DEL NORTE COUNTY REGIONAL AIRPORT CRESCENT CITY, CALIFORNIA Proposal Under the Small Community Air Service Development Program

Docket: DOT-OST-2010-0124 Before the Office of the Secretary of Transportation US Department of Transportation DEL NORTE COUNTY REGIONAL AIRPORT CRESCENT CITY, CALIFORNIA Proposal Under the Small Community Air Service Development Program Crescent City San Francisco An Integrated Program of Air Service Development via: An Enhanced Marketing and Advertising Campaign In Support of Current Essential Air Service to/from San Francisco Sponsor: Del Norte County Regional Airport Crescent City, California James Bernard, Airport Director Congressional Code: CA-001 Dun & Bradstreet Number: 619502628 August 27, 2010

TABLE OF CONTENTS Section Page Summary Information 3 Introduction 6 Primary Objectives of Proposal 7 Executive Summary 8 Detailed Explanation of Proposal 13 Current Air Service 16 Air Service Deficiencies 20 Extenuating Factors Affecting Air Service 23 Availability of Alternate Airports 25 Use of Local/Federal Funds 26 Public/Private Partnerships 27 Implementation Timeline 29 Air Service Advisory Groups 30 Local Air Service Development Efforts 31 In-kind Services from the Community 32 Performance Measures 33 Legal Sponsor 34 Financial Controls 35 Return on Investment 36 DOT Exit Strategy 37 Airport Information 38 Community Profile 39 Comparison to Other Communities in Region 46 Conclusions 52 Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 2

SUMMARY INFORMATION Small Community Air Service Development Program Docket DOT-OST-2010-0124 A. Applicant Information Not a Consortium Community now receives EAS subsidy Interstate Consortium Intrastate Consortium Community previously received a Small Community Grant If previous recipient, date of Grant: expiration date of Grant: B. Public/Private Partnership Public: 1. Del Norte County Airport/Jack McNamara Field 2. City of Crescent City 3. City of Brookings, Oregon 4. Curry County, Oregon 5. Del Norte County Private: 1. Del Norte Chamber of Commerce 2. Crescent City Chamber of Commerce 3. Smith River Rancheria 4. Elk Valley Rancheria Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 3

C. Project Proposal Marketing Upgrade Aircraft New Route Personnel Increased Frequency Low Fare Service Travel Bank Service Restoration Subsidy Surface Transportation Regional Service Other (Specify) Revenue Guarantee Launch New Carrier Start Up Cost Offset First Competitive Service Study Secure Additional Carrier D. Existing Landing Aids at Airport Full ILS Outer/Middle Marker Published Instrument Approach Localizer Other: E. Project Cost 1. Federal amount requested: $ 200,000 2. State cash financial contribution: $ 0 3. Local cash financial contribution: $ 20,000 3a. Airport cash funds: $ 0 3b. Non-Airport cash funds: $ 20,000 3c. Total local cash funds: $ 20,000 4. TOTAL CASH FUNDING: $ 220,000 5. Local funds contributed from already existing Programs of projects included in line 3c: $ 0 6. Local funds contributed from new commitments Or new resources included in line 3c: $ 20,000 7. Airport In-Kind contribution: $ Various Description: Additional In-Kind Marketing 8. Other In-Kind contribution: $ Various Description: Advertising and marketing match money 9. TOTAL IN-KIND CONTRIBUTION: $ Undetermined 10. TOTAL PROJECT COST: $ 220,000 Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 4

F. Enplanements at Airport 2000: 14,910 2001: 11,600 2002: 10,270 2003: 10,940 2004: 11,930 2005: 11,185 2006: 13,975 2007: 16,860 2008: 12,215 2009: 10,740 G. Is Application Subject to Review by State Under Executive Order 12372 Process? This application was made available to the State on. Program is subject to review, but has not been selected by the State. Program is not covered. H. Is Applicant Delinquent on any Federal Debt? No Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 5

INTRODUCTION Under the newly awarded Del Norte County Regional Airport Essential Air Service (EAS) contract Crescent City s long-running direct service to Sacramento will be eliminated. In its place SkyWest/United Express will operate a slightly expanded schedule to San Francisco. This service change reduces Crescent City flights by 22% and seats by 21%, while increasing the required subsidy for service by almost $600,000 per year. While the community generally supports the service change, as it increases service and connectivity at United s San Francisco hub, the Airport will be hurt by the loss of seats and flights. Moreover, with the service pattern changes, it is essential that the Airport do everything it can to educate the public to encourage them to With service pattern changes, it is essential that the Airport do everything it can to educate the public to encourage them to use the new service, and to ameliorate the effects of losing direct Sacramento service. use the new service, and to ameliorate the effects of losing direct Sacramento service. While service patterns change, the Airport has seen its average airfare rise by 27%, as it increased by $36 each way, or $72 roundtrip in the last year. Crescent City has the second highest average one way fare of all airports in northern California and southern Oregon. High airfares in Crescent City have the impact of convincing travelers that local air service is expensive and unattainable, which causes them to stop checking local flights at the Del Norte County Regional Airport before booking out of other, far away airports in the region. If the fare is too high to consider local service for a couple of trips in a row, local travelers become conditioned to check non-local airports first. A wide ranging marketing and advertising campaign would likely help to remedy this situation, and lead to increased local enplanements in Crescent City. The Airport believes a Grantsupported marketing and advertising campaign can have an immediate impact, with the new service pattern going into place. Now is the time for the campaign it cannot wait due to the fact the service changes are imminent. If the Airport cannot blanket the region with this message, it is likely the service changes will go unnoticed, and passengers will continue booking trips out of other airports in the region, increasing the per-passenger EAS subsidy in Crescent City. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 6

PRIMARY OBJECTIVES OF PROPOSAL Objectives for Program: Bolster performance of an Essential Air Service (EAS) route Increase enplanements through increased awareness Decrease leakage to other airports in the region through lower fares Long term service improvements due to increased viability of local air service Means to Achieve Objectives: Build a larger budget for marketing and advertising efforts Target segments of the population in the region most likely to use local air service Work with businesses to increase usage of current air service through increased awareness Course of Action to Support Means: Develop targeted marketing and local advertising campaign for potential airport users Ensure campaign saturates the market with the message that local air service is competitive with service offered at other airports in the region Ensure campaign has funding to run for a significant period of time at least 24 consecutive months Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 7

