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City, county again in war of words over airline project (Pikeville) Appalachian Express-News

Article originally posted to Appalachian Express-News Web site http://news-expressky.com/news/article_cb713d46-1676-11e3-b400-001a4bcf887a.html

    By Russ Cassady Editor | Posted: Friday, September 6, 2013 5:00 am        

The involvement of the Pike County Fiscal Court in a proposed project to bring daily air service to Pike County has, thus far, been limited to its approval of joining other counties in applying for funding.

However, on Tuesday, just days after the City of Pikeville and Pikeville-Pike County Airport Board approved contracts with Public Charters Inc., to begin a daily round-trip flight between Pikeville and Nashville in March, the Pike Fiscal Court approved a resolution expressing concerns about the project.

The resolution has sparked a new war of words between those who have worked to bring the project to fruition and the county, and accusations that the county’s actions are functioning only to “undermine the progress and implementation of commercial air service to the people of Pike County.”

The agreements were reached Friday, with the Pikeville City Commission voting unanimously and the Airport Board voting 5-1 to approve the agreements, with board member Brent Wagner voting against the measure.

The court’s complaints

In the resolution, which was approved by a unanimous vote of the fiscal court, the county raises several issues, including:

• That the fiscal court is “disappointed and discouraged that it had no meaningful role in the discussions and/or deliberations between the City of Pikeville and the Pikeville-Pike County Regional Airport Board and Public Charters Inc.”

• That the court has “serious legal concerns” about the specific language in the agreements approved.

• That the court maintains it is the sole owner of the airport property, not a joint owner with the city and airport board, as is indicated in some language of the contracts.

• That the county has “serious reservations” about the choice of Public Charters Inc.

• That the county is concerned that the city does not have a direct agreement with the airline service provider, Corporate Flight Management; and

• That the county is concerned about liability issues. Since the county is not involved in the contract, the resolution maintains, the city could be taking on potential liability on its taxpayers, because the city, unlike the county, does not have sovereign or governmental immunity from lawsuits.

“… While this body supports the idea of commercial air service in Pike County, the issues raised herein contain serious and legitimate concerns as to the viability and legal protection of the agreements entered into and previously referenced in this resolution,” the resolution goes on to say.

The resolution does raise questions about the legality of the contracts.

However, Assistant County Attorney Roland Case said that the county is not anticipating filing legal action in regard to the agreements.

“No legal action is anticipated as a result of this resolution, this is merely the court wanting to go on record about their reservations,” Case said. “The court did want to make it clear that the property the airport is located on belongs to the county and not the city and also that the airport is operated by the Pikeville-Pike County Airport Board, not the city or the county.”

Aside from directing that the resolution be sent to the city of Pikeville and airport board, no other action was taken by the court on the matter.

The project leads fire back

On Wednesday, after reviewing the resolution, the city of Pikeville fired back, with a statement accusing Pike Judge-Executive Wayne T. Rutherford of “undermining” the project’s progress.

“It is disappointing that when the community should be celebrating this achievement — the recruitment of commercial air service to Pikeville and Pike County — that Judge Rutherford has reprised his role to continue to question the work of many community leaders who only wish to move the region forward,” said Luke B. Schmidt, the project consultant, in the statement. “I like and respect Judge Rutherford; however, the fact remains that action taken by (the) Fiscal Court led by Judge Rutherford will continue to undermine the progress and implementation of commercial air service to the people of Pike County.

“The War on Coal makes it imperative that all of us work together to do everything in our power to create new jobs,” continued Schmidt. “The city, the airport board and the Chamber are to be commended for providing the necessary leadership to see this project through. I have no doubt that this new air service will assist in creating new, non-coal dependent jobs in Pike County while still supporting the existing coal industry.”

The statement also contained a comment from Mayor Pro Tem Jimmy Carter, speaking to the importance of the project.

 “The Pikeville city Commission will continue to work hard and fight to derail any attempts to stifle our plan to improve the quality of life for those we are elected to serve and represent,” Carter said in the statement. “As the 13-county region’s center for education, employment, health care, retail shopping and transportation, citizens look to the city to create resources such as commercial air service that will enable us to grow while improving our ability to market our resources and our workforce.”

In the statement, the project supporters also break down line-by-line the resolution’s charges, including:

• The lack of county involvement. In the statement, Pikeville City Manager Donovan Blackburn said that the county was involved in the beginning, but Rutherford chose to bow out of the project.

“It was agreed that our group would retain the services of Louisville-based consulting firm L.B. Schmidt & Associates, LLC and its president, Luke B. Schmidt,” Blackburn said. “However, when it came time to finalize the arrangement, Judge Rutherford elected to withdraw, stating he did not have the support of Fiscal Court. While we respected Judge Rutherford’s decision, the remaining three partners agreed to support the recruitment effort, which led us to the recently announced service to Nashville with Public Charters and Corporate Flight Management recognizing the benefits that this service will bring to the region.”

