Burns & McDonnell faces risk and reward with KCI deal

Proposal would shut down competitive bidding
Posted at 7:38 PM, May 12, 2017
and last updated 2017-05-12 20:38:40-04

One company is risking up to $1 billion to build a new single terminal Kansas City International Airport.

But that same company, Burns & McDonnell, in that proposal would have exclusive rights to design and build the airport, shutting out other potential bidders.

By assuming that risk, Kansas City Mayor Sly James hopes voters, who would have to approve the plan, will support it.

"A proposal that takes zero money from the city. It has no tax increase for any Kansas Citian and it adds not a penny of debt to the city's debt level or budget," James said at a Friday news conference at KCI.

While there’s no risk to taxpayers, there’s a huge one for Burns & McDonnell.

The company will front up to $1 billion in privately raised finances to help design and build the new airport. It would potentially recuperate that money through airline payments and passenger fees resulting in a 3 percent profit margin or $30 million.

"This is a huge financial risk to our company and a huge investment that we’re making between now and getting approval with no money coming back to us if it doesn’t move forward,” said Ray Kowalik, Burns & McDonnell President and CEO.

In exchange for that risk, the company would have exclusive rights on the design and build of the terminal, leaving other companies without a chance to bid on the airport project.

"That’s not the way we’d like to see it happen,” said Steve McDowell, BNIM President and CEO.                   

McDowell’s firm worked on the design and build for KCI’s current three terminal layout nearly 50 years ago and worked with Burns & McDonnell then.

He’d like another shot now.

"We are very interested in being a part of it as I know many, many other architects in the city are and already expressed interest in doing that,” McDowell said.

In March, we reported Burns & McDonnell was a major contributor to the GO Bond campaign and found city records show Burns & McDonnell has had 50 KCMO city contracts with 17 of them for more than $1 million.

In a separate deal with the city, the company won’t pay any property taxes for the next 15 years in exchange for expanding its world headquarters in Kansas City.

Now Burns & McDonnell wants to lead the $1 billion airport project.

"We need a new modern KCI. Not just for us, but for the rest of the business community and for our citizens," Kowalik said.

Charles Renner’s Kansas City based firm Husch Blackwell LLP is leading a public-private partnership tied to a project at the Denver Aiport.

Renner told the Kansas City Business Journal last August the key to that project working is competition and recommended a similar plan for KCI.

He said the new KCI proposal doesn’t have competition.