Pellston’s Palace Locals love it, but is quiet airport a boon or a boondoggle? By Anne Stanton On a Yahoo website, a woman asked how to get from Mackinaw City to the Pellston Regional Airport without having to pay taxi fare. A man suggested she take the shuttle bus service, Wolverine Stages, to Pellston airport. “By the way, when you get to Pellston, you’ll see just what a $7.5 million log cabin can look like.” Pellston, with a population of 700, is known as the “ice box of the nation.” But just north of this economically weary town is a gorgeous, lodge-style airport that rises out of the fields with majestic timbers and a bevy of tall, fluttering flags. The airport is proudly regarded by many of the residents. Just 18 miles north of Petoskey, it spares thousands of people a year from making the two-hour drive south to Traverse City’s airport, although many do because tickets are typically cheaper. Yet the ornately appointed airport has received a bit of notoriety lately, as the lead example of government waste in a USA Today article, “72 passenger-a-day airport gets $7.5M for terminal.” (12/14/2009). Actually, the price tag on the airport terminal wasn’t $7.5 million, but $8.4 million when accounting for state and local spending. The airport is poised to spend another $7.7 million this year (possibly less) on a building that will shelter snow-removal and aircraft rescue fire-fighting equipment. This with an airport terminal that’s empty as a pocket, except for two flights a day.
NORTHWOODS CHIC The two-story terminal is decorated in northwoods chic with three stone fireplaces. Visitors can wait in one of multiple sitting areas with leather couches, overstuffed chairs, large-screen televisions, and free wi-fi. The log motif extends to the pay phones and work stations. Even the blinds are wooden. Visitors often take pictures of the intricately carved woodwork and massive stairwell. Residents have mixed feelings about the airport. “I really wonder how Pellston managed to spend so much money on such a gorgeous terminal with so few available flights. Somebody got in on a boondoggle, I think. At least with that gorgeous lodge look, it could be converted to a hotel,” said Jennifer Tobias, owner of Bondurant, a home décor and apparel shop in Petoskey. Tobias said she opts to fly out of Traverse City for two reasons. The tickets are cheaper and weather is less likely to be a problem. “I live in Petoskey, so the Pellston airport would hands down be the best place for me to use. I never do. …First and foremost, the fares to and from Pellston are exorbitant.” Others like Ami Woods prefers Pellston and willingly pays the higher ticket prices. “The airport is gorgeous, the staff is always friendly and, all in all, I can honestly say I have always had a good experience. I find that the most amazing convenience is the location. Where else can you call ahead on a direct number to the airport, speak with a human being to confirm a flight schedule, and then if it’s delayed, stay home and wait! Nowhere.” Plus the parking at Pellston is free, and it’s eminently comfortable.
LODGE VISION Passenger Pat Connors of Indianapolis, who relaxed on a long leather couch, said his ride to the airport had to drop him off at 9 a.m., but he didn’t mind waiting until the next flight six hours later. “I love this airport!” Kelley Atkins, airport manager, came up with the lodge-style vision along with Emmet County Controller Lyn Johnson and a county commissioner. They concluded it would cost less to build a new 34,500 square-foot terminal than to replace the dilapidated 13,000 square-foot terminal. Their plan coincidentally coalesced after the 9/11 terrorist attack. The government’s response to the tragedy included a gush of new money for low-priority airport projects, including the Pellston terminal. A total of $3.5 billion was spent on 5,700 low-priority projects since 1998, according to the USA Today article. The money for these projects is funded with aviation taxes, including a 7.5 percent tax on passenger tickets and a domestic flight segment tax at $3.40 per passenger. Atkins credits Congressman Bart Stupak, who regularly uses the airport, for successfully persuading the FAA to allocate the money to Pellston; Stupak cut the ribbon at the terminal opening, although Senators Stabenow and Levin were also very supportive and could have been there too, Atkins said.
MISLEADING HEADLINE Atkins said the USA Today article’s headline that cited “72 (average) passengers a day” was misleading. Although the airport was slow in 2009, it was busy when the county applied for the funding — up to 14 flights a day. The airport’s two-a-day flight schedule is a casualty of the airlines trying to stay in the black by cutting flights and increasing ticket prices, Atkins explained in an interview that also included Beth Piehl, the county’s communication director. We sat in Atkin’s office, which is situated in a low-slung brick building next to the terminal. The office is modest, while the conference room, like the terminal, has beautiful overstuffed chairs and a fireplace. Atkins is proud of the interior decorating and points out that an airport is a showcase for the region it serves. “We live in Michigan. Michigan is struggling. So we want to do everything we can to stick out. We designed something we felt was gold-plated, that would be good for the image and the economy of Emmet County. The goal was to inspire people to relocate and bring their businesses here.” Added Piehl: “You hear visitors say, ‘Have you ever seen Pellston Airport? It’s beautiful!’” “We wanted something unique,” Atkins continued. “I don’t think it’s at all a waste of taxpayer money. I always looked at it as something to be proud of. Someplace else was going to get it (the funding), if we didn’t get it.”
A BIT LAVISH... Atkin’s assertion on the FAA’s willingness to fund the terminal raises a philosophical question. “It’s the age-old question you hear. Do you blame the bank robber or the bank that has the bad security?” said David Williams, vice president of policy for the Washington D.C.-based Citizens Against Government Waste. “It seems to be a bit lavish, especially at a time when everyone is trying to be modest about how they spend their money. It seems this airport is going in the exact opposite direction. Airports need to be showcases, but at what expense?” Williams said there have been multiple news stories popping up across the country about small airports, which receive an annual grant of $1 million from the FAA if 10,000 passenger tickets are sold. Pellston qualifies each year for the funding; the money was rolled into the $7.7 expenditure this year on the snow removal/fire fighting structure (the state and county will pick up 5% of the total cost). Williams said he just saw a CNN report about a West Virginia airport that gives plane rides at the end of the year to reach the 10,000 mark. “They take people up for a little sight seeing tour for free or else they charge them $10 or $15 for a 15-minute ride.” The FAA spokeswoman was unable to provide comment before press time.
