KCI single terminal groundbreaking: ‘Wheels up, Kansas City!’
Construction of a new single terminal at Kansas City International Airport, a source of discord and drama since voters overwhelmingly approved the project nearly 15 months ago, now appears imminent following a City Council vote Thursday that approved major documents governing the $1.5 billion venture.
The council signed off on agreements between the city and developer Edgemoor setting out design and construction of the airport, goals for women-and minority-owned business participation and community benefits to enhance Kansas City’s construction workforce.
A fourth document, agreed to by the city and seven airlines that serve KCI, outlines the scope of the project, its $1.5 billion price tag and oversight of airport development and construction.
While there is still debate over how to finance $90 million in early costs—including design work already performed and demolition of an existing terminal to make way for the new building — Thursday’s actions effectively greenlight the project.
Geoffrey Stricker, managing director for developer Edgemoor Infrastructure and Real Estate, said early demolition work on the site could start within two weeks. He said he was “thrilled to have the council vote.”
“Obviously it’s a great day for Kansas City, and we’re ready to get people to work as soon as we can,” Stricker said.
Councilwoman Jolie Justus, 4th District, who chairs the Airport Committee, urged her fellow council members to vote yes.
“In November of 2017, the voters of Kansas City overwhelmingly gave us the green light to move forward on this, and since that time this council, our Aviation Department, our development team and our airline partners have been doing the due diligence that we need to do to make sure that we have a project that we can be proud of,” said Justus, who is running for mayor. “That’s where we are today.”
The Council voted 11-1 in favor, with only mayoral candidate and Councilwoman Alissia Canady, 5th District, in opposition. Councilwoman Teresa Loar, 2nd District at-large, a frequent critic of the deal, was absent.
Canady said the deal was not the “transformative” project Kansas City was promised when voters approved it in November 2017. She took issue with a revised workforce development agreement that pared down some anticipated community benefits to comply with Federal Aviation Administration regulations.
“I think we get one chance to do this right,” Canady said. “I think we’ve rushed through it because there have been people who are very adamant about making sure that something happens. And I think that we have missed a lot of opportunities in the process to ensure this project was transformative and it would definitely have an impact on all parts of Kansas City.”
Mayor Pro Tem Scott Wagner, 1st District at-large, a candidate for mayor, said he likely would not have voted for the project Thursday if the ordinance had included all the financing arrangements council members are still working on. This way, he said, he gets another bite at the apple.
Council members must still agree on a plan to finance the $90 million in costs already incurred, including $23 million for Edgemoor and its subcontractors for design work, and $48 million to continue design and pay for demolition of Terminal A, one of the three existing “horseshoes” that make up KCI.
Those funds would allow the project to move forward while the city waits for proceeds from the sale of bonds, expected to flow in after the municipal fiscal year ends on April 30.. The bonds will be repaid by fees from airlines that use the airport.
City Manager Troy Schulte said city staff would brief the Airport Committee next week on financing options, but would recommend borrowing from Morgan Stanley, a proposal that emerged after plans to use funds from other city agencies proved politically unpopular.
That discussion was initially expected earlier Thursday, but Justus said the city’s finance department needed more time to prepare information for council members.
Stricker said Edgemoor didn’t need to wait for the results of that discussion to move forward.
“We want to get people to work, and it’s a committment we’ve made to Kansas City,” Stricker said.
The council vote comes more than three months after a revolt by two smaller carriers against a then-$1.64 billion price tag. Airlines that serve KCI came back to the council earlier this month and said they wanted a $1.5 billion airport, which the city’s aviation department and Edgemoor say they can achieve without paring down the planned size or number of gates.
Of the eight passenger airlines that serve KCI, five signed onto the deal, including Southwest, Delta, United, American and Alaska. City officials have said Frontier and Allegiant were not expected to sign because of policies against long airport leases. They will still be able to fly in and out of KCI subject to additional fees.
Spirit said in a letter to the aviation department that while it would not sign, it was pleased to see the cost lowered to $1.5 billion.
“However, we believe that the cost of the proposed development program is still too high and is demonstrably higher than the cost of comparable airport projects around the country,” Spirit’s senior vice president and chief commercial officer, Matt Klein, wrote.
He went on to say Spirit acknowledged the need for a new facility but its cost to operate would more than double when the new facility opens.
“These spiraling costs will result in a significant rise in air fares, borne by Kansas City citizens and visitors, as airlines are forced to offset the increased cost of operating at Kansas City International Airport,” Klein said. “The increased cost burden will also threaten low fare service and reduce competition.”
The letter says the company will monitor construction of the new terminal and hopes to sign on to the agreement when it is complete.