Small Airlines Worry Bigger Price Tag On New Kansas City Terminal Could Force Them Out
Kansas City’s aviation director assured city officials earlier this month that the airlines that use Kansas City International airport were fine with a higher price tag for a new single terminal.
On Thursday, it was revealed that’s not necessarily the case.
City officials finally learned on Nov. 1 that the guaranteed maximum price for construction of the project will be $1.46 billion. Additional permits and financing costs push the overall price tag to $2 billion.
Spirit and Allegiant — two smaller airlines — both sent letters to the Aviation Department saying that $2 billion figure could force them to raise fares and charges to an unsustainable level.
The airlines that fly in and out of KCI will ultimately be on the hook for the cost of the new terminal.
The news surprised Mayor Sly James, who, along with the rest of the city council, was assured two weeks ago that the airlines were on board with the price.
“It appears that perhaps we placed a little too much trust in the process,” James said at an airport committee meeting Thursday.
The increase from the original $1 billion figure is due, in part, to the fact that the airlines requested a larger terminal.
Southwest Airlines, American Airlines, United and Delta — the larger carriers — all co-signed a letter saying they support the scope of the project.
James says it’s time to take a more active role in negotiations between the airlines and the aviation department, rather than allowing them to work it out internally, where the interests of competing airlines can get in the way.
“This is easily the most important economic development project the city has undertaken in 50 years,” James said. “It took six years just to get to this point and I’m not going to see it fall apart now because different agendas that are not in the best interests of the city are being pushed.”
Aviation Director Pat Klein said he’s working to arrange a meeting between the city manager, the mayor and the airlines.
A public dispute over a tiny portion of the project
The dispute appears to center around who pays what portion of the cost of a $20 million baggage claim system — which is less than two percent of the cost of the entire project.
Klein says until this point, the process between the airlines has been extremely collaborative.
“The (aviation) department has underestimated how (the smaller airlines) were going to dig in, to tell you the truth,” Klein said.
City Councilman Quinton Lucas stressed that terminal developer Edgemoor isn’t to blame for hang-up between the larger and smaller airlines.
“I want to make sure to recognize the fact that they reach out to us frequently, they communicate with not just the council, but the public through community meetings, they communicate with the press often,” Lucas said.
Aside from the letters to aviation director Pat Klein, the city council has yet to hear directly from the airlines. Representatives have been scheduled to appear before the council several times but so far have rescheduled each time.
Members of the public also packed city council chambers to testify overwhelmingly in support of the project.
Many, like Joe Maben of the Minority Contractors Association of Greater Kansas City, were minority or women business owners worried about whether they would share a piece of the work.
“I want to comment Edgemoor and Clark Weitz Clarkson construction for their outreach efforts to the minority- and woman-owned business community. Efforts that have allayed many of these fears,” Maben said.
Edgemoor remains committed to hiring minority-owned businesses for 20 percent of the project, and women-owned firms for another 15 percent.
Those goals are higher than the ones required by the city's human relations department.
If Edgemoor fails to meet those higher goals, the city can assess damages of up to $7 million.
The city airport committee will meet again Nov. 29 to continue working minutiae of the development agreement, which will set the guidelines and governance of the project.
Lisa Rodriguez is a reporter and the afternoon newscaster for KCUR 89.3. Follow her on Twitter @larodrig.