First look at pact with KCI developer is ‘like putting on an engagement ring’

The Kansas City Council got its first look Thursday at the document detailing when and how the new single terminal at KCI will built, including goals for employment of minority- and women-owned firms.

The 50-page document, called a memorandum of understanding, is not the final word on the long-debated venture. It offers no specifics about how the developer, Edgemoor Infrastructure & Real Estate, plans to make good on its promise to finance the entire $1 billion project.

It also lacks hard numbers on how many jobs will be created, something officials say won’t be available until the terminal’s design is complete.

Those provisions will have to wait for two other development agreements, an interim version and a final accord, to be completed over the next six to nine months.

“It’s like putting on an engagement ring,” Mayor Pro Tem Scott Wagner said of the memorandum.

Voters on Nov. 7 overwhelmingly approved the proposal to transform the 40-year-old airport from its three horseshoe terminals to a new single one. City officials have said the plan is still to break ground in the fall of 2018 and have the terminal up and running by late 2021.

The memorandum sets in motion the legal and regulatory machinery to begin the largest public works project in the city’s history. It creates a project management team of city, developer and airline representatives and establishes a timetable for completion of key documents.

It also sets out the terms under which each side can exit the agreement in the event of fraud, failure to meet deadlines or other contingencies. The city would not owe legal damages to Edgemoor if it decided to end the agreement. The document also guarantees that Edgemoor can be reimbursed for up to $30 million in up-front costs if it decides to cut ties.

These “qualified out of pocket expenses” include consultants studies, environmental assessments, legal costs, and money it might owe to its construction subcontractors. The city would use money from the sale of airport revenue bonds to make the reimbursements.

Council members received the document during their legislative session late Thursday afternoon. It was introduced as an ordinance that will come before the council’s airport committee next week. Council members hope to take final action before they recess for Christmas break.

“I and my colleagues on the City Council will be reviewing this draft MOU with a fine-tooth comb in the days ahead,” said Councilman Jermaine Reed, chair of the council’s transportation and infrastructure, said in a statement.

“While I cannot make any guarantees, it is my expectation that this MOU will be approved by the full Council by or before our last Council meeting in 2017.”

The pact says that Edgemoor must make a “good faith effort” to reach minority hiring goals set out by the City Council when it approved Edgemoor’s selection as developer in September.

Those goals call for 35 percent of construction subcontractors be minority or women-owned firms. It sets the same goal for design and professional services firms.

The agreement also commits Edgemoor to a portfolio of services, cash payments and in-kind contributions to intended to help the city’s low-income communities benefit from the project.

These include job training, transportation to and from the site, licensed child care and on-site health care for workers, and low interest loans to provide working capital for minority and women-owned firms.

Earlier this fall, civil rights and minority business leaders called for a 40 percent subcontracting commitment.

The document also specifies that Edgemoor will contribute a total of $1 million over the next eight years to Love Thy Neightbor, a program the helps senior citizens repair their homes to avoid code violations and expensive legal costs.

The agreement specifies another $1 million over six years to the Shared Success Fund, which channels revenue from certain economic development projects to distressed neighborhoods.

“It’s everything we asked for,” said Councilwoman Jolie Justus, airport committee chair. Other members were more guarded in their early assessments.

“The devil is in the details,” said council member Kevin McManus. “We have to do our due diligence review.”

Councilman Quinton Lucas said there is likely to be more discussion about the community benefits package. “I think there is more space for conversation,” he said.

This story was originally published November 30, 2017 at 6:18 PM with the headline "First look at pact with KCI developer is ‘like putting on an engagement ring’."