Pearson airport to lease land, reduce fees
Toronto's Pearson International Airport wants to lease prime land to developers so it can reduce its landing fees, which are among the highest in the world.
The Greater Toronto Airports Authority is expected to announce Tuesday that a six-hectare site across from Terminal 3 is available for an estimated $300 million development, the Toronto Star reports.
The site, which is now a parking lot, could hold a 400-room hotel, conference centre, retail stores and two office buildings, the Star reports.
"We think it's pretty exciting that we have the opportunity to build a commercial development there," Howard Bohan, the GTAA's director of properties and concessions, told the newspaper.
Bohan said the project is a first for a Canadian airport authority. The plan is to maximum revenue.
"We are taking a look at all the lands that we have to see how we can put them to use to drive additional revenue," Bohan said.
The GTAA, which manages 1,820 hectares of airport lands and 733,000 square feet of space at Pearson, would not say how much landing fees could be reduced if land is leased out.
"There's no doubt we're an expensive airport," Bohan said. "But it's hard to say how much fees can be reduced. It would really depend on the proposals that we get."
Airlines are charged fees to use the airport, which are then passed on to consumers.
Pearson charges US$10,986 for a Boeing 747-400 to land, while New York's LaGuardia charges 5,031, the Star reports.
The GTAA raised its airport improvement fee from $15 to $20 per passenger at the beginning of the year to pay for its $4.4 billion redevelopment program.
The GTAA's board also approved a 1.45 per cent increase in landing fees for this year, the Star reports.
The fees cover airport improvements, which the GTAA has argued were needed to make Toronto competitive internationally.
Air Canada, a frequent critic of the GTAA, has called the airport improvement fee increase "completely unreasonable."
Other airlines said they have cut landings at Pearson because of expensive fees, the Star reports.
The land in question would be leased on a long-term basis likely starting at 50 years with an option to renew, said Sheila Botting, senior managing director for Cushman & Wakefield Lepage Inc.
"There is currently a shortage of land in the area, so we think this will be well received by developers," Botting told the Star.