Business

Developer sets new opening date, project budget for KCI single terminal

The developer of the widely anticipated KCI single terminal project is now setting a projected opening date of October 2022 at a budget of $1.3 billion to $1.4 billion.

Edgemoor Infrastructure and Real Estate, the Maryland-based firm picked to develop the single terminal project that Kansas City voters approved last year, told the Kansas City Council of the new plans at its Thursday afternoon business session.

The new estimated opening date and budget arrive a week after a Kansas City Council committee aired concerns over signs that the project wouldn't be done by November 2021, as originally proposed by Edgemoor, and that airport officials and the developer could not commit to a budget.

Edgemoor this week learned from airlines that use KCI — the same airlines footing the bill for the terminal project — that they believe Edgemoor should be able to build the terminal for no more than $1.4 billion.

That's an increased cost from an original price tag of $964 million that the airlines had committed to in 2015. Inflation accounts for part of the increase, but it has more to do with an expansion from 35 gates in the new terminal to 39 gates. Plans also contemplate the possibility of future expansions of the terminal to 42 gates.

The original design for the single terminal envisioned a 750,000-square-foot building, but the expanded gates pushes the size beyond 1 million square feet.

The increased budget won't fall on the backs of taxpayers; airlines fund the construction. However, it's likely that parking, concessions and ticket prices for those using KCI will increase to help pay for the terminal costs.

Council members, who have expressed concern with the pace and direction of the project, offered only minimal criticism of the new timeline. Most saw addition of the new gates as reflection of a more robust business environment.

"This is all good news," said Councilwoman Katheryn Shields. "We've got the approval of the public, we've got the company that will do this. I just think we're in a great place today."

Despite the new projections, the final price tag and completion date remain unknown, and could continue to creep upward and outward. Aviation Director Patrick Klein said he would be reluctant to open a new terminal in the midst of the holiday rush. It means that if the October 2022 target can't be met, delays could possibly slip into 2023.

In addition to the new gates, there are still uncertainties about security needs and baggage handling systems. Geoffrey Stricker, managing director for Edgemoor, said that a guaranteed maximum price won't be finalized until sometime in October.

At a September 2017 briefing, he told the council that a guaranteed price would be locked in by February or March of this year.

Edgemoor anticipates reaching financial closing on the project in November, after which construction can begin.

The company is still working through issues with labor unions. Many of the terms have been agreed upon, including a no-strike clause. But both sides still can't agree to how much work can be carried out by nonunion firms.

Edgemoor has offered up to $50 million in contracts that could go to nonunion firms, leaving the rest for union companies.

But the labor unions have countered with $15 million. While Edgemoor officials think $15 million is too low — that makes it difficult to include minority-owned contractors that don't want to unionize — they're encouraged that labor unions have at least offered a dollar figure for nonunion participation.

"They are offering things that have not been offered in the past," said Steve Kellerman, chief engineer for Clarkson Construction, part of the consortium designing and building the terminal.

An agreement with labor unions is required before Edgemoor can reach financial closure on the project.

Kellerman was reluctant to discuss the specifics of talks but expressed confidence that discussions were headed in the right direction.

"I feel that we're very close," he said.

  Comments