2008 Project Abstract - AirlineInfo · Project Abstract Merced County, CA ... Introductory...

Small Community Air Service Development Program – Docket # OST-2008-0100

Merced County – Castle AirportProject Abstract

Merced County, CA – Castle Airport’s proposal for Small Community Air Service DevelopmentProgram funds includes two project goals: 1) establish and market convenient commercial airlineservice and Castle Airport and make it the airport of choice for inbound and outbound regionaltravelers in the Central Valley to desired destinations currently not being service; and 2) ObtainAir Service Development Zone designation at Castle Airport.

Nearly a million people live within a 50 mile radius of Castle Airport and the two closest airportshave either recently reduced, or ceased air service altogether. Traveling to airports inSacramento or San Francisco often involves lengthy trips which further impacts the alreadycongested roadways and adds to the valley’s existing severe air pollution problem. Castle isstrategically located in the center of the Great Central Valley of California and directly adjacentto two of the major north-south roadways. A recent regional air service assessment indicates theMerced County area is capable of supporting daily flights on a 30 – 37 seat jet aircraft to LAXand SFO, as well eventually supporting expanded daily service to the Denver, Phoenix or SaltLake City area.

Castle Airport, boasting California’s sixth longest runway, is fully equipped and FAA-certifiedto land a variety of jet aircraft, with a new 150 passenger terminal opening in June 2008. By firstestablishing regular, passenger jet service to at least one hub destination, with an immediate planto implement marketing service awareness and expansion, Castle Airport will become the airportof choice for the Central Valley region. Obtaining an Air Service Development Zonedesignation will only enhance the 1996 community-approved Reuse Plan for the former militarybase. The facility includes 1900 acres of available space for development of airline service,aviation support activities and a first-class business park.

Key objectives of this proposal are to establish regional jet air service to desired destinationscurrently not being served; create an air service attraction and expansion program targetingmajor and/or regional airlines; create and rapidly deploy an extensive air service advertising andawareness campaign utilizing a combination of traditional and innovative marketing strategies;and ultimately become a catalyst for regional industry growth, the travel and tourism sector, localbusinesses, and the University of California, Merced.

Merced County – Castle Airport will, with funding assistance from the Small Community AirService Development Program, establish passenger service by the end of 2008; contract forprofessional marketing services to launch an interactive Internet website for advertising,promotion and sales of airline service; host media events, introductions and presentations to localgovernments, Chambers of Commerce and regional economic development corporations toannounce service availability; provide billboard advertisements for Castle Airport and CastleCommerce Center; create electronic lists of travel agencies, major area businesses andeducational institutions, hotels/motels/casinos for letters, email and notifications regarding CastleAirports services and promotions; and regular press releases of new airline routes, fares andpromotions. Continued marketing efforts will enhance service expansion to position CastleAirport as the airport of choice for Central Valley regional travelers, business and aviationindustry leaders.

Proposal Under the Small Community Air Service Development Program

Docket Number: OST-2008-0100

Community: Merced County

Legal Sponsor: Merced County

DUNS Number: 839845682

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM2008 Proposal

TABLE OF CONTENTS

Summary and Background......................................................................................................Page 1Narrative ................................................................................................................................ Section I – Existing Air Service............................................................................................. Page 5Section II – Historical Air Service......................................................................................... Page 9Section III – Previous Air Service Development Efforts......................................................Page 12Section IV – Description of Air Service Needs ....................................................................Page 14Section V – Strategic Plan ....................................................................................................Page 19Section VI – Public-Private Partnerships..............................................................................Page 24Section VII – Funding Detail ................................................................................................Page 26Section VIII – Funding Management ...................................................................................Page 29Section IX – Grant/Project Management ..............................................................................Page 30Section X – Plan to Sustain Project Beyond Grant...............................................................Page 31Section XI – Legal Sponsor ..................................................................................................Page 33Section XII – Support for Air Service Development Zone Designation ..............................Page 34

FIGURESFigure 1 ...................................................................................................................................Page 2Figure 2 ...................................................................................................................................Page 4Figure 3 ...................................................................................................................................Page 6Figure 4 ...................................................................................................................................Page 8Figure 5 ...................................................................................................................................Page 9Figure 6 .................................................................................................................................Page 11Figure 7 .................................................................................................................................Page 14Figure 8 .................................................................................................................................Page 15Figure 9 .................................................................................................................................Page 17Figure 10 ...............................................................................................................................Page 18Figure 11 ...............................................................................................................................Page 35

TABLESTable 7.1 ...............................................................................................................................Page 26

LIST OF ATTACHMENTS .............................................................................................Page 36

APPENDIX B – SUMMARY INFORMATION ...........................................................................

MERCED COUNTY – Castle Airport Summary & Background

Small Community Air Service Development Program Page 1 of 36

Docket Number OST-2008-0100

Merced County – Summary and Background

Historical Summary

Castle Air Force Base, then known as Merced Army Airfield, was an important pilot training

base during World War II. Its post war career was even more distinguished. Castle, as a

Strategic Air Command base was the location of all B-52 and KC-135 flight training and starting

location for several record setting around-the-world flights, until its closure via the Base

Realignment and Closure process. Castle began drawing down with all aircraft leaving in 1993

with a final closure in 1995.

The closure of Castle Air Force Base was devastating to the local community, a situation which

has only begun improving within the last five years. As Castle was closing, a Joint Powers

Authority (JPA) that included the City of Merced, City of Atwater and County of Merced took

over reuse authority of the Castle properties.

This JPA made many short-range property decisions that did not provide long-range value. Over

time, the JPA proved to be ineffective and it was finally dissolved in late 2000 with the County

of Merced becoming the sole reuse authority for Castle Airport. In 2002, the County hired a

professional airport manager and in 2004, realigned Castle under a new department, that being

the Department of Commerce, Aviation and Economic Development (CAED).

This dynamic department managed a nearly complete overhaul of the entire airfield bringing it

up to the Federal Aviation Administration’s commercial airport standards. In addition, the

County, through the department has been engaged with a Master Developer, Federal

Development, LLC, as a private partner in the development and marketing of the Castle

property. In December 2006, the Air Force finally deeded the Castle Airport property to the

County of Merced.

