The Port of Pasco may be able to pay for a $35 million "once in a lifetime" remodel of the Tri-Cities Airport terminal without having to break the project into chunks.
Recent increases in airport fees, such as parking and car rentals, will enable funding the full project to double the size of the terminal building, port commissioners were told Wednesday.
"You can do the entire terminal," said Stephen Horton of Leibowitz & Horton Airport Management Consultants. "It is financially feasible and we think prudently so."
The proposed conceptual design for the terminal includes moving the staircase and restrooms to the front of the building to open up the area near the security checkpoint. Security, ticketing and baggage areas would be expanded.
A new concourse past security will feature a glass wall looking out on the airfield, with gates to the right and left.
Port Commission President Jean Ryckman said the numbers are encouraging. It appears possible that the port will be able to avoid phasing, which is something it wanted to do.
Avoiding the use of tax dollars is important because the airport fees are paid by passengers, not the general public, Ryckman said.
"We believe that the people who use the facility should be the ones who are paying for it," she said.
The port is starting with about $8.7 million to fund the project. That includes the $3 million port commissioners decided to save for terminal improvements from parking lot revenue and passenger facility charges from airline tickets, said Linda O'Brien, the port's director of finance and administration. The remainder is from airport operating cash flow from 2013 to 2016.
About $1.7 million would come from airport improvement program entitlements. And a $1.2 million grant from the Transportation Security Administration could pay for the baggage area improvements, Horton said.
The port would issue a bond for about $23.7 million, paid back over 20 years using passenger facility charges and airport revenue, Horton said. Airport revenue includes money from the parking lots, car rentals, Bergstrom Aircraft and terminal rents.
The port will need about $1.9 million per year to pay back the bond, Horton said. Conservatively, the port will start out with about $1.2 million from passenger facility charges and $1.7 million from general airport operations each year, and those revenues will continue to grow.
The port will need to delay some projects, such as parking rehab, to free up enough cash to pay for the terminal improvements, Horton said.
Port Commissioner Ron Reimann said he was impressed that staff was able to get to the point of funding the whole terminal remodel project in one go. Earlier, it appeared the port would be millions short in trying to fund the full project without phasing.
The port increased user fees in the past year or so to improve airport revenues, said Randy Hayden, the port's director of planning and engineering.
There is a risk to everything, Horton said, especially when the port is bonding four times as much money as it has before, but conservative projections show the project is financially feasible.
The financial analysis bases revenue from the airport improvement program and passenger facility charges on fewer boardings than are actually expected, O'Brien said.
And then those projections were lowered by 10 percent to 15 percent, Horton said.
"I'd call it cushions squared almost," he said.
Even if the number of boardings drops to its 2008 level -- prior to the recent boom -- the port could still afford to pay for the project, Horton said.
Staff will continue to look for additional funding, such as federal or regional dollars, to lower the risk, Hayden said.
The final decision on the remodeling project will happen later, said Jim Toomey, port executive director.
-- Kristi Pihl: 582-1512; firstname.lastname@example.org