Aviation Sector Fueled by Cooperation

by Ashley Blanchard

It shouldn’t be a surprise that the aviation sector is a growing and thriving industry in Brevard County.  The seeds that were planted years ago are coming to fruition in this arena.  Strategic planning and collaborative efforts of community leaders has its rewards.

Long before the NASA Space Shuttle Program concluded, Brevard County had been attracting and meeting with aviation companies.  Lynda Weatherman, president and CEO of the Economic Development Commission (EDC) of Florida’s Space Coast explained, “We knew that we needed to diversify beyond space and that we didn’t want to be just a launch site.”

Currently, there are approximately 35 companies throughout the county, from Professional Aircraft Associates in Titusville to AAR in Melbourne and Palm Bay, classified as doing business in aviation and aerospace.  As a result, there are well paying jobs in a growth industry.  Harris Corporation and Northrop Grumman have had a long-standing reputation for being pillars in the community’s aviation arena, while many of the businesses are new to the area.  Significant international companies, like Embraer, have created a real industrial cluster, which is a magnet to attracting even more commerce to the area.

Weatherman reflected, “I’m excited about what the industry has brought to the area and confident with the base that we have built that we will see continued success in the future in aviation and avionics.”

The Epicenter, MLB

The majority of aircraft work is naturally centered at Melbourne International Airport (MLB).  Richard Ennis, Executive Director of the Melbourne International Airport, and Larry Wuensch, Director of Land Development, have been working together for 18 years with a clear vision – to make the airport an economic hub.  On the airport property, there are 75 tenants and 7,000 employees.  Within a three-mile radius of the airport, there are 36,000 employees.  The airport property alone has an economic impact of $1.1 billion.

MLB boasts a diverse number of aviation manufacturing and maintenance tenants including Embraer, Liberty Aerospace, MidairUSA and AAR Aviation Worldwide Services.

Embraer’s move to Melbourne in 2008 was a substantial addition to the aviation industry in Brevard County.  Having been in business for over 40 years, the Brazilian company is now the third largest commercial aircraft manufacturer in the world behind Boeing and Airbus.  Their presence has attracted international attention to the area.  In addition to the assembly facility and global customer center, they are planning to build a $24 million engineering center near their present North American operation.

Liberty Aerospace, headquartered in Melbourne, is known for manufacturing its Liberty XL2 two-seater single engine aircraft.  They continue to supply parts and made-to-order XL2 aircrafts domestically and internationally.  Liberty’s employment numbers have fluctuated since 2006.

Midair S.A. decided to relocate its aircraft maintenance, repair and refurbishing business to Melbourne from Rome, New York in 2010.  Currently, they are in a temporary facility but two hanger bays have been designed to accommodate Boeing 747-400 aircraft.  They are still on track to create 450 jobs by the end of 2013.

Chicago-based AAR relocated its Airlift Group to Melbourne, the fifth Florida city to host AAR operations.  It provides maintenance, repair and overhaul services to commercial airlines in the United States.  It is estimated that the Space Coast operation alone will add $42.3 million to the economy, including more than 900 jobs in the next three and a half years.

Commercial flights are 10 percent of the airplane traffic at MLB yet comprise 90 percent of the airport’s income.  Major commercial carriers include Delta and USAir, while Baer Air offers flights to the Bahamas.  Of course the airport would like to attract another airline and have met with the likes of Southwest, Jet Blue and United.  Private planes comprise the other 90 percent of airport traffic, but only account for 10 percent of the revenue.

If You Build It, They Will Come

Wuensch explained, “The key to our success has been the investment in infrastructure.  Water, fiber optics and a pump station are just a few examples of the millions of dollars that have gone into setting the stage for attracting tenants.”  To be competitive, companies need to visualize what they need.  Having parcels ready to build with level land, proper soil and a drainage system made Melbourne more attractive than other aviation hubs.

The collaborative efforts of the airport and the city have helped to accelerate the permitting process for businesses.  Being friendly and proactive has been their motto.   According to Wuensch, scheduling a meeting rather than creating an email maze with critical employees paves the way for taking care of the details and anticipating problems.  Behind the scenes initiatives such as obtaining a survey, CAD design or computer-generated aerial view for a potential tenant is customer service at its best.  The Airport Authority is entrepreneurial savvy and looks for ways to help start-ups maintain a positive cash flow.

The airport does not receive any local tax dollars.  However, they are allocated federal funds based on a formula, which factors the number of passengers, cargo and fuel sales. Wuensch explained, “We have to operate like a business, not a political entity.  We don’t have a government mentality.”

Incentives

Incentives are at the top of the list for attracting aviation companies.  Packages can include an attractive lease, tax abatement and permit waivers.  The economic development effort of Enterprise Florida, which is funded by the state, has been instrumental in assisting with incentives and matching funds.  General Electric is an example of a company that was attracted by special offerings.  Their package included road improvements, a stoplight, utility extensions, a 24-month rent-free period during the construction phase and a 60-year lease.

Companies already doing business in Brevard County are just as qualified to get incentives as those looking to relocate to the area.  Weatherman pointed out, “Half of our efforts are focused on existing industry.  We want to maintain their employment base.  We want to be good advocates for expansion.”

Just this year the Florida House of Representatives voted to modify the state’s sales tax on its aircraft maintenance parts and labor, which had been a disincentive to the industry. Representative Steve Crisafulli co-sponsored the bill to make the state’s tax policy more competitive with other states.

Weatherman commented, “We have to be aggressive and creative in our incentive offerings.  We can’t just rely on this [Brevard County] being a great place to live.”

With the massive layoffs from the shuttle program, there continues to be a focus on growing jobs related to the industry.  International companies recognize the high tech environment of the Space Coast.  The availability of labor from NASA is very intriguing to companies looking for a talented workforce.

Looking Forward

In 2009, MLB developed a strategic partnership with Florida Institute of Technology (Florida Tech) for research and development.  This agreement allows both parties to use their strengths.  Being an educational institution, Florida Tech naturally offers intellectual pursuits by professors and students.  However, with the university being landlocked, they benefit from the offerings of the R&D facility at the airport.  The payoff will not be immediate but the groundwork has been laid.

Of the 2,400 acres of industrial and commercial property at the airport, there are 600 acres currently available.  Ennis does not foresee large parcels available ten years from now but small ones, in the range of 20 acres, will be vacant.  Current tenants are anticipating their own further growth and some have options on the available land.  With 75 tenants, MLB is earning a reputation for being an air manufacturing and maintenance hub.

Infrastructure remains paramount for the future of the airport property and surrounding entities. The biggest issue is reconfiguring road access to alleviate congestion and provide easy accessibility to users.  Ennis anticipates a project of this magnitude will cost in the nature of $100 million and take two years to build.  However, he is adamant that this infrastructure is imperative to the continued success of the county’s industry.

The aviation industry can be volatile and has not been untouched by the economic downturn including employee layoffs in lean times.  Ongoing efforts to diversify within the sector are paramount and will attract peripheral businesses.  Local and statewide marketing and incentive partnerships with the Florida Chamber of Commerce and Enterprise Florida will help.

Brevard is positioned to remain a vibrant aviation center.  With the synergy already created, more businesses will be attracted not only to the hub in Melbourne but outside the airport boundaries as well.