Monday, September 15, 2008

Prince George hopes its future is in flight...

The Financial Post featured a comprehensive review of the massive redevelopment project at the Prince George airport on its website this weekend, exploring how the Central Interior city is hoping that Runway 15-33, the third longest runway in the nation will help to create Prince George as an internationl air hub.

The 36 million dollar runway project, which will be officially openend in a few weeks has given a number of Prince George boosters the lofty goal of attracting the international shipping industry, hoping to attract flights away from Anchorage, Alaska which currently ranks as one of the more important hubs on the international shipping scene.

Part of Prince George's marketing plans will include the proximity of the Port of Prince Rupert and the container port at Fairview which loads the trains that have to pass through Prince George on their way east and those containers that head west and to the Orient.

Prince George is hoping that by becoming an international shipping point, the benefits of all this global trade will help the city grow. With some wild eyed optimists predicting (and this is something that Podunkians heard not so long ago about Rupert) that the interior city will boom in population to around 200,000 by the year 2020.

Skeptics however point to the fact that much of those container trains coming to and from Rupert don't stop in Prince George, nor has any great boom in infrastructure accompanied the port development with the exception of the inland terminal recently constructed by CN. Some suggest that much the same might develop out of the massive runway development and the proposed industrial park to accompany it.

Who is right of course remains to be seen, but right now at the moment the dreamers of the big dream are getting ready to have their day.

Will Prince George take off?
The B. C. city dreams of being an air hub, but federal rules stand in its way
Nathan Vanderklippe, Financial Post Published: Saturday, September 13, 2008
Nathan VanderKlippe/National Post

Stieg Hoeg is nervous as he prepares to set foot on the flawless black asphalt of Runway 15-33. The fresh pavement will make this the third-longest runway in Canada when it opens next month, but even though several planes have already landed on it, Mr. Hoeg, the airport manager, has yet to step on it.

It's not that he's worried about getting in the way of incoming aircraft -- the runway is still closed. He's just superstitious. With only weeks to go before the runway extension is formally opened, he doesn't want premature footsteps to jinx it or the lofty aspirations its $36-million price tag represents.

For him and many others in this northern B. C. city, these 11,450 feet of landing space are hallowed ground, a red carpet leading to a bright new future for an area that sees its future potential as "enormous."

That belief is the foundation of a bid to transform a massive 2,500-acre tract of forest and hay fields surrounding the airport into a logistics park and remake Prince George into a global transportation and manufacturing hub. The new runway, they hope, will bring in the massive air freighters that carry time-sensitive cargo across the globe.

In a city madly trying to escape its forestry roots, the optimism is so thick it hangs in the air. City boosters suggest Prince George's next chapter will involve flying fish, beef and even wine to Asia, building computer components, perhaps making car parts. In a part of the country renowned for its wallet-stuffing forestry salaries, there is even talk of stealing manufacturing plants now staffed by China's inexpensive labour force.

The city's economic-development arm, Initiatives Prince George, has begun marketing the advent of the "northern decade" and one local businessman predicts Prince George's population will explode from its current 80,000 to 200,000 by 2020.

"It's going to be one of the biggest things," says Harry Backlin, 79, the Coldwell Banker realtor who helped assemble the airport lands for a Vancouver developer. In the past 33 years, he claims involvement in $600-million worth of city development, and is one of the scheme's most vocal supporters.

"You know why? 'What the mind of man can conceive and believe, he will achieve.' That's from Napoleon Hill," he said, referring to an early U. S. motivational writer.

An entire wall of Mr. Backlin's office in downtown Prince George is lined with floor-to-ceiling mirrors. "I believe in making things look larger, OK?" he says -- but is adamant the airport plans are no illusion.

"I will not live to see it all come together, but what we have done -- we've impregnated the animal and the baby is born and it's starting to develop and we're feeding it."
Eight hundred kilometres north of Vancouver, Prince George developed next to the vast forests that for decades fuelled its economy.

"It used to be that Prince George was a lumber camp for families," says Don Zurowski, a city councillor who can recall the times when forestry downturns produced 25% unemployment rates.

Today, forestry is in the worst mess anyone can remember, yet the town's unemployment rate only nudged up from 5.1% to 7.6% --evidence that change has already begun. New jobs have come from the mining boom, a fast-growing university and other public-sector investments that include a new cancer centre. Recent years have brought a 550,000-square-foot retail complex and big-name box stores such as Costco and Home Depot.

Yet local industry remains firmly tied to forestry, despite the geographic virtues that optimists say will remake the region.

Prince George is a crossroads city, lying at the confluence of north-south and east-west roads and rail lines. It sits beneath the circumpolar air routes that connect North America with Asia. A study done for the airport suggests Boeing 747s flying from Hong Kong to Dallas could save 8,000 pounds of fuel per flight -- and more than $300,000 a year -- by stopping in Prince George instead of Anchorage, the current destination for such refuelling stops.

In addition, the growing container traffic coming through the new Fairview Terminal in nearby Prince Rupert gives Prince George easy access to Asian markets.

In fact, its neighbour's success has greatly built up Prince George's hopes.

"You look back 15 years, it was a wild idea to have a container port in Prince Rupert. That's a reality today," says Tim McEwan, chief executive of Initiatives Prince George. As he speaks, the latest trainload of containers rolls beneath his office window as proof. "So some-thing's right about this place."

Apart from its location, Prince George has abundant land--and it's cheap, at about 10% of Lower Mainland values. The city is on the cusp of turning all those attributes into massive capital infusions and thick new profit streams, Mr. McEwan says. "We're going from field of dreams to reality," he said.

Yet for all its optimism, the city has little to show for its ambitions -- and has its share of skeptics. Apart from a $20-million intermodal facility built by CN Rail, little transportation and logistics investment has materialized. The Prince Rupert trains don't even stop in Prince George, and air experts doubt the planes will, either.

"They face a pretty formidable challenge in being able to wrestle away a fair amount of business out of Anchorage," says Rick Erickson, a Calgarybased aviation consultant at R. P. Erickson & Associates.

Cargo carriers have already made huge investments in Anchorage, where free-trade zones enable the easy flow of freight. Such zones do not exist in Canada, and it is unlikely Prince George could create one, he said. Air carriers have already made massive investments in Alaska that they are unlikely to abandon. While Prince George says it can match Anchorage on fuelling and landing fees, its ambitions are likely to run into a formidable wall:Ottawa.

For flights to pick up cargo in Prince George, they would have to secure federal traffic rights, and "the way it stands now, we are loath as a country to give cargo rights to non-Canadian players," Mr. Erickson says. "I salute the Prince George people, but I think they are facing some very, very severe challenges. I know the Calgary people have looked at this very closely and worked very hard to attract some Asian operators into the Calgary market, without any success."

The airport is nonetheless optimistic, banking on the current federal Asia-Pacific Gateway focus to help smooth regulatory concerns. Aside from the risks of an economic downturn or a punishing carbon tax -- both of which could scotch airport growth-- Mr. Hoeg sees his greatest risk as "being too successful and not providing a good level of service."

And he doubts his steps on to the runway damaged that prospect.

"It felt good," he says. "In fact, our luck had been going in the other direction-- we were having some challenges with construction. Now the weather has improved, the sky has opened, the birds are singing."
(photo of runway construction from the Prince George airport website)

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