• The legality of the city’s role as a party to the agreement. The city, the statement said, applied for the funding which is making the project possible, and maintains it is appropriate for it to be the agency which can enter into the agreement.

“(Rutherford) opted out of this project three years ago, as such, why would he have been consulted on this project?” the statement said. “How can (Rutherford) justify taking a leadership role in this project.”

• The lack of a contract between the city and the flight operator. According to the statement, CFM is a subcontractor to Public Charters, which is the main contractor on the project.

• The issue of the lack of sovereign or governmental immunity. According to the statement, even the county does not enjoy total immunity from lawsuits, which is why the county, and city carry insurance against such matters. Public Charters, the statement said, will also be required, contractually, to carry a $25 million policy, naming the city as an “additional insured” on the policy.

• The issue of the ownership of the airport property. The statement said that the ownership of the airport is not a relevant issue because the contract is not speaking of the land exchange making the city a joint owner, but the creation of the airport board, which was done through a city/county joint action.

“As a result of this action … the airport board has been given the authority to oversee and operate every aspect of the airport including the development of commercial air service,” the statement said.

• An issue expressed by the county that Public Charters is not currently licensed to do business in Kentucky. In the statement, the project organizers said that any and all appropriate licenses which must be obtained for the service to operate will be obtained before the airline begins operation.

City taking issue to the airwaves

On Thursday, Pikeville City Manager Donovan Blackburn took his case to the airwaves, filming an episode of the Pike-TV series “City Manager’s Report,” focused on fully explaining the operation of the airline and defending the importance of the project.

“This is something a lot of people … said could not be done,” Blackburn said. “And I believe a lot of people were surprised that it was, because this is somewhat of a new model, but it’s a proven model.

“It’s one that I know and feel very confident that will work, as long as … our community wraps its arms around it and utilitzes the service,” he continued.

Blackburn also pointed out during the filming that the funding for the project is totally based on outside sources.

“Understand that we’re not asking for one red cent from Pike County Fiscal Court or the city of Pikeville,” Blackburn said. “The money is simply coming out of the federal and state grant that would have gone somewhere else in this country or this state to benefit their economy.”

Schmidt also appeared on the program, explaining the plans for the service.

The episode is scheduled to air at 10:30 a.m. and 9 p.m. on Friday, 9 p.m. on Saturday, 4 p.m. on Sunday and 7 p.m. on Monday.

   

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Commercial air service landing in Pikeville WYMT-TV (Hazard)

Article originally posted on August 30, 2013 to WYMT-TV Web site http://www.wkyt.com/wymt/home/headlines/Commercial-air-service-landing-in-Pikeville–221852021.html


PIKEVILLE, Ky. (WYMT)   It is a day city officials in Pikeville say they have waited years for. A new program approved by the Federal Aviation Administration is in place that will bring commercial air service to the region.

A specially called joint meeting between the Pikeville City Commission and the Pike County Regional Airport board was held on Friday. The meeting was called to review and vote on two contracts that will bring commercial air service to the airport.

For years plans of bringing the service to Eastern Kentucky have been discussed and that is why Pikeville officials say Friday’s meeting was monumental for the region.

Project Consultant Luke Schmidt says, “We have reached a critical milestone in this project and were able to present a contract for use of the airport as well as a contract for air service.”

Both contracts passed, and the plan is to begin daily roundtrip service to Nashville International Airport beginning in March 2014.

“This is not only providing service but also opening ourselves up to the rest of the world for trade and working on a way to diversify our economy,” explains Pikeville City Manager Donovan Blackburn. “With the war on coal, we are losing jobs. We have to find a way to open ourselves up and make the area more enticing.”

Officials say none of this would have been possible without the help of Congressman Hal Rogers and support from the community which allowed them to receive a $750,000 federal grant.

Blackburn says, “Over 200 businesses worked with the chamber to write letters, the power of business…asking for the service, writing about what it would mean to their businesses. We had more letters submitted for that federal grant than any other community in the entire nation.”

Officials say it is a risk, “Will it work? We don’t know, but if we don’t try it shame on us because our community deserves quality healthcare, a quality education, an expo center for good entertainment, and quality services such as commercial air,” says Blackburn.

However, it is a risk officials say they are willing to take to help improve the region.

Officials are planning an formal ceremony for October 17th. The aircraft and its local brand name will be unveiled at that ceremony.

The flight will be operated by Public Charters.

