SUMMARY MINUTES STRATEGIC DEVELOPMENT COMMITTEE MEETING OF OCTOBER 19, 2016 Ms. Wells chaired the October 19 Strategic Development Committee Meeting, calling it to order at 9:35 a.m. A quorum was present during the Meeting: Mr. Griffin, Ms. Hanley, Ms. Lang, Mr. Mims, Mr. Session, Mr. Sudow, and Mr. McDermott (ex officio). Mr. Curto, Ms. Merrick, Mr. Pozen, Mr. Tejada, and Mr. Williams were also present. Recommendation to Approve Virginia Department of Transportation s Request for Easements within the Dulles International Airport Access Highway for the Transform I-66 Inside the Beltway Project. Johnna Spera, Deputy General Counsel, presented the staff recommendation. She reported that the Virginia Department of Transportation (VDOT) is currently working on a project to convert the segment of I-66 inside the Capital Beltway to dynamically-priced toll lanes in the peak direction during morning and afternoon rush hours. Ms. Spera noted that VDOT will charge tolls to all single occupant vehicles, including hybrid vehicles, travelling in the peak direction during peak hours. She explained that currently traffic on this segment of I-66 is restricted to high occupancy vehicles (HOV) with two or more passengers from 6:30 a.m. until 9:00 a.m. eastbound and from 4:00 p.m. until 6:30 p.m. westbound. Ms. Spera reported that once the Project is completed, eastbound vehicles will pay tolls from 5:30 a.m. until 9:30 a.m. on weekdays and westbound vehicles will pay tolls from 3:00 p.m. until 7:00 p.m. on weekdays. She noted that HOV-2+ vehicles and buses will not be tolled and the lanes will remain free to all traffic during off-peak periods and on weekends. Ms. Spera further explained that single occupant vehicles travelling to and from Washington Dulles International (Dulles International) during the peak hours will be required to pay the toll. Currently, such vehicles are not subject to the HOV-2+ restrictions on I-66. Ms. Spera reported that the Commonwealth of Virginia will use all revenue generated from the Project to benefit the I-66 corridor, both inside and outside the Capital Beltway. She stated that according to VDOT, the average toll is expected to be approximately $5 6 per trip, but the amount will vary based on demand in order to provide users a more constant rate of speed for the entire trip. The tolling will be accomplished through E-ZPass and is expected to begin in the summer of 2017. Ms. Spera further stated that VDOT will inform drivers by installing advisory signs in locations that give drivers wishing to avoid the tolls the ability to choose alternative toll-free routes. She noted that
six of the advisory signs, as well as associated tolling system elements, including conduits for carrying fiber optic cable, are proposed to be installed on Airports Authority property along the eastbound Dulles Toll Road and the eastbound Dulles International Airport Access Highway (DIAAH) between Spring Hill Road and I-495. Ms. Spera reviewed several exhibits outlining the areas that would be impacted by the Project, as well as VDOT requests for placement of the signs and equipment to accommodate construction activity related to the installation. She further stated that VDOT has agreed to allow the Airports Authority the right to install cameras, sensors and related traffic monitoring equipment on the VDOT structures within the easement should the Airports Authority desire to do so in the future. Ms. Spera reported that VDOT will not be assessed a charge for this easement, consistent with the Airports Authority s practice of providing easements to governmental entities at no cost. Ms. Hanley noted that Directors had recently received a letter from the Metropolitan Washington Airlines Committee opposing tolling airline passengers on Route I-66. She described the current traffic dilemmas and stated that she believed that the Committee and Board are being asked to support a request that will further complicate I-66 traffic inside the Beltway. For the record, Ms. Hanley stated that the tolling would apply only during the peak direction but noted that traffic congestion in the opposite direction was actually more extensive because of the HOV restrictions. Mr. Williams asked if there is any quid pro quo by the Board approving the request or any financial monies from VDOT now or in the future. Mr. Potter responded negatively. Mr. Tejada stated that he was familiar with the Project and asked how tolls will be applied from I-66 to Dulles International. Ms. Hanley explained that there are two transponders the regular E-ZPass and Hot Lanes Flex. The Hot Lanes Flex transponder can be flipped to recognize that the HOV requirement is being met. Mr. Potter added that the DIAAH and the Dulles Toll Road are not affected. He explained that drivers can travel from Dulles International via the DIAAH and exit at Route 123 during rush hour; however, drivers traveling further down to Route 66 will be required to pay a toll. Mr. Potter noted that signs will be displayed to inform drivers of the amount of the toll if they do not take the last opportunity to exit.