Future Directions

Castle Airport, soon to be re-designated as the Castle Commerce Center and Castle International

Airport, will be managed on a whole-base concept that includes the integration of a thriving

airport and international business park. Several foreign companies have shown significant

MERCED COUNTY – Castle Airport Summary & Background



interest/intent to build or lease facilities at Castle and open a United States division of their

companies. In addition, the airport is currently host to two truly international flight schools, one

that is training all the up-and-coming Chinese airline pilots and the other mostly training students

from India. Together, the schools will graduate over 200 students, with commercial ratings, this

calendar year.

Castle is expected to continue on its course toward its proper role as an economic engine for the

entire community. As Castle officials continue to reach out into the community, they are

assailed with many questions, the most common of which is, “When are you going to bring an

airline to Castle?” Many people who were in the community at the time of the base closure

mourned the loss of the Air Force and have been looking forward to the full utilization of the

magnificent Castle Airport and (believe it or not), the noise of airliners and cargo planes again at

Castle.

Figure 1

Castle Air Traffic Control Tower, Operations Building and Corporate Aircraft

MERCED COUNTY – Castle Airport Narrative



Introductory Narrative

This document is the Merced County, California proposal to the Small Community Air Service

Development Program, and contains two components:

1. Part one of this two-year proposal is to establish new air service at Castle Airport (MER) for

the communities that make up the greater community of Merced County, California, as well as

the surrounding communities of Mariposa, Tuolomne, Madera and Stanislaus. This section will

explore the marketing and incentives that will be used to sustain and expand new airline service

at Castle Airport and the surrounding aviation industrial park.

Merced County – Castle Airport sits, with the State’s sixth longest runway, in the center of the

San Joaquin Valley, a part of the Great Central Valley of California. For many air travelers in

the five-county area, most travel is done through Fresno (FAT), Sacramento (SMF), and airports

in the Bay Area (San Francisco, Oakland or San Jose). The extensive automobile travel

necessary to reach these airports is inconvenient for many travelers. Since many reside in

mountainous areas, a 70 mile trip can take several hours. Traveling to the Bay area from the

valley is dangerous and can include severe traffic back-up situations. Flights from Castle Airport

would alleviate many of the long road trips currently required for people to get to an airport. The

reduction in road trip length would provide the following positive results: less traffic on already

congested roads; less auto emissions in a severe air pollution problem area; and a more pleasant,

less expensive and less time-consuming travel experience.

Castle Airport (MER) (the former Castle Air Force Base) was fully deeded to Merced County on

December 19, 2006. Through FAA, State and local funding, more than $17 million has been

invested in upgrades for Castle Airport. The facility was inspected in May 2008, by the FAA

and certified as meeting all requirements of a 14 CFR Part 139 Certificated Commercial Airport,

(Attachment 1). Castle Airport has a full suite of navigational aids including an operating FAA

certified control tower and airfield lighting, a fully staffed and functioning Aircraft Rescue and

Firefighting unit, and a fixed base operator with more than adequate fuel storage and ground

support equipment. A new 150 passenger terminal will open in June 2008, (See Figure 2 – Floor

Plan).

MERCED COUNTY – Castle Airport Narrative



Castle Airport is within 10 miles of the Merced Municipal Airport (MCE), a Part 139 airport

with a limited, Essential Air Service subsidized operation that terminated on May 31, 2008 and a

short 5,903 foot runway, compared to Castle’s 11,802 feet. During summer months, due to the

high temperature and field elevation, a regional jet could not safely operate from Merced’s short

runway. However, aircraft operating from Castle Airport would have no such limitations.

2. The second component is to establish an Air Service Development Zone at Castle Airport –

Castle Commerce Center. The Castle Airport properties total 1900 acres; 1300 of these dedicated

to the airport and aviation activity and the other 600 acres to be utilized as a business/airpark.

Much of the Master Developer’s energies are devoted toward the airpark, cargo operations on the

airfield and outreach/marketing for the entire property.

Figure 2

MERCED COUNTY – Castle Airport Section 1

Existing Air Service



I. A Description of the Community’s Existing Air Service

The Castle Airport (MER) in Merced County has incredible capacity for air service in

California’s unique Central Valley. Currently, there is no existing commercial air service at

Castle Airport or Merced Municipal Airport, however, the County is in the final stages of

negotiation with an airline to provide passenger jet service from Castle Airport to Reno and

North Las Vegas, Nevada. Barring any unforeseen developments, service should commence in

mid-July 2008, (Attachment 2). The County of Merced, through its Department of Commerce,

Aviation and Economic Development, and surrounding communities, have been working toward

developing Castle’s potential for safe and efficient air service. There are several key factors

which continue to affect the progression of plans for air service at Castle Airport.

Atwater/Merced Catchment Area

The Atwater/Merced catchment area is bordered by the Modesto City-County Airport catchment

area to the north, Fresno Airport’s area to the south, and the San Francisco Bay Area catchment

to the west, (Figure 3, next page).

Local area travelers use one of six airports when diverting from the Castle or Merced Municipal

airports. The closest in location to Merced is Modesto Airport, which is approximately 40 miles

away. As mentioned above, travelers in the five-county area must often use the larger airports in

Fresno, Sacramento, or the Bay Area, to reach outlying locations which can critically impact

north and southbound surface traffic, thereby, further impacting existing highway congestion.

Travelers seeking outside the area airports point to a lack of major air service available in the

Central Valley. Existing airports around Merced County offer limited if any service at all, and

most travelers must use airports outside the local catchment area. With Merced Municipal

Airport losing its service and Modesto Airport’s recent reduction in air service, this leaves quite

a void in availability of air service. Also, there is an overall lack of north-south interstate hubs in

California, as well as a greater need for east-west connecting service.