 

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Pikeville – Pike County Airport Board, City of Pikeville Sign Agreements to Facilitate New Air Service

Press Release

EMBARGOED FOR RELEASE UNTIL SATURDAY, AUGUST 31, 2013

Pikeville – Pike County Airport Board, City of Pikeville Sign Agreements to Facilitate New Air Service

Agreements are the First of Several Steps to Bring Passenger Air Service to the Central Appalachian Region

Pikeville, Kentucky (August 31, 2013) – The group leading the development of commercial air service in Eastern Kentucky today announced that the Pikeville – Pike County Airport Board and the City of Pikeville have each signed agreements with Public Charters, Inc. (PC) of Avoca, Pennsylvania.  PC will facilitate the development of new air service at the Pikeville – Pike County Regional Airport (PBX), which will be operated under contract by Corporate Flight Management (CFM) of Smyrna, Tennessee.  The first agreement outlines various airport services, such as fueling, deicing, aircraft ground handling, terminal space, etc., that the airport will provide to PC and the fees that the airport board will charge for such services.

“The airport board is pleased to take this first and historic formal step towards the establishment of passenger air service in Eastern Kentucky,” said Bill Hickman, Chairperson of the Pikeville – Pike County Airport Board.  “This new service will link the region directly to the domestic and global air service systems and will provide a seamless and easy to use service for all of our region’s air travelers.  This new service looks to the future of the region and will help to create new jobs,” Hickman continued.

The second agreement outlines how the City of Pikeville will manage its revenue guarantee fund to support the start-up of new air service at PBX.

These two agreements are the first of what is expected to be a series of three agreements to be developed between PC and the airport board, the City of Pikeville and the Southeast Kentucky Chamber of Commerce.

In 2011, the City of Pikeville was awarded a $750,000 USDOT Small Community Air Service Development grant for the purpose of funding the City’s revenue guarantee to the first company to commit to providing service.  This grant was augmented with a multi-county coal severance tax grant of $1 million, which was announced last year by Kentucky Governor Steve Beshear.

(Since the governor’s announcement, the state grant has been reduced to $670,588, due entirely to the reduction in coal mining and receipts to the state’s multi-county coal severance tax fund)

“Each of the project partners has approached this project very carefully in terms of recruiting a provider to the community that will best meet our needs,” said Donovan Blackburn, Pikeville City Manager.  “By working together, Corporate Flight Management and Public Charters will bring new air service to Pikeville which will become an important tool in our toolbox when it comes to creating new jobs throughout the region,” said Blackburn.

The third agreement, expected to be signed at a later date this Fall, will be between PC and the Southeast Kentucky Chamber of Commerce.  This agreement will cover marketing and promotion of the new service.  “The Chamber looks forward to playing an active role in helping to develop and promote the new service throughout the region,” said Jared Arnett, President/CEO of the Southeast Kentucky Chamber.

The new service, which is expected to begin in March 2014, will feature nonstop turboprop flights operated by CFM under contract to PC from PBX to the Nashville International Airport (BNA).  PC will provide all ticket distribution, ticket counter, and check-in services, as well as coordination of ground handling and fueling services in both Pikeville and Nashville.  PC will also develop sales platforms for tickets for the new flights on virtually every Internet travel site, such as Travelocity, etc., (tickets will also be available for sale via PC’s web site and over the telephone).  CFM will conduct all flight operations using their BAE Jetstream 19-passenger turboprop airliners.

“The new flights to Nashville will be timed to allow Pikeville travelers to connect to nonstop connecting flights to 49 destinations throughout the U.S., Canada and Mexico,” said Luke B. Schmidt, President of L.B. Schmidt & Associates, LLC and project consultant.

“Travelers will be able to connect to any of the nine airlines which serve BNA, including low-cost carrier Southwest Airlines which has a major presence in Nashville,” Schmidt continued.  “Fully 23 of the Top 25 business destinations for Pikeville travelers will be only one stop away by connecting in Nashville.  This new service will eliminate the need to drive to Lexington, Charleston and Huntington/Ashland when it comes time to travel,” said Schmidt.

Public Charters, Inc. has been offering charter flights by partnering with numerous air carriers since 1999.  PC focuses on markets that are underserved by major airs’ scheduled services.  The company partners with companies such as CFM to provide regularly scheduled public charter flights and provides support in the area of ticket sales and ground handling.  PC’s services are offered on a fleet of aircraft ranging from turboprops to Boeing 737s.

Corporate Flight Management is the largest operator of BAE Jetstream J31/J32 and J41 turboprop aircraft in the U.S.  The company has provided unique scheduled passenger air service from Austin and Nashville to the new regional airport in Branson, Missouri.  The company holds the coveted ARGUS Platinum safety rating and operates a substantial aircraft maintenance and overhaul facility in Smyrna.  The company also manages a fleet of privately owned aircraft, ranging from piston twin engine aircraft to light and medium jets, operating from five bases in the Eastern United States, and holds numerous charter contracts with the State of Tennessee, the U.S. federal government and several collegiate sports teams.

