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From page 105... ... 105 Austin Bergstrom International Airport, South Terminal A P P E N D I X C Case Studies Transaction Highlights • Austin Bergstrom International Airport had a clear goal of expanding air service, which was met when it chose to redevelop the terminal and adjust the rates and charges structure to attract an ultra-low cost carrier. • Even though Austin Bergstrom International Airport did not use a public procurement process, there was a significant effort dedicated to negotiating commercial terms and the contract as compared to other delivery models. Read the entire page →
From page 106... ... 106 Evaluating and Implementing Airport Privatization and Public-Private Partnerships Austin Bergstrom International Airport is managed and owned by the City of Austin's Department of Aviation. The South Terminal was constructed and opened in 2008 as part of a lease agreement with Mexico-based, low-cost airline VivaAerobus. Read the entire page →
From page 107... ... Case Studies 107 ultra-low-cost-carrier tenants including Frontier and Allegiant. The term of the lease agreement is 40 years. Read the entire page →
From page 108... ... 108 Evaluating and Implementing Airport Privatization and Public-Private Partnerships Two issues drove Denver International Airport's interest in the Great Hall Project. First, Denver International Airport needed to reduce the exposure of travelers and personnel at the screening checkpoints. Read the entire page →
From page 109... ... Case Studies 109 Procurement Phase The procurement strategy consisted of a two-step, RFQ/RFP process to select a predevelopment partner under a predevelopment agreement (PDA) format. Read the entire page →
From page 110... ... 110 Evaluating and Implementing Airport Privatization and Public-Private Partnerships In addition to scoring proposals, the evaluation committee interviewed proposers. First, evaluators read each proposal and then identified questions that should be asked of proposers ahead of (and during) Read the entire page →
From page 111... ... Case Studies 111 construction -- are dedicated to paying the design and construction contract amount, operations and maintenance expenditures before substantial completion date, development fee and bid costs, bond issuance costs, interest paid on bonds before substantial completion, senior debt service reserve account and major reserve account, and costs related to the issuance of letters of credit. Great Hall Partners made a $69.4 million equity investment in the project (approximately 10% of the total capital costs) Read the entire page →
From page 112... ... 112 Evaluating and Implementing Airport Privatization and Public-Private Partnerships concession revenue and remit 80% to Denver International Airport. The developer could receive supplemental payments to make terminal improvements, thereby creating a contingency fund for Denver International Airport to make changes as needed. Read the entire page →
From page 113... ... Case Studies 113 really knew what the true costs or the actual schedule would be. Within a year of beginning the project, Great Hall Partners was seeking nearly $300 million and 3 years more than planned to complete the project. Read the entire page →
From page 114... ... 114 Evaluating and Implementing Airport Privatization and Public-Private Partnerships Airport and Project Context Gary/Chicago International Airport is located approximately 30 miles from Chicago, Illinois, in Indiana's Lake County. The airport's primary service is cargo, charter, and general aviation services, though the airport has hosted commercial passenger flights in the past, most recently by Allegiant Air, which exited the market in 2013. Read the entire page →
From page 115... ... Case Studies 115 the viability of implementing a P3 model, with an eye toward the investment, management, development, and job growth potential that a partnership with the private sector could yield. The committee identified the following "Key P3 Pillars" to guide the decision-making process: • Airport ownership remains with the Gary Airport Authority; • Robust job creation and economic development in the region; • Long-term, strategic community-regional partnership; • Ability and willingness to maximize capital investment dollars for the airport's growth and development of property adjacent to the airport; and • Development of a sustainable Gary/Chicago International Airport -- environmentally, economically, and socially. Read the entire page →
From page 116... ... 116 Evaluating and Implementing Airport Privatization and Public-Private Partnerships (either directly or by securing the commitments of other airlines and service providers) $100 million over the 40-year term. Read the entire page →
From page 117... ... Case Studies 117 of proposals, which included both a scoring component and qualitative discussion. AFCO/ AvPorts entered exclusive negotiations with the City of Gary and the Gary Airport Authority in September 2013 (Gary/Chicago International Airport "Public-Private Partnership Committee Enters Into Exclusive Negotiations with Firm to Invest in Airport and Surrounding Area," October 25, 2013) Read the entire page →
From page 118... ... 118 Evaluating and Implementing Airport Privatization and Public-Private Partnerships Airport and Project Context LaGuardia Airport is the closest airport to Manhattan and served over 14.5 million enplaned passengers in 2017. Per data from PANYNJ, LaGuardia caters heavily to origin-destination traffic -- in 2017 about 86% of passengers -- and to business travelers, with the highest percentage of the three major airports in the New York area. Read the entire page →
From page 119... ... Case Studies 119 Vice President Joe Biden due to its inadequate facilities that reflect underinvestment. Results of an international passenger survey by Skytrax found LaGuardia did not place on the top 100 list for customer satisfaction in 2018; meanwhile, John F Read the entire page →
