Special Report: Aerotropolis

A Fast-Track to Failure: Council Promises to Vote on Airport Lands Before Election

Air transport is a risky growth strategy in an energy-constrained future, and uses that are not airport-related do not need to be near the airport. So why are we still determined to open up the Airport Employment Growth District?

By Ryan McGreal
Published June 29, 2010

With Council's recent decision to fast-track a vote on the City's planned Airport Employment Growth District (AEGD), we appear determined to make the colossal mistake of betting hundreds of millions of dollars on a vast new industrial park on farmland around Hamilton International Airport (HIA), no matter how rapidly the economic case for such a gamble crumbles before our eyes.

AEGD Study Area as of 2010-06
AEGD Study Area as of 2010-06 (click image to view original PDF)

City staff plan to hold three public information centres about the plan - on July 15, August 3 and September 8 - and Council will vote on it before the upcoming municipal election. (Contrast area rating, which council voted to defer until after the election.)

The AEGD proposal has been kicking around in one form or another since it was introduced in 2002 as an "aerotropolis", or an airport-based city. The space-age term comes from John Kasarda, Professor of Entrepreneurship at the University of North Carolina at Chapel Hill's Kenan-Flagler Business School.

Kasarda argues that cities accrete around the goods transport mode of the age. Eighteenth-century cities grew around ports, nineteenth-century cities grew around rail nodes, twentieth-century cities grew around highways, and twenty-first century cities are growing around airports.

In the aerotropolis economy, the three As ("accessibility, accessibility, accessibility") replace the three Ls ("location, location, location"), as high-tech companies leverage proximity to the airport. It sounds impressive, and Kasarda's description is nuanced - a dense, diverse, well-planned, and even aesthetically pleasing mix of complementary facilities and amenities all based around access to the airport and, hence, to worldwide just-in-time markets.

Airports in an Energy Constrained Economy

But it all hinges on the continued viability of airports as goods transport nodes in the emerging age of permanent oil scarcity and declining global production. An April 2007 essay by Michael B. Charles et al. argues that the aerotropolis model "has not yet been critiqued adequately, especially form a long-term public policy and planning perspective."

[T]he oil-fuelled aerotropolis of today and the immediate future, as presently envisaged according to Kasarda's "business as usual" (BAU) scenario for future aviation ... ostensibly represents an investment in an unsustainable mode of transport, powered by an unsustainable fuel source, transporting unsustainable components (many low-weight, high-value components are petroleum derived). Thus the increased emphasis on air transport vis-a-vis terrestrial forms of bulk transportation, especially shipping, carries with it the threat of focusing too much of our energy on a transport system that may not necessarily survive in its present form. [emphasis added]

Global oil production has already been stalled at 85 million barrels a day for the past five years, which strongly suggests that we're in Peak Oil today. When the current economic recovery pushes demand for oil back up toward that threshold, the marginal cost to produce an additional barrel will skyrocket and another super-spike in the price of oil may well send the economy tumbling back into recession.

Kasarda himself still believes aerotropolis has good long-term prospects. When I asked him about the effects of rising oil prices last year, he responded that aviation "is a structural process with its forecasted growth not likely reversed in the longer-term through even higher oil prices than present." He noted that the industry survived the oil crises of the 1970s.

Yet those crises were political in origin, and today's crisis is geological: half the oil is gone, the easy-to-reach half. Oil is already trading in the $80-a-barrel range as the global economy crawls out of the sharpest, deepest recession in seventy years, and air transport is still a "very fragile" industry.

A future of high, volatile fuel prices will mean that only very large airplanes, like the Airbus A-380, will remain viable through sheer economies of scale. Those giant planes will only be able to fly between major metropolitan centres that have airports big enough to handle them and are distant enough that alternative transport modes are infeasible.

