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Kansas City Airport Developer Faces Community-Improvement Funding Failure

Edgemoor Infrastructure & Real Estate
The developer for the new terminal at KCI has hit a regulatory road block that may keep it from fulfilling a promise to fund community initiatives.

Developers of the new terminal at Kansas City International airport may not be able to follow through on a promise to help fund initiatives for minorities and disadvantaged parts of the city.

The so-called Community Benefits Agreement is a package of initiatives that include free or subsidized transportation options and licensed childcare for workers, as well as an on-site health clinic, expedited payment and workforce training during the project.

Edgemoor had previously placed a value of more the $20 million on the package, which would be paid through airport revenue. But in a letter sent to airport officials last month, first obtained by KSHB-TV, the Federal Aviation Administration says Edgemoor cannot use airport revenue for nearly half the items in the agreement.

Edgemoor officials told city council last week they were in conversations with the FAA about the agreement.

In the letter, which is dated July 19, 2018, the FAA objects to using $1.25 million airport revenue to donate to several non-profit organizations, such as the Love Thy Neighbor program, which helps elderly people with minor home repairs.

“There does not appear to be a nexus between this contribution and a financial benefit to the airport terminal program and this does not constitute a minimal charitable contribution for support of community activities or charitable purposes,” the letter states.

It also denies airport funding for historic preservation initiatives, Northland infrastructure projects and a workforce training program.

While the FAA said revenue could be for transportation and childcare for workers, it highlighted concerns with several initiatives aimed to provide financial support for disadvantaged and minority-owned businesses. The letter said these services needed to be available to the all firms and contractors on the project.

In all, the FAA rejected the use of nearly $14 million in airport revenues.

While that number is just a drop in the bucket for the $1.3 billion project, the community benefits agreement was a big sticking point between city officials while they were selecting a developer.

The Mayor and city councilmembers promised a project that would be “transformative” for the entire city.

Back in December 2017, councilman Lee Barnes was ready to cut ties with Edgemoor over the community benefit package. “I personally don’t think they’ve made the commitment to this city that requires us to move forward with (them on) a project that is this substantial,” Barnes said.

Edgemoor Managing Director Geoff Stricker has repeatedly assured city officials that any costs not authorized by the FAA could be covered by Edgemoor, but the letter indicated that the developer cannot be required to fund such programs. The agency recommended Edgemoor find private equity instead.

In an e-mail, Stricker said Edgemoor remains committed to the community benefits agreement.

"The conversations with the FAA are on-going right now. We anticipate having more clarity on the FAA's requirements for the Community Benefits Agreement over the next 60 days. Our team remains committed to the Community Benefits Agreement, and we will follow the direction of the FAA, City Council and City staff," Stricker said.

Lisa Rodriguez is a reporter and the afternoon newscaster for KCUR 89.3. Follow her on Twitter @larodrig.

Slow news days are a thing of the past. As KCUR’s news director, I want to cut through the noise, provide context to the headlines, and give you news you can use in your daily life – information that will empower you to make informed decisions about your neighborhood, your city and the region. Email me at lisa@kcur.org or follow me on Twitter @larodrig.
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