"Changes steer Branson Regional Airport back on course"

Monday, December 5, 2005

Changes steer airport back on course
Branson project's financing has been restructured, giving new life to
airport.
By Kathryn Buckstaff 
The Springfield (MO) News-Leader 


BRANSON CREEK - The Branson Regional Airport is still on its flight path
with opening predicted for late next year.
Financial planners are taking a new tack in seeking funds for the $95
million privately owned airport that will bring commercial flights to Taney
County, said Thom Harrow, recently named the new president of the Branson
Airport Authority.

Two years ago, groundbreaking was predicted for this spring. Financing is
available, but the airport's private investors weren't satisfied with the
proposed financial structure and opted to delay the project, Harrow said.

"There's plenty of financing available for a good business model in a market
that has plenty of demand like Branson," Harrow said.

The problem was that the project might have been burdened with too much
debt. Now, changes have been made to make the project more attractive to
customers for the municipal bonds that will be sold to build the project,
Harrow said:

Some amenities have been scaled back, including the initial size of the
terminal for a savings of $4 million to $5 million.

Investors have increased the amount of owner-equity.

Taney County and city of Branson officials are considering proposals that
would enhance airport operations.

A 4 percent tourism tax approved by voters this month will fund marketing
that will make more people aware of Branson.
The airport authority also has retained Citigroup, a worldwide financial
services company, as the underwriter for bonds to be issued, likely in the
first quarter of next year, Harrow said. If the financial structure isn't
feasible, Citigroup won't back the proposal, he said.

Harrow said his background is in public finance on Wall Street. He also
headed an airport financial advisory firm and was an advisor on the Branson
project for some time before being named president, he said.

"It's a very difficult process, and we're trying to be very controlled and
rational about how we're going about it," Harrow said. "It's good progress
from everyone's point of view. I think it's sized just right and priced just
right now."

FLY FROM THE HILL

The airport will sit atop 900 acres of pasture 10 miles south of Branson
near Hollister. Among the private investors putting up equity backing for
the project is Florida entrepreneur Glenn Patch. After selling his magazine
publishing business in the early 1990s, Patch bought the 7,000 acres that
will be the site of the airport and now includes Branson Creek Golf Club and
residential development.

The airport will be able to accommodate most commercial airliners. That will
be a big plus in bringing new visitors to Branson and conventions to the
Branson Convention Center set to open in 2007, said Bill Tirone, marketing
director for Hilton Hotels, which is managing the convention center.

"Having the airport nearby will give us another saleable feature," Tirone
said. "Right now, we're focusing on a driving market for regional
conventions. While Springfield is currently the airport of choice, it's
still a 45-minute drive away. Many convention planners look for an airport
20 or even 10 minutes away, so we feel that's the target now without an
airport here.

"If we do have an airport here, then we will be able to market to corporate
conventions," Tirone said. "Many times, people will fly for a corporate
convention because the corporation will pay their way, whereas if it's
association meetings, people often will drive."

LOCAL SUPPORT

County officials are reviewing a tax-increment financing plan for the
airport project, Harrow said. If approved, a portion of new sales tax
revenue generated by the airport could be returned to the developers. The
funds could be used to build a new road from the end of the existing road
into Branson Creek to the airport.

The Branson Board of Aldermen also recently approved a "pay for performance"
concept in which the city would pay a fee for each passenger the airport
brings in. The exact amount of the fee or the total annual cap have not yet
been worked out, said city administrator Terry Dody.

If approved, the contract will produce more new sales tax revenue for the
city than the fees will cost, Dody said.

"These are dollars that don't exist today," Dody said. "If the airport is
built, and those passengers come, they will stimulate the economic
development and create the new dollars that will pay those fees and more. If
we don't get the airport, and those people don't come, those fees will never
be incurred. If we give a portion back to the airport, then we all succeed."

AIRLINES WILL COME

The airport authority has had conversations with airlines over the years,
"but airlines need some evidence that there's going to be an airport,"
Harrow said. Once bonds sell and construction begins, Harrow anticipates no
problem attracting airliners.

"The market in Branson makes sense," Harrow said.

At the Springfield airport, manager Gary Cyr said he's not concerned about
competition from the proposed airport. The Springfield airport has enjoyed a
22 percent growth in passenger numbers this year, due in part to new nonstop
service to Las Vegas. With direct service to Atlanta that began last week,
the airport now provides service to eight of the 11 hubs in the United
States, he said.

"We're doing something right," Cyr said. Other improvements including a new
midfield terminal will continue to strengthen the airport's market, he said.

The Springfield airport charges airlines fees to land and rent space in the
terminal, but it doesn't offer incentive subsidies to the airlines, he said.

"Any airport can get all the service they want if they want to pay for it,"
Cyr said. "But if the airline is not standing on its own, it could go away."

Cyr said Springfield's fees are some of the lowest in the country, and they
can sell fuel at a good rate because they'll sell 8.5 million gallons this
year.

"We have an established airport with all the bells and whistles airlines
need," Cyr said. "If the (Branson) market is good enough to bring them here,
then it might be an option for who's coming in there to take a look at us."


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