Tampa Airport Expansion: Real Estate Opportunity?

By: Jason Quick, ESQ



The Hillsborough County Aviation Authority (Authority) is an autonomous county administrative unit that operates four airports, the most important of which is Tampa International Airport (TPA).  Currently, TPA occupies 3,300 acres west of downtown Tampa with three runways serving 16.7 million passengers annually.  The largest carriers are: Southwest/AirTran with 40% of traffic; Delta with 18% of traffic; and US Airways & American with 10% of traffic respectively.  Passenger traffic is still down by over 12% from a recent high of approximately 19.3 million passengers in 2007 (“A New Day in Tampa Bay,” 3-8).

The current TPA Master Plan calls for significant improvement of airport facilities in two phases between 2013 and 2023 at a total projected cost of approximately $1.2 billion.  Expansion will then take place in a third phase from 2020-2028 at a projected cost of an additional $1.2 billion.  These improvements are intended to double passenger capacity to 35 million passengers annually, improve passenger foot traffic through the airport, and expand international flight offerings (“A New Day in Tampa Bay,”  16-41).  However, the plan only gives minimal attention to expanded cargo operations.

Potential Economic Impact

The Authority projects that Phase I and II will provide in excess of 13,000 jobs, presumably directly and indirectly, as a result of the expansion and that Phase III will provide at least another 13,000 jobs.  (“A New Day in Tampa Bay,” 17, 33, 36).  The majority of these jobs are likely to be in the construction, retail, management, and administrative sectors.  According to 2012 data from the US Census Bureau, Hillsborough County has a population to employment ratio of 2.5, meaning that there are 2.5 residents for every one job in the county.  Thus, the creation of approximately 26,000 jobs could be expected to result in over 65,000 new residents and 20,000 new households.  Assuming the Authority’s projections are realistic, this increase in population would lead to increased residential and retail demand in neighborhoods within commuting distance to TPA.

Neighborhoods within a fifteen minute to commute to TPA are likely to experience the greatest increase in demand.  These neighborhoods include: Town ‘n’ County; Egypt Lake-Leto; Carrollwood Village; Downtown; and, South Tampa.  Of course, which neighborhoods will see increased demand depends on the quality of jobs created as a result of the expansion.  The Authority hasn’t made available a breakdown of projected median salaries or industry sectors for the projected jobs.  However, the data that have been provided suggest that the transportation and warehousing sector will not be well-represented.  Most demand should be in the residential, retail, and service sectors.

Cost-Benefit Analysis

The Master Plan essentially provides an input-output analysis of the economic impact of airport expansion (i.e., dollars in, jobs out).  This model is only one of the several ways to measure the economic impact of airport expansion.  The issue of properly analyzing airport expansion was explored extensively by Senior Vice-President of the St. Louis Federal Reserve Bank Cletus C. Coughlin and Professor Jeffrey P. Cohen of University of Hartford in their paper entitled, “Congestion at Airports: The Economics of Airport Expansions.” Cohen and Coughlin note that the primary shortcoming of the input-output analysis is that it focuses on short term demand and often ignores the underlying economic reasons for the project.  Ultimately, the expansion project should deliver intermediate inputs to produce goods/services for use by private business or completed goods/services for consumption.  Therefore, it is not sufficient to focus solely on a final jobs numbers as a valid measure of economic impact.

The FAA generally requires an extremely comprehensive cost-benefit analysis prior to the approval of any expansion.  As part of this extensive analysis, the Authority is required to identify alternative courses of action, such as: increasing capacity for alternative modes of transportation, airfield re-alignment, utilizing a multiple airport system, etc.  (Cohen & Coughlin, 17-18).  The Authority is then required to compare the net present value of the various alternatives in order to justify the decision to expand.  (Cohen & Coughlin, 19).  Generally, the alternative with the highest net present value is recommended as the project to be undertaken, however the sponsor (i.e., Authority) may proceed with a different alternative if it provides important intangible benefits or is substantially less risky.  A thorough examination of this issue is outside the scope of this paper, but, it is important to be aware that a thorough examination of the expansion and any alternatives are required and the Authority has chosen expansion, which may or may not have the highest net present value of all of the options available.