A formal community announcement with more details on the new service is scheduled for October 17, 2013 at the Pikeville – PikeCountyRegionalAirport.  Schedules and ticket prices will also be announced at a later date.

 

The City of Pikeville is a Fourth Class City and is the county seat of Pike County, the largest geographical county in Kentucky.  Pikeville is the regional center for education, employment, health care, manufacturing, mining and tourism in a region comprised of nine Kentucky counties, three Virginia counties and one West Virginia county with a regional population of 345,000 people.  The Pikeville – Pike County Airport Board owns and operates the city/county airport.  The Southeast Kentucky Chamber of Commerce represents 500 members in eight Kentucky counties and has established a support network for businesses in Southeast Kentucky that are committed to improving the local economy, regional unity, political advocacy and economic development. By working together, these three entities are leading efforts to establish scheduled commercial air service in Eastern Kentucky.  L.B. Schmidt & Associates, LLC is a full-service management consulting company based in Louisville, Kentucky and provides consulting services to this group in the area of facilitating air service.

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Ready to take flight – officials say daily air service could begin in March (Pikeville) Appalachian News-Express

Article originally posted on August 31, 2013 to the Appalachian News-Express Web site http://news-expressky.com/

BY RUSS CASSADY

EDITOR

The first concrete steps toward establishing a commercial air service out of the Pikeville-Pike County Airport were taken Friday, with two bodies approving agreements with a company which wishes to have a daily service out of, and back into, Pikeville.

During a special joint meeting on Friday of the Pikeville City Commission and Pikeville-Pike County Airport Board, the agreements and funding sources were approved to get the project off the ground.

According to documentation obtained by the News-Express, the two companies involved in the project, Corporate Flight Management (CFM) of Smyrna, Tenn., the service provider, and Public Charters, Inc., of Avoca, Penn., the ticketing and ground service company, plan to have the service operating by March.

The agreements approved on Friday outline airport services that the airport will provide to the airline and the fees the airport board will charge for the services, as well as how the City of Pikeville will manage its revenue guarantee fund to support the service. 

How the service will operate

The service, according to a statement from the organizations working on the project, will feature nonstop turboprop flights operated by CFM to travel from Pikeville to the Nashville International Airport. Because of the involvement of Public Charters Inc., the statement said, sales platforms for tickets for the new flights will be available on virtually every Internet travel site, such as Expedia, Kayak, Travelocity and others.

From Nashville, passengers can reach the world, officials said.

“The new flights to Nashville will be time to allow Pikeville travelers to connect to nonstop connecting flights to 49 destinations throughout the U.S., Canada and Mexico,” said Luke B. Schmidt, the consultant for the City, Chamber and airport on the project. “Travelers will be able to connect to any of the nine airlines which serve (Nashville), including low-cost carrier Southwest Airlines, which has a major presence in Nashville.

“Fully 23 of the 25 business destinations for Pikeville travelers will be only one stop away by connecting in Nashville,” Schmidt continued. “This new service will eliminate the need to drive to Lexington, Charleston and Huntington/Ashland when it comes time to travel.”

Those flights, unlike a charter service, will operate seven days a week, with one flight departing Pikeville and traveling to Nashville, and another flight returning from Nashville later that day. The flights, officials said, will run seven days a week, and, because of the regulations under which the service will operate, flights can only be cancelled because of extreme circumstances, such as weather or a nationwide or regional grounding of flights.

The service, officials said, differs greatly from a proposal made a few years ago by a company called Locair.

According to documents provided to the News-Express, the current proposal differs from what Locair offered in “every” way, including:

• The airports and flight schedule are approved by the U.S. Department of Transportation (DOT) Special Authorities Division; no changes can be made to either without DOT approval.

• The service will be daily, including weekends.

• All passenger seats on the aircraft are available for sale on each flight.

• There will be combined itineraries with many carriers, including Southwest.

• There will be connecting service at the hub airport’s main terminal — in Transportation Safety Authority “sterile” conditions to hundreds of destinations.

The sterile conditions will mean TSA screeners and inspectors, who will be employed and paid by the TSA, and stationed in Pikeville. Because of the “sterile” treatment, Schmidt said, the planes from Pikeville to Nashville will actually pull up to a terminal, eliminating the need for a second security check to get on another flight. 

Funding source has changed

When the project was in its early stages, it was subjected to a high level of controversy, when it became clear to organizers that they would have to have the support of the Pike Fiscal Court to apply for a $1 million multicounty coal severance grant.

After weeks of controversy, the fiscal court approved by a 5-2 vote applying for the funding for the project, which was later received.

