KANSAS CITY, Mo. -- The airport committee approved a plan Thursday to sell nearly $1.8 billion in bonds to pay for a new terminal at KCI Airport.
The city is using the Economic Development Corporation's Industrial Development Authority to issue up to $125 million in bonds, which would jump start construction of the new terminal project.
A groundbreaking date has already been set for March 25.
The first bond issue includes $90 million to pay for demolition of Terminal A and other start up construction costs.
More than $10 million of this initial money is needed for capitalized interest, bond issue costs and to establish a debt service reserve fund.
Although the financing passed the committee unanimously, Councilwoman Teresa Loar believes the project should have been funded with airport revenue bonds, which voters would have to approve.
"(Councilwoman) Katheryn Shields even put a resolution together to use airport revenue bonds because 99.9 percent of airports are built in this country with airport revenue bonds," Loar said. "We are just doing it convoluted and very complicated. So in the end I’m sure it will cost us a lot more money."
City Finance Director Randy Landes estimates the airport, through payments from the airlines, will pay about $104 million a year to service the debt.
There is about $110 million in existing airport debt from previous renovations and parking lots that will be wrapped into the new debt payment for the first eight years.
A proposal to include a private equity investment in the new terminal was not considered by the committee. Chair Jolie Justus says the city's analysis of the idea concluded that it was more expensive and the airlines did not support it.