Airport Land Sale Expected to Help Lower Dulles Ticket Prices

The Metropolitan Washington Airports Authority today approved the sale of 424 acres to data center developer Digital Realty Trust.

The $236.5 million deal carries significant ramifications for the county government’s tax rolls and for passengers passing through Dulles Airport.

The property is part of a larger 584-acre parcel listed in county records at a fair market value of $115.9 million. Under MWAA ownership, the land is exempt from county real estate taxes. Once it is transferred to a private owner, it will be subject to county real estate taxes and the county’s special Metro-area real estate tax districts, currently set at an additional 20 cents per $100 of assessed value.

The sale won’t only make space for a major expansion of Loudoun’s Data Center Alley and generate more money for schools and other government services; travelers are expected to rack up big savings, too.

Proceeds from the sale will be required to be used for airport-related activities. That creates capital for some planned expansion projects, but it also provides a pool of money that can be used to reduce the fees added to the tickets of every passenger who boards a flight at Dulles.

Passenger fees, called cost per enplanement, at Dulles reached a high of $26.55 per passenger in 2014. As airlines sounded the alarm about the increasing competitive disadvantage of running flights through Dulles compared to the lower cost at nearby Reagan National and Baltimore-Washington airports, there has been a stronger focus on reducing to ticket prices.

The situation has been helped by a decision shift some revenue, about $35 million this year, generated by at Reagan National, which also is controlled by MWAA, to Dulles. Also, then-Gov. Terry McAuliffe won General Assembly approval to provide Dulles with $50 million in state grants over two years to help reduce the passenger fees. Passenger costs are expected to drop 6 percent, to $17.82 per passenger, this year. However, with the expiration of the state grants, fees were expected to rebound to more than $23 next year. By comparison, the per passenger cost at BWI is under $10, allowing the region’s busiest airport to attract even more flights from low-cost carriers.

According to the airports authority, Digital Realty was the highest bidder, and has already negotiated with the authority and made a $5 million deposit. Following the board’s approval, closing is expected between Sept. 28 and Oct. 12. The deed will include covenants to ensure that development on the land is compatible with the nearby airport uses.

Digital Realty is already an established presence in Loudoun, with 17 data centers in the county already according to the company’s website. Some of those data centers have drawn noise complaints from the nearby residents, such as at Regency at Ashburn.

But the western lands—between Old Ox Road and the airport’s runways—are far from most homes, except Loudoun Valley Estates, and in an area where by policy the county does not allow residential development because of airport noise.

Governor Proposes $50M to Lift Dulles

4 thoughts on “Airport Land Sale Expected to Help Lower Dulles Ticket Prices

  • 2018-09-18 at 5:21 pm

    How foolish do they think that we are to try to soothe the wound of more data centers by saying that airfare ticket prices will go down? Yeah, you mean how the price of tolls on the toll road have lessened ticket prices? Right, we see how that went! Loudoun County is going to be known as ‘Data Center-ville’…great job BOS….”You’re going the wrong way!!!!”

  • 2018-09-18 at 7:55 pm

    Yep, since the “Passenger fees, called cost per enplanement, at Dulles reached a high of $26.55 per passenger in 2014”, must mean they have been lower since, and with the cost of a plane ticket, that $25.00 really doesn’t mean much— actually they mention “reduce”fairs , so that would probably end up, $1-$2 less!!
    What a joke!

  • 2018-09-18 at 10:45 pm

    Jack Potter will now get a bigger salary increase. He’s the most overpaid airport exec in the country

  • 2018-09-19 at 3:00 pm

    Lets not lose sight of how we got to the 2nd highest enplanement fees in the USA (after NYC) – mismanagement by the MWAA. $1.55 billion on a hole in the ground they call the “security pavilion.” Another $1.5 billion blown on a train that misses Terminal C and D entirely. Hundreds of millions on parking structures that cost nothing to run but have tripled the rates in just a few short years. As Vindicator noted, they have the most overpaid airport executive in the USA.

    Dulles is still operating “temporarily” terminals C and D since the 70’s and still has no way to clear international passengers without busing them on 50 year moon buggies to the main terminal.

    Dulles is what happens when you give an unelected, unaccountable quasi-governmental agency (MWAA) the ability to sell bonds and raise unlimited amounts of money through unlimited unchecked imposition of fees and rents on the traveling public. No bid contracts, nepotism and high fees that drive away low cost carriers and competition, overpaid executives and substandard facilities.

    Welcome to IAD!

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