However, this week, documents show, the full $1 million in funding was not obtained through coal severance.

According to a letter obtained by the News-Express, earlier this week, Pikeville City Manager Donovan Blackburn was notified by the Kentucky Department for Local Government that the agency would be funding a grant for $200,000 for the air service project from coal severance.

The reduction in coal severance, Schmidt said, is a direct result of the reduction in mining in the region, which has caused severance tax receipts to fall.

In the same letter, the agency confirms that it is the intent of the Kentucky Transportation Cabinet to fund the rest of the project, contributing a total of $470,588 to ensuring the operation of the service.

The funding, according to documentation provided to the News-Express, will be used to fund a monthly revenue guarantee program, which officials said will only be paid to the carrier if the company’s actual revenue trails the agreed upon monthly revenue target, and in an amount equal to the shortfall.

The service, according to the documents, is projected to carry a total of 5,244 passengers in the first year, with that number climbing to 13,223 the following year.

“The service should start with an average of three revenue passengers per flight in month No. 1 and build to an average of 18.5 revenue passengers per flight in month No. 14,” the documents said.

According to documents, the total amount of revenue guarantee which is planned to be available to the company is $1.425 million, between March of next year through February of 2016, the end of the agreement, with city officials planning to ask the state legislature to fund an additional $104,412 to bring the total available to that amount.

Approximately $750,000 is coming from the U.S. DOT’s Small Community Air Service Development Grant Program, from a grant first approved in 2011. 

Not all convinced of the good of the project

While the Pikeville City Commission unanimously approved the agreements during the meeting on Friday, the Pikeville-Pike County Airport Board approved the agreements by a 5-1 vote, with member Brent Wagner voting against the measure.

During the meeting, Wagner questioned Schmidt on several points of the airport’s end of the contract, including what the airport’s rights and responsibilities are.

Wagner told Schmidt that he was disappointed the board had only received the agreement 16 hours before the meeting.

“It’s hard to prepare and have valid questions when you don’t have the documents in front of you,” Wagner said.

However, Wagner pointed out that one part of the agreement commits the airport board to spending a maximum of $210,000 to bring the service to Pikeville. In response to Wagner’s questioning, Schmidt said that no matter what, the amount the airport would have to contribute cannot exceed that amount.

Also, Wagner pointed out that the contract is written in such a way that it would prevent the airport board from backing out without the city’s permission and that it would lock the airport board in to only being able to add a “mark up” of 50 cents per gallon on the fuel sold to the airline.

Schmidt said the fuel cost being locked is simply an incentive to attract the company, which wants to purchase fuel from the Pikeville Airport to contribute back to the community. The plane, Schmidt said, could fly from Nashville and back without having to fuel up in Pikeville.

“In reading this, I get the impression that there’s a lot of things in line for this company … to make it work,” Wagner said. “But we’re being restricted in many ways. We’re restricted on our profitability. We’re restricted about not being able to take this agreement and speak to the public, the people that’s spending the money for it.” 

Project first-of-a kind

According to Schmidt, the project to bring air service to Pikeville, as far as he is aware, is the first of its kind, in that the airline expects its involvement with the Pikeville-Pike County Airport to be profitable and it could become a model project for the nation.

But, he said, it doesn’t come without risk.

“All this requires a bit of a leap of faith,” Schmidt said.

Pikeville Mayor Pro-Tem Jimmy Carter agreed there is some risk before casting his vote, but said that the possible reward makes the risk worth it.

“We have to take the calculated risk to make sure that we succeed here in Eastern Kentucky,” Carter said. “If we don’t, we’re dead in the water.”

A formal community announcement of the project is currently scheduled for Oct. 17 at the airport. Schedules and ticket prices will be announced at a later date.

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E’town MSA finishes 11th in GDP growth The (Elizabethtown) News-Enterprise

 

Article was originally posted to The (Elizabethtown) News-Enterprise Web site http://www.thenewsenterprise.com/content/etown-msa-finishes-11th-gdp-growth
By Marty Finley
Sunday, February 24, 2013 at 2:05 am (Updated: February 24, 5:44 am)

The Elizabethtown MSA is no longer the alpha dog when it comes to real gross domestic product growth.

Of 366 MSAs nationally, the Elizabethtown MSA finished 11th nationally in real gross domestic product growth in 2011, recording a 6.1 percent increase from 2010, according to a report issued by the U.S. Department of Commerce, Bureau of Economic Analysis late last week. Odessa, Texas, finished first with a growth rate of 15.16 percent followed by nearby Midland, Texas, at 9.50 percent.

