Concerns about cost cut for new KCI terminal loom

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KANSAS CITY, Mo. — City council members say they’re ready to move forward with construction on an new airport terminal now that the airlines have reached an agreement to pay for it.

The airlines cut the construction budget to $1.5 billion.

The cost estimate had been $1.64 billion for the new KCI terminal. The airlines and developer Edgemoor Infrastructure now believe they can get it done for a guaranteed maximum price of $1.5 billion.

Council members expressed concerns about what the city may be losing in the new terminal to generate $140-million in cuts. But both Edgemoor and the airlines say they believe they can deliver all the amenities planned at a reduced rate.

Southwest Airlines Managing Director Steve Sisneros says the carriers will pay the entire construction cost plus financing costs estimated to be about $300 million, and all of the interest on the project over 35 years.

“We lose nothing,” said Geoff Stricker of Edgemoor Infrastructure. “Our plan is: we have further design. And the drawings have more information. What our experience and the airlines’ have all shown over time is when you have better information, you get better pricing. So we are all going to roll up our sleeves and work collaboratively to drive down to the lower number. We are confident we can get there.”

A cost sharing deal is expected to be signed and returned to the city by February 25. Six of the current eight carriers are expected to agree to the nine year use and lease agreement.

Allegiant and Frontier airlines are not expected to sign the deal but are expected to continue operating out of KCI, paying higher fees to do so.

Once the new terminal opens, Frontier may sign a five year deal. The airline’s policy is not to commit to anything for more than five years.

The city must now revise the development agreement to reflect the new numbers and determine how to provide short term funding to begin demolition of Terminal A, until bonds are sold in April. That’s expected to happen next week.



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