsdale Road by simplifying the route between Hayden and Scottsdale roads.

But with everything going on in the world, Keeley brought the conversation back to COVID-19 and its effect on the airpark area. Acknowledging an employment base of around 60,000 people in the airpark, Keeley admits office buildings have been “emptied.”

“You drive through the airpark now and the office buildings and you’ll see most of the parking lots relatively empty. So, that has impacted a little bit,” he says, quickly turning the subject to a relatively positive note. “However, it has not impacted nearly as bad as some of the mid-rise and high-rise buildings in other parts of the city and the country.”

But with companies working on solutions to work-from-home policies, Keeley says, more sublease space is becoming available in the office market.

“I think that’s still going to be a yo-yo effect for the next probably 12 months,” he suggests. “The landlords so far have not had a big issue, because their tenants are still paying the rent, even though they’re not buying the office space as much as they had previously.”

But in contrast, when it comes to buildings with a mix of office and warehouse space, Keeley highlights, “as of last month or so, there’s not any space available.”

“I have not seen it so occupied as it is now in the last 30 years,” Keeley says matter-of-factly, attributing the boom to a lack of new office warehouse buildings due to high land costs and pointing to the Deer Valley area as an alternative for potential new tenants.

Asked later about the long-term impact of ride share operations and COVID-19 on parking spaces and transportation, as well as what the needs will be in five to 10 years, Keeley pointed to several instances of parking areas being replaced with buildings as well as plans for parking structures to be converted to alternate uses. The demand just isn’t there, he says. But, he suggests, it’s likely going to be another decade before the impact of autonomous driving on companies will need to be considered.

“The world is changing,” he says. “In January, the world was flying high and the access to Uber and all the services were just the greatest thing on earth. And now, I don’t know if any of you try to get Uber as much, but it’s not quite as convenient as it was. And hopefully that gets back to what it was previously.”

As far as the economy at large, Keeley says metro Phoenix has seen a steady climb since the recession over a decade ago—but then COVID-19 hit earlier this year.