VA deal shows ILM working to use real estate for revenue
February 19, 2010By Alison Lee Satake
To better weather the economic storm, businesses must diversify their portfolios and the Wilmington International Airport is no different.
In the next few weeks, the U.S. Department of Veterans Affairs will select a developer to build the new VA clinic on 19 acres of the ILM Business Park. The 100,000-square-foot outpatient clinic will be built near the airport entrance on the open space bordered by 23rd Street, Airport Boulevard and Gardner Road, said Jim Morton, the airport’s finance director.
The new building, which is expected to open in the third quarter of 2011, is the culmination of four years of planning on the airport’s side. When Veterans Affairs identified New Hanover County as the region for a new clinic a few years ago, Morton contacted them through Wilmington Industrial Development and submitted the airport as a potential site. ILM was the Veterans Affairs second choice. But, its first choice, a piece of property located off U.S. 17 north of Wilmington fell through, Morton said.
“In recent years, we’re trying to diversify our revenue streams,” he said. Veterans Affairs will pay $217,000 in the first year of its lease with a 3.75 percent annual escalation for 20 years. Then, the VA will have three 10-year options to renew.
The VA deal has put ILM back on the radar for some developers. Since it has begun leasing to the VA, the ILM Business Park has received other inquiries about its rental property. “It has brought an awareness that the airport is available,” Morton said.
Leasing land used to be less desirable for developers. But, “New Hanover County is shrinking in terms of developable land,” Morton said. For the airport and other large landowners, that’s good news. The airport is seeking aviation-related contracts and is working with the state’s Department of Commerce to attract businesses to North Carolina.
Morton is saving a portion of the land for airport parking expansion. The number of people flying in and out of ILM has increased by 85 percent since 2003, he said. In 2003, ILM had 432,619 total passengers. In 2009, 807,126 passengers took off and landed at ILM.
“We’re always looking for more non-stop cities. We talk to the airlines,” he said. But, to get airlines to schedule more non-stop cities to and from ILM, you need to prove that enough people will fill those flights. Although the number of passengers flying out of ILM on a particular flight may warrant a smaller plane, the fuel tanks on the smaller aircrafts can’t fly the farther distances. Finding the right mix between consumer demand and logistics is key. In the meantime, diversifying revenue streams is one of the airport’s business strategies.
AAIPharma has been a tenant since 1986. Wilmington Industrial Development and building supplier 84 Lumber are also tenants. “We think the ILM park has a lot of long term viability for businesses. It has great accessibility. It is clearly a good destination,” said Scott Satterfield, CEO of Wilmington Industrial Development. “It’s centrally located in greater New Hanover County.” Morton markets the business park as an ideal location with a good road system and existing infrastructure, such as security, water and sewer in place. The airport has about 140 more acres of land it would like to develop and lease.
The new clinic will employ about 160 staff. Veterans Affairs estimates that this clinic will see about 250 patients daily and about 64,600 patients annually. The clinic will be open Monday through Friday from 7:30 a.m. to 5 p.m. and there will be no overnight stays. It will offer a variety of services including radiology, eye care, outpatient surgery and an on-site pharmacy. The VA’s Wilmington CBOC or community based outpatient clinic is currently located at 736 Medical Center Drive.
