Public-Private Partnership Yields New Cargo Complex at Chicago Rockford

Author: 
Jodi Richards
Published in: 
March-April
2009

Chicago Rockford International (RFD) is currently the 18th busiest air cargo airport in the United States in terms of landed weight, but it doesn't plan on holding that position for long. With Phase 1 of a new International Cargo Complex recently complete, it's poised to climb much farther up the list.

Improving its ranking would be consistent with RFD's historic performance. The airport has enjoyed significant increases in the past - from about 125 million pounds of landed weight in 1995 to 1.5 billion pounds in 2007, reports Franz Olson, deputy director of operations and facilities.

 

Rockford is already home to United Parcel Service's (UPS) second largest sorting facility in the United States, a 670,000-square-foot facility that was expanded in 2006. DHL and BAX Global also have sorting facilities there - 20,000 square feet and 25,000 square feet, respectively.

The new complex, however, is expected to boost cargo activity at RFD to new heights and bring in an estimated $600,000 in revenue to the airport. Much of the additional business is anticipated from carriers currently operating out of Chicago's O'Hare International, just 60 miles to the southeast.

Measured Growth

Paul Ahern, president Tandem Development Group, says the goal of building a cargo facility at RFD was to create a low-cost alternative in the Chicago region. According to his estimates, it will cost carriers two-thirds less to operate at RFD rather than O'Hare. "Rockford is a hidden jewel," says Ahern.

As Tandem waits for carriers to discover the treasure, it's developing the project in incremental phases. After certain "trigger points" are met, subsequent phases begin. Once tenants are secured for the first 72,000-square-foot phase, explains Ahern, additional construction will follow.

The ultimate build-out of the complex will be 400,000 to 500,000 square feet of cargo and associated equipment services buildings, reports Olson. An additional 25 acres of concrete apron will also be built - enough room to park about a dozen 747s. Tandem currently has a 40-year land lease with RFD; various extensions could lengthen the partnership up to 75 years.

 

Facts & Figures

Project: International Cargo Complex

Location: Chicago Rockford International

Size: 72,000 sq. ft. (Phase 1)

Airside Improvements: $8 million

Building and Roadway Construction: $8 million

Construction Timeline: August 2008 - December 2008

Developer: Tandem Development Group

Builder: Leopardo Construction

Under the public-private partnership for Phase I, RFD paid  for $8 million of airside improvements with FAA grants and Tandem funded approximately $8 million of building constructions and roadway costs. According to Ahern, the commercial real estate developer's investment could total $40 million.

 

Part of the preparatory work for the cargo center involved improving the grade at the site before the apron could be built and construction could begin. "It dropped off quite rapidly," Olson explains, "so we knew that a substantial amount of fill would be needed for that area."

At the same time, a local county landfill was expanding and had to find a taker for its fill material. "We were able to acquire this fill in preparation for the probability of someone coming here and building a spec building," he explains.

Culture of Cooperation

According to Olson, the Rockford Airport Authority's "very close working relationship" with the Federal Aviation Administration and local government officials has been instrumental to RFD's growth and success. He further cites early collaboration between the airport and development team as critical for achieving key early milestones, such as permitting and utility coordination.

Regular meetings were held throughout the planning, designing and construction phases of the project, Olson notes. This encouraged communication between all project principals and resulted in the project opening on schedule.

Early meetings with government agencies to ensure that infrastructure elements such as water and sewer utilities were in place for development were also key to the quick and efficient development of the site.

The entire region, says Olson, has shown support for RFD throughout the process. A special program undertaken by the Winnebago County Department increases the allowable weight limits for certain highways by up to 50% to facilitate trucks traveling from the airport to the interstate system.

"You can have the biggest airport in the world, with runways running every which way, and you can land more airplanes and launch more airplanes than any other airport," notes Olson. "But if you don't have the connectivity of the trucking logistics, the highway systems, your airport is landlocked."

Ahearn considers the airport, city and county "wonderful partners" for welcoming and encouraging investment and development at RFD. "They have invested time, energy and funds into the project," he says.

The Rockford Edge

RFD officials enthusiastically promote the advantages it offers over other airports, especially those closest to it - O'Hare and Midway. "We don't have long lines of aircraft waiting to taxi out to the runway," Olson notes. "Here you're talking a taxi time of two to three minutes."

The location of the new cargo facility, immediately adjacent to the primary 10,000-foot runway, is also ideal. And, he adds, "very few airports have the infrastructure capabilities that RFD has; the opportunity of land available to construct a new facility like this."

Additionally, RFD boasts separate air space from ORD, 24/7 U.S. Customs and federal inspection services and a newly acquired Foreign Trade Zone.

Even with the current economic downturn, Olson expects the cargo industry to remain steady and anticipates securing a tenant for the first phase of RFD's new cargo complex very soon. "There is a lot of interest in the facility," he reports. "And a lot of it is driven by current operators in the Chicago/Milwaukee corridor that are looking for alternatives to O'Hare."

Subcategory: 
Cargo

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