London’s Royal Borough of Heathrow to Mimic Denver Hub-Swap

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Skyscrapers in the City of London are seen on the skyline as aircraft move along the tarmac at Heathrow airport in London. Close

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Photographer: Chris Ratcliffe/Bloomberg

Skyscrapers in the City of London are seen on the skyline as aircraft move along the tarmac at Heathrow airport in London.

London Mayor Boris Johnson can point to the Rockies as he seeks to convince taxpayers and politicians to turn Heathrow Airport into a housing project and build a new hub 50 miles away at a cost of 65 billion pounds ($99 billion).

Johnson’s plan to raze Europe’s busiest airport and replace it with 100,000 homes comes almost two decades after authorities in Denver shut the city’s Stapleton terminal in a move that delivered a boost in flight capacity plus a popular new suburb. His proposal is one of a number submitted last week to a state-appointed commission on the U.K.’s airport capacity shortage.

Once the fifth-largest hub in the U.S., Stapleton’s landing strip and buildings have been transformed into a community of 15,000 people with nine schools and Denver’s third-largest park. Fifteen miles to the northeast, the new Denver International airport lured 53 million passengers last year, 17 million more than the capacity of Stapleton before it closed in 1995.

“We needed to start fresh,” said Tom Gleason, a former spokesman for Federico Pena, the Denver mayor who the initiated the project. “Stapleton did not have the ability to expand and add the capacity it would need to be of use in the long-term.”

Photographer: Simon Dawson/Bloomberg

London Mayor Boris Johnson's plan envisages construction of a new four-runway hub at one of two sites in the Thames estuary or at the existing Stansted airport north of the capital, with the bill running to about 50 billion pounds including transport links. Close

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Photographer: Simon Dawson/Bloomberg

London Mayor Boris Johnson's plan envisages construction of a new four-runway hub at one of two sites in the Thames estuary or at the existing Stansted airport north of the capital, with the bill running to about 50 billion pounds including transport links.

Estuary Switch

Replacing Europe’s top hub with a new borough of 250,000 people would help ease a national housing shortage and cost the government about 15 billion pounds, while generating “considerable revenue” via land disposals, Johnson said July 15.

The Conservative politician opposes the expansion of Heathrow -- operating close to the capacity of its two runways after attracting almost 70 million people last year -- as too noisy for London’s inhabitants, with the bulk of planes coming in to land directly over the city in prevailing westerly winds.

Johnson’s plan envisages construction of a new four-runway hub at one of two sites in the Thames estuary or at the existing Stansted airport north of the capital, with the bill running to about 50 billion pounds including transport links.

Heathrow Airport Ltd., the current hub’s owner, said July 17 it makes no sense to move to a new site and presented three options for boosting capacity to at least 702,000 flights a year from 480,000 via construction of a single runway and facilities costing a maximum 18 billion pounds and ready as early as 2025.

Hemmed In

“Heathrow is the cheapest and quickest way to deliver the hub capacity we need,” Development Director John Holland-Kaye said in an interview. “Far better to spend 15 billion pounds allowing growth in jobs and the economy there than to invest that in turning it into a housing estate.”

Photographer: Jerome Favre/Bloomberg

Royal Caribbean Cruises Ltd.'s Mariner of the Seas ocean liner, center, sails toward the Kai Tak Cruise Terminal, built on the site of the former Kai Tak Airport, in Hong Kong. Close

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Photographer: Jerome Favre/Bloomberg

Royal Caribbean Cruises Ltd.'s Mariner of the Seas ocean liner, center, sails toward the Kai Tak Cruise Terminal, built on the site of the former Kai Tak Airport, in Hong Kong.

Surrounded by fields when it opened as London Airport in 1946, Heathrow was long ago enveloped by urban sprawl, and its expansion plans each involve demolition of at least 1,000 homes, though the company reckons noise could be cut by adding a runway to the west so planes fly higher over the most populated areas.

In Denver, Stapleton airport, which dated to 1929, was similarly hemmed in by the expanding city, prompting Pena, mayor between 1983 and 1991, to push through plans for a replacement.

The decision meant finding a buyer capable of developing the $79.4 million site, demolishing 4.2 million square feet of buildings and removing the six million tons of concrete that made up the airport’s runways, taxiways and roads.

‘Pent Up’

While the replacement hub, originally scheduled for 1993, was plagued by delays to an automated baggage system that caused costs to double to more than $4 billion, at Stapleton it was a case of build it and they will come, according to Gleason, now a spokesman for the site’s developer Forest City Enterprises Inc. (FCE/A)

“Convincing people to live on a former airport property was not an issue because there was pent up demand,” he said in a telephone interview. “The day the last airplane took off, property values around Stapleton took off as well.”

While London’s own housing shortage would suggest that new homes at Heathrow might be similarly popular, one of Asia’s highest-profile airport projects indicates that demand for land isn’t always sufficient to deliver a successful regeneration.

The site of Hong Kong’s former Kai Tak airport, less than 7 miles from the world’s costliest office market, lies deserted 15 years after the hub was closed and flights shifted to the island of Chek Lap Kok, with only the runway developed.

After a decade of public discussion and consultation which saw the scale of plans reined in, the government came up with an outline proposal in 2007 for more than 33,000 housing units, 20 million square feet of office, retail and hotel space, plus a cruise terminal and a stadium.

Empty

So far, only the ship dock has opened for business, and most of the site is still empty.

In London, Howard Davies, who is leading the airport commission, has said he’ll examine all options for securing additional runway capacity, including the upgrading of Heathrow.

Prime Minister David Cameron, whose Conservative party is in coalition with the anti-Heathrow Liberal Democrats and who needs seats below flight paths to stay in power, has said that no decision will be reached until after a 2015 general election.

Residents of two west London boroughs voted almost 3 to 1 in May against building a third runway, and Conservative lawmaker Zac Goldsmith has threatened to quit if growth at Heathrow is approved, forcing a special by-election vote.

Johnson also says he’d be prepared to protest against extra flights, and that his vision of a new hub and what he has dubbed a “Royal Borough of Heathrow” to replace the old airport will win public approval if politicians are prepared to back it.

“There’s no substitute for having strong support at the grass roots level,” Denver’s Gleason said. “There are going to be ups and down, and times when elected officials may waver, but it is very important for the community to recognize that it is in their best interest that development stay on track.”

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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