FAIRBANKS (AP) -- Gov. Frank Murkowski has signed legislation authorizing $288 million in revenue bonds for improvements to the Fairbanks and Anchorage airports.
The legislation approves raising the bonding cap for the airports from $524.5 million to $812.5 million. The state's current bond debt is $427 million.
The bond measure includes $87 million to pay for construction of a new terminal and baggage handling facility at Fairbanks International Airport. Another $5.4 million will pay for reconstruction of the runway and the purchase of maintenance equipment at the Fairbanks airport.
The federal government will contribute $62 million to the Fairbanks projects. A portion of the bond money would be used to provide a state match for federal funding.
The new terminal will accommodate future growth and streamline baggage handling operations, said Kip Knudson, deputy commissioner for aviation at the Alaska Department of Transportation.
The project calls for replacing sections of the terminal built in 1952 and 1969 and remodeling the ticketing and baggage areas, said Jesse Vander Zanden, Fairbanks airport director.
The state plans to issue the bonds in January. Construction would take place between 2006-09, Knudson said.
About 400,000 passengers traveled through the Fairbanks International Airport in 2004, an 11 percent increase over the previous year.
Bond money also will pay for renovation of the A and B concourses at Ted Stevens Anchorage International Airport, a $91.5 million project.
Construction work could start early next year and finish toward the end of 2009, said Mort Plumb, director Anchorage's main airport.
The concourses need improvements to bring them up to current earthquake codes and other codes, Plumb said. They also will be remodeled to make their design more consistent with that of the new Concourse C, which opened last year.
When all the work is done, passengers will be able to move among concourses A, B and C without having to exit and re-enter through security areas, Plumb said.
The bonds will be repaid from revenue the Anchorage and Fairbanks airports receive from airlines, rental car agencies and other concessionaires, parking fees, fuel sales and other funds, Plumb said. To the extent rising airport revenue does not cover the debt costs, airlines will pay higher landing fees, he said.
The annual cost of repaying the bond debt is estimated at $19.5 million, assuming an average interest rate of 4.46 percent, according to a Revenue Department analysis.
Besides the concourses, the bonding should pay for about $52 million in other Anchorage airport improvements. They include runway improvements that will let the airport handle Airbus' new super-jumbo jet, the A380, which might start making cargo runs through Anchorage in 2008, Plumb said.
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Ted Stevens Anchorage International Airport is one of the area's most dynamic employment centers, where job growth has far outpaced the city's broader economy over the past nine years.
The Tulsa Airports Improvement Trust is spending about $23 million on the project to renovate the western part of the airport's terminal space.