The Elizabethtown MSA rate ranks first among the eight other Kentucky MSAs, and local officials said it reflects consistent growth in GDP. Hardin County United in a news release noted the figures reflect a roughly 30 percent jump in overall GDP growth since 2008. Luke Schmidt, a consultant with HCU, said the MSA also is outperforming peer military markets in GDP growth, such as Hinesville-Fort Stewart, Ga., and Manhattan-Fort Riley, Kan.

“The area is doing well,” Schmidt said.

Real GDP measures an area’s gross product based on the national prices for goods and services produced in an MSA, according to the BEA. The rate is adjusted for inflation.

In real money, the MSA ranked 259th nationally in GDP at $5.6 billion, according to the report.

HCU in its release argued the rankings help attract companies wanting to expand into progressive and flourishing communities, opening up more job opportunities.

“And it’s sustained growth,” Schmidt said. “It’s not a flash in the pan.”

Elizabethtown was ranked first in GDP growth in 2010 with a 14.4 percent growth rate, but revised rankings for 2010 on the bureau’s website listed a growth rate of 16.62 percent during that year, dropping Elizabethtown to fifth.

Schmidt reviewed the documents but said the changes for 2010 were made quietly. The BEA, he said, has not issued follow-up statements explaining the reasons behind the revision.

Hardin Judge-Executive Harry Berry said the MSA has consistently finished strong in GDP growth and the 11th place ranking for 2011 reflects well on the area’s ability to maintain its success.

Berry said the rankings are impressive considering the Elizabethtown MSA is significantly smaller than the major metropolitan areas touting much larger GDP totals, referencing the Dallas and San Francisco MSAs.

Real GDP increased in 242 of the 366 MSAs during 2011 — growth sparked by professional and business services, durable-goods manufacturing and trade, according to the report.

Berry said Hardin County has benefited from expansions in manufacturing and industry with companies restoring their workforces to pre-recession levels.

“People like to be with a winner,” he said.

The Elizabethtown MSA also finished in the top five in personal and per-capita income growth in 2011.

“With continuing high rankings in personal income growth, per-capita income growth and GDP growth, our region will continue to receive ‘looks’ from companies that are interested in expanding to a dynamic and growing market,” Berry said.

Marty Finley can be reached at (270) 505-1762 or mfinley@thenewsenterprise.com.

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Airport Survey Confirms Potential (Somerset) Commonwealth-Journal

 

Article was originally posted to the (Somerset) Commonwealth-Journal’s Web site http://somerset-kentucky.com/newslive/x1951907198/Airport-survey-confirms-potential

by Bill Mardis Commonwealth Journal

Somerset —

Results of a regional survey of airline travelers announced Tuesday indicate a robust market in this Southern Kentucky area for commuter airline service at Lake Cumberland Regional Airport.
Released by the Somerset-Pulaski County Development Foundation, the survey indicates a potential annual enplanement of 142,166 passengers who would use airline service in and out of the Somerset airport.
Both Martin Shearer, executive director of the development foundation and Luke B. Schmidt, president of L.B. Schmidt & Associates, LLC, project consultant, said a airline company is interested in providing commuter service at the local airport.
“It’s like recruiting an industrial prospect,” said Schmidt. “Name of the interested commuter service is confidential at this point.” He said there is still a lot of work to do, “ … dotting i’s and crossing t’s … like putting together a jigsaw puzzle.”
Schmidt noted the survey’s two strategic goals:
• Recruit a regional airline that is aligned with a major carrier such as American, Delta or US Airways.
• Establish service to a major connecting hub.
Schmidt said the interested airline service meets these objectives. The company has service in several small markets and  “ … has been around a long time,” Shearer revealed. He said the company is interested in establishing connection with a major airline hub and flying out of Somerset.
“We have made a lot of progress toward establishing a major market profile,” said Schmidt. The survey’s findings include the following information:
• Responding companies reported booking a total of 312 round trips by air each month.
• Approximately 612 visitors fly to the region each month to meet with responding companies.
• Total number of round trips by air to/from the region with responding companies equals 923 each month.
• Lexington is currently the preferred airport for flyers in Somerset, London and Corbin.
• Hours required to drive (one-way) to the primary airport in Lexington averaged 1.5 hours.
• Ninety-one percent of responding companies will use the service if a major connecting hub with reasonable fares is provided.
Although a commuter airline service out of Lake Cumberland Regional Airport would ultimately serve 16 counties in Southern Kentucky, Schmidt said the survey focused on the Somerset, London and Corbin areas. The reason, he said, is because these communities are the core of the proposed market with a combined population of 384,000. Schmidt met personally with several large employers in Somerset, London and Corbin areas.
A Florida-based commuter airline operated out of Lake Cumberland Regional Airport, first to Nashville and then to Washington, D.C., for a little more than two years. It was subsidized with about $900,000 obtained by Congressman Hal Rogers from the U.S. Department of Transportation and $100,000 in local matching funds. No sustaining local source of funding developed before the federal funds were exhausted and the airline shut down February 19, 2010.
The survey to reestablish commuter air service out of Lake Cumberland Regional Airport is an effort by Somerset-Pulaski Development Foundation, Somerset-Pulaski County Chamber of Commerce, Somerset-Pulaski Convention & Visitors Bureau, Corbin Economic Development Agency, London/Laurel County Chamber of Commerce, local airport board and Somerset and Pulaski County governments

