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HomeMy WebLinkAbout2001-02-20 Business and Economic Development Committee Minutes Business & Economic Development Committee Meeting Minutes � February 20, 2001 Councilors Attending: Joseph Baldacci, Judy Vardamis, Pat Blanchette, Nichi Farnham, Gerry Palmer, John Rohman, Dan Tremble StafF Attending: Rod McKay, Steve Bolduc, TJ Martzial, Sally Burgess, Rebecca Hupp, Ed Barrett, Bob Ziegelaar Others Attending: Telford Aviation Representative, Children's Choir Representative Meeting convened at 5:00 p.m. 1. Review of Bangor Region Deve%pment Al/iance Accomp/ishments and P/ans Steve Bolduc reported on the Alliance's accomplishments over the last year and presented its work plan for the coming year. The Alliance has been actively marketing the region through attending trade shows and its newly inaugurated web site. Plans call for this effort to continue in the � coming year. 2. I/acant Land at Union and Rando/ph Early in the process of redeveloping the Randolph Drive area, stafF suggested that the City might wish to sell two vacant lots on Union Street for additional housing development. At that time, the Council indicated its preference that these areas remain as open space. Recently, the City has been contacted by the owner of an abutting property who expressed interest in purchasing one of these lots. As we understand this interest, the owner would like to add this property to his existing lot as an extension of his yard and has no intention of building on it. StafF recommended that we entertain such a proposal with the provision that nothing be built on the property. After some discussion, the Committee authorized staff to enter into discussions for the sale of this property subject to a deed restriction that nothing be built on it. 3. Bangor Chi/dren s Choir Request for Support Information previously requested by the Committee: Ed Barrett explained that at one time, there were several agencies that the City provided money to, but after researching the issue, nothing was ever formally • adopted that indicates that it is the City's policy not to do this. Funding for non-profit agencies was gradually phased out as part of the annual budget process over a 3-year period. � Councilor Vardamis asked how much still needs to be raised. It was indicated that they were unsure of the exact amount. Councilor Tremble commented that there are a lot of very worthwhile causes to come before the Committee asking for donations. As a City, he doesn't feel that this is something to get involved in. Councilor Vardamis commented that she feels this is a great opportunity to promote Bangor and she doesn't know what is in the plan for the marketing budget, but there have been discussions on Bangor branding opportunities. This group is going to Washington, DC and representing Bangor and this is a perfect opportunity to do something. She agrees with Councilor Tremble, but it would be great to find something creative to do for these students. The City has made progress in getting the waterfront developed and moving other things along and the entire community is getting excited. Because of that, the community will come to the Council to ask for assistance to continue that promotion opportunity. She would very much support something that could be done for this group. Councilor Blanchette commented that an example of the City doing so much is the Children's Museum that probably would not have been open without City help. This is support that can be justified and a community resource that will be here to benefit several generations. This is a � wonderful opportunity for these young people, but Pat questioned the amount of impact this one group will have in Washington DC with all of the other groups that will be there. How much PR can Bangor get out of it? How can you say no to the Bangor Little League groups that come in and say yes to this group? � The Representative of the Choir commented that at no point would they want the choir put in a position with the City of Bangor where their organization will be in a firing line. She would see this organization gracefully fold before seeing any of the parents or children take a hit. For this group, as parents and citizens, balance is the key and they want balance for their organization no matter what it is. Councilor Rohman commented that this is a tough decision and although you want to help, you don't want to open the flood gates. Councilor Vardamis asked if this item should be tabled until further discussion. Ed Barrett pointed out that it would not have to be on the next Council Agenda. Councilor Baldacci feels a vote is needed to move it from this Committee. It was moved that the Committee engage this group to perform for one or � more City events on a fee for service basis in an amount not to exceed 2 $5,000, the terms of which to be worked out by the City Manager. Motion seconded. Approved 3-2. � 4. Ca/endar 2000 Year End Airport Report Bob Ziegelaar highlighted aspects of the Year End Airport Report for the Committee. Bangor is served directly by Delta, American Airlines, USAirways, PanAm, Northwest and Midwest Express Airlines. In the past year, there was an increase in the diversity of the carriers at BGR. New