Press Release Source: Panama City - Bay County International Airport
Panama City - Bay County International Airport Names Successful Bidder for Sale of Existing Airport Property
Tuesday July 10, 2:58 pm ET
PCA Development, LLC, Named Successful Bidder To Purchase 714 Acre Site For $99 Million: $61 Million In Cash And $38 Million In Transfer Fees
PANAMA CITY, Fla.--(BUSINESS WIRE)--The Panama City - Bay County International Airport and Industrial District (Airport Authority) announced today it had named PCA Development, LLC, of Pittsburgh, PA, as the successful bidder for the sale of the existing 714-acre airport property in Panama City, Florida, at a purchase price of $99 million made up of $61 million in cash and an estimated $38 million in transfer fees to the Airport Authority from the future sale of property on the current site.
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The final selection of PCA is contingent on the completion of a contract for sale and an irrevocable letter of credit consistent with the terms of the bid. A target limit of 45 days has been set for the negotiations. Also, the Airport Authority will continue discussions with Community Airport Development, LLC, (CAR) of Salt Lake City, UT, a second bidder in this process, to serve as a back-up in the event talks with PCA fail. If talks with both fail, the Airport Authority will continue discussions with RMC Investments, LLC, of Panama City Beach, FL, which earlier had submitted a bid, or reject all bids.
"This is a great deal for Bay County," said Bill Cramer, Airport Authority vice chairman and leader of the Authority's negotiating efforts. "Our objective from the beginning was to negotiate a bid and sale price that would enable us to build a first-class airport to serve our region for the indefinite future. We are very pleased with the terms reached. We believe the sale price fairly reflects the market value of the property and is a significant improvement over the prior bids."
The sale of the existing airport property is a component of the financial plan for relocation of the airport to a site donated by The St. Joe Company (NYSE:JOE - News) at West Bay in northwestern Bay County. The net proceeds of the sale are to be used for the construction of the new airport.
The $61 million will be paid in a lump sum at the time of transfer of the property. There will be a 0.50% transfer fee on approximately 60% of the housing units sold by PCA. The remaining property will likely be affordable housing, assisted living or rental/hotel accommodations. The fees will be in place for up to 90 years. The total projected value of the transfer fees in total dollars is estimated to be $38 million over thirty years. The total projected value of the transfer fees over this time in constant dollars (present value) is estimated to be $14.7 million. Substantial funds will be available in the subsequent 60 years of the agreement to fund expansion and maintenance of the airport.
The final PCA bid of $61 million in cash and $38 million in improved income from transfer fees over 90 years was significantly better than an earlier bid with a total value of $75 million, which limited the income from transfer fees to 30 years.
"This successful bid provides cash when the property is transferred and the opportunity to share substantially in long-term revenues gained during the sale of property as the land's value increases," Cramer said. "We also will continue talks with other firms in the event the PCA talks fail."
"It's important to remember that the future use and development of the airport property will be decided by the purchaser, with appropriate input and oversight from Panama City officials," Cramer said. "The development of the site will be subject to regulations governing developments of regional impact (DRI's), which provide regional and state oversight, in addition to local processes and protections."
"The Airport Authority will not oversee the future development of the property," said Cramer. "However, PCA is known for the quality of their work, and we believe they will work closely with Panama City, Bay County, and state and regional officials to develop a project that benefits Panama City, Bay County and all of Northwest Florida."
Completion of the sale of the existing airport property will finalize an important component of the financial plan to relocate the airport. The Florida Department of Transportation (FDOT) has committed $119 million in grants to the project since the relocation effort began. The Federal Aviation Administration (FAA) has committed a minimum of $72 million in federal funding for the project, with $25 million coming in the current federal fiscal year. The Airport Authority will also use its annual federal airport entitlement funds, totaling approximately $7 million, to help pay for relocation.
The St. Joe Company has agreed to donate 4,000 acres to the Airport Authority when all permits and funding for relocation are in place. Previously St. Joe announced it had recorded a conservation easement for 9,609 acres, to implement the Airport Authority's mitigation plan for environmental impacts of the relocation and construction of the Panama City-Bay County International Airport. The easement becomes permanent upon commencement of construction of the new airport.
The Airport Authority expects to break ground on the new airport in the second half of 2007. Construction is expected to take up to thirty months.
About the Relocated Panama City - Bay County International Airport
The Panama City - Bay County International Airport and Industrial District (Airport Authority) is nearing completion of a ten-year process to relocate the Panama City - Bay County airport. The relocated airport is expected to be the first new airport built since September 11, 2001.
In late 1980s the Airport Authority began an effort to address significant deficiencies at the existing airport, including non-standard runway safety areas. When local environmentalists and the Florida Department of Environmental Protection objected to extending the existing runway system into Goose Bayou, the Airport Authority began considering relocating the airport.
After working with the FAA to complete a feasibility study in 2000 and a site selection study in 2001, the Airport Authority identified a new site for the airport in northwestern Bay County (West Bay) on land owned by the St. Joe Company (NYSE:JOE - News).
In 2004 the FAA began preparing a Draft Environmental Impact Statement considering two-dozen alternatives for addressing the deficiencies at the existing airport. In May 2006 the FAA issued its Final Environmental Impact Statement, identifying relocation to the West Bay Site as its Preferred Alternative. In September 2006, the FAA issued its Record of Decision recommending and approving relocation of the Panama City airport to the proposed site in West Bay.
Since January 2007 momentum for relocation has continued to build. The Airport Authority has secured the necessary federal and state funding for the project. The sale of the existing airport site will complete the funding framework for relocation.
The Airport Authority expects to break ground on the project in the second half of 2007 after securing the final permit necessary and a development order from Bay County.
Contact:
Panama City - Bay County International Airport
Randy Curtis, Airport Executive Director
850-763-6751 ext. 203
Source: Panama City - Bay County International Airport