From page 120... ... 120 Evaluating and Implementing Airport Privatization and Public-Private Partnerships such bridges in the world) opening in 2020 (Barone and Cook, 2019) Read the entire page →
From page 121... ... Case Studies 121 Project Procurement LaGuardia's procurement process took about 3.5 years from RFQ issuance to financial close, in June 2016, due to project scope complexity, evolving bidding requirements, and political interference. Instead of requesting the private entity to provide an upfront payment to lease the terminal, PANYNJ indicated in its RFQ that it required (1) Read the entire page →
From page 122... ... 122 Evaluating and Implementing Airport Privatization and Public-Private Partnerships "executive director and subcommittee, instead of to the board," and second, the risk that LaGuardia would have cost and scope overruns similar to those seen at the World Trade Center (Porter, 2016) Read the entire page →
From page 123... ... Case Studies 123 Los Angeles World Airports valued the ability to partner with the private sector's innovation and expertise while sharing risks and financial responsibilities. The DBFOM method also aligns design, construction, and operation, while emphasizing the high quality and timeliness of the delivery. Read the entire page →
From page 124... ... 124 Evaluating and Implementing Airport Privatization and Public-Private Partnerships to the ConRAC will be roughly 10 minutes. Each train will hold approximately 200 passengers, for a ridership capacity of 10,000 passengers per hour. Read the entire page →
From page 125... ... Case Studies 125 LAX Integrated Express Solutions was announced as the preferred proponent on January 24, 2018. LAX Integrated Express Solutions earned the highest technical score and had the lowest project cost of the three teams that proposed. Read the entire page →
From page 126... ... 126 Evaluating and Implementing Airport Privatization and Public-Private Partnerships Express Solutions will spend the first 5 years of the contract in the design and construction phase and the last 25 years operating and maintaining the automated people mover. At the close of the agreement, the automated people mover system must have at least 5 years of remaining useful life. Read the entire page →
From page 127... ... Case Studies 127 Airport and Project Context Everett Paine Field (Snohomish County Airport) is owned and operated by Snohomish County, Washington. Read the entire page →
From page 128... ... 128 Evaluating and Implementing Airport Privatization and Public-Private Partnerships functions. The new terminal would connect the existing terminal building and the control tower and would feature approximately 30,000 square feet of interior space to accommodate check-in, TSA security screening, passenger lounge needs, boarding, concessions, and baggage handling and claims. Read the entire page →
From page 129... ... Case Studies 129 Luis Muñoz Marín International Airport, Commercial Facilities Transaction Highlights • Bringing together the airlines, owner, and operator in an memorandum of understanding (MOU) was complex, but necessary to complete the project. Read the entire page →
From page 130... ... 130 Evaluating and Implementing Airport Privatization and Public-Private Partnerships The purpose of pursuing a P3 for Luis Muñoz Marín International Airport was to accomplish three main objectives: restore the facility's infrastructure conditions and performance, strengthen Puerto Rico's economic growth, and re-establish the financial stability of Puerto Rico's Port Authority. In February 2013, the FAA approved the 40-year lease of Luis Muñoz Marín International Airport to a private operator, Aerostar Airport Holdings, Inc. Read the entire page →
From page 131... ... Case Studies 131 by Oaktree Capital Management in 2014. In May 2017, Oaktree sold its share of Aerostar Airport Holdings, with ASUR increasing its stake by 10% and AviAlliance purchasing the remaining 40%. Read the entire page →
From page 132... ... 132 Evaluating and Implementing Airport Privatization and Public-Private Partnerships Per the concession agreement, Aerostar is given primary operating control of the airport and its revenue. Under the agreement, Aerostar assumes full responsibility for the airport's management and operation; including any expenses incurred. Read the entire page →
From page 133... ... Case Studies 133 NYSDOT, with the assistance of ESD, coordinated closely in structuring the complex procurement. In addition to satisfying New York State procurement requirements, it also had to comply with procedures as set forth in the APPP that included a preliminary application and approval by the FAA. Read the entire page →
From page 134... ... 134 Evaluating and Implementing Airport Privatization and Public-Private Partnerships As the first of its kind privatization in the United States, NYSDOT and ESD faced various risks and uncertainties. To help with the procurement process, they retained technical and legal advisors. Read the entire page →
From page 135... ... Case Studies 135 The lease allowed for a sale by SWF Airport Acquisition any time after the fifth year, subject to the NYSDOT's written approval. Sale of Lease In 2006, SWF Airport Acquisition decided to focus its U.S. Read the entire page →

From page 105...

... 105 Austin Bergstrom International Airport, South Terminal A P P E N D I X C Case Studies Transaction Highlights • Austin Bergstrom International Airport had a clear goal of expanding air service, which was met when it chose to redevelop the terminal and adjust the rates and charges structure to attract an ultra-low cost carrier. • Even though Austin Bergstrom International Airport did not use a public procurement process, there was a significant effort dedicated to negotiating commercial terms and the contract as compared to other delivery models.