"Jacksonville, Fla., airport board forms 'enterprise division' to make money"

Friday, September 24, 2004

Jacksonville, Fla., airport board forms 'enterprise division' to make money.
By Gregory Richards
The Jacksonville Florida Times-Union


On Oct. 1, the Jacksonville Airport Authority is launching a new "enterprise
division" to give it greater focus and speed in growing its revenue from
non-traditional sources, including real estate development and aviation
consulting.

This new division is being spun off from the authority's existing business
development department, the duties of which will be pared back to tasks
specific to the authority's four airports. Among those duties are overseeing
rental car operations and food concessionaires.

John Clark, the authority's executive director, said the agency needs to
make the shift because of changes in the aviation industry, one that is
characterized by declining state and federal money for airports. Meanwhile,
costs borne by the authority have been increasing, especially for security.
The authority's bill for security has gone from less than $1 million several
years ago to nearly $5 million today, he said.

"We have to find ways to diversify our revenue stream," Clark said.

And without doing so, he said, there's no way the authority can reach its
goal of generating $100 million of annual operating within five years, up
from $58.3 million.

Eventually, he expects the Enterprise Division to supply 35 percent to 40
percent of the authority's revenue. Outside real estate investments and
consulting supply only a small percentage now; an exact figure was not
available Thursday.

Leading the new division will be Bingham Parkinson, the authority's director
of business development. In his new role, Parkinson will carry the title of
president, a designation Clark said was more suited to the business
environment where Parkinson will be functioning. He will report directly to
Clark, as do the authority's three other division heads, who are referred to
as chief officers.

No other candidates were considered for the president's role. Doing so would
be unnecessary, Clark said, since Parkinson, who has worked for the
authority for seven years, has the necessary experience and education for
the job.

The Enterprise Division will begin with just two employees: Parkinson and
his assistant. But the management restructuring will create several new
jobs: Experts in real estate development and marketing will be hired, and,
after Parkinson switches roles, the position of business development
director will be filled. But the director's job will carry a reduced salary
reflecting fewer responsibilities, Clark said.

Parkinson will start his new job earning his present salary of $105,274,
Clark said. But the division's salaries will decline at an unspecified rate
every subsequent year. However, workers may qualify for goal-based
performance bonuses.

The division's budget was unavailable Thursday.

Taking steps to broaden the authority's revenue base is a smart move, said
William Johnson, executive director of the Tallahassee-based Florida
Airports Council, which represents 83 Florida airports, including
Jacksonville's.

"That's just sort of good management practice," he said.

The new division is modeled after those at privatized airports in Canada,
England and Germany, Clark said.

First on the to-do list for the new unit is drawing plans to develop the
portion of the 18,000 acres not used or set aside for future expansion at
the authority's four airports: Jacksonville International Airport, Cecil
Field, Herlong Airport and Craig Airport.

Next, the division will strive to build the authority's aviation consulting
business. It dabbled in that market by holding two symposiums recently on
JIA's state-of-the-art baggage handling system, each drawing about 100
attendees. Future topics could focus on how the authority separated from its
parent, the Jacksonville Port Authority, in 2001. That's information other
airports might find useful, Clark said.

Changing the authority's business development lineup does not require
approval of the Airport Authority board, Clark said. He explained that the
management structure is the responsibility of the executive director.


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