San Diego’s Green Build

Terminal project to add capacity and enhance the passenger experience

“Design/build gives you the ability to shorten the timeframe up a bit, and allows you to design and build at the same time,” explains Enarson. “With design/bid/build, you design everything 100 percent, then bid and start building. If you find you have to make changes, speed up the schedule, or modify the design, the process can affect the schedule, and the budget.”

Enarson says the airport is taking full advantage of the bidding market, and that everything is coming in 20 and 30 percent below estimates due to a very competitive market place. “It is a good time for us to develop this project; it’s the best time to build,” he adds. “We are getting the biggest bang for our buck right now.”

The Green Build program is divided into two joint venture packages:

• Contract 1 work (led by Turner/PCL/Flatiron) will include ten new jet gates, expanded dining and shopping options, as well as terminal and airfield improvements.

• Contract 2 work (led by Kiewit/Sundt) will include construction of roadways, parking lots, elevated departure curbs (Smart Curb), and buildings and bridges.

With regard to concession contracting, the airport is moving to a contracting model that utilizes multiple primes in individual units, going away from the single retail/concession prime contractor. The Green Build also incorporates more of a local flavor with regard to the concessionaires, relates Enarson.

“Our board made a commitment to keep as much of the project as local as we can,” he says. “Not only is it an advantage in the program to be in the marketplace right now because construction costs are more competitive, but it’s also a time when the region needs the jobs. We will be up to 1,000 jobs at the midpoint of construction for this project [2011/2012].

“Instead of letting out a single contract for pieces of work, we’re breaking it down so we give opportunity to the smaller local contractors who can’t bid on a large dollar piece.

“ ... And we are not only just breaking it down, we are actively reaching out to local contractors. We go out and meet with the different contracting agencies, and have been hosting open-house events so they can better understand how to do business with us.

“We also have a bonding program where a small contractor who couldn’t get the necessary bond to work here — we would underwrite that bond. We are a supporter and underwriter of the Turner School of Construction Management. That brings in small contractors and helps them understand the construction process.”

Selling the stakeholders

“Airlines spend a lot of time in airports telling them not to build anything because of where the economy is,” remarks Enarson. “One of the things that was happening before the downturn was we were totally full; our 41 gates were occupied and we’d have anywhere from 14 and 16 planes per night that couldn’t get a gate.

“Carriers knew we needed the facility, and they know San Diego is a strong market — they are running more than an 85 percent load factor here. They support the development and support moving forward with the additional ten gates.”

Enarson says the airport did something that is fairly unique in the industry, at least to this degree, with regard to stakeholder outreach.

“We began programmatic design for the terminal almost four years ago — during that we spent a year where we brought in all of the stakeholders ... airlines, concessionaires, internal and external stakeholders that use the airport ... and got their take on what they wanted to see, and what they didn’t want to see,” explains Enarson.

“Do we always agree, no — but do we keep open communication, yes.”

SAN provides a residual lease structure on the airfield and compensatory on the terminal .

“We are going to more of a commercial compensatory,” says Enarson. “We basically get all of the revenues and the airlines only pay for the space that they use, then we make up the difference by paying for the other space.”

The cost per enplaned passenger here is currently $6.50/$6.60. When the terminal is complete, that rate will rise to somewhere between $10 and $11, he adds.

The lease term length here is usually five years, or no agreement at all, relates Enarson. “If your market is really strong the airport can say we don’t need an agreement … because if a carrier leaves, another will come in,” he says.

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