Cost – Benefit Study


May 1998

PDK Watch, a coalition of neighborhood groups, notes the following serious flaws in the Cost-Benefit Study of DeKalb-Peachtree Airport (PDK), completed in 1997 by RKG Associates of Durham, New Hampshire.

The fiscal benefit-to-cost ratio of 7 to 1 presented in the report is incorrect. That ratio completely ignores an estimated cost of $75,000,000 for the airport buyout and soundproofing of residential communities most seriously impacted by airport noise, a program to which DeKalb County has committed itself. Inclusion of those buyout and soundproofing costs would give a benefit-to-cost ratio of 0.6 to 1, or simply stated, for each dollar invested in PDK only sixty cents comes back to the general revenue fund. It should be noted that the consultant was specifically required by the request for proposal to include this cost.

The cost-benefit study assumes the value of airport property at $60,000 per acre. However, land surrounding the airport is currently selling at between $200,000 and $400,000 per acre for recent development projects. As only one example, DeKalb County paid more than $200,000 per acre to buy property immediately adjacent to the airport. These sales figures in the hundreds of thousands for land surrounding the airport could be expected to rise much higher if this prime real estate within the perimeter and adjacent to MARTA were not regularly impacted by the existing airport use. The study’s failure to use realistic land values seriously undercuts its credibility.

Although the Request For Proposal for the cost-benefit study specified that the highest and best use of PDK Airport land should be calculated, the study focused on possible industrial use and single-family use for the airport, rather than on the more economically productive possibilities of commercial and multiple-family use. The DeKalb County CEO and Chamber of Commerce are aggressively attempting to develop the commercial potential of the International Village bordering the airport, and there is new commercial (not industrial) construction throughout the area. Ignoring the more productive commercial possibilities for development in the area contradicts the Chamber’s goal of making the Village a destination for commercial, residential, and recreational activity.

The study states that the nearly 800-acre airport directly supports 762 on-site jobs, or approximately one job per acre, and directly or indirectly contributes to 7,357 jobs in DeKalb County. These numbers pale, however, in comparison to the jobs that could be produced by an alternative use. For example, just one nearby office building bordering the airport–the new IRS building–will employ more than 3,200 persons. One could easily envision new developments similar to nearby Century Center that could generate far more jobs than the airport now purportedly supports.

The study indicates that the districts identified as Chamblee-Buford Highway, Doraville, and Northlake/Lakeside have lagged behind the region in terms of residential sales. The Dunwoody area near PDK has underperformed the larger Dunwoody neighborhood. Those who live in the surrounding area have suffered a loss of $67,600,000. One would think that such evidence would encourage DeKalb County’s administration to take steps to control further airport growth. However, at the public hearing for the cost-benefit study, the consultant referred to these problems as “isolated pockets” that presumably could be ignore.

Despite the negative airport impacts identified in this study, airport and county administration are now laying the groundwork for further expansion of the airport. PDK Director Lee Remmel has proposed, for example, to change the County Comprehensive Plan to redefine PDK Airport as a state and regional resource rather than as a county airport, as it now exists. This change would encourage further airport growth on existing property and on land to be acquired in the future. Mr. Remmel’s immediate plans call for expansion of the airport onto land being bought out for noise abatement purposes; he want to install two 20-unit T-hangars in the Clairmont Road area. This contradicts current county policy that new property acquired by PDK Airport shall not be used for further expansion of airport operations.

Proposals for airport expansion presented in the study are deeply disturbing to those who are committed to a positive and vital relationship between residential and commercial developments in DeKalb County. Four expansion scenarios can be found in Appendix L of the study. Each can be completed individually to expand the airport incrementally. The study does not consider the additional negative impact such expansion would produce.

In conclusion, it is clear that this misleading cost-benefit study is a seriously flawed document that cannot be relied upon in making sound economic policy decisions regarding PDK Airport or the surrounding communities.