Government & Politics

Panel approves KCI terminal financing as crews prepare to break ground within weeks

Animated renderings show proposed approach to new KCI terminal

Animated renderings show the proposed approach to the new terminal at Kansas City International Airport.
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Animated renderings show the proposed approach to the new terminal at Kansas City International Airport.

After weeks of wrangling, Kansas City on Thursday settled on a plan to cover early costs for the new terminal at Kansas City International Airport.

Members of the City Council’s Airport Committee voted unanimously to issue $90 million in bonds to keep work moving on the $1.5 billion venture. It also approved several pieces of legislation for the project’s long-term financing.

Thursday’s vote comes after the City Council last week approved agreements with the airlines that serve KCI and developer Edgemoor Infrastructure and Real Estate to set the project in motion.

“It’s a big deal,” said 4th District Councilwoman Jolie Justus, a mayoral candidate and chair of the committee, “because this will allow us to keep the project moving forward without ever having to put any pencils down.”

The council is not in session next week, so a final vote on the financing ordinances is expected March 21.

The $90 million the city wants to borrow for design costs and other expenses already incurred has been a point of contention as the legal and financial framework for the project nears completion.

The total includes $23 million the city has committed to pay Edgemoor and its subcontractors. Without a short-term funding source, that money wouldn’t be recouped by the close of the city’s fiscal year.

City staff had considered a short-term loan or temporarily borrowing the funds from other parts of the city’s budget, which proved politically toxic.

The rest of the funds are expected to help pay for early work, while the city waits for proceeds from the bond sale that will provide the project’s long-term financing.

Those bonds can be sold once the city and airlines execute the use and lease agreement that lays out the fees airlines will pay to finance the project and use the new airport. That agreement, based on a term sheet the council approved last week, is expected by the end of May.

Committee members also voted to alter the city’s master bond ordinance to allow for the particular type of bond they plan to sell to finance the terminal. The ordinance, which governs how and in what order KCI revenues are spent, allowed for general airport revenue bonds, but the city won’t be using those.

But despite the unanimous vote, some council members still aren’t pleased.

Councilwoman Teresa Loar, 2nd District at-large, sits on the committee and is a frequent critic of the airport deal. She said she doesn’t believe “for one minute” that annual payments for the airport will total $104 million, down from more than $120 million when the project was expected to cost $1.64 million.

“This has gotten so complicated and so convoluted, and how we’re moving money around and who we’re borrowing it from and where it’s going to — I think it’s just a shell game is what it is,” Loar said.

But she said the “votes weren’t there” to hold the proposals in committee for further discussion.

“I will continue to do my research, and I will speak out and I will tell you what I find, but as far as trying to hold up anything, I can’t and won’t do it because it’s just not there,” Loar said.

Justus said she disagreed.

“Right now at this time, I am very comfortable with every dollar figure that has been given to us,” Justus said. “I’m also very comfortable with the fact that none of this is ever going to come from the general fund. None of it is going to come from tax payers. The airlines have signed a term sheet, which we’re legally obligated to follow, that says they are paying for this and backing the debt.”

Loar and Mayor Pro Tem Scott Wagner, 1st District at-large, a mayoral candidate, both took issue with the need to change the city’s master bond ordinance.

When the city was selecting a developer to build the new airport, it disqualified the KCI Hometown Team, led by Burns & McDonnell, for failing to comply with that policy.

“If we have created two sets of rules, that is wrong,” Wagner said. “And I’m not going to vote for anything that suggests that we can tell someone that they’ve broken the rules and therefore they’re out, but then we accept someone else’s plan and we decide we can change the rules for them. That is absolutely wrong. I’m not going to support that.”

Wagner voted in favor of the development agreement and other documents last week, but said it was only because he knew the council would have another chance to vote on the project financing.

A proposal from Wagner, who does not sit on the Airport Committee, to infuse equity to move the project along was tabled after the committee voted in favor of the plan to issue bonds to pay for short-term costs. He said he was disappointed and maintains that it could help save money on the project.

Justus disputes that and said city staff had indicated it would be more expensive.

Officials announced Thursday they would hold a groundbreaking ceremony for the new terminal later this month.

The terminal is expected to open in 2023.

Allison Kite reports on City Hall and local politics for The Star. She joined the paper in February 2018 and covered Midterm election races on both sides of the state line. She holds a bachelor’s degree in journalism with minors in economics and public policy from the University of Kansas.