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Airport gets $1 M pledge (Pikeville) Appalachian News-Express

 

 

Article originally posted to the (Pikeville) Appalachian News-Express Web site http://news-expressky.com/

BY RUSS CASSADY

Editor

After months of waiting, the controversy over whether coal severance funding should be used to finance a commercial air service project at the Pikeville-Pike County Regional Airport ended Friday when it was announced that $1 million had been allocated to the project.

In a press conference at Pikeville City Hall on Friday, representatives of the groups working to establish commercial air service at the airport gathered to make the announcement, made official by a statement from Gov. Steve Beshear that the project would receive the funding.

Pikeville City Manager Donovan Blackburn, who has been an active participant in several events and announcements this week regarding new projects in the City of Pikeville, said during the press conference that the air service project is “extremely important” to the success of the region.

“The face of Pikeville is forever changing,” he said. The commitment of $1 million in multi-county coal severance funding, Blackburn said, brings the total that those working on establishing the service have to $1.75 million, which will be used to establish a revenue guarantee program for the carrier which commits to coming to Pike County.

And, with the commitment, the air service could be established fairly quickly, according to Luke Schmidt, the consultant hired by the Southeast Kentucky Chamber of  Commerce, City of Pikeville and Pikeville-Pike County Airport Board to work on establishing the service.

“We hope to have a commitment in hand by the end of the first quarter of next year,” Schmidt said.
According to Schmidt, he works in several communities throughout the state, but that this one sets itself apart. “This is clearly one of the most progressive cities in the state,” he said. And according to Chamber President Jared Arnett, this project is just one of many that is helping to change the  business climate in Eastern Kentucky, despite questions over the energy industry.

“It’s imperative that we step up … and create a climate conducive to new investment,” Arnett said.

A statement from Beshear’s office said the successful recruitment of an airline will “significantly enhance economic development efforts and the creation of new jobs not only in Pikeville and Pike County, but also in the surrounding 12 counties.”

The funding was almost not obtained earlier this year. After announcing that the funding was  possible and that the support of Floyd County’s fiscal court had been obtained, organizers ran into questions from the Pike County Fiscal Court over the viability of the project and whether the multi-county coal severance funding, which had been uncommitted, should be used for the project.
After weeks of debate and a public forum hosted by the Appalachian News- Express, the Pike Fiscal Court voted 5-2 to support the funding. The county’s support was required for the funding to be processed.

One of the “No” voters, Dist. 6 Magistrate Chris Harris compared the funding, which will guarantee revenue for an airline, to “corporate welfare.”

“Many of us here would like to see commercial air service in Pike County; that’s not the issue,” Harris said during a fiscal court meeting. “The issue is, ‘At what cost do we want to see commercial air service in Pike County?’ At a time when we are looking at a loss of jobs, declining tax revenue, a limited amount of funding, I don’t think Pike County, right now, I don’t think we can afford this kind of project.”

Both Blackburn and Schmidt spent time on Friday thanking Pike Judge-Executive Wayne T. Rutherford and Floyd Judge-Executive R.D. “Doc” Marshall for their support. Blackburn said that a formal check presentation ceremony for the funding, which will include Beshear’s presence will be held at a later date.

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Pike airport receives $1M grant Williamson (WV) Daily News

Pike airport recieves $1M grant

Pike_airport_recieves_1M_grant0_1351912898
 Julia Roberts Goad

Staff Writer

PIKEVILLE, Ky. — The Pikeville/Pike County Airport came a step closer to commercial air service with the announcement of $1 million in grants from the Kentucky Department for Local Government from multi-county coal severance tax money.

The grant will be awarded once an airline is selected to provide commercial air service to the airport (PBX).

In addition, a Federal Small Aviation Grant granted the Pikeville City Commission received in 2011 was granted an extension of the $750,000 grant that was received for commercial air service last year, bringing the total of funds for the airport to $1.75 million.

Two commercial airlines have expressed interest in serving PBX, although both companies have remained anonymous.

Recruiting an airline to provide commercial service is one of the purpose of the grant. One of the methods of recruiting an airline is a revenue stream package. An airline doing business in the county would set a financial goal for each month. If the company falls short, money from the revenue guarantee package would be used to bring the amount of money the airline makes up to the monthly goal. The money would be given to the airline on a monthly basis so the company would not incur financial losses during the first two years of operation.

