Amazon Hub to Net Estimated $111.7 Million for Florida City
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LAKELAND, Fla. — The first question city officials were asked when news broke that Amazon was building an air cargo complex in Lakeland was how would the project benefit area residents. The calculations are in.
Gene Conrad, director of Lakeland Linder International Airport, said he predicts the Amazon hub will net $111.7 million in revenue for the city over the next 30 years.
“This is a very conservative estimate on our part because we don’t want to over-promise and under-deliver,” he said.
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Conrad on May 17 announced a 20-year contract with Amazon to construct a 285,000-square-foot cargo complex at the airport. The company will pay the city about $80,000 a month to lease 47.2 acres, with an option to renew the lease three times at 10 years each, for a total of 50 years. The company will also pay the airport 85 cents per 1,000 pounds of cargo landed at the airport, and a 3-cent surcharge per gallon of fuel.
Conrad estimated the city will receive $66.7 million in revenue during the first 20 years of the lease. More than half of the total proceeds are expected to be generated by the monthly lease payments.
“Those are very conservative numbers as far as what we’re showing, as we’re only showing 10 departures a day — which we believe is going to grow over time,” he said.
The airport director also projects that Amazon will activate at least one of the three 10-year extensions built into its lease. If so, it will bring in another $45.1 million in revenue.
“Excellent, these are the types of deals we love to see,” Mayor Bill Mutz said.
To uphold its end of the deal, the airport is expected to upgrade the landing systems at the airport, add five fuel tanks and improve one of the runways in preparation for Amazon’s arrival. The projects have an estimated cost of $44.9 million.
The city has already secured $37.5 million in state and federal grants to help cover these expenses. Lakeland Linder will be responsible for paying $7.4 million, or 16.5%, of the upgrades.
Control tower at Lakeland Linder (Gene Arty/Flickr)
“It’s a big deal for the airport,” Conrad said. “The lease is executed, the ink is dry. They are already under construction.”
Landing the Amazon deal has also been a major influence in helping the airport advance its long-term plan to revamp its runways, according to Conrad. Lakeland Linder has a 20-year master plan that aims to expand the current runway, add a parallel runway to the existing one, and build out its terminals, hangars and parking.
“Getting the Amazon deal done and inked has helped all these things move forward,” Conrad said.
The airport director said he has a meeting slated with American Airlines this fall to further discuss the opportunity of bringing commercial flights to Lakeland Linder. Conrad said he has spoken to American officials about having two to three flights a day from the city to their hub in Charlotte, N.C., where the airline is expected to add gates by the spring of 2021.
“They want to feed the beast, feed their hub and this is our opportunity,” he said.
