Sept. 26--The Austin City Council, chasing revenue to expand its booming airport, on Thursday will consider long-term parking and commercial leases at Austin-Bergstrom International Airport that could bring in $95 million or more over the next several decades.
That expansion will include adding seven gates to the east concourse by fall 2017, as well as two new concourses that would include 24 more gates some years in the future. Construction has started on a $62 million "east infill" project with added security, customs, ticketing and baggage-handling facilities.
Overall, airport officials foresee spending $470 million on the airport over the next five years, including almost $230 million on the terminal, $25 million on expanding the apron area, and about $150 million on parking and other buildings on the 4,000-acre airport site.
Airport passenger traffic, after a brief slump in 2009, has seen steady growth, and this year could reach a record 10 million. The airport has announced four new nonstop destinations this year, including two to Mexico, and in 2014 will add its first European nonstop flight, which will go to London.
The lease measures to be taken up Thursday by the council -- which would authorize airport officials to negotiate final details of the two deals with private companies and then sign them -- had been set for council action in early August and then pulled down. But Pete Winstead, an Austin lawyer representing Scott Airport Parking in its bid to lease up to 64 acres on and near the airport, said council concerns about the plan to add thousands of covered parking spaces have been allayed.
"I think, based on many meetings with council members, everyone sort of gets it now," Winstead told the American-Statesman. "They need that revenue to finance the new gate expansions."
And, Winstead said, the two private parking operators located just outside the airport along Texas 71 represent a competitive challenge to the airport's current parking offerings. Those companies, while they charge a bit more per day, have covered parking spaces and offer oil changes, car washes and other services to customers while on their travels.
Scott, in its initial phase of a several-year project, would build about 2,100 covered parking spaces north of the Airport Hilton and on an airport-owned parcel north of Texas 71, along with a "pet-and-jet" boarding facility for dogs and cats, and maintenance facilities comparable to those offered by the private parking operators.
"That's the right product that the city needs right now," he said.
Council Member Chris Riley, a bicycle and alternative transportation advocate who has had concerns about some past airport parking expansions, said he supports the Scott proposal, which ultimately could add 10,000 or more spaces. Under the tentative terms of the deal, the city initially would get 45 cents a square foot annually from Scott -- or about $500,000 a year for the 26 acres in the first phase and as much as $1.7 million annually for the entire 64 acres at future, higher rental rates. The city also would get a percentage of parking revenue that begins at 1 percent and would reach 10 percent in the final five years.
"The numbers are pretty big," Riley said. "So it seems to be a pretty good deal from the city's standpoint."
Winstead said that, while the final terms have yet to be negotiated, the deal could bring the city $84 million over the 40-year life of the agreement. Construction on the first phase likely will start about midway through 2014, officials said, and take about eight months.
The preliminary terms of a 13-acre commercial lease with ABIA Retail are similar in form, city officials said, with the city getting 40 cents a square foot annually in rent (this figure would increase every five years based on the consumer price index) and 25 percent of the developer's net revenue after expenses. The rent alone would raise an estimated $11 million over 40 years, according to airport spokesman Jason Zielinski. Officials declined to provide an estimate of how much the airport might take in from the profit-sharing side of the deal.
That commercial development, between Spirit of Texas Drive and Presidential Boulevard north of the terminal, could include two small hotels, several restaurants, retail and a convenience store that would sell gasoline. Riley, although saying he expects both leases to be approved by the council Thursday, said he wants to know more about the appearance of the development.
"There are many forms of retail. My question is, what form will this take?" Riley said. "All I've seen are maps with big colored areas, and that doesn't tell me much about what this retail will look like."
The developer will have to follow city guidelines, Zielinski said, and the airport director will have the right to approve or deny the plans.
"The developer is required to build a first-class facility," Zielinski said.
Up to now, the airport generally has built its own parking facilities, including about 1,700 surface lot spaces just now opening to the public. But Zielinski said that bringing in the private sector not only will bring in money for airport expansion but also save capital that otherwise would have gone to parking facilities.
Copyright 2013 - Austin American-Statesman
