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Flying Leap: Panama City opens first new regional airport in U.S. in more than 10 years.

Backed by Florida landowner, airport is part of a plan to create “a new national and international destination."


The first new international airport in the United States in more than decade is set to open in May near Panama City, Fla., a community of 37,000 people on the state’s panhandle. That is no small feat given the environmental, regulatory and financial hurdles involved in building runways and terminals, as well as community opposition to planes flying overhead.

But the airport, Northwest Florida Beaches International, is also noteworthy because it is perhaps more of a real estate project than an effort to address a pressing transportation problem. Backed by a major Florida landowner, it is part of a plan to create “a new national and international destination,” as one investor presentation proclaims, in a relatively sleepy region of beaches, barrier islands and wetlands.

“Silicon Valley at one point was out in the middle of nowhere,” said Britt Greene, president and chief executive of the St. Joe Company, the Florida developer that donated the land for the new airport and is the driving force behind the project. “We think we can do the same.”

St. Joe, once primarily a timber and paper company, has shifted to development and real estate, and owns hundreds of thousands of acres of land in northwest Florida. The airport property, northwest of Panama City, occupies just a fraction of the company’s 75,000-acre West Bay sector plan, which envisions 27,000 residential units, 490 hotel rooms, 2 marinas and 37 million square feet of commercial space that would bring tourists and entrepreneurs to the panhandle.

The existing Panama City-Bay County International Airport handles 11 departures a day, with about 160,000 departing passengers a year. Projections sketched out by the airport authority years ago anticipated that a new airport with a longer runway would entice airlines to schedule bigger planes that would nearly triple that passenger number by 2018 — including some international flights.

Regulatory hurdles were cleared, legal challenges from environmental groups were overcome and construction began in January 2008. Then the economy collapsed, casting the airport project in a different financial context.

Critics argue that there was never a need for a new airport — especially one that will cost more than $300 million — and that construction problems have caused the environmental damage they had predicted.

Proponents counter that the airport is a long-term bet on northwest Florida’s future, and that competing to attract businesses and tourists requires a transportation infrastructure that better connects the panhandle with the rest of the world. The airport will have space for customs and immigration facilities and runways long enough to handle any eventual overseas flights.

It may be years before anyone finds out which viewpoint is right. But in the meantime, both sides can point to evidence that bolsters their version of events.

St. Joe and the airport authority scored a coup late last year when they persuaded Southwest Airlines to begin flying to Panama City through a deal that ensures the carrier will not lose money on the service for three years.

Starting May 23, Southwest will operate two daily nonstop flights to Baltimore, Houston, Nashville and Orlando. Delta now flies to Panama City from Atlanta and Memphis, relying on regional partners to operate the flights.

“Our job, and our challenge, is to build a market — a market that heretofore has not existed,” said Bob Montgomery, vice president for properties at Southwest. He said the routes were chosen based on research that residents in those markets have second homes near Panama City, which they would visit more often if they could take affordable flights rather than drive.

The Baltimore route would link military personnel and contractors in the Washington area with installations near Panama City, like Eglin Air Force Base, which fits St. Joe’s strategy to attract aerospace companies to the Panhandle.

But Southwest’s arrangement — a first for the low-fare carrier — means it is hedging its bet on the region and can pull out if the routes do not prove to be profitable. “We weren’t in the position to take a huge amount of risk ourselves,” Mr. Montgomery said.

Mr. Greene, of the St. Joe Company, said the Southwest deal was well worth the passengers he expects the airline will bring to the area, visitors who will fill hotel rooms, shop at stores and possibly buy second homes in developments his company has planned or has already built.

“Tourism will grow as a result of Southwest connecting us to the rest of the nation,” he said. “Our new dominant strategy is economic development and job growth.”

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