Castle Airport is strategically located in the Central Valley to provide much-needed air service to

north-south hubs and connecting flights out-of-state. Due to some of the surrounding

catchments’ limitations, Castle is well positioned to capture major portions of the travel flow





from these areas, thereby, more efficiently serving the needs of Central Valley flyers. Travel to

other airports to make connecting flights out of state most often coincides with peak travel times

on the major roadways, further impacting the daily commuter traffic. A new airline at Castle

providing a more convenient, efficient, and cost-effective service to central California flyers will

help alleviate the already congested traffic moving toward the Bay Area airports and

Sacramento, as well as the southern-moving traffic toward Fresno.

Figure 3

Figure 3 - Castle Airport Catchment Area

Population Within: 50 Miles – 1,056,175

75 Miles – 3,790,664





Merced Municipal Airport

The Merced Municipal Airport, as mentioned above currently provides no air service. Mesa

Airlines (dba Air Midwest) terminated service May 31, 2008. This service, subsidized under the

Essential Air Service Program [EAS], had consisted of three to four daily departures to Las

Vegas/McCarran Airport, using Beech 1900 aircraft. Although this service provided travelers

with access to connecting flights to national destinations, the frequency and timeliness of Merced

Municipal Airport has been limited, and at times unpredictable. The EAS support was extended

to Great Lakes Aviation in 2007, but no action has occurred under that contract. Modesto

Airport, located 40 miles north of Castle, provides daily flights to San Francisco (SFO); service

to Los Angeles (LAX) was recently cancelled.

Community Economics/Demographics

“Castle Airport is located in the heart of California’s Central San Joaquin Valley, one of the

world’s largest and most productive agricultural regions alongside one of the most dynamic,

diverse, and high-cost urban centers in the United States” said the Interagency Task Force for the

Economic Development of the Central Valley in 2004.

California is expected to add approximately 11 million residents in the next 20 years, with the

Central Valley exceeding the overall state growth rate by an average of approximately 8%.

These high-speed growth rates will contribute to the Central Valley’s need for superior air

service and California’s overall need for intra-state flight availability with connections to

national and international hubs.

Castle Airport’s immediate community, Merced County, is located in the Northern section of the

San Joaquin Valley, directly in the middle of the Central Valley and the State of California.

Castle Airport has direct access to Highway 99, one of California’s major thoroughfares and

main north-south state corridors. Merced County’s Castle Airport is also easily accessed from its

western side by Interstate-5, another major north-south travel route. These two arterial roadways

provide a constant flow of travelers through Merced County and would provide a strong

consumer access base for new airline service at Castle. Plans are in the final stages of approval,

pending review and approval of the Environmental Impact Report, to build the new Atwater-

Merced Expressway, which will afford even greater accessibility to Castle Airport, (Figure 4).





Figure 4


Historical Air Service



II. A Synopsis of the Community’s Historical Service

Castle Air Force Base

The current Castle Airport has been historically owned and operated by the U.S. Air Force.

Throughout the twentieth century up until 1995, it was known as Castle Air Force Base or

Merced Army Airfield. The Air Force built Castle to be a safe, state-of-the-art runway to be

used for military operations, and was utilized as an important pilot training base during World

War II.

There were several operating units based at Castle during World War II, including the 93rd Bomb

Wing, which maintained readiness for global strategic bombardment. In 1948, the 93rd Bomb

Wing became the first Strategic Air Command bomb group to deploy in full strength to

Okinawa, and remained an active military unit through Desert Storm in the 1990’s.

Castle, during its use as a Strategic Air Command Base, was the location of all B-52 and KC-135

aircrew flight training from 1956 to 1995. Castle was also the starting location for several

record-setting jet flights, including the deployment of the first jet aircraft nonstop flight (1957)

around the world. (see Figure 5)

Figure 5

Three B-52Bs of the

93rd Bomb Wing

prepare to depart Castle

Air Force Base, Calif.,

for their record-setting

round-the-world flight in

1957





During the 1990’s the U.S. Department of Defense began evaluating various military bases for

potential closure. Formally called the Base Realignment and Closure process, Castle Air Force

Base was determined to be no longer needed, and was ordered to begin closing in 1991. In the

next two years, Castle’s aircraft were transferred to other bases, and Castle was finally closed in

1995, thereby ending the history of the famous 93rd Bomb Wing.

The closure of Castle Air Force Base was devastating to the local community. The economy

experienced higher unemployment rates and a loss of tax revenue, causing a local recession

which has just begun improving over the last five years. Currently, Castle Airport is designated

as a Local Agency Military Base Recovery Area (LAMBRA), which provides unique tax

incentive opportunities for aviation and economic development onsite. The addition of

commercial air service at Castle is part of the community’s overall plan to offset the negative

economic impact of the Air Force base closure.

Community Air Service

United Airlines served the community of Merced County until the deregulation of the airline

industry in October 1978 and terminated its service in March 1979. From 1979 through 2006,

Merced County area has been served by a variety of small airlines, providing service through

Merced Municipal Airport (see Figure 6 on the next page).

West Air/United Express provided scheduled service to Fresno, San Francisco, and Los Angeles

with frequencies of up to seven departures per day using BAe Jet Stream aircraft.

There has been no air service to California hub airports since 2001, despite significant population

increases in the county and region.





Figure 6

Service Period Airline

April 1979 through February 1980 Air Pacific Airlines

March 1980 through August 1981 Golden Gate Airlines

June 1982 through September 1983 Inland Empire Airlines

April 1984 through August 1987 Wings West/American Air

August 1987 through May 1998 West Air/United Express

June 1998 through September 2001 Skywest/United Express

September 2001 through November

2006 Scenic Airlines

November 2006 to May 31, 2008* Mesa Airlines

(Merced Municipal Airport, Strategic Development Plan (Draft Final Report), By DMJM

Aviation, February 2007; *Mesa Air Group Press Release, Phoenix, May 14, 2008)

Castle Airport – The Community’s Airport

As the Air Force was going through the closure process at Castle Airport, (the former Castle Air

Force Base), the community developed a “Final Castle Air Force Base Reuse Plan” dated May 9,

1996 in collaboration with a large contingent of community representatives, educators and local

government leaders. This master plan for the civilian reuse of Castle Airport and its

accompanying Environmental Impact Report were adopted by the entire community through an

extensive public participation process and local government approvals.

