Denver airport seeks to spend up to $560 million more on projects

Denver International Airport says the dramatic air-travel slowdown during the coronavirus pandemic provides the perfect opportunity to accelerate long-planned refurbishment work on all three of its concourses.

Airport officials are asking the City Council on Monday for approval to spend up to $560 million more on DIA’s existing concourse expansion projects. The $1.5 billion program, underway since 2018, is adding 39 gates.

DIA says the additional work will include customization of those new gates for United and Southwest airlines — which signed leases for most of them earlier this year — as well as potential upgrades of restrooms, moving walkways, ramps and outdoor gate-apron areas that have aged since the airport’s 1995 opening.

That refurbishment work had been planned for several years out, but now DIA officials are considering putting those tasks on the same track as the new gates, which are pegged for completion by early 2022.

The council is set to vote on expanded contracts for the existing concourse project partners during its 5:30 p.m. meeting.

Two main considerations are behind the plan: While DIA has had to slash its operating budget and freeze hiring to absorb the hit from the pandemic, it’s flush with cash that can only be spent on capital projects. It’s sitting on well over $1 billion from bond proceeds and other sources, and DIA expects to receive another $269 million from the federal coronavirus stimulus bill.

The other factor is that passenger traffic has nose-dived by more than 90%. Projections of a slow recovery in air travel could give the airport leeway to close down more areas than it could during normal use, officials told council members in briefing documents in recent weeks.

At the same time, the airport says it is considering delays for some other planned projects, including a study for a seventh runway, parking upgrades, and improvements and widening on Peña Boulevard.

DIA estimates the additional concourse work’s cost will range from $425 million to $560 million. The expanded contracts set a limit at the higher amount, but DIA says any work will be based on task orders, subject to bidding between prime contractors. Spokesperson Stacey Stegman says the setup allows for work to begin quickly and comes with “efficiencies and cost savings” because the contractors are already working on site.

“If we end up not doing the whole $560 million, that’s fine,” said Councilman Kevin Flynn, who has warmed up to the proposal, in an interview. “I like this approach better than issuing the whole contract. I do think there’s a very good opportunity for (DIA) to emerge … in a stronger position than we were before, because of these improvements we’re making.”

He also likes that the added construction would support the economy during the recession.

Pittsburgh’s airport has put a $1.1 billion modernization project on hold during the pandemic, but it was still in the design phase. In Denver, airport and city officials are confident that air-traffic levels will justify the expanded gate capacity.

But there’s plenty of uncertainty about the pandemic’s potential effects.

“If traffic doesn’t bounce back,” Flynn said, “then we do less work — and we spend less of the bond proceeds.”

DIA has faced some skeptical voices on the council in recent years due to the amount of money it spends — all self-generated — and problems on its separate terminal renovation. Last year, amid tussles over the $650 million budget and delay projections, the airport terminated its contracting team. Work by a revamped project team restarted in March.

The airport’s proposed concourse contract expansions would allow increased spending of up to $265 million for a Holder-FCI joint venture; $240 million for a Turner-Flatiron joint venture; $20 million each for Jacobs Engineering and HNTB Corp., for architectural and design work; and $15 million for project manager WSP USA.

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