DALLAS – A $1 billion terminal at Kansas City International Airport would be designed, financed, and built by engineering firm Burns & McDonnell under a public-private partnership proposal to be outlined to the Kansas City, Mo., City Council on Thursday.
The engineering company said it would work with Kansas City-based insurance giant Americo and other investors to line up financing and equity for the project and then build it at no cost to the city.
The privately funded airport terminal, which would still be owned by the city, would be the first of its kind in the nation, said Kansas City Mayor Sly James.
“We don’t have to issue any bonds. We don’t have to take on any debt. We don’t have to pay out of the general fund. We don’t have to raise any taxes. This is a privately financed deal,” he said. “They will be the ones to raise the capital. They are the ones who will be on the hook. We have no risk here.”
The memorandum of understanding to be considered by the city council on Thursday would give Burns & McDonnell the exclusive right to design and build the new terminal, which could replace three existing passenger terminals.
The proposal would have to be approved by Kansas City voters, probably in November, under an ordinance adopted by the council in February 2014 that gives residents the final say “before the city demolishes or replaces any terminal at any city-controlled airport.”
City Manager Troy Schulte said Burns & McDonnell executives first approached him about the terminal proposal several months ago.
“This is a heck of a lift for them to do this,” he said. “I’m not sure there’s anybody else in the country crazy enough to do it.”
The private partners are taking a chance on a much-needed project, said Ray Kowalik, president of Burns & McDonnell.
"This is a huge financial risk to our company and a huge investment that we’re making between now and getting approval with no money coming back to us if it doesn’t move forward,” Kowalik said at a Friday news conference.
Burns & McDonnell employees took more than 33,000 flights through Kansas City International in 2016, an average of more than 90 flights per day, Kowalik said.
The memorandum of understanding would require the eight airlines at Kansas City International to pay rent at the new terminal, which together with federal grants and other sources of revenue is expected to total $85.2 million per year for 30 years. The private partners would also be allowed to levy a 1% tax on retail sales at the airport if the additional revenues are required.
In May 2016 James canceled a plan to put a $964 million single-terminal modernization plan up to a vote at an August election. He made the move after polling revealed that less than 40% of frequent voters in the city supported the proposal.
A special mayoral advisory group, which was appointed by James in 2016, recommended earlier this month that a new central terminal is needed. A city fact sheet released last year said the existing terminals “do not make sense financially or environmentally and cannot accommodate needed modernization for passenger convenience, airline expansion, baggage and security requirements."
The proposed new terminal would have at least 35 gates and 6,500 parking spaces, three times the current capacity.
Construction will require demolition of the Terminal A parking garage as well as terminals A and B. Construction on the new terminal is to be completed four years after it begins.
The airport has $151.5 million of outstanding general airport revenue bonds, including $66.7 million supported by federal passenger facility charges, and $20.3 million of debt supported by other revenues.