Industrial Opportunity in Tampa?

Jones Lang LaSalle published its 2013 U.S. Airport Outlook (Outlook) recently.  Although it notes that total cargo volume growth across the nation is somewhat anemic, it notes there are opportunities to cater to certain end-users tied to growing trade lanes and expanding e-commerce.  The Outlook rated Miami International Airport as having the second-highest air cargo score, the second-highest industrial real estate score, and the highest overall score (Jones, 11).  The air cargo score rates the health and growth of the airport, as well as functionality and connectivity, whereas the real estate score measures industrial market metrics within three miles of the airport.  The primary reason for Miami’s high rating is international cargo traffic between the U.S. and Latin America, particularly in the area of floral and perishable food trade (Jones, 12).  While air cargo transportation has suffered generally due to the cost-effective nature of transportation by sea and by rail, the time-sensitive nature of food and flowers means that they continue to be a major component of air cargo (Jones, 7).

Miami International Airport handles over 1.8 million metric tons of air cargo metric tons of air cargo in 2012, whereas TPA handled only slightly more than 80 thousand metric tons of cargo, more than 20 times less than Miami (Jones, 12; Tampa Int’l Fact Sheet 2012).  The continued growth of Florida as a gateway to Latin America provides significant opportunity for industrial expansion, particularly in light of the large volume of perishable food importation from South America.  The question is, can Tampa begin to penetrate the dominance of Miami?

I contacted Janet Zink of the Tampa Airport Authority who directed me to the various Master Plan sections for TPA dealing with cargo.  According to Volume 1 of the 2012 Master Plan, the forecast for growth of air cargo at TPA is projected in the following chart:


The Authority also directed me to Volume 2 of the Master Plan, which indicates FedEx is currently the only large air cargo carrier utilizing TPA.  Additionally, there are no immediate plans for expanding cargo handling facilities at TPA, other than to reserve land for unforeseen growth in cargo operations.  Thus, cargo growth is expected to be slow but steady and unlikely to result in increased industrial demand near the airport.  However, given the increase in trade agreements with Central and South American countries for air-transported produce, I believe there is a strong possibility for growth, particularly considering Tampa’s strategic location within one driving day of Atlanta.  The question is will local leaders look beyond the conservative projections and pursue the possible new cargo business aggressively?  That remains to be seen.

About the Guest Author: 

Bergstrom Center for Real Estate Studies - University of Florida - MS Real Estate CandidateJason Quick is a native of Southwest Florida and graduate of UCF and the Wake Forest University School of Law.  He is currently a Master of Science in Real Estate candidate at the University of Florida and resides in Tampa, Florida with his wife, Jillian.  After spending several years as an attorney with a federal agency in Raleigh, NC and Philadelphia, PA, Jason made the decision to return to Florida and pursue his passion for real estate as a full-time career.  His interests include leasing and brokerage as well as residential development.  Jason can be reached by email at jasondquick@gmail.com.

Works Cited

Cohen, J. & Coughlin, C., “Congestion at Airports: The Economics of Airport Expansions,”              Federal Reserve Bank of St. Louis, May/June 2003.

Jones Lang LaSalle, “U.S. Airport Outlook 2013,” Port, Airport & Global Infrastructure, 2013.

Hillsborough County Aviation Authority, “A New Day in Tampa Bay,” Master Plan Update, 2012.

Tampa Int’l Airport, “Activity Report,” December 2012.

WilburSmith Associates, “Florida Statewide Aviation Economic Impact Study,” March 2010.

Contact us at 813.514.1070 for more information on Sales and Leasing Commercial Property in Greater Tampa Area

No comments yet.

  1. No trackbacks yet.

Leave a Comment