Mineta San Jose Int'l Airport to Scale Down Expansion Plans

SJC officials, forced by a stumbling economy and worried airlines, will soon unveil a drastically scaled down plan for expansion.

To accommodate the ambitious aim of finishing the majority of the construction by the end of 2010, Sherry plans to ask the city to approve using a single master contractor to design and build the airport. Traditionally, the city awards separate contracts for designing and constructing various phases of public projects, choosing the lowest bid.

But Sherry said Thursday that there's no way the airport could be built by the end of the decade under that traditional method. So he wants the city to use a new process, approved by voters as Measure D in 2004, that will grant far greater powers to one master contractor.

Measure D was controversial with some officials, including Councilman Reed, a mayoral candidate, who feared that it could be used as a shortcut by politicians seeking to give rich contracts to favored vendors without adequate public review.

But Thursday, Reed said he believes that some new procedures San Jose recently implemented for soliciting proposals from contractors will ensure that the airport project bidding will be transparent and fair.

The previous airport master plan was crafted in 1997 and has been amended a dozen times. That plan envisioned a peak of 17.6 million passengers flying into San Jose by 2010. If San Jose stayed with that plan, it would cost $4.5 billion, and would require airlines to pay average fees of $17.50 per departing passenger, up from a current $4.33.

Airlines balked

Asking airlines to pay $17.50 per passenger became impossible after a series of setbacks including the dotcom bust, the Sept. 11 terrorist attacks and a resulting drop-off in passengers, as well as a spate of airline bankruptcy filings and spiking airline fuel costs. San Jose's passenger growth has slowed so dramatically, too, that the city now envisions reaching its peak passenger levels only in 2017.

The current plan, which Sherry said the airlines support for the most part, calls for airlines to contribute no more than $9 per departing passenger.

Keeping the master plan affordable for airlines while maintaining San Jose's ability to increase flights is crucial, said Dan Fenton of Team San Jose, which operates the downtown convention center. Fenton said his group backs the new plan.

``We understood the economics of the cost per passenger,'' Fenton said, ``and realized if we got ourselves into the numbers of the plan . . . it would be a potential negative situation with the airlines. That's got to be our primary focus . . . how we grow flights.''

Like the old plan, the new airport plan calls for San Jose to issue bonds that are supported by those fees from the airlines, as well as revenue from parking, concession and other sources. Unlike the old plan, the current proposal would also use the $4.50 that is tacked on to each ticket, by federal law, to help fund the airport expansion rather than reserving it for other capital projects.

San Jose Mercury News

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