It is through direction laid out in this document that local agencies, specifically the County of

Merced, have begun working to build Castle into a first-class commercial airport and make

optimal use of its prime central valley location and lengthy runway.


Description of Community’s Air Service Developments



III. A Description of the Community’s Air Service Development Efforts over the Past

Five Years and the Results of Those Efforts:

During Castle’s tenure as an active Strategic Air Command Air Force Base there were no efforts

to develop commercial air service. However, since its closure as a military base, community

agencies have been actively engaged in planning for and executing the civilian reuse of Castle.

As described in the Summary and Background section of this proposal, community agencies

initially formed a Joint Powers Authority to guide the process for development. Although the

JPA was later dissolved, it was the first step in a long planning process and illustrates the

communities’ consensus for the development of airline service at Castle. In 2000, Merced

County became sole airport reuse authority and has seen over $17 million dollars invested by

federal, state and local agencies to convert the airport from military to civilian status. All work

and approvals (including the 14 CFR Part 139 Commercial Airport Certification inspections) are

complete, except for the passenger terminal which will be ready for use the end of June 2008.

Aggressive marketing of the airport and its capabilities and services has begun. Since 2005,

Castle Airport has received many letters from local agencies and businesses in support of air

service development at Castle, (Dole, Foster Farms, Joseph Gallo Farms, Chambers of

Commerce, and many others). These local agencies believe that Castle’s safety measures and

capacity for airline and professional services (found nowhere else in the area) will provide the

regional community with the best possible option for meeting the area’s current and future travel

needs. Such amenities at Castle (reflecting the most recent development efforts) include:

Castle is home to California’s 6th longest runway

Castle’s runway boasts 1000 feet of overrun (or stopway) on both ends for added safety

State-of- the-art and fully operational air traffic control tower

8000 feet of emergency runway

Newly constructed 150 passenger terminal (will open June 30, 2008)

Abundant parking

Extensive and implementation-ready air service expansion capacity

No noise, flight or operations restrictions and no encroachment

Safe and immediate access to two major north-south California roadways


Description of Community’s Air Service Developments



Over the next six months and if awarded funding, Castle Airport will finalize a formal contract

with an airline to begin service in mid-July 2008 and market this available service to the local

and surrounding community. In addition, the Airport Manager and a member of the Developer

Team will continue marketing Castle Airport’s strategic central valley location, lengthy and Part

139-certified runway and control tower, brand new 150 passenger terminal and abundance of

parking to airliner carriers that meet the criteria specified above as well as to industry partners

looking for a location to establish and/or expand their aviation related businesses. The County

has hired an airline consultant to promote the airport with various target airlines. Finally,

because of the airports’ tremendous capabilities, marketing has also begun on the international

level.


Description of Community’s Air Service Needs



IV. A Description of the Community’s Air Service Needs and Deficiencies

The analysis of Merced County’s air service needs stems from the community’s interest in

maximizing Castle Airport’s potential as a commercial airport and business park.

As discussed in the above sections, Castle was historically used as an Air Force base, and was a

strong economic driver for the immediate community, as well as the overall Central Valley.

Once Castle Air Force Base was closed in 1995, it caused an economic vacuum in Merced

County which has gradually improved through the efforts various agencies.

The community, through their activities to develop a plan for the reuse of Castle Airport,

identified several needs/deficiencies which could be best served by commercial air service at

Castle. Figure 7 below highlights the major deficiencies as well as those needs identified by

Merced County Department of Commerce, Aviation and Economic Development with detailed

descriptions of each point.

Figure 7

Rapid Growth – regional growth has been and is expected to continue

growing at rates averaging 25% per every 5 years.

Population growth estimates for the local region during our current 20 year

period give a cumulative total of approximately 370,894 new residents.

The new University of California at Merced will foster significant new travel

needs, particularly to Los Angeles and points east.

Riverside MotorSports Park Adjacent to Castle Airport – Castle Airport

becomes a Destination

The distance to the nearest hub airports exceeds 60 miles on congested

highways.

Increased road trips are being linked to higher levels of pollution in the

Central Valley, and local air travel is viewed as one potential solution.





Population Growth and Service to California Hub Airports

Since 2001, there has been little to no service in any of Castle’s surrounding communities to

California hub airports. Despite significant population increases in the County and in the region

(Counties of Stanislaus, Mariposa, Tuolumne, and Madera), airline service has not expanded

mainly because airlines have looked only at Merced County population figures and because the

available facility was inadequate to handle larger operations.

Merced County has shown a growth of over 33,000 people during the years 2000 to 2005. The

five county region is projected to grow by approximately 175,717 in this decade (2000 – 2010),

and another 195,177 in the next decade (2010 – 2020), providing a cumulative population growth

of approximately 370,894 people over the next 20 years (Great Valley Center, 2007).

As discussed in earlier sections, Castle is placed in the unique position of attracting travelers

from several different catchment areas due to its location near two of California’s largest north-

south corridors and the limitations of surrounding airports. According to information recently

released from the California Department of Finance (Figure 8), population estimates for the

surrounding areas are within 99% of the figures for the 50 mile radius noted in Figure 3 above.

Figure 8

County Population

Mariposa 18,156

Merced 249,116

Madera 147,201

Stanislaus 519,276

Tuolumne 57,347

Total 991,096

According to the above information, Castle Airport currently has a potential consumer base of

approximately one million area residents. And if growth patterns for the area remain consistent,

these numbers will increase dramatically over the next 10 years, creating an increase in airline

travel needs and demand.





University of California at Merced

In 1988, the University of California began planning for a new campus based on population and

enrollment projections. At the end of a lengthy planning process, Merced was chosen as the site

for the prestigious University’s 10th campus. UC Merced opened its doors to its inaugural class

in 2005, and has since grown in faculty, programs, and enrollment. Currently, plans are in place

to cultivate UC Merced’s potential for cutting-edge research in the fields of

environmental/biological sciences, engineering, and medicine. In fact, UC’s Sierra Nevada

Research Institute and engineering laboratories are located at Castle. Plans are also underway

for building the University’s medical school.