Luke Schmidt of LB Schmidt Associates, a consulting company which has been working with the City of Pikeville and the East Kentucky Chamber of Commerce on the airport project, said the revenue stream package is essential to an airline.

“It is expensive to for an airline to start a new route,” Schmidt said. “They have to invest in new planes, employees, equipment. If they lose too much money too soon, they aren’t going to stay. We need to make it profitable sooner rather than later.”

The grant was obtained after garnering support from the Floyd and Pike Counties Fiscal Courts.

However, the support of the Pike Court was not unanimous vote. Two of the six magistrates on the Court were not in favor of asking for coal severance tax money for the airport. Both Chris Harris and Jeff Anderson said they felt the airport would not be profitable. After initially refusing to throw his support behind the request for coal severance funds, Judge Executive Wayne T. Rutherford did vote in favor of the request.

Millions of dollars have already been used in the development of PBX, Pikeville City Manage Donovan Blackburn said, including $3,383,971 to complete the parallel taxiway alongside the airport’s primary runway, $330,513 in improvements and repairs to the primary runway, 679,000 for a new nine-aircraft T-hangar and $109,304 for the installation of a new Automated Weather Observation System.

Jared Arnette, President of the East Kentucky Chamber of Commerce, said the airport is the result of groups working together.

“This is the best example I have ever seen of teamwork,” Arnette said. “Our businesses spoke in one voice. The airport is part of the vision of economic development, they see value of a commercial airport. It is a milestone we have reached. In a time when people are concerned with energy, it is important to step up and say we are creating opportunity.”

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Governor Beshear Announces Airline Service Grant in Pikeville (Press Release)

 

Press release originally posted to Kentucky.gov Web site http://kentucky.gov/Pages/home.aspx

Friday, 11 02, 2012

Kerri Richardson
Terry Sebastian
502-564-2611

Multi-county coal severance tax grant to support new airline service at the Pikeville – Pike County Regional Airport

PIKEVILLE, Ky. – Governor Steve Beshear and the Kentucky Department for Local Government today announced a pledge of a $1 million multi-county coal severance tax grant to the city of Pikeville. The grant will be used to support the development of new airline service at the Pikeville – Pike County Regional Airport (PBX).

Pikeville’s elected officials, along with the Pikeville – Pike County Airport Board and the Southeast Kentucky Chamber of Commerce have been spearheading efforts to develop scheduled passenger airline service at the Pikeville field for more than two years. The grant will be awarded once an airline is selected to provide the public service. The proceeds of the grant will be matched with a $750,000 federal grant that the city of Pikeville received last year, and will be used as part of the project’s revenue guarantee program to assist a carrier in reaching sustainability during the start-up phase of service.

“So far, two airlines have expressed interest in serving PBX,” said Gov. Beshear. “Local officials have demonstrated strong leadership on this project, and the Commonwealth is pleased to partner with the community and airport officials to support ongoing efforts to develop new airline service.”

The grant will play an important role in the final stage of recruiting an airline to PBX. The successful recruitment of an airline will significantly enhance economic development efforts and the creation of new jobs not only in Pikeville and Pike County but also in the surrounding 12 counties.

“This is great news for our community,” said Sen. Ray Jones of Pikeville. “This grant puts us further down the road toward our goal of establishing scheduled airline service at PBX.”

“I want to thank Governor Beshear for his support of this important community goal,” said Rep. Leslie Combs of Pikeville. “We’re getting closer to our goal of new airline service to a major connecting hub which will truly connect Pikeville and Pike County to the global economy.”

“Our city appreciates the support of Governor Beshear and the Commonwealth,” said Pikeville Mayor Pro-Tem Jimmy Carter. “New airline service at PBX will help us to create new jobs in the coalfield.”

“The Commonwealth has been a wonderful partner at PBX ever since the field first opened in 1983,” said Bill Hickman, Chairman of the Pikeville – Pike County Airport Board. “This is yet another confirmation of this partnership as the airport continues to grow and serve the community.”

“New airline service at PBX will make it much easier for our business and professional community to compete in the global economy,” said Jared Arnett, president and CEO of the Southeast Kentucky Chamber of Commerce. “This grant helps us get closer to our goal of securing service.”

“This project enjoys widespread support,” said Luke B. Schmidt, President, L.B. Schmidt & Associates, LLC and consultant to the project’s leadership group. “Airline service will be a real game-changer for this community. I want to also thank Pike County Judge/Executive Wayne T. Rutherford and Floyd County Judge-Executive R.D. “Doc” Marshall for their support of our grant application.”

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