It has been presented as the number one economic objective of the city for well over a decade but the airport employment growth district (AEGD, aka the aerotropolis) still shows no sign of activity. The airport itself remains stuck in neutral as renegotiations begin of the leasing deal that placed the management of the city-owned facility in private hands twenty years ago.
City staff expect to unveil a public process this summer that will review the 1996 deal that put Tradeport International in charge of the 1600-acre facility. Early council enthusiasm about the privatization appears to have waned in the face of more than a decade of stagnant passenger and freight numbers.
Demands that the city spend millions of dollars purchasing land for expansion that hasn’t occurred has soured some councillors on the privatization deal, and there has been talk about selling the airport. The rental fees paid to the city are also a fraction of Tradeport’s earnings on the facility.
The company is a wholly-owned subsidiary of Vantage Airport Group which describes itself as “one of the first to be involved in the global trend of airport privatization, investment and management”. It has seven other airports under lease including Moncton, New Brunswick and airfields in Kamloops and Ft St John, British Columbia.
After climbing past one million in 2003, passenger numbers have gone into a long decline to just over 300,000 in 2015 – the fourth year in a row they has fallen. Freight has also fluctuated but never exceeded the level achieved in the late 1990s.
The most recent data reported by Statistics Canada are for 2014 and show Hamilton cargo shipments weighed just under 89,000 tonnes – about equally divided between incoming and outgoing freight. However, Tradeport publicly reported 418,000 tonnes of cargo in 2014 and recently claimed 448,000 as last year’s total. The company uses a unique calculation method called “cargo aircraft billable weight” that includes the tonnage of the aircraft itself.
Despite the torpid performance, the company’s Hamilton operations racked up $6.7 million in earnings last year, more than double the $2.9 million achieved three years earlier. Under the leasing agreement the city’s share is just over half a million dollars, 50 percent of which must be used to promote the airport. Over the last ten years those payments have accumulated to $2.3 million after being waived for the first decade of the lease.
The company now claims 1160 full-time equivalent jobs at the airport, down from an earlier peak of 1600. Most of these employees work for courier operations and other companies located around the airport rather than for Tradeport itself.
The aerotropolis plan envisioning the airport as the new engine of Hamilton jobs growth came from a 2001 workshop that included Tradeport. It was adopted as the city’s central economic objective two years later and was predicated on vigorous expansion of the airport as well as expected benefits from the construction of the Highway 6 by-pass past the airport that opened in 2006.
Local opposition and provincial government challenges delayed the approval of a 555 net hectare AEGD until July 2013, but nearly three years later the predicted flood of new businesses has not materialized. Opponents such as Environment Hamilton have long contended that the real objective of the AEGD expansion was obtaining more land for residential sprawl and that the city ignored hundreds of acres of vacant or underutilized industrial land along the waterfront.
A 2010 city report estimated servicing inside the boundaries of the AEGD would cost $351 million. The only item in this year’s capital budget is reconstruction of Garner Road along the boundary between the aerotropolis lands and urban Ancaster that would mainly service lands that residential developers successfully excluded from the AEGD.