The air transport prospects for smaller, regional centres like Hamilton are very poor by comparison. As it is, HIA had a million passengers in 2002, but that number fell to half a million by 2009, and is likely to fall again now that WestJet has announced further cuts in flights coming into Hamilton. Only 13 flights a week to Calgary will remain.

Not Airport Related

It's at this point that AEGD supporters and apologists tend to shift focus and claim that the developments around the airport - on what currently looks to be about an 809 hectare (2,000 acre) study area, though the size of the area seems to be in flux - doesn't necessarily have to be airport-related.

This goes back to Council's 2005 deliberations on the aerotropolis plan, during which Councillor Sam Merulla claimed, "Airport related development is bad, but non-airport related development around the airport is good."

Former Mayor Larry Di Ianni was more nuanced in a 2005 interview with RTH, in which he stated:

Whether we develop an aerotropolis or not, planes are going to land, planes are going to take off. Can we find some, some, opportunities for some activities around the airport that will complement that side of the operation? A head office, perhaps. An operation that flies in and out of whatever that might use the airport and also benefit the community, create some jobs there. A hotel use, with some recreational or restaurant uses. An industry, a high-tech manufacturing or some sort of knowledge-based industry that will be copacetic with the airport but quite independent in terms of the pure operation from the airport as well.

More recently, a Hamilton Spectator editorial supporting the AEGD plan stated:

We're talking about agricultural land in the general area of the airport that will be re-zoned so it can be converted to land that will attract business and create new jobs.

Yes, these would include businesses such as aircraft hangars, shippers and freight warehousing, but also businesses as diverse as auto sales, veterinarian clinics, restaurants, fitness clubs and hotels.

Careful readers may be forgiven for wondering why "auto sales, veterinarian clinics, restaurants, fitness clubs and hotels" need to be next to the airport if they are not airport-related. Indeed, if the proposed uses of the land are not dependent on access to the airport, there's no reason whatsoever why they need to be proximate to the airport!

Rezone First, Ask Questions Later

It's not as if Hamilton has a shortage of contiguous greenfields zoned for industrial use. In fact, Hamilton has been rezoning existing highway-accessible industrial lands for residential and big-box commercial use, in part under the threat by developers of taking the issue to the Ontario Municipal Board. This, despite the fact that the OMB has actually been ruling in favour of cities that fight against rezoning.

But it's not in Hamilton's nature to change its mind when the facts change. In presenting his landmark peak oil report Hamilton: The Electric City to Council in 2006, transportation planner Richard Gilbert observed:

There is a certain amount of thinking [in Hamilton] of putting the land first and then wondering how to fill the land with jobs. What I'm proposing is an alternative way of going about it, which is figuring out what you want to do and then after you've defined it a bit, what the lands are for that particular thing.

Gilbert particularly drew the city's attention to its abundant already-existing brownfields, which he considered an excellent opportunity to develop the kinds of small-scale, entrepreneurial, job-creating industries in energy innovation that would provide Hamilton's best chance to turn the challenge of peak oil into an opportunity.

The city responded by redefining brownfields out of existence and insisting that Hamilton's only employment prospects involve warehousing and logistics around the airport.

Chamber Steps Up AEGD Campaign

Richard Koroscil is the President and CEO of John C Munro Hamilton International Airport. The City of Hamilton owns the airport, but has contracted the management of the airport to TradePort International Co. since 1996, in a deal that has generated controversy over its secretive terms. Koroscil joined TradePort in 2003 and became CEO of the airport later that year.

Koroscil is also the current chair of the Hamilton Chamber of Commerce, and one of the Chamber's major projects is to promote the development of the AEGD and to make it an election issue in the upcoming municipal election.

On the announcement of his Chamber chairmanship in March, Koroscil stated, "We're not going to be just the voice of business in Hamilton; we're going to be a voice that's listened to." Since, then, the Chamber has gotten more aggressive about its "jobs and prosperity agenda" - with the airport lands in a place of prominence.

