An Analysis of the Potential for Economic Expansion with Infrastructure Bond Proposals

stephennieman6
May 21
3 min read

Jefferson County Infrastructure Bond Proposal

Port of Port Townsend & Jefferson County International Airport Expansion

A Revenue-Neutral Economic Development Strategy

Executive Summary

This policy proposes a self-financing infrastructure bond program to expand:

Jefferson County International Airport (JCIA)
Port of Port Townsend marine and industrial facilities

The central goal is zero net tax increase, achieved through:

User-generated revenues (fees, leases, fuel sales, moorage)
Capture of growing tourism demand
Industrial and maritime lease expansion
Grant leverage and existing tax streams (not new taxes)

The Port already operates a diversified revenue base (~$8.3M annually) with positive operating income. Strategic expansion allows scaling to $12M–$16M annual revenue within 10 years, sufficient to service long-term bond debt without raising taxes. [peninsulad...lynews.com ]

Baseline Economic & Infrastructure Conditions

1. Existing Port Financial Capacity

2024 operating revenue: $8.35M [peninsulad...lynews.com ]
Net operating income: $1.24M [peninsulad...lynews.com ]
Historic revenue range: $6.2M–$8.8M annually [portofpt.m...ipal.codes ], [peninsulad...lynews.com ]

Revenue sources:

Marina moorage and yard fees
Airport leases and hangars
Industrial site rentals
User fees

➡️ Key insight: The Port already functions as a quasi-enterprise utility, making it ideal for revenue-backed bonds rather than tax-backed bonds.

2. Airport Activity & Capacity Constraints

~34,800 itinerant operations annually [city-data.com ]
~21,700 local operations [city-data.com ]
Single 3,000 ft runway limits larger aircraft access [portofpt.com ]

➡️ Constraint: Runway length and industrial space limit:

Corporate aviation
Air cargo
Maintenance/repair (MRO)
Advanced manufacturing tenants

3. Tourism-Driven Demand Growth

Annual visitors: ~644,000
Visitor spending: $159.9M annually [olympicpeninsula.org ]

➡️ Tourism is the largest scalable revenue driver, feeding:

Marina demand
Air charter demand
Industrial service demand

Market Opportunity & Capture Strategy

A. Airport Revenue Upside

General aviation airports generate revenue primarily from:

Fuel sales
Hangar leases
Aircraft maintenance
Charter/passenger activity

Scaling Mechanism:

Expand runway to ~4,000–4,500 ft
Add hangars + maintenance facilities
Enable turboprop and small business jet operations

Revenue Potential Estimate:

Baseline ops (~56K annual) → modest yield today
With expansion: assume +40–70% operations growth

Projected Annual Airport Revenue (10-year horizon):

Source	Current Est.	Expanded
Fuel sales	$0.8–1.2M	$2.0–2.8M
Hangar/lease	$0.6–0.9M	$1.5–2.2M
Services/MRO	minimal	$1.0–1.8M
Total	~$1.5–2.5M	$4.5–6.8M

B. Port & Marine Industrial Expansion

Key current revenue streams:

Marina moorage
Boatyard services
Industrial leases

Despite recent softness, the Port maintains:

Stable but under-capacity utilization trends [ptmta.org ]
Ability to raise rates ~4–5% annually [peninsulad...lynews.com ]

Expansion Focus:

Boat Haven industrial yard densification
Maritime trades clustering (ship repair, composites, electric marine tech)
Eco-industrial park buildout

Revenue Projection (10-year):

Segment	Current	Expanded
Moorage & marina	$2–3M	$3.5–5M
Industrial leases	$1–2M	$3–5M
Yard/services	$2–3M	$4–6M
Total	~$6–8M	$10–16M

Bond Structure (No Tax Increase Model)

1. Financing Framework

Revenue Bonds (Primary Instrument)
Backed by:
- Airport revenue streams
- Port enterprise revenue
- Industrial lease agreements

2. Capital Stack

Source	Share
Federal/State grants	30–50%
Revenue bonds	40–60%
Existing IDD levy funds	5–10%

➡️ Existing IDD levy already generates ~$2.6M annually for capital ➡️ No increase required—only reallocation [peninsulad...lynews.com ]

3. Debt Service Coverage

Assuming:

Project cost: $60M–$90M total
Bond portion: ~$40M–$50M
Interest: ~4–5%

➡️ Annual debt service: ~$2.5M–$3.5M

Projected Net New Revenues:

Airport expansion: +$3–4M
Port expansion: +$4–8M

✅ Total new revenue: $7–12M annually

➡️ Debt Service Coverage Ratio (DSCR): 2.0x–3.5x (strong, investment-grade)

Economic Impact

1. Direct Impact

Job creation: maritime, aviation, logistics
Expansion of industrial tax base (without raising rates)

2. Indirect Impact

Tourism spending multiplier (currently $159.9M annually) [olympicpeninsula.org ]
Increased high-income visitors via private aviation

3. Strategic Positioning

Jefferson County becomes:

A Puget Sound niche aviation hub
A maritime innovation cluster
A tourism access gateway

Risk Assessment

Risk	Mitigation
Tourism seasonality	Diversify to industrial leases
Revenue volatility	Phase development
Community resistance	No tax increase messaging
Cost overruns	Grant-first funding strategy