Economic Impact Assessment of the LLM 

International Airport Public Private Partnership

Executive Summary

June 27, 2012

Submitted to:

Aerostar Airport Holdings LLC
Economic Impact Assessment of the LLM International Airport Public Private Partnership

Estudios Técnicos, Inc. Page | 2

EXECUTIVE SUMMARY

Estudios Técnicos, Inc. was commissioned by Aerostar Airport Holdings LLC (“Aerostar”) to 

conduct an economic impact assessment for the LLM International Airport PPP. The report 

presents how this transaction will impact local business activity, employment, income, and 

fiscal revenues. 

The economic benefits of the transaction are associate with following:

1. Aerostar’s commitment to investment over $1.8 billion over the course of 30 

years needed to facilitate the airport’s growth;

2. Aerostar’s operational plan which will result a significant increase in passenger 

movement; and

3. The change in ownership structure, which will result in new tax revenues certain 

jurisdictions.

Accepted economic procedures were adopted to estimate the economic impact of the 

transaction. The estimates were based on Puerto Rico’s Input-Output Model and National 

Accounts from the Puerto Rico Planning Board.

The analysis shows that the proposed public private partnership will result in substantial 

economic impacts during the initial 10 years of the agreement. Local businesses will perceive 

$2.3 billion per year in new commercial activity, which will support 14,461 new jobs per year

and $437.4 million in annual salaries. Economic impacts increase over time. By the end of 2020, 

more than 22,999 jobs and $766.7 million in salaries would be supported by a projected 

increase in $4.0 billion in commercial activity. The government will benefit from $936 million in 

new tax revenues over the ten year period. 
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Economic Impact Summary

Impact of Aerostar’s 10 year investment plan

Aerostar’s construction activities and investment in machinery and equipment of $583 

during the initial 10 years of the agreement will support $1.4 billion in new business activity, 

913 new jobs per year with associated salaries of $23.3 million per year.

The government will benefit form $67.1 million in additional taxes during the period, of 

which $35 million are in construction excise taxes, $21.8 million in personal income taxes and 

over $10.3 million in sales taxes. 

2013 2022 Total

Average per 

year

Business Activity ($000) $617,998 $3,982,597 $22,722,082 $2,272,208

Direct $269,589 $1,810,142 $10,291,053 $1,029,105

Indirect $188,328 $1,125,767 $6,459,576 $645,958

Induced $160,080 $1,046,688 $5,971,454 $597,145

Employment (Jobs, #) 4,688 22,999 144,613 14,461

Direct 2,118 10,787 67,617 6,762

Indirect 1,427 6,514 41,211 4,121

Induced 1,143 5,698 35,785 3,578

Salaries ($000) $117,250 $766,736 $4,374,259 $437,426

Direct $55,007 $373,383 $2,124,647 $212,465

Indirect $36,087 $222,599 $1,275,322 $127,532

Induced $26,157 $170,754 $974,290 $97,429

New Tax Revenues ($000) $28,004 $160,028 $936,016 $93,602

Personal income tax $8,818 $59,437 $337,321 $33,732

Sales and room taxes $9,512 $83,307 $464,165 $46,416

Construction excise tax $5,259 $3,649 $34,997 $3,500

Municipal license tax $614 $881 $7,628 $763

Corporate income tax $1,300 $5,413 $44,503 $4,450

PRPA annual payment $2,500 $7,341 $47,403 $4,740
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Economic Impact of Aerostar’s 10-year Investment Plan

Impact of Aerostar’s Operational Plan

The expected increase in passenger movement resulting from Aerostar’s operational 

plan will support an estimated increase of $8.8 billion dollars in additional visitor expenditures, 

which amount to $19 billion in new business activity during a ten year period. This will promote

11,292 jobs per year with associated salaries of $337.2 million per year. 