In an opinion piece published in the Spectator on June 25, Koroscil wrote, "We're not shy about saying we want to influence the course of the election and see candidates elected who will respond to the needs identified."

A Chamber-sponsored survey of Hamiltonians' priorities found that the top issues are taxes, jobs and prosperity, health care, and downtown revitalization. Where the harebrained scheme to rezone 800 hectares of farmland around the airport - at an uncalculated but astronomical cost in infrastructure servicing - fits into this priority list is anybody's guess, but the Chamber is determined that "jobs and prosperity" should mean "development around the airport" among voters.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal.

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By Kiely (registered) | Posted June 29, 2010 at 13:25:40

Can we find some, some, opportunities for some activities around the airport that will complement that side of the operation? - Larry Di Ianni

Seems to me that is a question you should answer before spending $100 million.

That quote from Di Ianni isn't "nuanced" it is borderline nonsense. "Copacetic"... Really???

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By nobrainer (registered) | Posted June 29, 2010 at 13:53:21

Let's be fair, he did say DiIanni was "more nuanced" than Merulla.

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By Kiely (registered) | Posted June 29, 2010 at 15:36:51

True nobrainer, but it isn't hard to be "more nuanced" than "Dat is bad, but dis is good" ; )

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By Undustrial (registered) - website | Posted June 29, 2010 at 20:57:08

If we want jobs in agricultural areas, why did we let the area's last soft fruit canning plant close?

And in general, why has the main priority of the last hundred years in agricultural making it require LESS labour (which tends to exact enormous costs in terms of oil)? Small-farms in Canada have had a negative average income for several years now (though things may now be changing). Why not FARM this land? Labour-intensive growing methods are far more sustainable, use far less energy (organic or otherwise), and produce much higher yields per acre. Oh, and more jobs.

Plan B, one of the closest Organics operations, ran the nation's biggest CSA (in number of shares) on something like 48 acres. And while many conventional industrial farms in the area have to mistreat Mexican guest workers, farms like Plan B have university students lining up to intern or work there, and many have since gone on to run their own farms.

And yet nearly every aspect of our nation's policies still favours large industrial farms, from the government to the banks to the buying practices of big supermarket chains. If not, a key aspect of suburban development (small farms going broke and having to sell to developers) would be in danger. All of this is related, from the crappy labour jobs the farmers kids have to get in the cities (look at China right now) to the incredible (near 50% in some cases) drop in nutrients in vegetable crops.

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By Spirit of Mao (anonymous) | Posted June 29, 2010 at 21:00:16

Central planning doesn't work, trust me, been there, done that. A better idea would be to stop planning and just let the economy take shape based on how people vote with their money. Peace out. })

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By Tecumseh (registered) | Posted June 30, 2010 at 00:17:10

Hey, if area rating is still going to be around for a few more years, maybe the folks in the suburbs can pay for the servicing of the aerotropolis? If I have to pay more for transit because I live downtown then surely suburbanites can pay extra for this sprawling boondoggle. How about this: households in wards where councilors vote in favour of the aerotropolis get to pay for the billions in service upgrades it will eventually require.

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By Pxtl (registered) - website | Posted June 30, 2010 at 09:07:02

The Aerotropolis sounds like an obvious idea - to drop developments around a small cargo-oriented airstrip.

Which means it's been tried somewhere before.

And yet nobody's saying "this worked in X, Y, an Z, and it will work here too".

Yeah, that doesn't inspire confidence. Nor does the fact that Westjet is gradually abandoning this facility, and the highway that was supposed to go through the area has similarly been cancelled.

Even if the Aerotropolis was a good idea when it started, it sure isn't now. What's going to end up there is a lot of vacant land that the HHHBA will be happy to offer to take off the city's hands for more housing sprawl.

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By highwater (registered) | Posted June 30, 2010 at 16:10:05

The Chamber's got a poll up. Have at it.

http://www.hamiltonchamber.on.ca/

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By Kiely (registered) | Posted June 30, 2010 at 16:13:54

Thanks Highwater!