EXECUTIVE SUMMARY The Del Norte County Regional Airport in Crescent City, California is in the midst of its first major change in its service pattern in a decade. This fall, SkyWest/United Express the only carrier serving the Airport and the region will shift its service from two destinations to just one. At the same time the community will lose four departures per week and 110 weekly departing seats. Crescent City is served under the Essential Air Service (EAS) program, as it is 369 miles from the nearest medium hub Sacramento. The Department of Transportation awarded its latest Essential Air Service (EAS) contract for 14 frequencies per week to San Francisco, on SkyWest Embraer Brasilias, in May of 2010 at a subsidy rate of almost $1.8 per year. This contract eliminated Crescent City s long-running one-stop service to Sacramento, the State capital. It also reduced Crescent City flights by 22%, and seats by 21%, while increasing the required subsidy for service by almost $600,000 per year. While the community generally supported the service change, as it increases service and connectivity at SkyWest/United Express will shift its service from two destinations to just one. At the same time the community will lose four departures per week and 110 weekly departing seats. United s San Francisco hub, the Airport will be hurt by the loss of seats and flights. Moreover, with the service pattern changes, it is essential that the Airport do everything it can to educate the public to encourage them to use the new service, and to ameliorate the effects of losing direct Sacramento service. Already, many of those who live within the Airport s catchment area drive to other airports to access the national air transportation system due to cheaper fares, more available flights and the lack of awareness about the more convenient airport located in Crescent City. In effect, the lack of awareness of the local air service available at the Del Norte County Airport suppresses the number of travelers, and potential travelers, in the region, forcing many to fly from other competing airports, or to not travel at all. The Del Norte County Regional Airport must work harder address the challenge of awareness and now is the best time as it is in the midst of a service change. The most effective way of accomplishing this task will be a wide-ranging marketing and advertising program, designed to Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 8

increase regional knowledge about the service offered in Crescent City. The Airport believes this program will initially result in increased enplanements, with more of those who live in the immediate and extended catchment areas flying locally. Further, the Airport believes those increased enplanements will result in increased service, allowing fares to achieve parody with other airports in the region. The Del Norte County Regional Airport has the ability to draw from a large area due to its relative isolation located on the west side of the Pacific Coast Range mountains and isolated from the population centers on the coast and in the central valley. The Airport s catchment area extends north along the Pacific coast to Gold Beach, Oregon, east to Cave Junction, Oregon, and south to Orick, California. The population of the Airport s extended catchment area is 77,100 and increased by 1,830 people since 2000, or 2.4% (see Figure 1). FIGURE 1: The Del Norte County Regional Airport s Primary Catchment Area Although outside the State the Del Norte County Regional Airport is primarily designed to serve, the Oregon portions of the Crescent City extended catchment area are closely tied both economically and culturally with the California portions of the area. In fact, Curry County, Oregon committed more than $2,000 in local funding to promote the Airport and its current EAS service through a local air service grant. The Del Norte County Airport had its best passenger year in a decade in the year ended first quarter 2008 (see Figure 2). However, that was followed by a very difficult year ended first quarter 2009 and year ended first quarter 2010. The Airport saw 32,090 total passengers as of the year ended first quarter 2008, or 44 passengers per day each way (PDEW), but that number Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 9

dropped to 21,800 total origin and destination passengers as of the year ended first quarter 2010, or 30 passengers per day each way (PDEW). Overall, in the year ended first quarter 2010, Crescent City s total passengers dropped to the lowest level since the year ended first quarter 2006 down 32% from the passenger peaks just two years before. FIGURE 2: O&D Passengers and Average One Way Fares at Crescent City YE1Q05 YE1Q10; Source: US DOT Table DB1A 35,000 30,000 $157 $157 25,000 $151 $148 20,000 $140 30,560 32,090 $134 15,000 24,020 21,390 23,550 21,800 10,000 2005 2006 2007 2008 2009 2010 This passenger drop illustrates the importance of awareness about local air service especially in Essential Air Service (EAS) markets. When the message of the availability of local air service is not a constant one in these smaller markets, they tend to lose ground in capturing their local passengers. This means the EAS subsidy in a market like Crescent City is going to support the use of fewer passengers increasing the per passenger subsidy significantly. From 2004 through the first part of 2010, the EAS program at Crescent City has been able to keep the number of available airline seats in the market stable it has been unable to do anything significant to increase the percentage of those seats being filled. Crescent City s overall load factor, or percentage of airline seats filled by paying passengers, sat at just 39% as of the year ended April 30, 2010 down from a high of 43% as of the year ended April 30, 2008 Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 10

(see Figure 3). At no point in the last decade has Crescent City been able to fill more than half of its available airline seats, in many years filling less than half of available seats. FIGURE 3: Available Seats and Onboard Passengers, Crescent City Year Ended April 2004 Year Ended April 2010; Source: US DOT T100 Data Seats On-Board Passengers 60,000 60,450 60,015 57,090 57,720 60,660 61,110 59,229 Inbound/Outbound T-100 Seats and Pax 50,000 40,000 30,000 20,000 10,000 23,028 25,044 22,342 23,160 26,069 23,336 23,318 0 It s not that the Crescent City market is too small to support airline service. In fact, on average, national airline markets generate 2.1 trips per resident of their extended catchment areas. Crescent City generated just 0.3 trips per resident as of the year ended April 30, 2010 meaning it s likely those who live in the Crescent City area drove to other airports to access the national air transportation system. This passenger leakage is common in markets with limited service because it s difficult for small markets to compete on both flight frequency and airfare. The fare disparity in northern California and southern Oregon is becoming more pronounced. As of the year ended first quarter 2010, the average domestic one way fare at Crescent City was the second highest in the northern California and southern Oregon, at $170 (see Figure 4). Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 11

Average fares at the Del Norte County Regional Airport are 10% higher than the Western region average domestic one way fare of $153 (see Figure 4). Moreover, Crescent City s average one way domestic fare is $5 higher each way than the average fare at Medford, of $165 each way as of the year ended first quarter 2010. Local Crescent City fares are also higher, on average, than the fares found in other small markets in the region such as Klamath Falls, North Bend, and Chico. It appears to be the case that SkyWest is only boarding a small portion of its potential passengers in Crescent City due to higher average fares and the lack of general knowledge about Del Norte County Airport. SkyWest loses a large portion of its local, Crescent FIGURE 4: Average One Way Domestic Fares in Regional Markets YE1Q10; Source: US DOT Table DB1A Arcata/Eureka, CA Crescent City, CA Medford, OR Klamath Falls, OR North Bend, OR Sacramento, CA Chico, CA Santa Rosa, CA City area passengers to other airlines at other airports in the region namely Medford and Eureka/Arcata. A wide ranging marketing and advertising campaign would help to remedy this situation, and lead to dramatically increased local enplanements in Crescent City. $117 $131 $143 $170 $165 $160 $159 $198 $100 $110 $120 $130 $140 $150 $160 $170 $180 $190 $200 The Airport cannot undertake this campaign on its own its revenues simply cannot cover that kind of expense. It needs a federal partner for financial assistance in this case. The Airport believes a federal Small Community Air Service Development Grant will not only help it publicize its flight availability, but that it will also limit leakage, and capture more local passenger traffic. The Airport has a comprehensive plan to achieve its air service goals in line with the SCASDG Program. The Airport s marketing and advertising program includes many media platforms, and will blanket the region, ensuring widespread outreach. The program is the best for the DOT to ensure its EAS funding is being put to its best possible use. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 12

