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KCI Terminal Project Balloons in Cost, Size

Monday, November 12, 2018

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Missouri’s Kansas City International Airport could be facing another bout of turbulence as the project balloons in both size and cost: The current plan has grown about 40 percent in square footage and has doubled in costs, up to a nearly $2 billion price tag.

What Happened

The latest figure, reports the Kansas City Star, is about $1.923 billion, which includes $401 million in finance costs. If finance costs are taken out of the equation and a different number of federal grants are factored in (which are still up in the air), the cost comes in at $1.634 billion, still well over earlier estimates.

Geoffrey Stricker, managing partner for terminal developer Edgemoor, told the publication that the airlines (who are financing the project), have requested four additional gates, more parking for airplanes and larger gate holding areas. All that extra space is what is driving up costs, Stricker says.

Not only is that the extra cost for extra materials, but that bumps up financing costs as well, which were about half—$289 million—when the project was right at $1 billion.

Pacman5, CC-SA-BY 3.0, via Wikimedia Commons

Missouri’s Kansas City International Airport could be facing another bout of turbulence as the project balloons in both size and cost: The current plan has grown about 40 percent in square footage and has doubled in costs, up to a nearly $2 billion price tag.

The growing costs are worrying some council members as the project has already been marred with controversy.

Previously

Edgemoor was awarded the bid in 2017 after a contentious bidding process. The firm nudged out firms AECOM, Jones Lang LaSalle and Burns & McDonnell for a new terminal at KCI.

Some took issue with the project proposed as a no-bid contract by Burns & McDonnell, a local firm, leading to a public outcry when the bidding was opened up. In addition, several airlines that fly out of the airport came out in support of Burns & McDonnell; though they did add that they’d be willing to work with any of the four teams that had bid on the project.

Another glitch was that the bidding process was handled differently by each company, with some releasing financial information and design renderings publicly. Others also publicly criticized the process.

According to the Star, Karl Reichelt, an AECOM Capital senior manager, had said that the committee’s follow-up questions to bidders were “moving the goalposts” and allowing other competitors to alter proposals.

Burns & McDonnell held rallies and alleged conflict of interest, going so far as to say within recent weeks that the process should start over.

In the end, the selection committee said it recommended Edgemoor because of terminal project experience and finances, but also because the company kept a low profile.

Then, in December 2017, the Kansas City Council rejected the original memorandum of understanding with Edgemoor, with members posing concerns about the agreement’s vague terms and insufficient community benefits, but a questionable provision that put the city on the hook for up to $30 million, even if the deal never closes.

When it came to light that council was questioning the MOU, AECOM and Burns & McDonnell, announced that they had teamed up and were waiting to step in if the council decided to complete scrap the deal with Edgemoor.

However, the council and Edgemoor came to a revised agreement in February, which included a more robust description of community benefits, such as free or subsidized transportation options and licensed child care for workers. It also added contributions to several charitable organizations, detailed an apprenticeship program and made commitments to hiring minority and women-owned businesses.

   

Tagged categories: Airports; Budget; Commercial Construction; Terminals

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