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By Ryan (registered) - website | Posted June 30, 2010 at 22:21:24

Now this is interesting: earlier today, the Chamber had a poll on developing the airport lands in which the overwhelming majority of respondents voted against it. Now that question has disappeared from the website and the survey results page throws an HTTP 403 Forbidden: Access is Denied error.

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By Kiely (registered) | Posted July 01, 2010 at 08:30:29

the overwhelming majority of respondents voted against it. - Ryan

I believe it was 45 No versus 10 Yes when I voted around 3PM yesterday.

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By WRCU2 (registered) | Posted July 01, 2010 at 08:38:53

Great article Ryan. The 403 was put in place because the means didn't justify the end. I see the current poll now asks, "Do you feel that Light Rail Transit service would help attract jobs and prosperity growth to the City, particularly the downtown?" And current results show about 70% yes.

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By highwater (registered) | Posted July 01, 2010 at 10:16:45

The poll was overwhelmingly against long before any progressive blogs picked up on it so they can't argue that it was freeped. Odd that a group of business people would be opposed to spending potentially 100's of millions on a proposal with no solid business case. Or maybe they don't like the idea of competing on an uneven playing field with businesses that are being subsidized by public dollars. What a bunch of hippies.

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By Kieran C. Dickson (anonymous) | Posted July 01, 2010 at 15:08:43

This is the Max Power approach to planning.

Homer: From now on, there are three ways to do things: the right way, the wrong way, and the Max Power way.
Bart: Isn't that just the wrong way?
Homer: Yeah, but faster!

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By Kiely (registered) | Posted July 01, 2010 at 15:21:10

This is the Max Power approach to planning. - Kieran C. Dickson

Ya and forget the LRT, lets build a monorail from Lime Ridge Mall to the airport!!!

Sing it with me: monorail... monorail... monorail...

Comment edited by Kiely on 2010-07-01 14:22:31

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By Undustrial (registered) - website | Posted July 01, 2010 at 17:51:16

The amount of business support for progressive ideas is often a lot larger than people like to believe. Look at public health care in the US...major corporations (like Ford) are itching to cut the HMOs loose. And then there's the Hamilton Monor...err..uhh..LRT (honestly, the airport has TWICE failed to support a bus route). If George W Bush and Ronald Reagan prove anything, it's that the conservative movement, despite its tremendous successes in the media, has lost all fiscal sanity.

I don't know what it is, but past a certain level of power in this city, whether someone is running City Hall or a steel mill, it's like everyone turns into charcters off The Simpsons.

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By davidsfawcett (registered) - website | Posted July 04, 2010 at 13:14:49

This is kind of a digression, but how many "shovel in the ground" commercial projects have been generated by the RHVP/Linc combination? Other than Canada Break, I don't recall seeing any other announcements in the Spec. I HAVE seen lots of residential construction along the Linc, though. Have they started rezoning the land that was originally designated "commercial" to "residential" as it becomes clear that the light industrial development, the development which these highways was supposed to enable, isn't going to materialize? If my years of living in this town have taught me anything it's that once the land out by the airport is rezoned once, it'll likely be rezoned again and instead of being prime agricultural land it will be covered in hundreds of houses on 35 ft. lots with the garage where the lawn should be. Gotta have a car to commute!

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By Anti-Spin (anonymous) | Posted July 04, 2010 at 19:01:26

@davidsfawcett - And Canada Bread is a consolidation of jobs from Hamilton and some from elsewhere (Toronto - Mowat Plant). Canada Bread was not, and should not, be positioned as a full win. The City's Economic Development Department is keen to position it as a win, but really it was a partial win, and a partial save.

Canada Bread is not job creation, it's only job consolidation.

