Investment at Lambert Could Bring Mexico Hub to Saint Louis

This week, the St. Louis Airport Commission approved a plan to lease airport property that once housed the McDonnell-Douglas complex to Bi-National Gateway Terminal LLC. This company would invest $77 million in the property to create a new freight terminal. In addition, another private company (owned by the same person as Bi-National) has already successfully petitioned for a dual-customs facility at Lambert. The plan is to create a cargo hub in Saint Louis for freight from Mexico.

Leasing airport property to a private company for aviation-related business makes good sense. Most airport land is virtually impossible to sell because of federal grant assurance restrictions. Allowing private companies that would benefit from access to the airport to lease adjacent property (rather than letting the land lie fallow) is a win for the private business, the airport, and the local economy. As things stand, far from spending money, the airport should receive about $13.5 million a year in lease payments. There are currently no plans to spend any airport money for the facility.

If the plan to use Lambert as a Mexico Hub succeeds, it could mean lower landing fees for commercial airlines, which can attract more flights. The public at large would benefit from more travel options, as well as from any jobs that a cargo hub would create. In the worst-case scenario—the private company fails—the airport would not be worse off financially. If anything, it would be better off, as the airport would have a new dual-customs facility and freight terminal to attract more business.

However, Saint Louis residents should keep an eye on the project, because all too often local governments will shift the risk of these investments from the private sector to taxpayers. The plan to make Lambert a “China Hub” just a couple years ago is a prime example of this tactic. There is no talk of local subsidies yet, but that could change.

Lambert-St. Louis International Airport, as Saint Louis’ only large airport, is vital to the local economy. Allowing the private sector, rather than local governments, to make the investments and take the risks of building a freight hub is a strategy that the airport, and the public at large, would benefit from.