DETAILED EXPLANATION OF PROPOSAL The United Airlines hub at San Francisco has been, and continues to be, a key connecting point for many cities up and down the west coast including almost all of California, Oregon, and Washington. The Del Norte County Regional Airport s access to the San Francisco hub is an essential key to its economic success (see Figure 5). But for too long, the United Express service at the Airport, operated by SkyWest, has not been adequately supported, mainly due to a lack of awareness about local air service options in northern California and southern Oregon. The Airport seeks a Small Community Air Service Development Grant in order to provide essential marketing and advertising support for SkyWest s, dba United Express, Essential Air Service to the San Francisco hub. FIGURE 5: Service at the Del Norte County Regional Airport Source: CEC EAS Docket Now is the perfect time for this advertising and marketing campaign. The Airport is in the midst of a major service change the biggest change in service in the region in more than a decade. SkyWest/United Express will end direct service from Crescent City to Sacramento. The Airline will focus all of its resources on the Crescent City San Francisco route, increasing departures to San Francisco by 17% and non-stop San Francisco seats by 17%. The Airport must do all it can to publicize and market this service change. Crescent City San Francisco At the same time, the Airport would hope the increased enplanements from a marketing and advertising program would reduce the burden on the Essential Air Service (EAS) program to provide subsidies in the market. The long term goal under the program would be to increase enplanements to a level where the community s Essential Air Service funding is no longer needed. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 13

One of the main reasons for the continued passenger leakage from the Del Norte County Regional Airport, outside its higher average fares, is the lack of local knowledge about available air service in Crescent City. This will become more pronounced as service changes take place. Those who live in the Airport catchment area are not conditioned to check local fares first, before booking flights from other airports. Local area travelers immediately book flights from Medford, Eureka/Arcata, and North Bend/Coos Bay, without ever checking to see if fares would be cheaper at Crescent City itself. This lack of general air service awareness is draining the local economy of valuable travel dollars, as travelers spend more than they would locally by flying from other airports. In order to counteract this harmful trend, which, in effect, wastes valuable Essential Air Service (EAS) dollars, the Del Norte County Airport plans a wide-ranging marketing campaign, saturating the entire region of northern California and southern Oregon. The main messages will be to check local fares before booking from other airports in the region, along with a general message explaining the new service pattern at the Airport. The campaign will highlight local air service affordability and availability, by showing direct comparisons on certain routes between fares at Del Norte County Airport and the The new campaign will also have a focused message towards San Francisco service, promoting the new double-daily schedule seven days a week. airports in Eureka/Arcata and Medford. The campaign will also have a focused message towards San Francisco service, promoting the new double-daily schedule seven days a week. The campaign will be designed to include frequent radio, television, and newspaper advertising, along with giveaways. The Airport seeks $200,000 in federal funds, to be paired with $20,000 in new local funds, from the Airport and its community partners above and beyond the Airport s current marketing budget to support this marketing and advertising campaign. The campaign is planned to last for the entire length of the current Essential Air Service contract through May of 2012. The Airport has already developed a comprehensive marketing and advertising placement plan, which will include large buys on local and regional radio stations, along with local and regional newspapers and magazines. The campaign will be focused in the immediate Crescent City MSA, and bordering counties in both northern California and southern Oregon. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 14

Other types of marketing will include new website materials for ease of booking and better awareness of specific flight schedules, with banner ads promoting the double-daily San Francisco service. The Airport also plans specific outreach to area businesses, through Airportaffiliated employees, to meet with those who travel most frequently and ensure they are aware of the benefit of using local air service. Rough drafts have been created for some the advertising slated for newspaper and magazine runs. The main draft print advertisement extols the benefits of flying to San Francisco on the currently available non-stops promoting the new increased availability of flights with the 17% increase in departures and seats from Crescent City (see Figure 6). Many of those who live in the area drive to San Francisco, despite the high cost of fuel and the long drive time of 6 hours and 30 minutes. This ad seeks to increase awareness that the trip can be made much more quickly by using Crescent City air service on United Express, especially now that flight options have increased. FIGURE 6: Proposed Print Advertisement for the Del Norte County Regional Airport DON T TAKE A DAY TO GET TO THE BAY. United Express offers daily non-stops to San Francisco, direct from the Del Norte County Regional Airport. No more big airport hassles, and no more wasted days getting to the Bay. Why drive, when you can fly? The Airport believes the marketing and advertising campaign will have an immediate impact, with the new service pattern going into place. Now FLYCRESCENTCITY.com United Express service at the Del Norte County Regional Airport is independently operated by SkyWest. is the time for the campaign it cannot wait due to the fact the service changes are imminent. If the Airport cannot blanket the region with this message, it is likely the service changes will go unnoticed, and passengers will continue booking trips out of other airports in the region, increasing the per-passenger EAS subsidy in Crescent City. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 15

CURRENT AIR SERVICE IN CRESCENT CITY Crescent City, as document in this proposal, is in the midst of its biggest service change in years. SkyWest, the community s Essential Air Service (EAS) carrier won a new EAS contract with its bid to end direct service between Crescent City and Sacramento while adding two flights per week on the Crescent City San Francisco route. The end result of this service change will be the reduction in total departures per week and seats per week by almost a third. Still, San Francisco service will gain two departures per week and 60 seats per week in each direction, which is likely a better service pattern for the community. Current Passenger Traffic at the Del Norte County Regional Airport Between the year ended first quarter 2003 and the year ended first quarter 2008 the Del Norte County Regional Airport saw strong passenger growth. As of the year ended first quarter 2003 the Airport saw an average of 28.5 passengers per day each way (PDEW) (see Figure 7). By the year ended first quarter 2008 this number had grown by 54%, to an average of 44 passengers per day each way. The Airport was able to accomplish this growth through limited local marketing and advertising. FIGURE 7: Domestic O&D Passengers, Del Norte County Regional Airport, YE1Q03 YE1Q10; Source: US DOT Table DB1A 2003 20,820 28.5 2004 22,570 30.9 Annual Passengers PDEW 2005 24,020 32.9 2006 21,390 29.3 2007 30,560 41.9 2008 32,090 44.0 2009 23,550 32.3 2010 21,800 29.9 0 5,000 10,000 15,000 20,000 25,000 30,000 Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 16