The furtherance of professional academic disciplines located in Merced will continue to

dramatically change the face of the area’s economy, and ultimately, consumer travel needs and

patterns. The location of the University and its focus on scientific and medical research will

foster significant need for travelers to fly statewide, as well as nationally and internationally.

Castle Airport’s near proximity to this important institution and onsite research centers will

provide business and student travelers with convenient access to and from hub locations.

Riverside MotorSports Park

Riverside Motorsports Park (RMP) is a 1200-acre, motorsports-themed family recreation and

entertainment center in development in Merced County, located in the heart of California's

Central Valley.

The Park plans include eight different types of tracks, including a paved super speedway; 3-1/2-

mile, multi-configuration road course; 5,000-foot drag strip; kart course; integrated paved oval

tracks; integrated dirt oval tracks; an off-road circuit; and a motocross course. Riverside

Motorsports Park's multiple tracks will provide a racing venue for every form of automobile,

truck, motorcycle and kart racing—meeting the needs of professional and club racing

sanctioning organizations across the United States.

A landscaped environment complete with RV facilities, picnic grounds, upscale food courts and

family restaurants, video and game arcades, playgrounds and clean, attended restrooms, the park





will be a motorsports and recreational destination for racers, race fans and families from

California, the West, and the entire United States. In addition to motorsports events, the Park

plans to feature mid-week racing and technical motorsports schools, music concerts, car shows

and business center events (www.rmpracing.com, 2007), (see Figure 9 below). The Park will

also be a major national research and testing facility.

The addition of this multi-venue park will enhance Merced County/Castle Airport’s position as

an airline passenger destination. Castle is the closest airport to Yosemite National Park, another

destination. Based upon experience of other airports near large racing venues, Castle should see a

continuous stream of people visiting or supporting RMP coming and going through its passenger

terminal. Convenient air travel from hub airports will be very important to the people of this

market segment.

Figure 9





California Regional Air Service Plan – Air Service Needs Assessment (2007)

Based upon the final report entitled “California Regional Air Service Plan – Air Service Needs

Assessment,” (Mead and Hunt, 2007), Merced County’s Castle Airport exhibits the following

passenger demand needs and capabilities (Figure 10):

Figure 10

This service potential, as recommended in the Regional Air Service Plan, would provide an

important link for area travelers to large flight hubs in Los Angeles and San Francisco, as well as

important connections to major airports outside of California. Without the development of

airline service at Castle, travelers are forced into lengthy commutes northbound or southbound to

the larger airports, creating traffic and efficiency issues, which will only be exacerbated as the

Central Valley’s population continues to grow.

LAX - “Results of the economic screening indicate that Atwater/Merced could

support daily frequencies on either 30-seat or 37-seat jet aircraft. This initial

screening indicates there is enough demand to warrant new service to Los

Angeles Airport from Atwater/Merced.”

SFO – “Atwater/Merced appears capable of supporting multiple new daily

flights on either 30-seat or 37-seat jet aircraft based on initial economic

screening. Initial results indicate that there is sufficient beyond San Francisco

traffic to offset the local market for service to be economically viable.”

DEN/PHX/SLC – “Atwater/Merced is potentially capable of supporting two

daily roundtrip flights to Denver Airport, Phoenix Airport, or Salt Lake City

Airport on 50-seat regional jet aircraft.”


Strategic Plan



V. A Strategic Plan for Meeting Those Needs Under the Small Community Program:

Goal – 1) Establish and market convenient commercial airline passenger service at

Castle Airport and make it the airport of choice for inbound and outbound regional

travelers in the Central Valley to desired destinations currently not being served.

Nearly a million people live within a 50 mile radius of Castle Airport, including large

concentrations of population in the Fresno and Modesto areas. It is the intent of the

County of Merced to promote Castle Airport to achieve its goal of becoming the airport

of choice for air carrier and aviation industry services to the Central Valley and beyond.

Regional travelers also indicate, according to research and public comments gathered by

Mead and Hunt Consultants, there is a desire/demand to fly to LAX – Los Angeles (and

vicinity), SFO – San Francisco, and hubs to the east such as; PHX – Phoenix, DIA –

Denver, and SLC – Salt Lake City.

Last year was the first year in which more travel was purchased online than off-line in

the United States, according to the PhoCusWright Consumer Travel Trends Survey. The

study said that 51 percent of U.S. travel was booked online in 2007, and it projected that

percentage to increase to 56 percent in 2008 and 60 percent in 2009.

Objectives: (measurable/deliverable methods to reach goals)

(1). Establish regional jet air service at Castle.

(2). Create air service attraction and expansion program targeting additional major

and/or regional airlines (specific airline names will not be presented in this

proposal).

(3). Conduct and direct airline visits.

(4). Create and deploy an aggressive 24/7 advertising and air service awareness

campaign, combining traditional marketing opportunities with proven Internet

marketing and promotion strategies targeting regional travelers and the business

community.

(5). Become a catalyst for growth for regional industry, the travel and tourism sector,

local businesses and the University of California.


Strategic Plan



Through a recent marketing assessment, the County recognizes that there are several

destinations not being served locally, (Section IV). Based upon this assessment and

“passenger comments,” the County will clearly define the desired routes by order of

preference and identify the airlines that are most likely to meet those routes with the

preferred type of aircraft. The target airlines are not listed in this proposal.

The market assessment referred to specific types of aircraft by seating capacity of 30, 37

or 50 seat regional aircraft. The aircraft that meet these criteria include but are not

limited to:

Embraer EMB-120 Brasilia – 30 seats

SAAB 340 – 33 or 34 seats

Fairchild/Dornier 328 Jet – 30 or 34 seats

DeHaviland Dash 8 – 37 seats

Embraer Regional Jet ERJ-145 – 50 seats

Bombardier Canadair Regional Jet (CRJ) – 50 seats

The County, working with their private partner, Federal Development, LLC, and a hired

professional airline attraction consultant will create a marketing program including

presentation materials promoting Castle Airport’s availability for new carriers to initiate

service to the proposed routes. Flexibility will be the key ingredient. For example, the

County believes LAX is the preferred route, when in reality, an airline may desire to start

service to SFO (the county would be willing to accept airline desires). The airline

attraction program would include personal visits between County/Castle and Federal

Development representatives, and airline officials.

