Study confirms new KCI terminal — at $964 million — is cheaper than airport renovations

Proposed plans for a new single terminal for Kansas City International Airport were presented Thursday.
Proposed plans for a new single terminal for Kansas City International Airport were presented Thursday. From the City of Kansas City

It may not be what many Kansas City residents want to hear, but cost estimates show a new airport terminal is cheaper than renovations at Kansas City International Airport.

The Kansas City Council learned Thursday that building a new single terminal at KCI could cost about $964 million, while renovating two terminals could cost an estimated $1.04 billion to $1.19 billion.

Thursday’s Aviation Department presentation, the most specific cost estimates to date, follows up on an earlier report in July. But since then, a different 13-member City Council took office with nine new members. This was their first chance to consider options for improving the city’s 43-year-old airport in the Northland.

At the presentation in July, a consultant and a representative of Southwest Airlines, which provides the most service at KCI and speaks for the airlines, said it had become clear that a renovation project would cost more than $1 billion, while a new terminal would cost somewhat less than that.

But at that time, no specific dollar figures were presented, and council members said it was important to get all the financial facts.

“What we’re dealing with is facts and not fiction,” said Assistant City Manager Pat Klein, who is working with the Aviation Department on the planning.

Sheri Ernico, a consultant working with the Aviation Department, acknowledged she was surprised at first that renovation was more expensive than building new.

But she explained that renovation actually involves the complete gutting and reconstruction of two terminals to deal with federal guidelines for processing passengers and security requirements, to improve airplane maneuverability and to add needed infrastructure and technology upgrades.

The existing terminals have three times as much space as is needed in the prescreening areas, while they only have half the space needed in the postscreening gates where passengers spend much of their time.

Meanwhile, a new terminal can be built in a more compact footprint and designed for more efficient, comfortable and cost-effective operations.

“We are trying to size this properly,” Ernico said.

Klein said the priority for both the airlines and airport planners is to retain KCI’s vaunted convenience and affordability, and a new terminal can accomplish that.

He said the city has no intention of building a “Taj Mahal.”

Klein emphasized that no decisions have been made and said the City Council will be kept informed and must approve any final recommendation. He said the next step is for the airlines to reach a consensus on the right design approach and what they can afford to build. The next update is expected by May.

Some council members remained skeptical that all renovation options have been fully explored. Councilman Lee Barnes wondered why some creative engineering firm in Kansas City couldn’t come up with a cheaper renovation design that meets federal guidelines but doesn’t require complete reconstruction.

Klein said the study group has already looked at countless design possibilities and he doubted such a cheaper viable option exists, but he said he will ask again.

City officials have repeatedly emphasized that any improvements at KCI will not be paid for with general taxpayer dollars. The airport, including any new construction, is funded with passenger ticket fees, parking revenues, concessions, grants and other special revenues.

Kansas City voters will be asked to approve any revenue bonds to pay for the airport improvements.

No matter what happens, improvements to KCI are years away. Even if voters approve the revenue bonds, the final design would take 18 months, and construction would take three to four years. Renovations would take even longer, because they would have to be staged around ongoing airport operations.

Southwest Airlines did not have a representative at Thursday’s meeting. But a spokesman afterward remained positive about having a new terminal and working out details.

“It’s less expensive to build a new terminal, which will be constructed in a way that’s affordable, has lower operating costs, is efficient, utilizes space better and has the customer conveniences that the travelers deserve,” Dan Landson of Southwest said in a statement.

“It’s important to remember that it’s the airlines that will pay for the project and not the taxpayers,” he continued. “We look forward to completing negotiations and presenting a final recommendation” by next May.

The Greater Kansas City Chamber of Commerce also liked what it heard Thursday.

Chamber president and CEO Jim Heeter said in a statement: “Today’s presentation validates the decision the KC chamber board made two years ago to support the concept of a single terminal for KCI.” Besides the cost advantage, he said, “the single terminal will improve the operational efficiency of the airport, as well as passenger safety and convenience.”

City Councilwoman Teresa Loar was irate over the presentation. While the recent planning process has included consultants, Aviation Department officials and the airlines, Loar said the City Council should also be represented because it has its fingers on the pulse of the community.

The airlines “are not the deciders,” Loar said, adding she gets “sick and tired” of hearing about a new terminal as if it’s a done deal.

“That will fail miserably on a ballot right now,” she predicted.

Kevin Koster, a businessman who frequently uses KCI and was on a citizens task force on the airport, said he remained concerned that one of the initial renovation plans, which would cost far less than a new single terminal, had been removed completely from consideration.

And U.S. Rep. Sam Graves, the congressman for northwest Missouri, said: “KCI is one of the most convenient major airports in the country. … I’m worried the single-terminal plan would jeopardize that.

“I also still find it hard to believe that renovating the current terminals would be more expensive than building a new one from scratch. ... I would like to have seen more than studies designed to build support for the single-terminal plan.”

The future of KCI became a fiercely-debated topic in 2011, when Aviation Director Mark VanLoh said KCI’s three-terminal configuration was becoming increasingly inefficient and outdated in an era of intense airport security, lots of airline mergers and technological innovation.

At that time, the department raised the possibility of building a new airport terminal on city-owned land 4 miles south of the existing KCI, which had the advantage of being closer to where most airport passengers live.

But building new roads to that location proved to be exorbitantly expensive, so the next plan, disclosed in October 2012, was to demolish Terminal A and build a new terminal there, while Terminals B and C remained open.

Because of airport mergers, KCI uses far fewer gates than in the past, and in fact Terminal A was closed in early 2014 as all the airlines were consolidated in B and C.

But many city residents and airport users in both Missouri and Kansas feared losing the convenience and short car-to-gate distance of the three horseshoe terminals if the city built a new, single terminal.

Critics were also highly skeptical that a new building would be cheaper than renovating the existing structures.

A group of citizens was so concerned about the planning direction that they gathered petition signatures in 2013 to force a public vote before the city demolished any terminal or constructed a new terminal.

City officials said a public vote would likely be required anyway to authorize airport bonds to pay for major improvements, but the City Council in 2014 adopted an ordinance promising a public vote as the petitioners had asked.

Because of the public discord, Mayor Sly James appointed a citizens task force in June 2013 to study the optimal plan for upgrading the airport. After 11 months of meetings and research, that group in May 2014 recommended a single terminal as the best option. But members admitted they didn’t have specific construction cost figures, and it certainly wasn’t the end of the community debate.

Meanwhile, in February 2014, the Aviation Department announced it would collaborate with the eight airlines serving KCI to come up with a project that was affordable, practical and that the public could embrace. That’s the process that resulted in Thursday’s presentation.

The presentation comes at a time when the airport is doing well in terms of passenger numbers and finances.

The department said Wednesday that KCI has had 18 straight months of passenger traffic growth and expects to end the year with 10.6 million total passengers. That would make 2015 the busiest year since 2007 and second busiest since 2001.

Credit rating agencies have also upgraded their outlooks for the airport’s finances in recent months, which is good news for borrowing costs. This past summer, Moody’s upgraded the outlook from stable to positive. In 2013, Standard and Poor’s upgraded the outlook from negative to stable.