Duluth airport considers selling naming rights for new terminalThe new $77.5 million Duluth airport terminal is pretty much paid for. Still, the selling of naming rights is being considered by the Airport Authority.
By: Candace Renalls, Duluth News Tribune
The new $77.5 million Duluth airport terminal is pretty much paid for.
About $67 million came from state and federal funding sources, including the Federal Aviation Administration, stimulus and state bonding money, and the Duluth Airport Authority. The remaining $10.6 million is coming from another FAA grant.
Still, the selling of naming rights is being considered by the Airport Authority.
“We’re just exploring possibilities,” said its president, John Eagleton. “In today’s world, if you’re not continually looking for additional revenue sources, you’re not doing your job.”
To that end, Airport Authority directors last week accepted a proposal from Rob West, the former head of Area Partnership for Economic Expansion, to seek sponsors to donate more than $1 million to the Duluth International Airport in exchange for naming rights.
West, who left APEX this month, is now a managing partner in Northpointe Strategy Group. During his eight years with APEX, West successfully worked with airport officials on the terminal project, bringing expanded air service to Duluth and other airport-related efforts.
Offering his consulting services, West said he would seek sponsors for the naming of the terminal and areas of the new terminal, including conference rooms.
“We believe that the best approach may be to get upwards of 10 different donors (business and private contributors) to donate an average of $150,000 over a 10-year period at $15,000 a year,” West wrote in his proposal.
That would raise $1 million to $1.5 million more to pay for the airport’s operations, maintenance and other expenses, he wrote.
The money wouldn’t be used to pay for construction but ongoing maintenance, said Brian Ryks last week, before stepping down as the airport’s executive director.
They’ll start with naming rights for inside spaces and not necessarily with the entire terminal, Ryks said.
But Eagleton said they’ll consider naming rights for the entire terminal, if the opportunity arises. He said the authority isn’t aware of any airport naming its terminal in that way.
“We don’t have any prospects standing at the door to make that investment,” he said. “This process will explore possibilities.”
According to West’s proposal, which authority directors approved by resolution, West will donate the 80 to 100 hours he says the task will take, but he will have his out-of-pocket expenses and mileage covered. They’ll also pay for the use of other consultants that might be needed.
Officials say the extra revenue for the airport should be sought even though the airport has been self-supporting for decades and the operating costs of the new terminal are expected to be less than the current one.
“You never know in business today what tomorrow will bring,” said Eagleton, retired CEO of Northstar Aerospace. “You always need to be looking for revenue opportunities. It allows us to build a capital budget to be more sustaining moving forward.”
But they won’t go the way of Boston’s Logan Airport, which sold advertising rights for areas in front of its airport, where giant statue-like cups of Dunkin’ Donuts coffee are on display, Eagleton said.
“We don’t want to do that,” he said. “We don’t want junky advertising.”