MONEY MAGNET? Pellston airport not only receives FAA money, it’s also subsidized by Emmet County. Each year, the airport runs in the red, with its bottom line showing a deeper crimson each year due to Delta cutting back flights—something over which the airport management has no control. In 2007, the airport ran short by $518,321. In 2008, the shortfall increased to $598,885. In 2009, the deficit was $463,082. Emmet County taxpayers made up the shortfall. Although with that said, it’s also true that budget shortfalls occur at airports across Michigan. There are 236 airports in the state that are open to the public. Upper Peninsula columnist Carole Williams complains that taxpayers are picking up the bill, largely for the wealthiest of its residents. The richest of the rich have clustered in Friendship Township, Bay Harbor Resort, Harbor Springs Petoskey, and nearby lake communities. “According to Stupak, rural airports like Pellston are essential to the necessary business travel that occurs in and around smaller communities,” wrote Williams. “ … The same can be said about Escanaba’s Delta county airport, which, unlike Pellston, has no nearby airports. However, millions of dollars aren’t funneled to that city and it’s most likely because Pellston’s nearby areas, such as Harbor Springs, Petoskey and Mackinac Island, cater to upper crust millionaires, while Escanaba and its nearby communities are primarily home to low to middle-income working class people. “This is also true of the Copper Country’s Houghton County airport, which serves a four-county area and two universities in the twin cities of Houghton and Hancock. The terminal buildings at both facilities have the ambiance of a hospital emergency room and their vending machine menu leaves much to be desired.” In contrast to Pellston’s airport, Cherry Capital Airport in Traverse City— now the state’s fourth largest — operates in the black with three airlines. Although it serves about 10 times the numbers of customers as Pellston, it’s terminal area is only three times as large (120,000 square feet).
WORTH THE TAXES? Atkins said people of all income levels benefit from the airport. Taxpayer subsidies make sense because the airport brings in visitors who spend money in the area for hotels and restaurants. Local businesses need an airport for delivery of food and supplies. Many visitors buy vacation homes and even relocate their businesses to Petoskey. The Michigan Department of Transportation Bureau of Aeronautics computed the airport brought in an additional $35.9 million to the region. But its 2008 report raises questions. Its figures show that 112 people worked at the airport, including 42 restaurant workers at the well-regarded Village Inn. Yet sluggish business forced it to close last year. Smokey’s Grille took over in November and hopes that its new liquor license will boost business. The state survey computed the income for these 112 workers at $44,142 per person. Yet the average wage in Emmet County in 2005 was $29,869, according to Emmet County’s Northern Lakes Economic Alliance. Atkins said he doesn’t mind the publicity from the USA Today article. Flights at Pellston have historically been up and down, and he has no doubt they’ll eventually be an upswing. If that happens, however, it could mean using more tax money to enlarge the holding area, since it was designed to hold only about 53 people.
Up North Robbery? The sky-high cost of flying from the region
When it comes time to buying a ticket, locals are often forced to pay more, sometimes hundreds of dollars more, compared to flying out of Detroit, Flint, Saginaw, or Grand Rapids. Anyone who flies must do the math. A higher ticket price versus the cost and time (lost wages) of driving, parking, eating, and possibly staying at a hotel. There’s also the risk of what to do and where to stay if the flight is canceled. The economics usually favor flying locally unless the flight involves more than one person, said Leelanau County’s Bob Pisor, who wasn’t surprised that Cherry Capital Airport was named one of the “Top Five Airport Rip-Offs” by a 2009 Forbes study. The study calculated that the average cause of the Traverse City airport flight came out 41 cents per mile on average. It came in second in the country behind Cincinnati/Northern Kentucky International Airport, which averaged 48 cents per mile. Stephen Cassens, Cherry Capital’s airport’s director, said the survey wasn’t fair because all the flights originating from Traverse City are short — to Detroit, Minneapolis, and Chicago -- compared to much longer journeys originating at other airports. Longer flights have lower per mile costs.
AT THEIR MERCY People get angry at the airports for the high prices, but, in fact, they are completely controlled by the airlines, he said. The irony? If people don’t buy high-priced tickets and business is too slow, the airlines simply leave. “So the carriers will continue to serve it as long as they can make money. If they can’t, they’ll take their equipment and move it somewhere else. They are very mobile. It’s different than a stamping plant that would have to pack up their equipment. For an airline, they just say, ‘I’m not flying there tomorrow and their airplane will not come this way,” Cassens said. Cassens said Flint is able to offer extremely low ticket prices because it has a low-cost carrier, AirTran Airways “Air Tran is a premiere airline; my son used to work for Air Tran, I know. It’s a top-notch airline. Grand Rapids just landed AirTran, but they had to put up quite a bit of money to do it -- $4 million to get them in there to fly. AirTran is in Flint and Flint draws off Oakland County for its commuters.” Cherry Capital would love to get in AirTran, but it would have to show a base population of seven million to draw off of, Cassens said. “We only have 90,000 in the Grand Traverse region. We have a little ways to go.” With the flights stalled in Europe due to the volcano, customers can expect ticket prices to go higher in order to cover the huge losses, Cassens said. “The loss in April, internationally -- 10% or more has already hit. It’s a huge economic hit and will have to be recouped somewhere. They still have to pay bills of pilots, insurance, maintenance; It’s a real problem. The economic impact of this is going to be huge.”
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