In the last two years the Airport has seen steep passenger declines due to a number of factors, not the least of which were increasing airfares and a weakening local economy. As of the year ended first quarter 2010, the Del Norte County Regional Airport saw an average of 29.9 passengers per day each way, down 32% from the passenger highs seen in the year ended first quarter 2008 (see Figure 7). During this same period the average fare in the market increased from $134 each way to $170 each way an increase of 27%. This fare increase had the effect of making Crescent City service much more expensive than similar service found at both Medford and North Bend, Oregon both competing airports to Crescent City. San Francisco remained the Del Norte County Regional Airport s largest origin and destination passenger market for the year ended first quarter 2010, with almost 3,400 total passengers, or 4.6 passengers per day each way (PDEW) (see Figure 8). Non-stop service on the route has seen passenger declines in the last several years. As of the year ended first quarter 2009, the CEC-SFO local route averaged 6.3 passengers per day each way (PDEW), which was 27% more passengers than the route was able to average in the year ended first quarter 2010. FIGURE 8: Top 20 Domestic O&D Passenger Markets at Del Norte County Regional Airport, YE1Q10; Source: US DOT Table DB1A San Francisco Los Angeles Sacramento San Diego Orange County Las Vegas Denver Ontario Phoenix Chicago O'Hare New York Kennedy Honolulu Santa Barbara Washington Dulles Boston Philadelphia Palm Springs Salt Lake City Orlando Dallas/Ft. Worth 640 540 500 470 420 0.6 410 0.6 400 0.5 370 0.5 320 0.4 320 0.4 300 0.4 270 0.4 250 0.3 250 0.3 2000.3 1,790 1,540 800 1.1 0.9 0.7 0.7 0.6 2,610 2.1 3,360 2.5 3.6 Annual Passengers PDEW 4.6 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 17

San Francisco is an excellent gateway for all of Crescent City s top 20 origin and destination markets, as each is served with one-stop by United and its Star Alliance partners (see Figure 8). Still, only five of Crescent City s top 20 markets produce at least one passenger per day each way, indicating SkyWest needs to collect Crescent City passengers connecting to a number of destinations just to fill a 30-seat aircraft. For the first time in several years San Francisco does not rank as Crescent City s top origin and destination revenue market. As of the year ended first quarter 2010 Los Angeles International Airport (LAX) took that honor, generating an average of $446 in revenue per day each way (RDEW)(see Figure 9). San Francisco ranked second as of the year ended first quarter 2010 with an average of $407 in revenue per day each way generated from the Crescent City market. FIGURE 9: Top 20 Domestic O&D Revenue Markets at Del Norte County Regional Airport, YE1Q10; Source: US DOT Table DB1A Los Angeles San Francisco Sacramento San Diego Orange County Las Vegas Washington Dulles New York Kennedy Phoenix Chicago O'Hare Denver Dallas/Ft. Worth Ontario Honolulu Boston Philadelphia Santa Barbara Kansas City Palm Springs Salt Lake City $325,640 $297,150 $201,610 $175,760 $241 $125,250 $172 $85,110 $117 $81,440 $112 $76,260 $104 $71,720 $98 $69,280 $95 $67,920 $93 $62,130 $85 $61,630 $84 $59,740 $82 $58,880 $81 $51,490 $71 $49,240 $67 $45,480 $62 $42,430 $58 $41,570$57 $276 $407 Annual Revenue RDEW $446 0 50,000 100,000 150,000 200,000 250,000 300,000 Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 18

San Francisco s average revenue per day each way was down by 35% from the year ended first quarter 2009, when it generated an average of $625 in revenue per day each way (see Figure 9). Only four of Crescent City s top markets produced at least $200 in revenue per day each way, with the rest producing significantly less than that. The passenger and revenue numbers for the year ended first quarter 2010 seem to indicate that the Del Norte County Airport is barely With just a few markets producing more than a passenger per day each way, the Airport is retaining only a small percentage of local travelers. scratching the surface of its potential. With just a few markets producing more than a passenger per day each way, the Airport is retaining only a small percentage of local travelers. Many of those who live within the Airport s catchment area have little awareness about the affordability of air service provided locally, so they don t even check local fares before purchasing tickets from other airports in the region. The Airport believes it must work harder to capture the local passengers, by proving service is attainable, and even though it might be slightly more expensive, there is value in flying locally. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 19

AIR SERVICE DEFICIENCIES IN CRESCENT CITY The average airfare in the Crescent City market rose by 27%, $36 each way, or $72 roundtrip between the year ended first quarter 2009 and the year ended first quarter 2010. Additionally, Crescent City has the second highest average one way fare of all airports in northern California and southern Oregon as of the year ended first quarter 2010. These high airfares have the impact of pushing local passengers to other airports in the region for fare relief. High airfares in Crescent City also have the impact of convincing travelers that local air service is expensive and unattainable, which causes them to stop checking local flights at the Del Norte County Regional Airport before booking out of other, far away airports in the High airfares have the impact of convincing travelers that local air service is expensive and unattainable, which causes them to stop checking local flights... region. If the fare is too high to consider local service for a couple of trips in a row, local travelers become conditioned to check non-local airports first. But average fares only tell part of the story. They do not indicate what the fares look like on the high end of the scale, or what percentage of travelers from each airport pay for fares in each bucket. In order to gain a better understanding of the true fare environment in Crescent City it is important to compare the percentage of travelers at Crescent City obtaining fares in each fare bucket. It is then important to compare the fare bucket data with other regional airports for a point of reference. Between the region and Los Angeles International Airport (LAX) a larger percentage of passengers using the Del Norte County Regional Airport paid higher fares than passengers using either Medford s Rogue Valley International Airport or the Arcata-Eureka Airport. The largest proportion of passengers flying between Medford and LAX paid between $50 and $100 each way for their flight 37.4% as of the year ended first quarter 2010 (see Figure 10). At the same time, the largest proportion of Arcata-Eureka Los Angeles passengers 46.4% paid between $100 and $150 each way for their flights. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 20

