Alex Coxon discovers that Denver Airport has huge commercial opportunities in its backyard.
It might be best known for its striking backdrop of the Rocky Mountains, as the birthplace of Coors beer, and for its moniker of 'the mile-high city' on account of it being 1,609 metres above sea level, but now Denver has its sights set on a new title - that of becoming a world-class aerotropolis.
Despite Denver only coming 26th in the list of most populated US cities, Denver International Airport (DIA) is the tenth busiest airport in the world, according to figures from Airports Council International (ACI), and is one of the country's primary hubs.
It's also the largest airport in America, with 53 miles of available land, which also makes it the third largest in the world after Saudi Arabia's King Fahd International Airport and Montrèal-Mirabel in Canada.
With these assets, Denver cannot only continue positioning itself as a primary connecting hub, but also develop its land into a commercial offering and make the airport a business destination in its own right.
DIA handled 52.2 million passengers in 2010, 2.2 million more than its current capacity and to cope with this, DIA has assembled enough land to take its six existing non-intersecting runways to 12: a scheme that will enable it to double its current passenger numbers by 2060.
While these plans are very much for the long-term, the airport has a more immediate strategy to help consolidate its position as the primary economic engine for the state of Colorado, into which it already brings $22 billion a year in direct and indirect fiscal benefit.
Consultants MXD Development Strategists have been appointed by DIA's chief commercial officer John Ackerman to carry out a comprehensive study of the airport's considerable land mass and to use this information to formulate a commercial development master plan, which - by its completion at the end of 2011 - should pinpoint how DIA can best exploit its real estate opportunities.
"We already have an airport master plan, which looks at how we're going to grow for the next ten years from an aeronautical perspective," Ackerman explains.
"We also have a ten-year financial plan attached to that, which will see us spend approximately $1 billion over the next decade on capital projects that will either grow or refurbish the airport. The next step is to produce a commercial master plan to determine the best use for property not earmarked for aviation."
MXD has a virtually blank canvas to work with. Aside from a service station, a solar energy park, several oil and gas wells and a convenience store adjacent to the airport, most of the land is still rolling fields; the only commercial property that is already in situ is a cargo-handling facility called World Port.
This 70-acre structure was constructed several years ago by a private equity real estate fund and never realised its full potential - most likely because two-thirds of the US population can be reached by truck from Colorado, thus diluting the need for dedicated air cargo acreage.
The development strategists will, however, need to integrate their plans with DIA's South Terminal Redevelopment Program: an ambitious $500 million scheme that will see the South Terminal become a key intermodal and business location.
The programme - which will create an adjunct facility next to the existing Jeppesen Terminal to meet extra passenger demand, and is due for completion by the end of 2015 - incorporates several commercial elements, including a public plaza and a Westin hotel and conference centre, the designs for which were unveiled by master architect Santiago Calatrava in July last year and are now being project- managed to realisation by Parsons Transportation Group.
Key among these is an intermodal public transit centre, which is predominantly being financed by the airport but is being built in conjunction with Denver's Regional Transport District (RTD).
This will connect the airport - via a 23-mile long, public-private-financed bi-directional rail line called the East Corridor - with Union Station in downtown Denver, and will form a key component of a city - suburb-wide network of rapid transit corridors called FasTracks, which is set to be finished by RTD in 2018.
Although budgetary constraints meant that an iconic $20 million rail bridge over the Pe??a Boulevard has had to be drastically scaled back, the East Corridor itself will be one of the first segments to go live, with a scheduled completion date of January 2016 and a commitment to open earlier if possible.
"There are currently seven stations in the corridor: one at each end, with five intermediate stops - one of which will be situated at the location of an existing park and ride bus station just outside the airport perimeter," explains Kevin Flynn, the public information manager responsible for the project at RTD FasTracks.
"There is also a provision to build two additional stations on airport land, although these are subject to sufficient on site development and to funding being forthcoming by private parties, who will need to meet the lion's share of the costs.
"In the meantime, the line will run every 15 minutes, with the exception of late at night and early morning"ª with an overall journey time of 35 minutes," he continues. "This compares favourably with travel time by highway which, by 2030, is estimated to be 79 minutes."
To complement the rail link and intermodal public transit centre, as part of the South Terminal Redevelopment Program, DIA is also at the early stages of building a 516-room Westin-branded hotel and conference facility, which will be situated immediately above the rail station and adjacent to the terminal.
The 37,624-sqm property, which will be financed and operated by DIA, is scheduled for completion between late 2014 and early 2015. When finished, it is expected to create 225 permanent hospitality jobs, providing the city with up to $2 million in annual tax revenue while also giving DIA an income stream with which to pay off the general airport revenue bonds (GARBs) it will use to finance the hotel's construction costs.
Like the transit centre, the hotel has been designed to harmonise with the iconic, tent-roofed Jeppesen Terminal.
"The rail station will correspond with the terminal by having a tensile membrane structure for a roof system. And the hotel will respond to that through its own design one long bar that dips in the middle and is white in colour, like the tent," says Jennifer Johnson, managing director at Gensler Denver, the architectural practice responsible for taking the hotel through design development.
While the hotel and other elements of the South Terminal Redevelopment Program will certainly help fuel DIA's economic engine, they will not be the only avenues for the airport's commercial growth.
Thanks to its vast land reserves and accessible airport equities, DIA is in the fortunate position of being able to enter into public-private partnerships that will enable it to build and own commercial property on its land, or to secure classic ground rental agreements where it decides the risk should be taken by external developers.
Specific financing models and partnerships will only be created once MXD has finalised the commercial development master plan towards the end of this year and once suitable organisations have been identified to locate within DIA's boundaries. However, the airport's chief commercial officer is optimistic that development opportunities will be plentiful.
"We do have some constraints," Ackerman concedes. "When the airport opened in 1995, it was done with the consent of a couple of municipalities, so we do have some restrictions on development for non-aviation purposes. However, we believe that by focusing on companies that have a direct interest in aviation or a direct link to the airport, we will be able to realise commercial success.
"In addition to this, we will look to attract industries that have been successfully brought into the region by the local chambers of commerce, including clean energy and biosciences firms, and companies that manufacture products or components for those types of business."
Of course, the forthcoming commercial development master plan will present some risks as well as opportunities. Ackerman acknowledges that DIA will need to be mindful that plans that present short-term profits could also create long-term problems - especially if they stymie developments that are taking place immediately adjacent to the airport.
To prevent this from happening, he says a significant part of MXD's brief as author of the commercial development master plan is to work with all the surrounding municipalities and landowners to investigate what developments are scheduled at the edges of the airport and how they can be successfully integrated into DIA's own plans and vice versa.
"Much of our planning will be about not foreclosing options. We need a strategy that can endure for 50 years," he states.
According to Cal Fulenwider, president of LC Fulenwider Inc - one of the key adjacent landowners and a master developer in its own right - Ackerman is proving good to his word.
"I think one of the things that will help establish DIA as an aerotropolis is the fact that it's looking outside of its own borders," he says. "The airport isn't only working with Denver City, but with businesses such as ourselves, who own key parcels of land with developments like DIBC , which is currently only one-sixth of the size of its capacity at full build-out.
"What DIA is doing is working collaboratively for sustainable growth," he adds. "It's this approach that will help the airport not only double in size, but also make significant commercial profits from its landmass."
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