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Waiting advised on terminal

Fate of '05 terminal expansion tied to wetlands permit

The difficulty of borrowing money for an airport terminal expansion and a new justice center in close succession could push construction on the second phase of improvements at Yampa Valley Regional Airport beyond 2005, Routt County Manager Tom Sullivan said.

If the county succeeds next month in obtaining a wetlands permit it needs to move ahead with construction of the justice center, it should not have a problem with the timeline for the airport expansion.

Routt County hopes to begin work next year on expansion of aircraft parking areas as well as a much-needed addition to the passenger holding area where travelers wait to board their flights at YVRA.

Sullivan told members of the Yampa Valley Airport Commission this week that he and finance Director Dan Strnad are recommending that the county wait until mid-September before pursuing financing options for the 5 percent grant match on the airport expansion. That’s when they will know the fate of a federal wetlands permit for the justice center site. Mid-September also is an important date for locking in federal airport grants for 2005.

“We’re still hopeful we can do the expansion in 2005,” Sullivan said. “The airport project is important to the county commissioners. They want to get it done.”

Sullivan said his presentation to the airport commission was intended to make its members aware of the “realities” of the county’s situation. It was in no way intended to heighten any tension between the city of Steamboat Springs and the county over the justice center issue, he said.

The airport work represents the second phase of a three-part project estimated to cost about $22 million. Federal grants would cover 95 percent of the cost. Strnad estimated the amount of money the county needs to borrow to complete Phase Two of the airport expansion at between $7 million and $8 million.

The planned cost of building the justice center on the preferred site is $15.8 million. Of that, $7 million would come from county reserves. The balance would be financed.

The commissioners have resolved that if the wetlands permit for the justice center site isn’t granted, they would look for an alternative site on Steamboat’s west side. That could mean they would face the additional cost of acquiring more real estate when they already own two potential sites — their preferred site near the Routt County Jail and the original site, which they have since ruled out, on Sixth Street in downtown Steamboat.

Sullivan said the situation is further complicated by the fact that he needs to let the FAA know by mid-September whether the county intends to move forward with improvements to the apron at YVRA and pick up a portion of $5 million in discretionary funding already dedicated to the job.

Strnad said funding the airport expansion involves complex layers of matching revenue streams to different aspects of the construction project.

The county must come up with $1.7 million on its own to complete new parking planned for Phase Two that is not covered by federal grants.

The funding for the apron improvements would allow large Boeing 757 jets to park so that the tails of the aircraft are outside the safety zone on the north side of the runway. That money comes from a different pot of money than FAA grants for terminal projects.

Routt County needs to arrange financing to meet its 5 percent match for federal grants on the terminal expansion. Those loans involve a degree of risk, Sullivan said, because it’s impossible to be certain that Congress will approve airport funds from year to year.

“The debt structure is risky,” Sullivan said. “The risk of repayment is high because you don’t know how much the federal government will appropriate.”

It’s the risk that led Sullivan and Strnad to recommend the commissioners wait to be certain all of the borrowing they need for the justice center is in place before they pull the trigger this fall on the airport project construction slated to begin in 2005.

Sullivan and Strnad agree they would not advise the county to take on any risky debt before securing the funding for the justice center.

Strnad said there are other issues. A fundamental difference between the justice center project and the airport expansion, he said, is that the former is part of the county’s statutory responsibility. Faced with a choice between the two, the justice center is a higher priority, he said.

The prospect of future terrorist acts also heightens uncertainty about the airport project, Strand said. FAA discretionary monies were channeled to security issues in the wake of Sept. 11, 2001, he pointed out.

Sullivan remains optimistic that the Army Corps of Engineers will be persuaded to reverse its tentative denial of a wetlands permit for the county’s preferred justice center site. At the suggestion of the Corps, the county has undertaken additional research to support its request. If the Corps reverses its preliminary finding, the county’s problem will be solved.

“If that happens, we won’t have a funding problem,” Sullivan said.

Chris Diamond, a member of the airport commission, is also president of the Steamboat Ski and Resort Corp. He has a vital interest in seeing the terminal expansion move forward because Ski Corp.’s business success is linked closely to the ease with which vacationers can travel here by air.

“It would be a disappointment if it happens,” Diamond said of a potential delay to the terminal expansion. “We just have a difficult service situation out there. The most important thing to me is what can we do now to make it better?”

Diamond said that if the project is delayed, he would like to see a two-pronged response. The first would be to explore short-term measures that could ease congestion and passenger inconvenience in the holding area. Then, he said, it would be important to develop a contingency plan that would anticipate the possibility that the site for the justice center could be held up for several years.

The concern is that the ongoing community debate over the best choice of sites could lead to litigation and further delays.

Airport Commission Chairman Marty Kolonel concurred with Diamond’s assessment. He said time is too short to arrange replacement funding to cover the county’s grant match for the terminal expansion in time for next year. However, he said that arranging some form of “bridge funding” is a possibility if the justice center issue further prolongs the airport funding delay.

Kolonel remains optimistic the problem will be resolved.

“There’s a will, and one way or another, everyone is committed to getting this done,” he said.

Diamond said the completion of the first phase of the terminal expansion in late 2003 confirmed the importance of the project. That 23,000-square-foot addition created more room for luggage security screening and passenger check-in lines.

“The addition they made last year had a huge impact,” Diamond said. “We’re lucky we had it.”

— To reach Tom Ross call 871-4205

or e-mail tross@steamboatpilot.com


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