The largest proportion of local passengers using the Del Norte County Regional Airport in Crescent City paid between $150 and $200 each way for their flights to Los Angeles (LAX) 44.2% as of the year ended first quarter 2010 (see Figure 10). In essence, more passengers at Crescent City s Airport are forced to buy tickets in a higher fare bucket due to the lack of available seats in the lower fare buckets. Airports with more seats available overall tend to have more seats available at lower fare buckets. FIGURE 10: Tickets Purchased by Airfare Range, or Bucket, To Los Angeles (LAX), YE1Q10; Source: Sixel Consulting Group Analysis 60% 50% 40% 30% 20% 10% 0% 1.0% 7.4% 10.3% between $0 and $50 2.7% 16.9% 37.4% between $50 and $100 46.4% 10.1% 22.5% between $100 and $150 32.2% 44.2% 15.0% between $150 and $200 16.3% 15.7% 8.9% between $200 and $250 CEC-LAX ACV-LAX MFR-LAX 5.6% 5.9% 1.3% Above $250 The same is true between northern California/southern Oregon airports and John Wayne Airport (SNA) in Santa Ana/Orange County. The largest proportion of passengers flying between Medford and SNA paid between $200 and $250 each way for their flight 34.6% as of the year ended first quarter 2010 (see Figure 11). FIGURE 11: Tickets Purchased by Airfare Range, or Bucket, To Orange County (SNA), YE1Q10; Source: Sixel Consulting Group Analysis 60% 50% 40% 30% 20% 10% 0% CEC-SNA ACV-SNA MFR-SNA 21.5% 2.5% 4.0% 1.6% 0.9% 0.0% between $0 and $50 between $50 and $100 8.9% 8.9% 5.5% between $100 and $150 17.7% 5.1% 23.5% between $150 and $200 20.2% 10.1% 51.9% 51.6% Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 21 34.6% between $200 and $250 31.5% Above $250 The largest proportion of local passengers using the Del Norte County Regional Airport in Crescent City paid more than $250 each way for their flights to Orange County (SNA) 51.9% as of the year ended first

quarter 2010 (see Figure 11). More Crescent City passengers paid for fares in the highest bucket to Orange County than passengers at any other airport in northern California and southern Oregon. These fare disparities have the impact of causing local, Crescent City catchment area residents to fly from Medford and Arcata-Eureka for cheaper flights. It should be noted that Crescent City fares would likely be even higher were it not for the strength of the subsidy provided for SkyWest/United Express service by the federal Essential Air Service (EAS) program. Under this program, SkyWest earned $1.14 million in annual federal funding to operate its Crescent City flight schedule in 2009. Effectively, this was a $52.29 subsidy, per passenger, as of the year ended first quarter 2010. Taking into account this per passenger subsidy, the true fare in Crescent City as of the year ended first quarter 2010 would have been $229.29 each way, not $170. With clearly lower published fares it is no surprise that a large percentage of those who live within the Crescent City catchment area chose to fly from Medford and Eureka/Arcata. With clearly lower published fares it is no surprise that a large percentage of those who live within the Crescent City catchment area chose to fly from Medford and Eureka/Arcata. Local passengers have been conditioned to expect local air service will be more expensive, so they don t even bother to check local fares. Even if fares drop at the Del Norte County Airport, it goes largely unnoticed by local travelers providing strong emphasis for increased local marketing and advertising to explain the value of flying from the local airport. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 22

EXTENUATING FACTORS AFFECTING AIR SERVICE As would be expected in an Essential Air Service (EAS) market, Crescent City s Del Norte County Regional Airport offers far fewer available seats and far fewer departing flights than any of the other airports in northern California and southern Oregon. This exacerbates the difficulty in growing local air service. In many cases there are so few local seats available on a daily basis that flight options are either inconvenient for local travelers, that passengers have trouble finding competitive fares on the flights they want. SkyWest/United Express offers fewer available seats out of Del Norte County Regional Airport than do the airlines service all of the other airports in northern California and southern Oregon. FIGURE 12: Total Departing Seats at Regional Airports, YE1Q10; Source: US DOT T100 Data 800,000 700,000 600,000 500,000 400,000 300,000 848,978 In fact, as of the year ended first quarter 2010, SkyWest offered just 22,944 total departing available seats in and out of Crescent City which equates to just 63 departing seats per day each way (see Figure 12). 200,000 100,000 0 356,806 295,900 The two closest airports to Crescent City, outside the 181,179 22,944 Del Norte County Regional Airport, Medford Eureka/Arcata Redding Santa Rosa Crescent City Medford and Eureka/Arcata, offered significantly more departing seats available as of the year ended first quarter 2010. Airlines in Eureka/Arcata offered 15 times the departing seats 356,806 or 488 departing seats per day each way than airlines offered in Crescent City (see Figure 12). In Medford, airlines offered 37 times the seats as of the year ended first quarter 2010 that they offered in Crescent City. Under these circumstances, it is difficult for the Del Norte County Airport to compete with the air service offered at other northern California and southern Oregon airports. Even in the rare cases where when fares are lower in Crescent City, there are times there are no seats available at that Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 23

fare class, and travelers are forced to fly from other airports in the region. The Airport must increase awareness of local air service in order to counteract the deficiencies that have grown more pronounced in recent years. Another challenge in the Crescent City market is the limited number of flights offered locally versus the more frequent flights offered at other airports in the region. As of the year ended first quarter 2010, SkyWest/United Express averaged just 2.7 departures per day at Del Norte County Regional Airport (see Figure 13). At the same time, Eureka/Arcata averaged 11.5 departures per day with eight more flight choices per day than Crescent City. FIGURE 13: Total Departures at Regional Airports, YE1Q10; Source: US DOT T100 Data 20 Meanwhile, airlines at Medford offered more than seven times the flight options as airlines at Crescent City, as Medford averaged 19.4 departures per day as of the year ended first quarter 2010 (see Figure 13). Even smaller airports in the region such as Redding and Santa Rosa had at least double the airline departures per day that Crescent City had as of the year ended first quarter 2010. 18 16 14 12 10 8 6 4 2 0 19.4 11.5 7.7 4.8 2.7 Medford Eureka/Arcata Redding Santa Rosa Crescent City It must also be noted that the Del Norte County Regional Airport will lose four departures per week under its new EAS contract. All direct service to Sacramento will end, leaving the Airport with just two departures per day to San Francisco a loss of 0.7 departures per day. This will put the Airport at a greater disadvantage versus other airports in the region. Travelers in the Crescent City catchment area realize this shortcoming of local air service. They don t perceive air service at the Del Norte County Airport as offering a competitive array of departure times. Still, the daily departures from Crescent City are spread to both sides of the day, and often offer many of the same connections available from other airports in the region. This message must be spread throughout the Airport s catchment area in northern California and southern Oregon, in order for Crescent City air service to be truly competitive. T Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 24

AVAILABILITY OF ALTERNATE AIRPORTS It is well established that many of those who live in the Del Norte County Airport/Jack McNamara Field catchment area choose to fly from other airports in the region. The most popular alternate airport for Crescent City area travelers tends to be Eureka/Arcata, which is located 69 miles south of Crescent City on Highway 101, the Pacific Coast Highway (see Figure 14). The drive to Eureka/Arcata takes about an hour and a half on a mostly narrow two-lane highway due to the rugged terrain one must cross, through the Coast Range. FIGURE 14: Airports in the Same Region as The Del Norte County Regional Airport A number of Del Norte County Airport catchment area travelers also fly from the Rogue Valley International Airport in Medford. Medford is 109 miles from Crescent City (see Figure 14). Moreover, the drive from Crescent City to Medford is exceptionally difficult, on a narrow, two-lane road Highway 199 through the Redwoods National Park, and the Coast Range of southern Oregon. In the winter, this trip is almost impossible when storms roll in off the Pacific, dumping heavy snows in the mountains. In good weather, the drive from Crescent City to Medford takes 2 hours and 20 minutes. In bad weather the drive can take as long as 4 hours. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 25