Mr. Griffin asked what would happen if the Board did not approve the subject request. Roger Natsuhara, Vice President for Engineering, stated that federal regulations would prevent VDOT from moving forward with the Project. Mr. Griffin stated that the General Assembly has appropriated $50 million for Dulles International. He further stated that this action will potentially impact airline passengers getting to the Airport. Mr. Griffin asked about options other than eventually or initially rejecting the approval of the easements and having further discussion. The Committee approved the recommendation. Ms. Wells stated that she would offer a resolution later in the day s Board Meeting. Due to time restraints, the Committee recessed its meeting at 9:50 a.m. At 12:20 p.m., Ms. Wells reconvened the meeting. Ronald Reagan National Airport Capital Construction Program. Mr. Natsuhara provided an update on the Capital Construction Program at Ronald Reagan Washington National (Reagan National). The presentation included renovation designs, expenditures and budgeted forecasts. Mr. Natsuhara reviewed the status of the Corporate Office Building relocation and renovation along with its budgeted amount that is scheduled to be completed in March 2017. He reported the following scheduling information regarding the completion of the south hangar line renovations: Airports Authority February 2018; Delta Airlines October 2016; and American Airlines March 2017. He reported that the Secure National Hall project cost is budgeted and forecast at $237,524,197 with current expenditures totaling $8,626,273. Other Secure National Hall scheduled activities include a submission of National Environmental Protection Act documents to the Federal Aviation Administration for approval, 60 percent completion of the design package, and the completion of construction by the fall of 2020. He stated that expenditures for the New North Concourse project totaled $4,266,976 with a budget and forecast of $380,898,607. The New North Concourse design development and construction procurement are progressing with an anticipated completion in the summer of 2021. Mr. Tejada inquired whether the upcoming demolition and construction would have any impact to the bike trail or immediate area, to which Mr. Natsuhara responded negatively. Mr. Tejada also inquired whether the Airports Authority is coordinating its effort with Arlington County regarding those issues. Mr. Natsuhara responded affirmatively.
Airline Business Development Information Report. Jerome L. Davis, Executive Vice President and Chief Revenue Officer, was joined by Mike Stewart, Vice President for Airline Business Development, and Mark Treadaway, Vice President for Business Outreach. Mr. Davis provided a summary of air service developments for both Airports, as well as significant aviation industry activities that occurred since the last report presented in June. The report covered the following topics: 1) Beijing Capital International Airport (BCIA) Agreement; 2) IPW 2017; 3) World Routes; 4) Air Service Developments; and 5) Dulles International Cargo Developments. Mr. Davis stated that the BCIA was not an agreement that the Airports Authority initially sought after but that the opportunity presented itself as a result of the work being done in Loudoun County. On behalf of the Airports Authority, Mr. Treadaway had signed a Memorandum of Understanding (MOU), and he was joined by. Phyllis Randall, Chair of the Loudoun County Board of Supervisors, and members of the Economic Development Group. As a result of the MOU signing, Mr. Davis and Mr. Stewart had attended the CEO Forum in Beijing on September 20-22, which was hosted by BCIA. As 2016 marked the Airports Authority s first year in participating, Mr. Davis explained that there are two major opportunities for the Airports Authority going forward marketing terminal management and route development. He reported that 21 companies participated in the CEO Forum. Mr. Davis reiterated that it will be important to continue to strengthen the Dulles Sister City Agreement and overall relationship, as well as the exchange program with emphasis on Route Development and Marketing Terminal Management. He noted that BCIA serves 90 million passengers. When the new Beijing Airport opens within the next four to five years, the region will serve 300 million passengers. Mr. Treadaway reported that 1,500 international buyers from 70 countries, 500 international journalists, and 4,000 U.S. suppliers attended the IPW 2016 event in New Orleans. Mr. Treadaway explained that Destination DC and the Washington regional partners garnered a great deal of interest as Washington D.C. would host IPW for the first time on June 3 7, 2017. Mr. Treadaway stated that the event is expected to generate more than 1 million new international passengers. He reviewed the IPW 2017 schedule of events, including the opening celebration on June 4 at the National Air & Space Museum, the DC LGBT Event on June 5, and the closing celebration on June 6 when DC, Maryland, and Virginia partners will gather together for a spectacular event at Nationals Stadium.