An aggressive local area marketing plan has been developed to make potential five-

county passengers aware of the new airline service. This program includes multi-media

facets, including but not limited to; television, radio, billboards, newspapers, local

magazines and periodicals, as well as personal visits to local businesses, organizations

and government centers. In addition, Castle Airport will create and deploy an Internet

Marketing Campaign to include:


Strategic Plan



1. Introduction of a new interactive website for Castle Airport.

2. Integration of conventional marketing efforts with internet technology to

create an interactive air service brochure featuring fares, destinations,

current flight, travel and tour information for inbound passengers.

3. Advertising opportunities for new airline services on Castle’s Website.

4. Optimization of Website for Internet search, with a focus on Castle’s top

markets and competition.

5. Distribution of promotional emails, newsletters and surveys to a local

business list and opt-in subscriber database.

Action Steps:

(1). Contract for Professional Marketing Services.

(2). Host a media and press event to announce the start of passenger jet service.

(3). Provide introductions and presentations to local governments, Chambers of

Commerce and regional County Economic Development Corporations (in the five

county area).

(4). Initiate an advertising blitz regarding Castle Airport’s passenger service startup.

(5). Provide Public Service Announcements on radio/television stations in the five

county area.

(6). Offer printed media advertisements in five county area.

(7). Provide at least 4 well-placed billboard advertisements for Castle Airport and new

service.

(8). Create a list of regional travel agency E-mail contacts and scheduled marketing

blitzes.

(9). Establish an electronic list of regional major businesses for letters, notifications

regarding Castle Airport services and scheduled electronic reminders.

(10). Purchase of city/county business license and Chambers of Commerce business

lists for marketing distribution.

(11). Direct contact with regional Visitor Bureaus.

(12). Distribute regular press releases on new routes, fares, promotions and

announcements.

(13). Facilitate contact with local tour companies.

(14). Create an electronic list of hotels/motels/casinos in 5 county areas.


Strategic Plan



(15). Establish a Web site and Internet marketing for airline.

(16). Provide Public Service announcements through other media.

The County/Castle Airport intends to be very aggressive in meeting the end goal of

establishing regional service. Once established, continued marketing efforts will enhance

service expansion to position Castle Airport as the airport of choice for Central Valley

regional travelers. The real timeline, when all is said and done, is for the

County/Castle to do as much as possible, as quickly as possible, to start airline

passenger operations at Castle Airport to one of the identified preferred locations or

a reasonable alternative hub site.

Action Steps Timeline to Establish Passenger Service

1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER

Hire consultant Meet with airlines Meet with airlines Meet with airlines

Validate routes and

aircraft

Establish Air Service

Contract with Airline





Identify Compatible

Airlines

If Contracted – Then

Begin Marketing to

Community

If Contracted – Then

Begin Marketing to

Community

If Contract – Then

Begin Marketing to

Community

Establish Attraction

Program

Inaugurate Air Service Inaugurate Air Service Inaugurate Air Service

Create Presentations If No Contract –

Continue to 3rd Quarter

If No Contract –

Continue to 4th Quarter

Pay Quarterly Cost

Offset to Airline

Create Incentive

Package

Meet with airlines

For quarters five through eight, we will continue post inaugural activities to insure that the

County builds sufficient service use to reduce dependency on grant funds. The County will

continue to market and promote any service available at Castle for years to come through our

non-airport budget process.


Strategic Plan



Goal – 2) Have Castle Airport designated as an Air Service Development Zone. This

designation will be an excellent fit for the type of development and targeted markets

planned for Castle. See detailed explanation under Section XII.


Public-Private Partnerships



VI. A Description of Any Public-Private Partnership That Will Participate in the

Project

Formal Partnership

Merced County is a local public governmental entity and is the current owner/operator of Castle

Airport. The County, having already established an Asset Management Agreement, is

negotiating a formal development agreement with a private company called Federal

Development LLC. Federal Development LLC will become Castle Airport’s professional

Master Developer, bringing private equity and the know-how to develop Castle Airport and

Castle Commerce Center’s potential into a first class airport and business park.

Federal Development proposes to develop the approximately 1900 acres of Castle Airport for use

as professional offices and warehouses; retail centers; airline services and aviation related

activities; air cargo and aircraft maintenance uses; a research and development park; and for

hospitality, entertainment and leisure activities. Their marketing plan coincides with the goal of

designating Castle Airport and Castle Commerce Center as an Air Service Development Zone.

Castle’s designation as a Foreign Trade Zone and as a Local Agency Military Base Recovery

Area (LAMBRA) provides extra incentives for the location of both commercial air services and

surrounding business developments.

The County of Merced, as lead entity, will be fully involved in the activities at Castle, in

collaboration with the contracted Master Developer. The County will continue to submit grant

proposals as funding opportunities arise, and will execute any federal grant awards received, as

well as process associated grant documentation and oversee grant administration. The County’s

Department of Commerce, Aviation, and Economic Development has been in the past and will

continue to be the County’s “point” agency in the development of Castle Airport. They also

possess extensive experience in FAA, EDA and CDBG grant administration.

The County of Merced, in its role as owner/operator and lead entity, will also contribute as a

major link to surrounding communities. Any development activities occurring at Castle Airport

must follow the formal public approval process. This affords the public and community

residents the opportunity to participate in the development of Castle Airport. Through this

process, it is expected that the reuse of Castle Airport, and its future airline service and business


Public-Private Partnerships



opportunities will provide maximum benefit to the surrounding communities, including the

greater Central Valley region.