USE OF LOCAL FEDERAL FUNDS Marketing and Advertising The Del Norte County Regional Airport/Jack McNamara Field proposes to spend a total of $220,000 in funds on marketing and advertising promotions in support of SkyWest/United Express service to and from San Francisco. The goal is to increase enplanements, and lower fares, through targeted regional campaigns. An example of the advertising produced for the campaign is available in the detailed explanation of the proposal section of this document. $20,000 of the total marketing budget will come from new local funds, being committed specifically for this Grant application, while the federal share will be $200,000. Additional Costs As part of this program the Airport understands that additional expenses will be incurred, such as monitoring the results of the program and reporting those results back to the US DOT. The Airport will pay for these additional expenses out of other airport sources and will not incorporate these fees and charges into this proposal. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 26

PUBLIC/PRIVATE PARTNERSHIPS A number of local partners will be working with the Del Norte County Regional Airport to promote and market air service. Contacts will be made to all members of local chambers of commerce and similar organizations, and those with an interest in growing the economic base of the community through local business growth, attraction of new businesses and the promotion of tourism and visitor traffic via the airport. Del Norte Chamber of Commerce The Del Norte Chamber of Commerce acts as an information bridge between the Airport and the community s businesses. The Chamber represents thousands of area businesses. The Chamber is in a unique position to spread word about air service in the market, and to promote its use. The Chamber is vital in marketing of any air service, and is ready to use its resources to aid in the marketing program described in this application. Del Norte County Del Norte County Supervisors are some of the biggest supporters of continued air service at Crescent City s local airport, as they realize how vital the Del Norte County Regional Airport is to the growth of the entire region of northern California and southern Oregon that it serves. As the owners of the Del Norte County Regional Airport, County leaders continually work to develop and support new air service initiatives. Border Coast Regional Airport Authority The Airport Authority was recently formed as a cross-border Joint Power Authority to provide regional management of a critical public use facility that serves the entire region. The Airport Authority Board of Commissioners is made up of representatives from the County of Del Norte and Curry County Boards of Supervisors, the City Council of Crescent City and Brookings Oregon, and the Tribal Chair of the Elk Valley Rancheria and soon the Smith River Rancheria. The Border Coast Regional Airport Authority is responsible for the operation, management, and promotion of the Del Norte County Regional Airport. The Airport Authority Board of Commissioners is in charge of determining the Airport s budget, and approved this application for grant funding. The Airport Authority Board will oversee this grant, if awarded. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 27

Curry County, Oregon Curry County, Oregon took the unprecedented step of awarding the Del Norte County Airport a County grant to study and promote new air service. This cross-county and cross-state grant is one of the few of its kind ever awarded in the country. City of Crescent City, California and City of Brookings, Oregon The Cities of Crescent City and Brookings are members of the Border Coast Regional Airport Authority and they work together to promote air service at the Del Norte County Regional Airport. Both cities realize the importance of air service in expanding local tourist-based economy. City leaders continually work with Airport leaders to promote service, and to ensure the Airport has the resources it needs to be competitive in the region. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 28

IMPLEMENTATION TIMELINE The Airport s proposed implementation timeline for the project assumes the Department will award Small Community Grant Funding in December 2010. Once the award is announced, the Del Norte County Regional Airport will begin work with private marketing and advertising firms, along with SkyWest and United Airlines, to build the campaign materials and to finalize the placement plan. The first two milestones on the Airport's timeline are to execute the grant agreement with the Department and execute an agreement with a marketing and advertising firm to begin work. These milestones should be achieved by the end of January 2011. Additionally, the Airport will submit grant status reports on a quarterly basis to the Department throughout the proposed term of the marketing and advertising program. The specific timeline is listed. Activity/Project Milestone Estimated Date SCASD Grant Award Announcement December 2010 Executive Grant Agreement with DOT January 2011 Executive Agreement with Marketing Firm January 2011 Develop Creative February 2011 Develop Comprehensive Placement Strategy February 2011 Launch Campaign March 2011 Sustain Campaign March 2011 - March 2013 Monitor Route Performance March 2011 - March 2013 Submit Grant Status Reports to DOT Quarterly Q1 2011 - Q1 2013 Close Grant April 2013 Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 29

AIR SERVICE ADVISORY GROUPS Border Coast Regional Airport Authority Technical Advisory Committee The Airport Authority Technical Advisory Committee is a sub-committee of the Airport Authority Board of Commissioners. This Committee is made up of community members and meets regularly to evaluate airport plans, policies procedures and promotions as well as current trends and issues that affect air service serving Del Norte County and the northern California/southern Oregon region. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 30

LOCAL AIR SERVICE DEVELOPMENT EFFORTS For a smaller, regional airport, the administration at the Del Norte County Airport/Jack McNamara Field is very active in working with airlines, community stakeholders, and businesses to increase the viability and affordability of local air service. The Airport contracted with an air service development consulting firm in 2008 to conduct a full scale survey of the air service provided in the northern California/southern Oregon region. This study led to an air service development master plan, providing a blueprint for the marketing, advertising, and expansion of the Del Norte County Airport in the years to come. The Airport has had numerous conversations with leaders at United Airlines and SkyWest, as it works to improve the service offered in the Crescent City market. The Airport continues to advocate for additional non-stop frequencies, flights that are de-linked from Eureka/Arcata, and additional seats in hopes of continuing to bring down average fares. The Airport believes Small Community Air Service Development Grant funding is an important step that needs to be taken in order for its long standing initiatives and goals for air service to be met. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 31

IN-KIND SERVICES FROM COMMUNITY The following organizations will help promote the new service through their various membership groups. There is no estimated value to these services. Del Norte Chamber of Commerce City of Crescent City City of Brookings, Oregon Del Norte County Airport Technical Advisory Committee Elk Valley Rancheria Smith River Rancheria Curry County, Oregon Brookings Chamber of Commerce Tri Agency Economic Development Agency Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 32

PERFORMANCE MEASURES The success of the program will be based on a pair of variables. The Airport will judge the first measure of success by the increased number of enplanements on United Express service to San Francisco. The second measure of success will be based on how much average airfares charged in the community have gone down, with the increase in enplanements. The measurement of enplanements will include a monthly comparison, once the program begins, to past enplanements numbers. The measurement of airfares will be derived from US DOT OD1A reports. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 33

