DALLAS – Kansas City (Mo.) voters will go to the polls on Nov. 7 to decide on a $1 billion public-private renovation of Kansas City International Airport following a decision by city officials to leave open the option of financing the project with airport revenue bonds.

Kansas City International Airport renovation will consolidate three existing passenger terminals into a single facility with 35 airline gates and a parking garage.
Kansas City International Airport renovation will consolidate three existing passenger terminals into a single facility with 35 airline gates and a parking garage.
Kansas City International Airport

The project will consolidate the airport’s three passenger terminals into a single terminal that can accommodate all the airline ticket counters and gates with space for expanded dining and retail areas.

Kansas City has received four proposals from its request for interested private partners willing to design, build, and finance a passenger terminal with 35 airline gates and an adjacent parking garage with at least 6,500 spaces. The city would retain ownership and operational control of the new terminal.

The city council decided on the compromise ballot language late Thursday night after several weeks of debate over the financing ended when Councilwoman Katheryn Shields agreed to drop her demand that the project be financed with up to $990 million of revenue bonds. The council barely beat the Aug. 24 deadline to put the ballot question to put it onto the November ballot.

Councilman Jermaine Reed said he proposed the compromise to end the dispute over whether to provide public financing for the terminal project.

“We have not always agreed on the best method to achieve the construction of a new airport terminal in Kansas City,” Reed said.

The question "asks them should we build a new airport, but it also says that if there is a need for us to go out for any public funds that we will come back and make sure that there is voter approval for that as well," he said.

The November ballot will include a question asking voters if the existing terminals should be demolished and a new terminal built “with all costs paid solely from the revenues derived by the city from the operation of its airports and related facilities, and without the issuance of general airport revenue bonds unless such general airport revenue bonds have received prior voter approval?”

The airport revenue bonds probably will not be needed but allows the city to issue debt if it turns out that bonds would be less expensive than private financing, said Councilwoman Jolie Justus. In either event, she said, city taxpayers will not pay for the terminal project

“It allows the voters to decide,” Justus said.

Mayor Sly James, who postponed an election for a new terminal in 2014 because polls indicated it would fail, supported a ballot question without a reference to revenue bonds but said he was pleased with the compromise ballot proposal after more than five years of discussing the need for a new terminal.

"This is the first milestone to doing what we absolutely must do if we're going to keep this city vital and keep the momentum and provide for the businesses in this city," James said. “It has been a long, long trudge. Now residents get to have their say.”

A council committee has been reviewing proposals for the project from four teams of private investors and is expected to recommend the preferred private partner on Thursday.

Groups seeking the terminal work include: KCI Hometown Team, which includes Kansas City-based Burns & McDonnell and its partners Americo Life Inc. and Corgan Architects; KCI Partnership, a consortium led by Los Angeles-based AECOM that includes Turner Construction and Oaktree Capital Management Ltd.; BlueScope Construction Inc. of Kansas City in partnership with Jones Lang LaSalle Midwest LLC; and Edgemoor Infrastructure and Real Estate LLC, a unit of Maryland-based Clark Companies.

Burns & McDonnell revised its earlier proposal to say it could design and build a new $1.1 billion terminal for $15 million less than its earlier estimate for a terminal costing $1 billion.

The company amended its estimate after the city said the private investors should assume that $156 million of passenger facility charge revenues and federal airport grants would be available for the project.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.