The St. Cloud Regional Airport is banking on a recently announced $750,000 federal grant to land an airline at the airport that’s been virtually deserted since Delta terminated service in and out of St. Cloud in late 2009. Despite a $5 million makeover of the terminal two years ago, St. Cloud’s airport has mostly sat idle as the city desperately seeks new commercial airline partners. St. Cloud received $750,000 in federal stimulus funding to assist with a portion of the renovation, but the project has thus far amounted to a passenger boarding bridge to nowhere.

The latest federal subsidy comes under the little-known Small Community Air Service Development Program (SCASDP), which provides temporary help to small airports to attract and maintain local air service through marketing and revenue guarantees. St. Cloud officials said the taxpayer gift would go a long way toward courting a new carrier, mostly by offsetting the financial risks involved with getting new service off the ground. In other words, the federal government is subsidizing the airport so the airport can subsidize the airlines. “One hundred percent of it will go towards what we call a minimum revenue guarantee. It’s really putting a pot of money somewhere set aside that in the event that airline loses money or has some start up costs or whatever it might be that they’re able to pull from that and make themselves whole,” airport director Bill Towle told the St. Cloud Times.

While increasing St. Cloud’s chances of attracting air service, analysis by the Freedom Foundation of Minnesota suggests the program fails to deliver for communities more often than not. In fact, a federal audit found that half of SCASDP grants failed to meet their objectives or failed to continue to provide air service capable of competing in the marketplace after the subsidies dried up.

Federal auditors have consistently raised questions about the overall lack of effectiveness of the $20 million per year FAA program. An Office of Inspector General 2008 audit revealed that just 30 percent of subsidy recipients were successful in achieving and sustaining their desired results for at least one year. The 40-page report concluded that “70 percent of the grants in our review failed to fully achieve their objectives. Specifically, 50 percent of the grants were unable to achieve any of their articulated grant objectives or were unable to sustain grant benefits beyond the grant horizon.”

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No Commercial Flights, But Airport Still Hoping to Land More Federal Funds

St. Cloud Regional Airport (STC) touts lots of amenities on its website—a café, ATM, free wi-fi, free parking and a $5 million completely renovated terminal whose capacity went up dramatically from 30 to 200 travelers. There’s also a new $750,000 passenger boarding bridge secured with federal stimulus funds to keep travelers out of the elements while catching a flight.  One asset, however, the newly renovated airport notably lacks—commercial flights and passengers.

“We’re here to serve the public and serve them well and have adequate facilities,” Bill Towle, airport director, told the Freedom Foundation of Minnesota. “I would say the airport is a utility and we need adequate facilities to serve the public.”

Currently, an average of about one charter flight a month with 130 or so passengers uses the eerily empty 9,000 square foot glass-fronted facility.  Potential passengers checking the airport’s website are notified there’s “no commercial air service” available. Delta Connection flights between St. Cloud and Minneapolis were grounded at the end of 2009 due to weak customer demand. Both national rental car agencies pulled out of their airport offices months ago.

By then, it was too late. $3.125 million in federal aviation grants from user fees on fuel and tickets, $1.131 million in state airport funds, and $767,000 in local sales taxes were already spent on what’s in danger of becoming a terminal project in more ways than one.

“One thing we did not see is that Delta was going to pull out of here.  That was an absolute shock,” Towle said. ”We might not have done this improvement if we knew they were going to be gone.”

Soon the six Transportation Security Administration (TSA) baggage screeners based in St. Cloud will also depart, along with their high-tech, high-cost equipment. Assigned to other airports in the region for several months, the screeners have been offered jobs elsewhere.

“There’s no commercial flights, so there’s no need for screening,” said Luis Casanova, TSA spokesman.  “We’re pulling our screeners out in November and at some point, the equipment will be moved, too.”

Not so long ago, federal, state, and local transportation planners envisioned the St. Cloud facility as a tier-two “reliever airport” to ease air traffic congestion into Minneapolis-St. Paul International Airport, setting in motion the $5 million terminal upgrade and other spending for infrastructure improvements.

Officials forecast 25,000 or more commercial passengers would fly through STC in 2010 with a steady increase in traffic in future years, according to the project’s 2006 master plan.  Without Delta, however, about 1,000 passengers have boarded a handful of Sun Country charter flights to a Nevada casino resort this year.

“We got all those numbers approved by the FAA. The likely growth if we continued even as a status quo put us at 26-27,000 enplanements a year,” Towle said.

The controversy refocuses attention on the FAA’s Airport Improvement Program, which some critics say too often results in misplaced priorities and aviation funding. In the last decade, St. Cloud Regional Airport has received more than $24 million in FAA airport improvement grants, including funding for the terminal project, according to OMB Watch, an online database that tracks government spending.  Another national watchdog group indicates the St. Cloud airport received clearance for the terminal expansion despite the project’s low ranking of 35 out of 100 on the FAA’s own priority ratings scale.  The FAA states the rating “is the first evaluation factor and serves to categorize airport development in accordance with agency goals and objectives.”

Meantime, St. Cloud officials have launched an unusual campaign to attract another carrier, approaching local businesses for travel pledges in hopes of demonstrating significant local demand for air travel. With results falling short of the goal so far, the effort may depend on whether the city proves successful in obtaining a more familiar revenue stream–another $500,000 federal grant now under consideration at the FAA.

“Some of the ways we’d use that grant money would be to offset costs from start up of service,” Towle said.  “Additionally, if there’s any losses at the beginning maybe we could help reduce the cost of those losses…and maybe also help with marketing.”

Despite a shortage of commercial flights out of STC, there’s no shortage in requests for federal dollars.  Senator Al Franken’s website lists a $500,000 earmark request for improved runway lighting for the St. Cloud Regional Airport, while Senator Amy Klobuchar’s website lists a $1,000,000 earmark request for the same project.

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Now that most of twelve California wind turbines retrofitted for Minnesota winters are finally operational, several cities have acknowledged to the Freedom Foundation of Minnesota that the $5 million project may be more suited for generating PR—both good and bad—than producing significant quantities of power.

The wind power project involves utilities in eleven cities scattered across the state from the metro area to East Grand Forks in a consortium called the Minnesota Municipal Power Agency (MMPA). Each of the eleven member cities received one turbine, and the twelfth was given to the MMPA owned and operated Faribault Energy Park in Faribault. It was supposed to be a step toward meeting the state renewable energy mandate that requires 25 percent of Minnesota’s power be from renewable energy sources by 2025.

It turns out, however, the twelve wind derricks will produce power for perhaps several hundred homes, hardly making a dent in the MMPA’s 57,000 household and business customers.

“They’re basically for public relations, educational purposes. They’re just not feasible for any significant amount of electrical generation,” said Dan Voss, Municipal Utilities Director for the City of Anoka.

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Minnesota has declined to make public its list of recommended projects for the first round of broadband stimulus funding until Washington announces the lucky recipients beginning in early November.   Sure, many other states have released their prioritized lists of applicants for a $7.2 billion jackpot.  And sure, the secretive nature of the process seems at odds with the high level of transparency that was promised to accompany the even higher level of stimulus funding.

A cursory review by the Freedom Foundation of Minnesota of the projects under consideration, however, indicates there’s plenty of reasons to avoid public scrutiny.  

Leading the list of dubious projects is a $5.2 million proposal by the city of Minneapolis to provide laptops or iPod Touches to “underserved” residents, courtesy of taxpayers.  Of course, many taxpayers would no doubt appreciate receiving an iPod Touch themselves and there’s no indication of how handing out iPods and laptops would help create or save jobs, or spur economic recovery. 

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