DALLAS – The New Orleans Aviation Board has unanimously adopted an $826 million modernization plan at the city’s airport that will be funded in part with $267.5 million of airport revenue bonds.

The board Wednesday accepted one of four options for capital improvements at Louis Armstrong New Orleans International Airport developed since Mayor Mitch Landrieu’s call in August 2011 for a study into how to upgrade the airport.

The capital plan includes a new $650 million terminal and parking garage on 42 acres of vacant land across the airport’s main east-west runway from the existing terminal, an $87 million highway interchange, a $72 million power plant financed with state capital outlay funds, and a $17 million hotel with private financing.

The capital program is to be completed by May 2018, in time for the 300th anniversary of the founding of New Orleans as a French colony.

The analysis of the four options by the team of five consultants on the project said building a new terminal north of the current terminal would be the best solution.

“A new north facility creates the best opportunity for non-airline revenue, stimulates the most jobs for the community, and has the greatest economic impact,” the consultants said. The accepted proposal could also be completed quicker and with less disruption to passengers or airlines than the other three.

Landrieu praised the decision to move ahead with the improvements to the airport, which he called a major economic force in the region.

“Creating a new, modern airport is integral to our success as a world-class travel destination and hub for commerce,” Landrieu said. “It makes economic sense and will create over 13,000 jobs in construction.”

The financial plan for the $650 million terminal project includes $237.5 million of general airport revenue bonds, $207.3 million from the passenger facility fee, $97 million in federal aviation grants, and $26.8 million of state aviation grants. No city funds will be used.

Airport revenues total about $120 million a year from concession sales, leases, and fees, and a facility fee of $4.50 per airline passenger generates another $20 million a year.

The New Orleans Aviation Board’ $141 million of outstanding revenue bonds are rated A3 by Moody’s Investors Service and A-minus by Standard & Poor’s and Fitch.

Aviation Director Iftikhar Ahmad said the new terminal would generate additional air traffic and would be cheaper to operate than the airport’s aging and under-utilized terminal.

The new terminal would be about half the size of the existing 50-year-old facility, with 30 passenger gates and room for another 30 in its three concourses.

Volume at Louis Armstrong New Orleans International Airport totaled 8.6 million in 2012. Activity hit a record of almost 10 million passengers in 2000, but fell to 6.2 million in 2006 following Hurricane Katrina.

Landrieu asked the Aviation Board in 2011 to undertake an “in-depth and robust analysis” of how to turn the airport into a “world-class international airport.” Landrieu said he favored the plan to build a new terminal and demolish most of the current one, which was the option approved Wednesday by the board.

“For over 30 years, we have studied this issue, and we have collectively rejected proposals to move the airport to other locations,” Landrieu said in a 2011 letter to airport trustees. “We cannot afford to let another 30 years go by without a clear path forward.”

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