It’s impossible to know yet. This question may be settled in part by the city's July 26, 2024 litigation filing against the FAA. There may be some costs, but the land is worth more (about $400 million) than reasonably foreseeable costs. Closure is doable and would not harm the city’s finances. The city would gain significant tax revenue in the long run. We believe that costs for airport repurposing have been vastly exaggerated, will be manageable in both the short and long terms, and the city will emerge with net economic gains.
The short answer is that nobody knows yet what the exact costs will be. Many communities across the United States have worked to close their local airports. Each airport’s situation is unique, so there is no easy precedent or pathway for Boulder to follow.
To close the airport, Boulder will have to end Federal Aviation Agency (FAA) control over our airport. The city has already filed litigation against the FAA to clear up title to the airport site. See also "Can we legally close the airport" for a discussion of this litigation. Other airports have also been able to secure closure by working with their Congresspeople.
Rumors have been floated that it will cost the city around $100 million to "pay the FAA back". This rumor stems from the fact that the FAA helped the city to purchase 38 acres of land for the airport back in the 1950s and 1970s. When airport sponsors are required to pay the FAA back for grants for land purchases, the FAA's policy is that the land is sold at market rates with the proceeds going to the FAA. Airport proponents often imply that this is money that would come from the city budget. In a 2018 memo, City staff estimated the land value at approximately $2.2 million per acre (which would be $83.5 million for 38 acres).
If we had to pay this money, it would be paid via selling 38 acres of the airport land. Thus, the money would not come out of city coffers or the taxpayer pocket.
However, we don’t even know for sure that we would have to pay that amount. We are not attorneys, but we can read the contract language on those grants including an explicit timeframe of "no more than 20 years". Our commitments under those contracts are long expired with no stipulations about repayment after that time, so we believe it is most likely that we owe the FAA $0 for that 38 acres.
Even if we suppose that the city did have to sell 38 acres of land at market rate and give the money to the FAA, the city can still zone that land for development of a neighborhood before it is sold. And there would still be 138 acres of city owned land left worth approximately $286 million that can be developed according to city priorities and used to leverage the outcomes we want.
While repayment for land purchases - if required - would be the biggest category of potential cost, there are a few others to look at.
-Repayment of capital improvement grants that have not yet run down their 20-year amortization period.
City staff have not yet produced a list of past capital improvement grants that would need to be repaid. If the city chose to (or was required to) run out the clock on the existing grants, we would owe nothing in repayment.
If we are able to close the airport before the 20-year clock has run out on the last grant we took (less than 16 more years, until May 2040), then the amount we owe would be calculated at that time. The city's website says that we currently take an average of about $250,000 in federal grants per year, although we have not accepted any grants in the past few years.
But if we assume that amount for the past 17 years, we would owe about $4.25 million if we closed the airport tomorrow (which we will not do). The amount of money to repay is decreasing as time goes on, as long as we do not accept new grants. And if we close the airport, we can reasonably quickly sell some portion of the land to recoup any money we needed to front.
-Costs to run the airport without accepting further federal or state grant money.
Every time Boulder takes a capital improvement grant for the airport, it comes with grant assurances that, among other things, require the city to continue to operate the airport for another 20 years. If Boulder wants to eventually close the airport, the city would need to get off the grants treadmill and find another funding source to make up the difference.
It is possible, though not guaranteed, that we might need to operate the airport independently for another 17 years or so, which is the amount of time remaining on the last capital improvement grant we took. It’s also possible we may be able to negotiate an earlier closure.
It is true that the airport does not currently pay its own way and utilizes state and federal subsidies to stay out of the red. All revenue generated by the airport is legally required to go toward maintaining and operating the airport. Revenues generated by BDU currently pay a good portion of airport operating costs, but not all. As noted above, the airport has historically taken an average of $250,000 per year in state and federal capital improvement grants for items like runway repaving and equipment purchases.
There is likely some trimmable fat in those historic “free money” grant requests, but let’s go ahead and assume that the city needs to find $250,000 per year in replacement funding. The city legally can, and should, increase the revenue generated from airport uses. For example, Boulder can raise our airport hangar rental rates and institute landing fees, as other airports have done. The airport is classified as an enterprise fund, separate from the city budget, and is responsible for taking whatever steps are necessary to meet its own financial needs. If the airport is able to completely fund itself from airport activities, the cost to the city taxpayer in these 17 years would be zero. If not, the maximum budget hit appears to be about $250,000 per year for a maximum of 17 years (again, $4.25 million), which we think would be a reasonable investment to unlock $400 million in land value.
- Costs associated with infrastructure and site remediation
The airport site has some infrastructure and utilities in place and is not a greenfield. There is electricity, water, and sewage to the main buildings. It is already annexed into the city and zoned for development. However, it is not densely developed. Much of the site is simply paved and lacks permanent structures. Boulder would need to study and plan new roads, transportation connections, and additional infrastructure for the site, as part of a community visioning process. This would take staff and consultant resources, which are standard operating procedure for the city's Planning and Transportation Departments.
Once the site has been planned, the city would partner with developers, including developers of affordable housing, to make the vision a reality. Paying for infrastructure improvements is a negotiation between the city and developers.
Regarding site remediation, first of all, to whatever extent that airport activities are causing land contamination issues, this would be all the more reason to cease the polluting aviation activities. Certainly, some amount of environmental remediation would likely be required prior to redevelopment. Testing and remediation is a normal and routine part of the redevelopment process where there is a risk of contamination, for example when a gas station is closed and redeveloped. Costs for remediation on city-owned land are again built into the negotiation between the city and developers.
Previous airport conversions that have resulted in thriving new neighborhoods include Denver’s Stapleton airport and the Austin Mueller airport. Airport proponents have provided no data nor examples of prohibitive costs of remediation associated with any previous airport redevelopment.
In addition to using some of the $400 million land value to trade with developers for the outcomes we want, the city may also explore outside partnerships and grants (that are not tied to operating an airport!) for infrastructure improvements and environmental remediation.
Once the site is redeveloped, property taxes and sales tax from the new neighborhoods (potential for 2000+ homes and 270+ businesses) will contribute to the city's bottom line, whereas the airport currently contributes next to nothing to the city coffers. All revenue generated by the airport is required by law to be reinvested in the airport, and sales tax from the current 13 airport businesses is neglible.
In short, we believe that costs for airport repurposing have been vastly exaggerated, will be manageable in both the short and long terms, and the city will emerge with net economic gains from repurposing the site for new neighborhoods.