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Edgemoor breaks down price increase for new terminal

Posted at 1:01 PM, Oct 31, 2018
and last updated 2018-10-31 19:21:41-04

KANSAS CITY, Mo. — The KCI-Edgemoor team is explaining to 41 Action News the $1.9 billion price tag for the new terminal that's leaving some fliers with sticker shock.

According to Edgemoor Managing Director Geoffrey Stricker, that figure includes the financing costs for the terminal.

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There's a difference between the project cost and the total cost once you add in bond financing. The project cost was first estimated at roughly $1 billion, but it increased to $1.4 billion in June. The figure now stands at $1.6 billion. Edgemoor attributed that increase to additional gates and accompanying infrastructure, which were requested by the airlines over the summer.

"That's made the building grow from about 750,000 square feet to over a million," Stricker said.

LISTEN: 41 Files Podcast breaks down change in cost for KCI

Meanwhile, the cost with financing is increasing from $1.6 billion to $1.9 billion. 

To use an example that's more familiar to most people, it's akin to buying a house but paying more once the mortgage and closing costs are figured in. 

"It costs money to borrow money," Councilwoman Katheryn Shields said.

Opinions in City Hall about the new price tag are split. 

"I don't know if we anticipated the financing to be over $300 million, so that's a little alarming," Councilman Lee Barnes said.

Councilwoman Heather Hall reiterated the timeline and budget were two reasons why she voted against the project in the first place. 

"I'll question everything up until it's time to make a vote," she said. 

The City Council still has to approve a development agreement with Edgemoor, which will include a guaranteed maximum price for the terminal. 

Meanwhile, Mayor Pro Tem Scott Wagner is waiting to hear from the airlines, since they're footing the bill on the project. 

KCAD Director Pat Klein is currently meeting with airline executives around the country to present the design and budget. Representatives from the airlines are expected to share their thoughts with council members next month.

"I'm kind of waiting to see if they have a problem, because if they have a problem, then we've got a big problem," Wagner said. 

Stricker emphasized he has not received any pushback from the airlines on this figure. 

"They've worked collaboratively with us. They are in every meeting we have every single week on design, on budget, so they've known how this has progressed over time," he said. 

According to Edgemoor, the final price isn't the only change for the project. Due to a last minute change on the environmental assessment, construction is being pushed back by about 60 days. Edgemoor is tentatively setting a January 2023 opening for the terminal, although Stricker hopes they will be closer to the October 2022 date previously set.