Government & Politics

KC council miffed it learned of FAA rejection of KCI revenue for programs from media

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We traveled to airports in Indianapolis, Raleigh and Florida to compare KCI in general design, number of passengers and gates.
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We traveled to airports in Indianapolis, Raleigh and Florida to compare KCI in general design, number of passengers and gates.

City Manager Troy Schulte on Friday defended the nearly one-month delay in notifying City Council members that the Federal Aviation Administration (FAA) had rejected half of the $28 million in proposed community benefits pledged by KCI terminal developer Edgemoor.

The benefits package was a critical, and possibly decisive, factor in the City Council’s approval of a memorandum of understanding in February that was in doubt up until the final minutes. The vote was 8-to-5.

The FAA informed the city in a July 19 letter that $14 million in programs — including workforce training for low-income communities and economic development funds for the Northland — could not be paid by Edgemoor out of future revenues from the new Kansas City International Airport.

The nine-page letter cited agency policy requiring that airport projects directly benefit financially from any community programs funded with airport revenues.

But the council did not learn of the details until reporters shared copies of the letter Wednesday and Thursday.

“That’s a little distressing,” said Councilwoman Teresa Loar, a member of the council’s airport committee. “That’s not a good way for us to get notice.”

Edgemoor managing director Geoffrey Stricker said in an interview Friday that the company will make good on the entire community benefits package, one way or the other.

“We’ve never wavered in our commitment to Kansas City,” Stricker said.

He added that the firm is continuing to talk to the FAA about the disallowed programs and hopes “to provide the clarity and the comfort” the agency needs to permit the use of airport revenues. He said he expected to update the City Council on the matter within the next few weeks.

Schulte said that after receiving the letter, it took time to set up a conference with the city’s Washington-based airport counsel, Robert Cohn of Hogan Lovells, to analyze the document. The city also employs two local law firms for the terminal project, Husch Blackwell and Hardwick. Edgemoor also needed an opportunity to consider its next steps, Schulte said.

“We needed to know what we were talking about,” Schulte said, adding that the process was prolonged because the council did not meet on Aug. 9.

Schulte briefed the council in closed session on Tuesday but did not share the letter with members. Councilman Quinton Lucas, who did not attend the meeting but spoke to members who did, said Schulte’s summary did not reflect the consequential nature of the FAA’s decision.

“I’m not sure I had a single colleague who understood the FAA statement to be as strongly negative toward the community benefits agreement as it was in the letter,” Lucas said.

Schulte stood by his handling of the matter.

“I wouldn’t have handled it differently,” he said.

Aviation director Patrick Klein, the recipient of the letter, and other city officials spent about an hour briefing the airport committee on Aug. 16, but did not disclose the FAA’s action.

In his short presentation, senior associate city attorney Galen Beaufort said only that Edgemoor and the city were “working to flesh out some of the programs and address some of the concerns that the FAA has raised.”

Toward the end of the session, Councilman Jermaine Reed asked Beaufort explicitly if the city had received a letter from the FAA about community benefits. Beaufort said it had but added only that the city and the developer were working on this issue.

The letter’s first line stated that the agency “has completed its review of the city’s proposed Community Benefit Agreement (CBA).”

Beaufort did not return a call or email seeking comment Friday. A spokesman said Klein was traveling and could not be reached.

“Needless to say, I was and am perplexed,” Reed said Friday. “I am not sure if city staff understands the significance of this matter or is just trying to skirt the issue.”

The FAA’s announcement is the latest in a recent series of bumps for the project.

In June, Edgemoor announced that the timetable for completion had slipped a year, from November 2021 to October 2022, and that the price had grown from $964 million to $1.4 billion. Last week’s presentation of interior renderings of the terminal met with some negative reaction on social media for its generic look — minus a fountain that was the centerpiece of the check-in hall in an earlier iteration.

Officials said the indoor fountain took up too much space. It will be replaced by an outdoor fountain near the main entrance.

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