Funding Detail



VII. A Detailed Description of the Funding Necessary for Implementation of the

Community’s Project, Including the Federal and Non-federal Contributions:

Section V displays the 2-year Strategic Plan broken down into elements. The Action Steps are

further displayed chronologically. Table 7.1 below provides the Action Steps budget broken

down by element and funding sources:

Table 7.1 Action Steps Budget

Funding SourcesDescription

U.S. DOT Airport Non-airport

Total

Cash Cash In-Kind Cash In-Kind

Attraction program:

Products $10,000 $2,500 $12,500

Travel $15,000 $6,500 $21,500

Incentive program:

Landing fee abatement $55,120 $55,120

Marketing $206,626 $49,972 $256,598

Cost Reduction $53,374 $53,374

Staffing:

Program administration $30,320 $35,588 $65,908

Consultant $35,000 $35,000

Total $320,000 $85,440 $58,972 $35,588 $500,000

Percent of total project 64.00% 17.09% 11.79% 7.12% 100%

Percent of cash contribution 75.79%


Funding Detail



A. Attraction Program: Consists of two main elements, Products and Travel. The products

include all written and audio-visual products that can be sent and/or shown to prospective

airlines to make them aware of and get them interested in Castle Airport. The budget for this

item is $12,500. Travel will be within the five-county market area. Introduction and

presentations will be to local governments, chambers and Merced County Economic

Development Corporations. The total amount budgeted for this item is $ 21,500 and will be used

in the quest for an airline to service Castle Airport.

B. Incentive Program: Consists of three main elements, Landing Fee Abatement, Marketing,

and Cost Reduction. The money identified here will be provided to the airline or reduced from

money they would owe to the airport.

The landing fee abatement was computed as follows: Using the County of Merced

Ordinance No. 1764 – Establishing Aircraft Landing and Parking Rates and Related

Charges at Castle Airport, landing fees for 2009 are listed as $0.47/1000 pounds of

Maximum Takeoff Weight (MTOW) or $16.00/landing (whichever is higher). Similarly,

landing fees for 2010 are listed as $0.50/1000 pounds of Maximum Takeoff Weight

(MTOW) or $20.00/landing (whichever is higher). Using the Dornier 328 Jet, which

has a MTOW of 30,843 pounds and expecting 15 landings per week in 2009 and 41

landings per week in 2010, we compute the amount of landing fees to be abated for 2009

and 2010 respectively to be $12,480 and $42,640 for a total of $55,120.

The marketing component will consist of an aggressive local area marketing plan to

make the potential five-county (Merced, Stanislaus, Madera, Mariposa, and Tuolumne)

passengers aware of the new airline service. This program will include multi-media

facets, including but not limited to; public service announcements on radio/television

stations, billboards, printed media advertisements, introduction and presentations to local

governments, chambers and Merced County Economic Development Corporations,

Castle Airport internet marketing Website with local and destination weather

information, ticket counter locations and an interactive terminal map, as well as personal

visits to local businesses and organizations. $256,598 is budgeted for this item.


Funding Detail



Cost reduction at $53,374 was established to assist the airline in paying some of its

operating costs as they relate to Castle Airport for two years. The airline can use this to

pay the terminal rental cost or any other identified cost of operating at Castle Airport.

C. Staffing & Consultants:

Staffing consists of in-kind work performed by three managers and clerical staff within

CAED for grant program administration, as follows:

10% of airport manager’s time (although it’s expected to be quite a bit more)

5% CAED Department Director

5% CAED assistant department director

3% clerical/accounting staff

The total line item amount of $65,908 includes salaries, payroll taxes and benefits paid by

the County of Merced over a two-year period.

Consultants: will be hired to work on the following areas: Promotional Items, Materials,

and Activities Events, Demographic and Passenger Data collection and analysis. The

amount budgeted is $35,000.

Promotional Items, Materials and Activities Events will focus on advertising blitz

regarding passenger service, distribute promotional e-mails, newsletters and surveys to

local businesses, as well as development of a new user-friendly, interactive Website.

Demographic data analysis will focus on area needs to expand our market reach to

customers within the 5 county area.

Passenger Data collection and analysis will be used to provide air service marketing as

well as survey/attraction campaigns.


Funding Management



VIII. An Explanation of How the Community Will Ensure That Its Own Funding

Contribution is Spent in the Manner Proposed:

If awarded grant funds through the Small Community Air Service Development Program,

monies, including non-airport revenue, will be placed in the Castle Airport Enterprise Fund, and

will be managed, tracked and administered by the Merced County Department of Commerce,

Aviation, and Economic Development and audited by the Merced County Auditor. Project

activities and an action plan will be established in the County/Department Budget Plan during

the public budgetary process, as well as through the Master Developer Agreement.

Commitment to accept and administer the grant funds will be authorized by the Merced County

Board of Supervisors, coinciding with the process for commitment and execution of the Master

Developer Agreement. Private and matching funds for the project will be obligated through the

Merced County Board of Supervisors process to approve the submittal of the grant proposal, and

by formal acceptance of an award.

The Merced County Department of Commerce, Aviation, and Economic Development has

experience in successfully managing both federal and state grant-funded projects and will

diligently track all awarded funds including matching fund contributions. The department is

committed to abiding by any and all reporting requirements set forth by the federal Department

of Transportation, and any other federal agency that has awarded grant funds for the

development of Castle Airport.


Grant/Project Management



IX. Description of How the Community Will Monitor the Progress of the Grant Project:

Progress on the grant project will be monitored jointly by the County of Merced and the Master

Developer. The monitoring process will be established through the creation of a Program

Evaluation Committee. The Program Evaluation Committee will conduct monitoring activities

on a quarterly basis, and report the findings of those activities at the end of each quarter to the

County CEO. The committee’s composition will include CAED, Federal Development, Airport

Consultant with reporting required to the County Chief Executive Office and Board of

Supervisors. As airlines commit to operating at Castle they will be added to the Evaluation

Committee for marketing input.

Audits of the funds will be prepared by the County Auditor, and an outside audit company as

necessary, in addition to Commerce, Aviation and Economic Development Department’s

submittal of any required reports to the Department of Transportation.

Critical milestones to be met:

Establish air carrier service with one airline to provide passenger service within first

quarter.

Increase frequency of flights scheduled.

Assess effectiveness of marketing strategy by quarterly evaluation of website contacts,

ticket sales, etc.

Assess load factor by airline and determine marketing focus based on outcomes.

Based upon quarterly analysis of marketing strategies and if unable to establish daily air

carrier service and expand market share at Castle Airport within twelve months, no

additional grant funds would be requested.