In addition, the government will benefit from $868.9 million in additional revenues

associated with new visitor expenditures and Aerostar’s tax burden during the initial 10 years of 

the lease. Of this total, $99.5 million will be paid directly by Aerostar in municipal license tax, 

income taxes and PRPA annual payment. Over $7.6 million in municipal license tax will directly 

benefit the Municipality of Carolina.

2013 2022 Total

Average per 

year

Business Activity ($000) $215,130 $149,266 $1,431,545 $143,154

Direct- Capital Investment $87,654 $60,818 $583,276 $58,328

Indirect $79,578 $55,214 $529,536 $52,954

Induced $47,899 $33,234 $318,733 $31,873

Employment (Jobs, #) 1,531 833 9,131 913

Direct 612 333 3,654 365

Indirect 569 310 3,395 339

Induced 349 190 2,083 208

Salaries ($000) $35,069 $24,333 $233,362 $23,336

Direct $14,104 $9,786 $93,855 $9,385

Indirect $13,106 $9,093 $87,210 $8,721

Induced $7,859 $5,453 $52,297 $5,230

Taxes ($000) $10,088 $7,000 $67,131 $6,713

Construction excise tax $5,259 $3,649 $34,997 $3,500

Personal income tax $3,281 $2,277 $21,835 $2,184

Sales tax on construction materials and related $1,110 $770 $7,387 $739

Sales tax on indirect and induced business activity $438 $304 $2,912 $291
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Economic Impact of Aerostar’s Operational Plan

Economic Impact of New Fiscal Revenues

New tax revenues from the LLM public-private partnership would support $2.4 billion in new

business activity during the initial 10 year term of the agreement, along with 2,257 annual jobs 

and more than $76.9 million in annual salaries. 

Economic Impact of New Tax Revenues

2013 2022 Total

Average per 

year

Business Activity ($000) $332,122 $3,429,049 $18,925,867 $1,892,587

Direct- New Visitor Expenditures $153,932 $1,589,295 $8,771,761 $877,176

Indirect $97,414 $1,005,768 $5,551,113 $555,111

Induced $80,776 $833,985 $4,602,993 $460,299

Employment (Jobs, #) 2,354 18,683 112,917 11,292

Direct 1,090 8,651 52,287 5,229

Indirect 690 5,475 33,089 3,309

Induced 574 4,557 27,541 2,754

Salaries ($000) $59,169 $610,897 $3,371,709 $337,171

Direct $28,168 $290,824 $1,605,138 $160,514

Indirect $17,826 $184,045 $1,015,794 $101,579

Induced $13,175 $136,028 $750,776 $75,078

New taxes $17,916 $153,029 $868,885 $86,889

From Incremental Visitor Expenditures $13,501 $139,393 $769,351 $76,935

Room tax $5,223 $53,925 $297,626 $29,763

Sales tax from other visitor expenditures $2,130 $21,993 $121,388 $12,139

Sales tax to municipalities $456 $4,713 $26,012 $2,601

Sales tax from other business activity $612 $6,315 $34,853 $3,485

Personal income tax $5,536 $57,161 $315,485 $31,549

From Aerostar Operations ($000) $4,415 $13,635 $99,534 $9,953

Municipal License Tax 614 881 $7,628 $763

Corporate income tax 1,300 5,413 $44,503 $4,450

PRPA Annual Payment 2,500 7,341 $47,403 $4,740

2013 2022 Total

Average per 

year

Business Activity ($000) $70,746 $404,282 $2,364,670 $236,467

Direct- New Tax Revenues $28,004 $160,028 $936,016 $93,602

Indirect $11,337 $64,784 $378,927 $37,893

Induced $31,406 $179,469 $1,049,728 $104,973

Employment (Jobs, #) 804 3,484 22,566 2,257

Direct 416 1,803 11,677 1,168

Indirect 168 730 4,727 473

Induced 219 951 6,162 616

Salaries ($000) $23,013 $131,506 $769,187 $76,919

Direct $12,735 $72,773 $425,654 $42,565

Indirect $5,155 $29,461 $172,317 $17,232

Induced $5,122 $29,273 $171,217 $17,122