carriers included CommutAir, Allegheny Airlines, Piedmont Airlines, Colgan Air and PanAm. Comair also underwent significant change with its integration into the Delta Connection group. Connection opportunities also increased. Air service route expansions included Philadelphia, Pittsburgh, and New York LaGuardia. In February, PanAm started service to Allentown (NYC, NJ and Philadelphia metro access). Air service proposals are currently pending for new service to Detroit, Chicago, Boston, Hartford, Washington Dulles, Cleveland, Quebec, Montreal, Halifax, Saint John and Moncton. New Equipment: USAirways upgraded from the Beechcraft 1900's to a 34 seat Saab 340 regional airliner. USAirways commenced flights with Dash 8s, large turboprops with 37 seats. They will be coming in with larger 50 seaters that are supposed to be faster. The Philadelphia runs are doing • very well which is why they were kept through the winter. 2000 showed a diversification of the market share at Bangor through increasing competition and a substantial boost in jet flying. It shows that the carriers in the market are not as dominant as they used to be. Delta used to be the dominant carrier, then it went to Business Express. It has really changed now with USAir having taken approximately 25% of the market. It's balanced which means more competition. The passenger count was 382,000. BGR lost approximately 40,000. This is attributed to the Delta code share agreement falling apart. When Delta jet pulled out and put ComAir in, they did not maintain their relationship with American Airlines. American's failure to capture passengers cost Bangor as many as 53,000 in 2000. Other issues that still need to be worked on include local perceptions. It is difficult to tell people that there are 60 flights out of Bangor. People are not catching on to the fact that BGR does have good carriers available. There is a greater availability of inexpensive fares. Bangor was one of 21 cities that stood out last year for the greatest price reductions. . Councilor Rohman commented that it is has been changing so quickly and so often that there is no consistency. This is part of the perception that 3 the area has. People are reluctant to buy tickets in case there is a change. Consistency is important. Councilor Blanchette asked if there are brochures at the Airport? Bob indicated that there were. Councilor � Blanchette indicated that she'd like to have enough to take to Augusta to distribute to other legislators. Bob indicated that he would put some packets together for Councilor Blanchette. Councilor Baldacci asked if there has been any thought to Bob Ziegelaar doing some type of �/z show each week updating the community on the airport. It's a free medium and there are residents that watch it. It is something that should be considered. The yield has gone up this year. It went from .13 cents a mile to .14 cents a mile. By rightsizing/downsizing the market, airline planners have constrained the capacity available at Bangor, thereby improving the profit yields Quality of Service: BGR is working with their community service initiative, which is working well. Complaints are being passed off to the carriers so that they receive a response from BIA and the carriers. The Bangor- Boston route continues to be the most problematic route. StafF continues to work on this route, but this is why the Philadelphia route is so important. Other carriers have been talked to about potential Manchester connections. � Marketing Efforts: Staff works closely with the existing carriers. They also work diligently with potential service providers. The Boston Fox Teague (BF� Agency has been an asset to work with. For next year, there is an aggressive outbound and inbound campaign planned again. StafF will brief the Committee at the next meeting. Vacation Packaging: BIA received word from American Airlines that their primary packaging person came from the West Coast and visited here. He has brought packages to both Bangor and Bar Harbor via Bangor. This is the first time BIA has been able to get into a major carrier's vacation packages. It would be listed as a Maine vacation and show the different destinations that they have in Bangor and Bar Harbor and that it will be serviced through Bangor. Community Outreach: Staff does a fair amount of outreach through the Rotary, the Lions, the Maine Development Foundation Leadership Conference, Eastern Maine Voc Tech Leadership Group and several others. Co-Op Marketing: Coordinated marketing efforts are available to all � resident air service providers. During 2000, the Airport worked very closely with market entrant PanAm and the expanding USAirways Express 4 team at Bangor. Co-op opportunities are available to all of the carriers that use Bangor. Over the last year, Bob developed a relationship with an airport in the Black Forest in Germany. This airport was given advice as � to how they could potentially develop. They were very interested in developing a relationship with BGR in terms of joint marketing which staff has indicated that they will. An agreement may be forthcoming in the future. Bob recently heard from them that they have been taken over by a British Airport group which also manages airports in the UK as well�as the