Plan to Sustain Project Beyond Grant



X. A Description of How the Community Plans to Continue with the Project if it is Not

Self-Sustaining After the Grant Expires:

The County of Merced Department of Commerce, Aviation, and Economic Development

(CAED) will use funds from the Small Community Air Service Development grant to attract new

airline service and provide a marketing strategy and marketing activities to facilitate a smooth

start-up transition for commercial flights. Once the grant period has expired and the funds are

exhausted, CAED will continue its efforts to appropriately manage and market Castle Airport

through its Master Developer Agreement.

Continued Marketing

The Master Developer Agreement (currently being negotiated with Federal Development, LLC)

is termed for a period of 30 years. During that time, the County of Merced is committed to

collaborating for the economic and air service development at Castle Airport. Once airline

service is established, the County of Merced and the Master Developer will continue marketing

to local and regional business on a regular basis as a part of planned operating activities. The

County recognizes this project as a priority, and continued activities in marketing and

development will reap benefits for residents of local as well as regional communities.

Development proformas include marking funds for the next 25 years.

Continued Economic Development

During the Master Developer Agreement period, efforts for economic development of Castle

Airport will be ongoing. As new airline service attracts larger consumer flows into the County,

Federal Development will be leveraging these new and existing local resources to attract new

businesses including retail, hospitality and leisure to the site at Castle. It is anticipated that many

of these businesses will negotiate with the County for lease space at Castle Airport. The

development of new businesses and business opportunities at Castle will provide a significant

revenue source with which to continue efforts to support air service and any needed

improvements or additions.

To assist with rehabilitation of the former Air Force Base, the county recently designated Castle

Airport and Castle Commerce Center as a Redevelopment Project Area. In addition to private


Plan to Sustain Project Beyond Grant



equity through the Master Development Agreement, Tax Increment dollars will provide

additional funds and/or bonding ability to see that the facility reaches its’ full potential as a first

class airport and business center.


Legal Sponsor



XI. Designation of Legal Sponsor for Administering the Program

County of Merced – Department of Commerce, Aviation and Economic Development,

Castle Airport, 2507 Heritage Dr., Atwater, CA 95301.

DEPARTMENT OF

COMMERCE, AVIATION AND

ECONOMIC DEVELOPMENT


Air Service Development Zone Designation



XII. Support for Air Service Development Zone Designation

Merced County is seeking the designation of Air Service Development Zone for Castle Airport.The plans for Castle Airport/Castle Commerce Center include a fully developed CommerceCenter that will offer retail, dining, hotel, entertainment, and professional services to areatravelers. Interest in this commerce center includes attracting high-tech and internationalbusinesses to continue facilitating a progressive relationship with global communities. Alsoincluded are research centers, small/large business developments, commercial and industrialfacilities. Big Creek Lumber, AT&T Mobility and UC Merced are already in place. Plans callfor development of another 6.5 to 7 million sq. ft. of facilities over the next 15-20 years.

Existing Airpark Land

Castle Airport and the adjoining Castle Commerce Center have approximately 1900 acres ofavailable space for the development of airline service, aviation support activities, and a first-classbusiness park. Facilities already existing at Castle include a very long runway, large ramp space,air traffic control tower, two international aviation flight training schools and correspondingstudent dormitories, and plans for a full-service terminal. Castle also has buildings available forlease, as well as ample room for construction of build-to-suit facilities for new businesses. (SeeCastle Concept Map below).

Business Activity

Currently, there are 58 businesses and 2500 personnel working on Castle. These include twointernational aviation schools; Sierra Academy of Aeronautics, training student pilots fromChina, and American School of Aviation, which trains students from India and elsewhere. Localaviation support businesses such as Gemini Flight Support, Fixed Base Operator are also inoperation at Castle, as well as new corporations that have located to the site including Big CreekLumber and the new UC Merced research facilities. In addition, a new high speed railmaintenance facility and a flight simulator company are under consideration.

Access to Major Transportation

As discussed in previous sections of this proposal, Castle Airport is strategically positioned inthe middle of the Central Valley, California, directly adjacent to two of California’s major north-south vehicle corridors. Highway 99, Interstate 5, as well as a major East-West corridor,Highway 152, provides access to Merced County and Castle Airport. These roadways willprovide passenger vehicle traffic and shipping/cargo traffic with safe and convenient entranceinto Merced County and Castle Airport. The County is also served by two railroads, BurlingtonNorthern Santa Fe (BNSF) and Union Pacific (UP), which run and maintain track throughout thearea communities (including a BNSF spur onto the Castle property), offering unique shippingopportunities to companies that locate to the area.


Air Service Development Zone Designation



Community Demographics

The County’s population is rapidly increasing, in fact, it has risen 23% in the last 15 years.Median household income has risen 41% in 13 years while unemployment rates have dropped44% since the year 2000. There are 20% more people employed in the County than in 1990 andhousehold ownership has risen 15.3 during the last decade. Daily traffic on Merced County’sbusiest highway (Rte 99) has grown from 40,000 to 60,000 in a little over 10 years. There is noquestion that the growth in the County, particularly over the last 5-7 years, greatly outpaces mostcounties in the state.

GOAL: If awarded an Air Service Development Zone Designation, Merced County will link theZone’s image to development plans and enlist the assistance of other participating Federaldepartments’ expertise in locating resources to complete full development, establishment of jobsand attract new tenants.

Merced County is truly excited about the expected development of Castle Airport air servicesand commerce expansions and we look forward to being a part of the Small Community AirService Development Program and a possible designation as an Air Service Development Zone.

Figure 11

MERCED COUNTY – Castle Airport List of Attachments



LIST OF ATTACHMENTS

Attachment 1 ..................................................14 CFR Part 139 Certification

Attachment 2...........................................Letter of Intent from Vision Airlines

Attachment 3........................................................... California Counties Map

Attachment 4...............................Federal Development, LLC Letter of Intent

Attachment 5............Merced County Board of Supervisors Letter of Support

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2008 Project Abstract - AirlineInfo · Project Abstract Merced County, CA ... Introductory...

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