Duluth Terminal Takes Off

Duluth International Airport’s new $78 million terminal was more than a decade in the making. But the new terminal’s wow factor makes it well worth the wait

The new parking garage holds approximately 400 cars. There are also long- and short-term grade-level spots, a cell phone lot, employee and rental slots, for a total of 1,283 spots. “The loss of about 150 spots to the garage of 400 was a good trade-off,” he says.

The traffic flow throughout the parking areas and near the terminal building is improved. The old facility had single drop-off lane, for everyone. “At times it could get very congested, and potentially it was not too safe,” says Werner. “Now we have two parallel lanes; one is exclusively commercial — taxi, livery, hotel shuttles.”

DLH also overhauled revenue source management with parking, and will be phasing in an e-tag system to track commercial vehicle use, for tracking and cost recovery on a per-use model, rather than a blanket yearly fee. Further, Werner says, “We’ve gone through our airplane and tenants’ agreements, to look for ways to make them more consistent and better for all.”

Baggage Up

After 9/11, baggage systems everywhere needed revamping. Here, DLH experienced some growing pains as it struggled to comply. A new baggage system was needed that worked with current and anticipated security requirements, and was convenient for customers too, says Werner.

“We now have two fully automated lanes that are designed to run one at a time, with full redundancy,” he says. “For added assurance, we also have a third lane that’s manual; and there is a fourth lane for oversized baggage.

“We commissioned and tested all these systems before opening,” he continues. “TSA’s third-party contractor brought in all sorts of baggage to see where we would find any troubles. The installation company also tested this — for weeks. We tested for nearly two months, and it was one of the things that went smoothest on opening day (officially January 14, 2013).”

Paying for the Project

Ryks says his biggest headache was getting, keeping, and perfecting financing. Many sources — FAA, Minnesota, and ultimately Duluth and others — were employed; each with its own headaches. But his efforts paid off — the entire tab for the project was paid for with federal grants and state bonds.

“We didn’t want to go outside our ‘self-sustaining’ status at the airport. We didn’t want to put additional demands on the taxpayers. I thought this would be a real win, if we could pull this off without additional local taxpayer dollars. Ultimately, we were able to do that.”

He credits the help of others and working hard to sell the project to others as the reason for their financing success. “Northwest helped us with the state legislature to secure approximately $16.6 million in state bonding. It’s not a loan; you find a match,” says Ryks. “We used federal discretionary money. That was challenging — the state was looking at budget so we really had to sell this. We would have lost substantial FAA dollars, if we couldn’t get approval.”

Paying contractors was a challenge since Congress balked on long-term FAA financing. “With Congress’s inactivity, we lived on continuing resolutions. We’d get our bids in, and then we’d wait to see what the FAA would get as ‘discretionary’ money. It was frustrating … Contractors don’t like to work that way, either. We’d continue to extend our Notices to Proceed, from 60 to 90 days; then we’d push it out to maybe 120 days. In Duluth, we don’t have a long construction season. The timing … was a big challenge.”

The FAA money goes through the state’s aviation department, which also slows the process down. “We issue pay requests to the state, they sent them to the FAA; the FAA then reimburses the state, and the state pays us. And, during this project, the state government shut down.” Ryks arranged a $4 million line of credit with Duluth. “Then, right after the state shut down, the FAA shut down. This was an $80 million project. It probably could have been done in 2 or 2 ½ years; but because of the lack of an Aviation Bill, the shutdowns and the uncertainty, it took more like four years. “

But Werner explains that he’s happy to finally be open for business and only 0.5 percent over budget to boot.

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