Brett Smith, founder and CEO of Propeller Airports, wants to shake up the world of American commercial aviation. At the start of this year, he moved from New York to Washington to do just that.
Smith’s company is funding the construction of a new 30,000-square-foot passenger terminal at Everett’s Paine Field, which as early as January 2019 will begin serving travelers from all over the Eastside and north Puget Sound.
What’s unique about the terminal isn’t just that it will be stunning to look at, or that it will satisfy an increasing need for additional airport facilities in the region. It’s that the project came about through a public-private partnership (P3) — a rarity in the United States, where most airports are owned and operated by government entities — cities, counties, or port authorities.
It was in Europe that Smith first got the idea for a privately funded passenger terminal.
“Zurich, London, Paris, Milan are all privately owned and operated (airports),” he said. “Those airports tend to generate probably four times more revenue than U.S. airports. Because they’re private companies, they have to make money to survive, and that translates to being in tune with the customer and offering things that people actually want to buy.”
In the case of the Paine Field terminal, Snohomish County is leasing land to Propeller, which is funding construction and will be operating the new facility.
The initial lease is for a period of 30 years, with two optional 10-year extensions. Propeller will pay approximately $450,000 per year in rent plus other fees, including a profit-sharing agreement that requires the company to give 2.5 percent of its gross revenue back to the county for the first four years, and 5 percent of its gross revenue every year thereafter.
The P3 model doesn’t just translate to making more money for the organizations involved, Smith said. It also can provide freedom to government entities to use money received via revenue sharing outside of airport spending.
“There is no financial reason for the county to build this (itself),” Smith said. “Almost all airports in this country are funded by the FAA — federal dollars. And they have a rule, that you’re not allowed to divert funds off the airport. They want to pay for aviation, not schools or police or any of that stuff.”
Although Paine Field is currently hosting one of the only P3 airport projects in the country, the funding model has been floating around for at least a couple decades.
In 1996, the U.S. government launched the Airport Privatization Pilot Program as a way to provide “access to various sources of private capital for airport improvement and development,” according to the program’s website.
But participation in the privatization program has been extremely limited. As discussed in a 2017 Federation of American Scientists report, the reasons for that may range from readily available public funding to stakeholder risk to satisfaction with the status quo.
The report offers several changes that might be required to drum up real interest in airport privatization. One of those is making private funding more attractive to those in the public sector.
That’s where Smith comes in.
“Our goal is to bring some civility back into the airport experience,” he said. “And not just like a Greyhound station, which is what a lot of these airports have become in the U.S. We’re doing things that you don’t see typically in U.S. airports.”
The Paine Field terminal, even in its partially finished state, is no Greyhound station.
With a full bar, an old-school-style digital Solari board, two fireplaces, intricately tiled individual bathrooms, unique paneling on the walls and high ceilings, two glass jet bridges, and countless windows letting natural light pour into the building from multiple directions, the space is bizarrely beautiful for an airport facility.
“I can only imagine how much Windex we’re going to need for this place,” Smith joked.
Aside from the aesthetic allure of the space, passengers will be treated to an amenity-filled experience, as well. According to Smith:
- It will take a maximum of roughly 10 minutes for passengers to get from their cars to their gates, depending on airport security procedures
- The TSA area, with one TSA Precheck lane and two regular lanes, will be able to process approximately 300 passengers per hour.
- The terminal itself will serve approximately 1,700 passengers per day.
- Valet parking will increase convenience and efficiency for travelers.
- Self-parking lots will be easy to navigate and close to the terminal entrance.
These amenities may sound expensive, but Smith said they won’t cost a lot extra.
“We’re being very careful. We’re not going to nickel and dime people,” he said. “We don’t need to make money on everything. We want to give a quality experience. We want people to want to use this terminal.”
Smith said he realizes that Propeller could have built a basic, boring facility, and because Seattle-Tacoma International Airport is so full, the Paine Field terminal still would have been successful.
“Then people would say, ‘That’s what happens when you privatize. You get a crappy product,’” he said. “I want the first impression of Everett and the last impression of Everett not to be a steel box, but (for people) to be able to see the green and the Olympics.”
Smith expects the economic impact of the terminal to be substantial. For the hotel industry, for businesses who work closely with Boeing (the aerospace company operates its massive 98-acre manufacturing plant adjacent to Paine Field), and for others.
“One of the things that airports are afraid of — wrongly, and we’re proving that now — is that airport management thinks that if you bring privatization in, (their) jobs are going to go. This airport has added jobs because of us.”
According to Snohomish County Executive Dave Somers, the county also expects to benefit economically from the project.
“Paine Field is the economic engine of Snohomish County, with roughly half of the state’s aerospace manufacturing jobs based here,” Somers said. “The addition of commercial flights will be transformational for our economy and for those who travel. Flights will connect our community to new people, new places, and new opportunities. It’s an exciting time in Snohomish County.”
The terminal itself will directly employ about 200 people, according to Smith.
“The reason I’m doing this, quite frankly, is I love aviation, and this is a chance to make a difference in aviation and do something that’s unique,” Smith said. “It’s going to create jobs and convenience for millions of people that I will never meet or know.”
Terminal construction was expected to be complete by mid-October, and passenger service will begin early next year. Alaska Airlines, United Airlines, and Southwest Airlines will offer flights from Paine Field to cities including Portland, San Francisco, Los Angeles, Denver, Las Vegas, and Phoenix.
John Kirby, Alaska’s vice president of capacity planning, said the airline anticipates that its offering of daily flights out of Everett will create much-desired convenience for its North Sound customers.
“Alaska aims to be the airline the West Coast loves to fly,” Kirby said in a statement on the airline’s website. “We’ve put together some great places to go to from Paine Field that we believe will make a lot of people very happy.”
The terminal project will put a new face on Paine Field, which has served many different functions in the more than 80 years since its construction. Built in 1936 as a Works Progress Administration project, the airport has acted as a base for various military groups during both World War II and the Korean War. In 1951, its name was even changed to Paine Air Force Base.
But in 1966, the identity of the airport shifted away from the military and toward the aerospace industry when Boeing arrived. The aerospace giant now employs thousands of people at its Everett location and occupies more than 470 million cubic feet of space.
As a tribute to the field’s namesake, a bronze statue of Everett native Lt. Topliff O. Paine, crafted by Mukilteo-based design and fabrication firm Dillon Works, will be erected outside the new terminal.
“This is our flagship. This airport is historic,” Smith said. “As a pilot and someone who loves aviation, I couldn’t imagine not being here to build this.”