LEGAL SPONSOR The Border Coast Regional Airport Authority is the legal sponsor responsible for administering the program. The Border Coast Regional Airport Authority is a government entity. Border Coast Regional Airport Authority 150 Dale Rupert Road Crescent City, California 95531 James Bernard, Airport Director 707.464.7288 JBernard@co.del-norte.ca.us Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 34

FINANCIAL CONTROLS As the sponsor, the Border Coast Regional Airport Authority will be the responsible party for all fiscal matters and US DOT reporting requirements. The Airport is publicly owned by Del Norte County and operated and managed by the Border Coast Regional Airport Authority who also manages and monitors numerous Caltrans and FAA AIP grants for various airport capital improvement and compliance projects. As a public entity the US DOT can be assured that proper financial controls are in place to guarantee that the US DOT s grant will be used in accordance with any subsequent agreement. The leaders of the Airport Authority understand that the grant is a reimbursable grant, meaning the Airport is responsible for program expenditures and will submit invoices to the US DOT for reimbursement, based on a percentage of the total grant request. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 35

RETURN ON INVESTMENT The Del Norte County Regional Airport has developed a cost effective and achievable strategy to increase enplanements at the Airport. The proposal uses proven methods of achieving air service improvements, allowing the DOT to be comfortable with choosing this proposal. The increased awareness of air service, increased enplanements on the service, and access to lower airfares with increased enplanements, is in line with the major goals of the Small Community Air Service Development Program. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 36

DOT EXIT STRATEGY The Del Norte County Regional Airport has developed this proposal as a one-time grant. The advertising and marketing program will commence as soon as this grant is awarded and last for the duration of the current Essential Air Service (EAS) contract. It is projected that local enplanements will grow within the first few months of the launch of the advertising program. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 37

AIRPORT INFORMATION Del Norte County Regional Airport, also known as Jack McNamara Field, serves the northern coast of California as the only gateway commercial airport between Arcata/Eureka, California and Medford, Oregon. The airport has many advantages to offer the traveling public. Facilities include free on-airport parking, close proximity to the cities, counties and communities served, shorter lines for TSA conducted security screening of passengers and car rental agencies on-site. The Airport has to runways, in an x formation. Each runway is 5,000 feet long, while Runway 11 is the only one equipped with an ILS (instrument landing system) approach. FIGURE 15: Del Norte County Airport at Jack McNamara Field, Crescent City, aerial photo Del Norte County Airport is a County-owned facility, located just three miles from the Crescent City central business district. The Airport is also located within walking distance of the Pacific Ocean. About 27% of the Airport s 2008 operations were provided by commercial airlines (with scheduled SkyWest service), while 73% of the Airport s operations were air taxi and general aviation. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 38

CRESCENT CITY COMMUNITY PROFILE The town of Crescent City is named after its crescent-shaped beach. It emerged in the 1850s, during the Gold Rush, and soon became the chief port of entry and supply center for miners of Oregon and neighboring settlements in California. The community was incorporated in 1854 and agriculture, lumber, and fishing soon became the primary economic mainstays. The Redwood forest provided settlers the lumber they needed for settlement and survival. Today, those same forests bring millions of tourists to the region. Redwood National Park was established in 1968. Crescent City has a thriving tourism industry that capitalizes on the community s location and easy access to numerous recreational opportunities. Crescent City is surrounded by State and National Parks and recreational opportunities. The Elk Creek Wildlife Area is located adjacent to downtown Crescent City, Tolowa Dunes State Park is slightly north of the Airport, and the Redwood National Park Headquarters and Visitor Information Center is located in the city s downtown. The Smith River National Recreation Area, and the Redwood National Park are both within a few miles of the city. Hiking, biking, bird watching, fishing, and whale watching are all offered within a few miles of the downtown core. The Crescent City Harbor offers resources for whale watching cruises, wind surfing, surfing, fish derbies, and diving. There are three community groups that offer arts and cultural performances, exhibits, and educational programs, including the Community Concert Association, the Del Norte Association for Cultural Awareness, and the Lighthouse Repertory Theatre. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 39

What s New in Crescent City Crescent City has completed its transition from a timber economy to a tourism and fishing economy, with downtown development helping to lure significant new investment. As the gateway to Redwoods National Park, Crescent City has become a top tourist destination on the west coast, and a number of new businesses are popping-up to take advantage of local tourist spending. Crescent City officials have made it a priority to revitalize Front Street, seeing it as a potential boon for economic development and beautification. After a final conceptualization is chosen, the city intends to go to the Del Norte Local Transportation Commission to secure funding for the design. Local Transportation Commission Executive Director Tamera Leighton said the project design would likely be eligible for various types of funding including Regional Surface Transportation Program money from Caltrans because it is considered a regional transportation priority. Front Street is seen as an important area for the community. Leighton said, It s an access to our downtown and a lot of our public beaches. It has the potential to be a main street to our city and really benefit our community. Bay Area developers recently built a new downtown project, called the Abbienna Plaza, which is a complete remodel of a 20,000 square foot building that survived Crescent City s 1964 tsunami. The building houses five commercial tenants businesses aimed at bringing tourists to the downtown area along with upper floor office space. The multimillion dollar development is just one of several that are reviving the downtown core. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 40

Crescent City Economic Overview Crescent City s economy has long been tied to the natural resources which surround the City. In the early days of the City s founding the mid 1800s timber was king in Crescent City and throughout the hills surrounding the City in northern California and southern Oregon. As more land was brought under federal protection in the mid 1900s, the economy was forced to move away from timber, and towards commercial fishing. Today, more than 100 commercial ships are docked in the Crescent City Harbor, along with dozens of sport fishing boats which draw tens of thousands of tourists to the region each year. FIGURE 16: Del Norte Employment by Industry, 2006 Source: Del Norte County Government is, by far, the Crescent City area s largest source of employment, employing almost 44% of all area workers (see Table 20). Educational and health services is second, with almost 14% of workers. Meanwhile, the importance of tourism to the local economy is evident, as leisure and hospitality workers make up almost 11% of all Crescent City area employees. While the unemployment rate in Crescent City, CA, is 12.40%, future job growth over the next ten years is predicted to be 24.10%. Tourism and recreation are vital factors in the local economy, and in the reduction of the unemployment rate. Industries such as government, educational and health services, and trade, transportation, and utilities recorded significant job gains. Educational and health services grew by more than 13 percent, or 130 jobs, while trade, transportation, and utilities experienced 11.8 percent growth, also adding 130 jobs. Other industries recording gains over these years included: natural resources, mining, and construction; financial activities; leisure and hospitality; agriculture; and manufacturing. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 41