Continent and they are very interested in discussing joint marketing. Business Passenger Marketing: The Airport's work continues with Campus Travel Management which will work to negotiate bulk rate discounts between companies and carriers while collecting and maintaining data of critical interest to carriers interested in the BGR market. Web: The flybangor.com site was completely redone in 2000 and is now in its third generation. The Airport's website is designed to be an easy to use comprehensive informational resource about the Airport and its air service options. The site also serves as a comprehensive resource for information about visiting the Bangor region and the State of Maine. Challenges: The Bangor region still faces several challenges affecting air service i growth. Population growth in the region remains static and future forecasts predict a decrease in regional population resources. Seasonality continues to be an issue. Staff continues to work with the ski resorts, and the snowmobile industry is helping in that respect. Passenger composition continues to be a challenge. Only 25% are business travelers and 75% are leisure travelers. The Manchester Airport is developing as a regional hub. This is why staff is looking at opportunities to use Manchester in much the way that Boston is used now. Summary: Bob feels that progress was made last year. The better balancing of the carriers is very important. Marketing exposure and the leadership role being played locally and economic wealth has been good as well. Councilor Vardamis commented that with regard to seasonality, the media discusses how most of the ski resorts were at 259,000 last year and it is now 350,000 so it has been a wonderful season. Has there been a , noticeable difference in incoming to Maine for skiing. Bob answered that they haven't seen much change. Most of this traffic is drive traffic. 5 Councilor Blanchette asked if there was a way to tap into information from the Office of Tourism to see if we are missing some of our should-be targeted areas for ski trips. Bob answered that he agrees and he has � talked with the Tourism office who has indicated that they are in the process of developing a database. Councilor Palmer indicated that during one recent interview with BIA staff that did not include any Councilor. He feels that the Council should be involved with these types of events in some way. Bob indicated that he talked with Jeff Russell about this and Jeff was surprised at the amount of . press play that they received. He really had no indication what type of article it was going to be. 5. Te/Ford Proposa//Concept Rebecca Hupp explained that the majority of the Committee members were a part of the tour of the Telford Facility. Rebecca met with Telford last Friday to discuss a proposal, which is included in the packets. Mr. Telford was asked to attend this meeting to review the proposal and explain the general terms. Telford has relocated the majority of his business from Waterville to Bangor and, in hopes of expanding, he approached the City with this proposal. Mr. Telford explained that at the Bangor Airport, they have two � operations. One side of the field is the joint venture with Volvo-Aero and also houses their heavy maintenance facility and corporate offices. On the other side of the field, where general aviation is, general aviation maintenance is performed. The company operates 22 airplanes. Since moving from Waterville, they have moved all of the maintenance to Bangor and, by doing this, it has put a limit on their space. Telford currently leases half of Building 115 and proposes to take over the entire building. They will continue to hangar current tenants on the non-leased side to keep good relations between the City, Telford and the tenants. The tenants are also very good customers of Telford. The suggestion is to not take any new customers/tenants and as current tenants leave or sell their plane, etc., not take on any new to replace. With this concept, there will be renovations and remodeling. They would like to use the same process as was used for the remodeling of the Volvo joint venture building. This worked very smoothly and the construction went well. Telford will come up with the design concept, present it to the City for approval on the costs, construction, etc., and Telford pays the cost and it is then deducted from future rents. Telford would like to start this in ]une. At this time, Telford is working on a design layout to present to the City. • They do not have cost estimates as yet. Mr. Telford projects that it will cost between $150,000 - $200,000. 6 Councilor Palmer asked if there were any jobs tied to this project? Mr. Telford answered that the jobs are already here and they are sharing � offices. Business has been good and it is hoped that they will continue to grow the business which will add jobs. Councilor Tremble asked if this were common to ofFset future rents for renovations? Rebecca answered that it is common at other airports and it has been done at BIA. Committee approved staff to proceed with negotiations on planning the concept that has been outlined. 7. Executive Session:Airporf Land Acquisition Update With no further business to discuss, the meeting adjourned. � � 7