Before any meaningful construction has started on a new single terminal at Kansas City International Airport, its planned opening of November 2021 is already delayed.
"We're looking at something like six to 12 months" behind schedule, said Geoffrey Stricker, managing director of KCI terminal developer Edgemoor Infrastructure & Real Estate.
Stricker offered three reasons on Thursday to members of the Kansas City Airport Committee during a regularly scheduled monthly update on the project's progress:
- Financial closing for the project, originally planned for June, is now scheduled for November because of delays in Edgemoor reaching an initial agreement with the council.
- The Federal Aviation Administration needs to sign off on an environmental assessment before construction can begin.
- The original plan for a 35-gate terminal has been expanded to include 39 gates.
"It's not a two-, three- or five-year delay," Stricker told council members.
Some committee members were not pleased with the news, particularly Third District Councilman Jermaine Reed.
"It does give me some sort of concern with the uncertainty, in all seriousness," Reed said.
There are other reasons for the delay, too.
For one thing, Edgemoor still hasn't reached an agreement with labor unions on how the work on the $1 billion-plus project will be handed out.
Greg Colevas, division president for Edgemoor's construction partner Clark Construction, said he's encouraged by the direction talks are going with labor unions.
"There continues to be one stumbling block that we're working on: Some of the unions — I don't say all of them — some of them are pretty fixed on having 100 percent union representation for any workers on the project," Colevas said. "That creates an issue for having nonunion MBEs (minority-owned business enterprises) participating on the project."
Edgemoor officials were scheduled to meet with labor union leaders later on Thursday.
There's also no budget yet for the project.
Pat Klein, director of the Kansas City Aviation Department, said a budget figure for the project could arrive at the Airport Committee's next update on the KCI project in July.
One of the reasons the city picked Edgemoor to develop the KCI project was the company had pledged to arrive at a guaranteed maximum price by February or March, a year ahead of the AECOM-led KCI Partnership.
There's also the matter of getting the FAA to sign off on an environmental assessment, meant to ensure that environmental issues are cleared up, before major construction can begin.
Klein said there had been an assumption that the city could put out solicitations for certain construction work before the FAA approved an environmental assessment in October, and then signing those contracts shortly afterward.
"What we've been told initially by the FAA is they don't think that's a smart idea," Klein said. "They think we should hold, so we're in discussions with them to do that. That's a three-, four-, five-month lag on our schedule, which could be the difference between summer or winter of 2022."
Hearing that raised Reed's hackles once more.
"The first thing you said is 'We assumed,' " Reed said. "That's concerning because, if I am hearing you correctly ... you're making an assumption about something now that could likely jack up the schedule. What other assumptions are we making? Do we have the right folks at the table doing this work?"
Klein replied: "We are doing our due diligence and I think we have the right people at the table."
Another matter that popped up was potential revisions to the city's master bond ordinance, which establishes an order of priorities for how revenues produced by KCI are spent.
The master bond ordinance was a major issue during last year's process to select a developer. The Burns & McDonnell-led KCI Hometown Team was disqualified when the city's finance experts and lawyers determined that its financing plan did not comport with the master bond ordinance.
The KCI Hometown Team's debt, the city believed, would be a higher priority for repayment than bonds that had previously been issued in 2005 to renovate KCI, a conclusion that the KCI Hometown Team disputed.
John Green, the aviation department's chief financial officer, said one revision was to the definition of debt in the master bond ordinance to include conduit debt, or debt that's issued through a quasi-public agency. The KCI project's debt is expected to be issued by the Industrial Development Authority.
Green also said that the aviation department was looking at whether it could issue new debt at equal priority to the existing debt, or lower priority, depending on which is better when the debt is issued.
According to the city's master bond ordinance, new debt can't be issued at equal priority to existing debt unless a number of conditions are met. It's not clear if that has happened.
"The determination has not yet been made but if we do issue at parity we will have to meet the additional bonds test and coverage requirements," Green said in an email.