The Crescent City area has also become a center for bulb farms, producing a large proportion of the bulbs sold to nurseries around the west. Crescent City s most well-known bulbs include many varieties of lilies. FIGURE 17: Major Employers in Del Norte County, Source: Del Norte Chamber of Commerce Select Company Profiles Dahlstrom & Watt Bulb Farm The Dahlstrom and Watt Bulb Farm, located in Smith River, is one of the largest floral growers in the western United States, with markets around the country, and in several foreign countries. Dahlstrom and Watt operates 12 acres of greenhouses producing holiday flowering plants, foliage plants, and specialty plants. The facility also has several outdoor acres of ornamental plants. Dahlstrom and Watt grows nearly 25% of all the Easter Lily bulbs in the US and Canada. Employer City of Crescent City Crescent City Nursing & Rehab Elk Valley Rancheria Hambro Forest Products Home Depot Palmer Westbrook Inc. Pelican Bay Prison Ray s Food Place Safeway Smith River Rancheria Sutter Coast Hospital Walmart Yurok Tribe Hambro Forest Products The Hambro Group owns several forest products producers from Crescent City and Eureka, California to the coasts of North Carolina. Hambro s Crescent City facility produces Cresdek, engineered recycled wood used for flooring. Credek is shipped from Crescent City to more than 60 home builders around the country, and has been in continuous production since 1965. Palmer Westbrook, Inc. The Palmer Westbrook Ranch, in Smith River, features two distinct businesses. The Ranch is one of the largest producers of Easter Lily bulbs in the US, after nearby Dahlstrom and Watt, while at the same time being one of California s largest organic beef producers. The Palmer Westbrook company operates a sustainable organic farm, in line with the values of many in the region. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 42

The Sun Valley Group Sun Valley floral is another of the region s large flower producers, helping to anchor the agricultural economy of Del Norte County. Sun Valley grows primarily Iris, Hydrangea, and Zantedeschia at its Smith River facility. The Group also has it headquarters in Del Norte County, with its national sales team that places its products around the country. Crescent City Tourism Amid an awe-inspiring cathedral of soaring ancient redwoods, along a rugged wave-swept Pacific shore, deep in the cool serpentine canyons of the untamed Smith River, Del Norte County is where visitors find the real Northern California. Visitors, from the moment they arrive, are immersed in the splendor of nature at her most extravagant. Each path leads to a breathtaking world of contrasts tiny flowers in the shadow of the world's largest trees, the silent grace of a solitary pelican dipping its wings the pounding surf, morning mists evaporating in the warmth of the sun. Unspoiled and unlike any other place on earth, Del Norte County is an experience in nature. The influence of the sea and rivers is omnipresent. Cool ocean mists nurture the giant redwoods. Rich offshore fishing grounds support a thriving commercial fishery. The rocky chasms and thrilling whitewater of the Smith River California's largest wild river system form the spectacular centerpiece of the 305,337 acre Smith River National Recreation Area. And throughout Del Norte County, diverse river and sea-creature habitats support an incredible array of wildlife. Magnificent forest trails, sandy beaches, and river rafting are all close at hand. Yet for all its accessibility, Del Norte County is unspoiled and uncrowded perhaps the most remarkable fact of all. Standing above all others, the great redwood forests of Del Norte County have long epitomized the fabled beauty of the North Coast. For many years, tales have been told of a redwood kingdom hidden in the North. Today, the County is home of Redwood National and State Parks, nearly a half-million acres of national forest lands. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 43

Redwoods National Park Created in 1968, to preserve the majestic Redwood forests of the northern California coast, Redwoods National Park is a 132,000 acre preserve just a few miles outside of Crescent City. The Park is located entirely within Del Norte and Humboldt Counties, protecting 45% of all the remaining Coastal Redwood forest in the world. The Park also offers breathtaking vistas of the rocky, rugged Pacific Coast. Roughly 400,000 people come through the Park s visitor s center, located in Crescent City, each year. Brookings, Oregon Located less than 45 minutes to the north of Crescent City along the famed Pacific Coast Highway, Brookings is in what s known as the banana belt of Oregon, on a warm current in the Pacific Ocean that keeps it in the 70s during the winter. Brookings is also known for its spectacular, rocky coastline, and championship golf courses. More than a million tourists make the trip to Brookings each year, with Crescent City being the closest gateway by commercial airline service. Crescent City Charter Fishing The Crescent City Harbor is home to several dozen sport fishing charter boat, which run both public and private deep sea Pacific fishing charters. Most trips catch salmon and tuna, but depending on the season boat captains offer Dungeness Crab, shrimp, and cod trips. Enderts Beach Located within Redwoods National Park, Enderts Beach is just three miles south of the Crescent City downtown business district, and is one of the most popular for visitors and locals alike. Enderts offers a sandy beach, along with trail access to a number of rocky tidepools. Enderts is known as the premier spot for whale watching in the spring and fall. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 44

Elk Valley Casino This 23,000 square foot casino is located near the entrance of Redwoods National Forest, featuring Las Vegas-style gaming. A hotel resort, an 18-hole golf course, a bowling center, and an RV resort are in the planning and design phase. Lucky 7 Casino The Lucky 7 Casino is an enterprise of the Tolowa Indians of the Smith River Rancheria. When the Rancheria was established in 1906, it was the largest in the State of California, consisting of 160 acres. In 2001, the Rancheria opened a new facility, which now offers 270 slot machines, Blackjack, Bingo, and the House of Howonquet restaurant. The Casino is in the process of a major expansion that will add a new conference/bingo area, new restaurant and double the size of the gaming area. Point St. George The Point St. George Trail, part of the Pacific Coast Trail, offers a mellow stroll along bluffs overlooking a dramatic rocky coastline. The well-preserved wetlands here are an important stopover on the Pacific Flyway a major migration route for bird species such as harlequin ducks, tundra swans, and Aleutian Canada geese. The park encompasses a stretch of dramatic rocky coastline that is among the best in the state. Killer sunsets are a regular occurrence, and the bluffs make an excellent platform for whale watching in late fall and mid-spring. Higher Education in Crescent City Crescent City is home to several thousand full-time students who attend the College of the Redwoods local campus. The College offers two-year community programs in a number of fields, with its main campus in Eureka. The college offers a variety of transfer, vocational, and community-based classes, including its world-famous Fine Woodworking Program started by master woodworker James Krenov, along with a Police Academy, Nursing and Dental Programs, Truck Driving School, ever-evolving Computer Information Sciences, Computer-Aided Drafting, and Digital Media Departments, and the Hospitality, Restaurant and Culinary Arts Program. Del Norte County Regional Airport Small Community Air Service Development Grant August 2010 45