With regard to airline business development, Mr. Stewart reported that he and Mr. Davis had attended the 22 nd World Route Development Forum in Chengdu, China on September 24-27 and participated in 17 pre-arranged meetings. The premier platform for airlines, airports and tourism professionals was attended by approximately 3,000 Delegates representing 300 airlines, 700 airports and 130 tourism authorities. Mr. Stewart noted that he had learned that several airlines are considering Washington, D.C. as a potential new destination in 2018 or 2019. IcelandAir will begin a double daily from Dulles International in the summer of 2017. The Airports Authority had received accolades from the airlines for presentations providing credible data and information. Mr. Stewart stated that there are great opportunities for increasing awareness of Dulles International to new airlines that are familiar only with the United States, Washington, DC, and Virginia. Mr. Stewart further stated that these are opportunities to observe practices of other leading world airports to provide ideas for the Airports Authority s future development. Mr. Stewart presented information on several airlines offering either increased or new air service developments. Royal Air Maroc began three weekly flights between Dulles International and Casablanca, Morocco effective September 8. On November 6, Southwest Airlines will begin new daily service to Orlando from Dulles International and twice daily service to Providence from Reagan National. United Airlines will begin new daily service from Dulles International to Ft. Lauderdale, and once weekly seasonal service to Providenciales, Turks & Caicos; Vail, Colorado; and Nassau, Bahamas. Additionally, Icelandair announced that it will increase service to double daily from Dulles International to Reykjavik, Iceland during the summer of 2017. Mr. Stewart noted that Delta Airlines will replace one beyond perimeter daily service from Reagan National to Salt Lake City with Los Angeles on April 24, 2017 and start daily service from Dulles International to Salt Lake City. With regard to cargo business developments, Mr. Stewart reported that the Airports Authority had issued a Request for Interest (RFI) for the Lease, Development and Management of Air Cargo Facilities at Dulles International. He stated that the Airports Authority is seeking a qualified, experienced third-party partner to design, construct, finance and operate air cargo support and maximize the existing facilities at Dulles International. Mr. Stewart further stated that the Airports Authority hopes to gain information that will lead to negotiation of a lease and operating agreement with a respondent; however, the Airports Authority is not required to select a partner from the respondents. The
due date for submissions is November 3. Mr. Stewart reported that the Airports Authority and United Airlines Cargo had jointly sponsored a customer appreciation marketing event in July in London to promote United Cargo s TempControl pharmaceutical airfreight product and its flights between Dulles International and Heathrow. APICS, which is the premier professional association for supply chain management, had hosted airport tours in September for approximately 65 attendees as part of its annual conference in Washington, D.C. Ms. Merrick inquired whether the cargo business developments were expected to increase revenue significantly. Mr. Stewart stated that they will likely not result in a huge revenue stream. Most cargo at Dulles International is transported in the belly of passenger jets. Mr. Stewart noted that rental and landing fees are currently the Airports Authority s sources of revenue for cargo. Mr. Sudow reported that the Chinese government had donated a classical Chinese garden to the United States National Arboretum. He stated that the formal groundbreaking would be held at the end of the month. The construction of the garden is expected to last approximately two years. Mr. Sudow also reported that Chen Dun Province, located between Shanghai and Beijing, had approached the Commonwealth of Virginia to enter into a tourism exchange program. Ms. Wells stated that the Committee would need to meet in executive session to receive an Airline Business Development Update (Tab 27), pursuant to Article IX, Section 3(c) of the Airports Authority Bylaws which permits the Board and its Committees to move into executive session to consider existing or prospective contracts, business or legal relationships to protect proprietary or confidential information of the Authority, any person or company; the financial interest of the Authority; or the negotiating position of the Authority. The Committee concluded its regular session at 12:50 p.m. and began its executive session. At 1:00 p.m., the Committee concluded its executive session. being no further business, the meeting was thereupon adjourned. There