Airlines, not taxpayers, will fund $30 million Eagle County airport terminal expansion
Eagle County Regional Airport Expansion
• $29.5 million in bonds to be sold later this month.
What that buys
• 91,000 square feet: Size of the terminal currently.
• 141,000 square feet: Size of the terminal after the expansion.
The 50,000 square feet of additional space includes departure lounge and concessions space that will accommodate people in restaurants and bars, where passengers can relax and also keep an eye on their gate; six new gates, four upstairs and two downstairs; expanded passenger hold rooms and reconfigured security.
• The airlines are picking up the tab through the fees they pay to operate at the airport. The airlines pay their rent based on airport operating costs, and part of those operating costs covers the existing debt.
• Millions of dollars in previous debt was scheduled to be paid off this year. That would have cut debt payments from $2.2 million to $1.3 million per year. In turn, that would have cut the airlines’ payments to the airport almost in half.
• The airlines agreed to keep their current payment levels, as part of the plan to pay for airport terminal expansion and improvements. That money will pay off the new bonds.
• Those bonds will be sold this month: $29.5 million at around 4 percent interest. The airport’s credit rating is baa-2 through Moody’s.
• Jet bridges for the four new upstairs gates will be purchased separately. The airport authority has stashed enough money in its savings account that it can pay cash for four jet bridges, around $700,000 each.
• The airlines will pay a fee for every person who walks through those jet bridges. Those fees will generate about $350,000 a year.
Airport Fact vs. Fiction
County tax dollars are being spent on this project.
False: No Eagle County tax dollars are used to fund airport operations. The airport operates completely on its own revenue sources, derived from airline fees, concessionaire revenue, Federal Aviation Administration grants, lease payments, etc.
The county could spend this money on other community needs
False: The FAA and other federal regulations require that every cent of money generated from fees and grants at the airport must be spent on the airport for aviation purposes.
If the county stopped making expensive improvements, flights would be more affordable.
False: The fees the county charges airlines to operate in the Eagle County airport account for about 3 percent to 5 percent of the airlines’ total operating costs at the airport. There are no guarantees the airlines would lower ticket prices by a corresponding amount if fees were reduced.
The county is building for future growth and this project is not necessary project right now.
Debatable: The county says the improvements will position the airport to accommodate future growth but also address immediate foot traffic flow issues in the terminal.
This project should be deferred until the economy improves
Doubtful: The county is paying off prior debt and wants to maintain current airline payment levels. Airline rates and charges are based on the airport’s debt service and operating fees. Lower debt also means lower fees from the airlines.
Source: Eagle County Airport Terminal Corp.
GYPSUM — County commissioners on Monday voted to spend $29.5 million of the airlines’ money to expand the Eagle County airport.
The project is part of a 20-year improvement plan that includes expanding the terminal, adding air bridges and improving traffic flow.
“This was part of quite a public process. The current and future needs of the county and the airport make this a welcome project,” said Chris Romer, CEO of the Vail Valley Partnership and member of the EGE Air Alliance, a nonprofit consortium of government and business interests working to enhance air service at the county airport.
Follow the money
No taxpayer money is spent to operate the airport, and no tax money will be spent to expand the terminal, said Bryan Treu, county attorney and interim county manager. The Federal Aviation Administration and other federal regulations demand that money generated through airline fees, federal grants and concessions stays where it’s generated.
“Every dollar generated at the airport has to stay in the airport,” Treu said.
Airlines will pay for the terminal expansion through the fees they pay to operate at the airport, Treu said.
Parts of those fees cover millions of dollars in previous debt that was scheduled to be paid off this year. If it had been paid off, then those airline payments would have been cut from $2.2 million to $1.3 million.
The airlines agreed to keep their current payment levels as part of the plan to pay for airport terminal expansion and improvements.
“We asked the airlines if they’d keep the same level of lease payments if we made these improvements. They said they would,” Treu said.
Part of those airline lease payments covers the airport’s debt.
“If we don’t do this, the airlines pay us less. We would be walking away from money,” Treu said.
The county will sell $29.5 million in bonds later this month. The interest rate will be around 4 percent, Treu said.
“We need to bear in mind that for many visitors, the airport is their first impression of this area,” said Adam Ambro, architect with Gensler, the firm that will design the project.
Construction is scheduled to begin in April, after the winter flights end with the conclusion of the ski season.
For the 2018-19 winter season, commercial gates will move from the terminal to the Vail Valley Jet Center when construction begins, Ambro said. By the winter of 2019-20, the new terminal should be ready to go.
The airport is owned and maintained by Eagle County. The three county commissioners comprise the Eagle County Air Terminal Corp., a nonprofit formed in 1996 when the terminal was built that oversees airport operations.
Staff Writer Randy Wyrick can be reached at 970-748-2935 and firstname.lastname@example.org.