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By Not Following (anonymous) | Posted July 06, 2010 at 09:26:29

On the announcement of his Chamber chairmanship in March, Koroscil stated, "We're not going to be just the voice of business in Hamilton; we're going to be a voice that's listened to." Since, then, the Chamber has gotten more aggressive about its "jobs and prosperity agenda" - with the airport lands in a place of prominence.

This statement, and the subsequent actions with the Chamber poll also noted above, are the consequences of a political obsession with leadership. Ignoring contrary opinions, ignoring evidence, viewing them as nothing more than an opportunity for rhetorical spin to persuade and lead, are the hallmarks of non-democratic processes. Big decisions with big consequences that allow for few alternatives are the legacies of leaders, but in the long run it is the every-day decisions of small businesses as they succeed and fail that sustain activity (jobs) while the big decisions inevitably become the "too big to fail" failures.

What this city needs is less leadership. It's tough to predict the future. Shit happens. But it's easy to predict the past and try to reconstruct it. That's the thinking that supports leadership. So Hamilton has an east-end expressway built decades after it's prime time of utility and even though it has not delivered on its promise of jobs and its main proponent was cought fiddling with the democratic process; many still accept him as a good leader. The airport too looks to be an example of trying to reproduce past successes elsewhere while ignoring current trends. All that's needed to make it so is asphalt and leadership that will be reaping the rewards of retirement long after the plan has proven inadequate.

I don't really mind that the Red Hill Expressway didn't produce the promised prosperity and jobs. What I mind is that it's construction has nearly bankrupted the city, resulting in on-going delays to necessary work and redevelopment spread throughout the "old" city. There's nothing wrong with some airport related economic development. It will succeed and fail depending on its merits in an uncertain future. But airport development should not come at the expense of necessary infrastructure to support economic development elsewhere. We need to stop putting our eggs in one basket. We need to stop electing leaders to make big decisions just because they make sounds like they know how to lead. We need to start making more of the little decisions for ourselves.

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By Graefe (anonymous) | Posted July 06, 2010 at 09:31:47

It seems that there are several battles here. The first, to stop the aerotropolis project. Even people who do not buy Ryan's peak oil arguments and might support this development model should ask that it be stopped until some better quality information is available about the costs of the scheme and the likely benefits. The fact that promoters are now seeing the jobs generated up there as being in restaurants and hair salons is really preoccupying... I always criticized the aerotropolis for creating very few jobs an acre and at fairly low wages in warehousing and logistics, but if the job mix is in fact going to be even more strongly skewed to retail jobs, then the price tag (still unavailable) is completely unnecessary.

The second battle is to force the city to restrict the range of uses. There is really no point continuing with the little programs for downtown renewal if the range of uses for aerotropolis amount to plans to develope a new downtown around the airport... a plan that ultimately is consistent with the aim of homebuilders to develop new subdivisions between the city and the airport.

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By highwater (registered) | Posted July 06, 2010 at 09:34:03

But airport development should not come at the expense of necessary infrastructure to support economic development elsewhere.

QFT

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By highwater (registered) | Posted July 06, 2010 at 09:34:28

But airport development should not come at the expense of necessary infrastructure to support economic development elsewhere.

QFTT

Comment edited by highwater on 2010-07-06 08:37:15

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By Capitalist (anonymous) | Posted July 06, 2010 at 12:06:36

Good decision by council.

Let's get moving on this thing!

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By highwater (registered) | Posted July 06, 2010 at 12:36:42

Enjoy your increased industrial taxes, 'Capitalist'! That is if we can still call you a capitalist after your support this socialist scheme to subsidize corporate welfare cases.

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By Kiely (registered) | Posted July 12, 2010 at 16:29:03

If George W Bush and Ronald Reagan prove anything, it's that the conservative movement, despite its tremendous successes in the media, has lost all fiscal sanity. - Undustrial

That's simply because they are no longer "fiscal" conservatives, and as you accurately point out, haven't been for some time.

Comment edited by Kiely on 2010-07-12 15:33:24

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