How does the Day of Terror affect airport enterprises?

PDX, Airport MAX and Cascade Station face new realities 

By Lee Perlman

THE MID-COUNTY MEMO

On September 10, the Airport MAX light rail extension  officially opened, and 5300 passengers came to ride the line.  Waiting in the wings were the airport's new Concourse C, and  CascadeStation with its potential for 10,000 new jobs.

On September 11, Osama Bin Laden made it a whole new ball game.

The west coast was spared the horrors of death and destruction  visited upon New York and Washington, but the economic  repercussions are being felt nationwide, particularly by the  nation's flight industry and everything connected with it.

The city invested $125 million in the light rail airport  extension, based on the continued future growth of PDX as a key part of Portland's increasingly tourist-oriented economy. How will the new reality affect it?

The prognosis seems relatively good. After falling to an  average of about 1400 riders a day, useage has risen to about  2300 by mid-October, according to Tri-Met's Mary Fetsch. This  has come with airline useage still at just 60 percent of pre-September 11 levels.

As Tri-Met general manager Fred Hansen pointed out at last  month's Hazelwood Neighborhood Association meeting, new security  measures have eliminated 1100 parking spaces nearest the  terminal, a powerful incentive not to drive to the airport. And  the numbers of those flying and those riding MAX seem to be  steadily increasing.

This is in spite of the fact that the skies are a little less  friendly, and flying means standing, united or otherwise, for  longer periods. The check-in process can take two hours. Less  carry-on luggage is allowed, and sharp objects can go on board  only in checked luggage. You and your belongings are more likely  to be checked more thoroughly, and being frisked by hand is a  possibility.

 "For the most part, passengers are reacting to the new  security procedures well," airport spokesperson Steve Johnson  says. "Obviously no one wants to stand on line for any reason,  but people on the whole have been most understanding.

"Security is our number one priority, but we're still trying  to make travel comfortable."

The airline industry may indeed recover; PDX's Concourse C  will not, at least in its current form. Intended to be a  commercial showcase and gathering place, the concourse was to  have featured high-end retail, restaurants and brew pubs to make  it an attraction. All this is now off-limits to the general  public. New Federal Aviation Administration regulations forbid  anyone except ticket-holding passengers from venturing into  areas beyond security checkpoints, such as Concourse C.

In mid-month, the Port of Portland ordered $34 million worth  of work on Concourse C delayed "indefinitely." Johnson says a  possible future course may include reconfiguring the security  gates to "allow everyone access to most of the airport while  still maintaining security."

Down the road from PDX is CascadeStation, a proposed 120 acre  retail-office-entertainment "village." The Bechtel and Trammell Crow corporations have been given long-term rent-free leases to  develop the land in exchange for contributing $28 million to the  creation of Airport MAX. How are they faring in the post-September 11 world?

According to Trammell Crow's Jeff Sackett, and retail leasing  agent Mason Frank of BKM, there are problems, but they have less  to do with the airport per se than with a general economic  downturn that the tragedy and its aftermath have accelerated.  The orginal design for the project called for movie theaters and  hotels. The theaters are gone, and Sackett says, "No one's  building hotels right now." As for office space he says, "We'd  love to tell you that we have a big developer ready to build  office buildings, but it isn't true, and we have no ability to  finance a speculative office building."

As for the retail, Frank says that such companies as  R.E.I., Nordstrom, Linen and Things, Magnolia HiFi and Import  Plaza have signed letters of intent to lease space in the  complex, but all are waiting to see what happens to the economy.  "A real monitor will be the sales during the holidays," he says.  "If we were in a real expanding economy we'd have commitments  for the whole 40 acres today - but we're not."

Sackett says that the rate of construction, slated to begin  next spring, will depend on the rate at which space is leased.  "This doesn't change our plans, but it slows us down," he says.

 The development will not be stopped by whatever happens to the  airport, or even to MAX. This is because, as critics have long  charged, the project is only superficially related to either.

"Light rail was always integral to our plans," Sackett says.  "Neither would have happened without the other. That being said,  this is in the suburbs. It looks urban, works suburban."  Especially, 90 percent of those who come will do so by car;  "That's just reality." Airport passengers play "a relatively  small part in everything except the hotel."

In fact, CascadeStation may benefit from the problems of  Concourse C, offering the same sort of attractors minutes away.  "It's a positive for us," Sacket says.

Both Sackett and Frank say emphatically that CascadeStation  will not become another PGE Park, an expensive public-private  embarrassment. "We've loved this property ever since we started  talking with the city," Sackett says. "We like the real estate,  and it will only get better over time."

 "If this gets built at all, it will be very significant,"  Frank says. "It may be built in stages, but each one will be  significant."