the airport city

Airports may be the next big center for commercial and industrial development. The birth of a new transportation-focused metropolitan sub-region, the aerotropolis, is on the horizon. How do your products and services fit into this new business model?

Could the aerotropolis play a major role in the future of semi-urban, mixed-use developments? An aerotropolis is a metropolitan sub-region where the layout, infrastructure and economy are centered on an airport, which serves as a multimodal "airport city" commercial core. It is similar in form to a traditional metropolis, which contains a central city commercial core and commuter-linked suburbs.

The engine of the aerotropolis is the airport and its air routes, which offer companies the connectivity to their distant suppliers, customers, and enterprise partners worldwide. Some aerotropolis businesses are more dependent on distant suppliers or customers halfway around the world than those located nearby. As economies become increasingly globalized and reliant on air commerce for trade in goods and services, the speed and agility that aviation provides to long-distance movement of people and goods generate competitive advantages for firms and places.

In the aerotropolis model, time and cost of connectivity replace space and distance as the primary metrics shaping development, with "economies of speed" becoming as important for competitiveness as economies of scope and scale. In this model, it is not how far but how fast distant firms and places can connect.

DENVER DEVELOPING HUGE AEROTROPOLIS

Denver is the most recent metropolis to announce the development of an aerotropolis. Media outlets are reporting that a late-February, multi-county deal made the initial $200 million investment in roads and utilities a reality, spurring the project start as soon as this spring. After five years of planning, Denver’s aerotropolis is expected to be a planned community that will ultimately be the size of a small city. The 21,000-acre site is located on a stretch of prairie just south of Denver International Airport. Plans call for 80 million square feet of residential, retail and industrial space plus 23,000 homes (Aurora Highlands) and it will take more than a decade to complete.

There are three other official aerotropolis projects in existence globally. One in South Africa, one in India and one in San Diego (although on a much smaller scale than the proposed Denver aerotropolis). There is also a failed effort to establish one in St. Louis, Missouri where the incentive package for participants was never finalized.

AEROTROPOLIS DEVELOPMENT HEADWINDS

Various criticisms of the aerotropolis model exist. One major criticism is the question of whether oil will stay relatively inexpensive and widely available in the future or whether a downturn in oil production will adversely affect aerotropolises. Others have criticized the aerotropolis model for overstating the number and types of goods that travel by air. While many types of high-value goods, like electronics, tend to travel by air, larger, bulkier items like cars and grain do not. Those who point this out suggest that the relationship between seaports, airports, and rail facilities should be studied in more depth. Other criticisms of the aerotropolis include loss of farmland and forests, excluding affected people and communities and locking in high-carbon infrastructure for decades to come.

VOICES IN THE CONVERSATION

While we are not experts in oil futures or air freight, we do see the aerotropolis as an interesting and innovative model designed to address common business needs in today’s global economy. We also want to help our clients be at the forefront of the conversation to discuss the best uses for their products and services in the context of the evolving aerotropolis model.

To read more, check out this article in The Denver Post.

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