It will Cost $4 Billion to Modernize and Expand RDU; It Has Only About Half that Much

When Raleigh-Durham International Airport approved a long-term plan for growth in late 2016, it projected the number of passengers passing through the terminals would increase to about 14.2 million a year by 2031.

Instead, a hot local economy and the arrival of several low-cost carriers has swelled the number of air travelers in the region, so that RDU has already surpassed that number 12 years sooner than expected. To keep up, RDU has plans to refurbish and expand the airport, including additional gates, a new main runway and a new rental car facility within walking distance of the terminals.

It’s not clear yet how it will all be paid for, which is why the business community agreed, at the airport’s request, to form a task force to develop ideas. The Regional Transportation Alliance, a program of the Greater Raleigh Chamber of Commerce, released a first draft of the task force’s work on Friday that includes proposed higher fees for passengers and airlines and larger contributions from local governments.

“There are going to be things here that everybody’s going to like, and there’ll be some things everybody’s going to dislike,” Joe Milazzo, the alliance’s executive director, told a gathering of business and government representatives. “The task force goal is to get your attention, highlight the issue and propose a series of options while avoiding an excessive burden on any one group of stakeholders in our market.”

The airport’s master plan, called Vision 2040, called for about $2.7 billion worth of construction; the pace of growth has increased that number to nearly $4 billion, airport officials say. Most of the money will come from state and federal grants and income generated by the airport from such sources as parking, rent in the terminals and passenger fees.

RDU president Michael Landguth says the airport has enough cash and credit to cover its building plans over the next decade. But beyond that remains unclear, resulting in a potential shortfall of $1 billion to $2 billion.

Landguth said he and other airport officials want to study the task force’s recommendations before identifying the most promising ones. But he said having the business group making RDU’s development a priority will help.

“The engagement with them and this entire community is what’s important right now,” Landguth said. “I can’t be the only one carrying the conversation to Washington, D.C. It’s got to be a broader conversation and a broader audience that’s got to be part of that overall solution.”

New fees among task force’s ideas

One of the task force’s recommendations is to push for increasing the passenger facility charge on each airline ticket by $1, to $5.50. That charge is set by Congress, which has capped it at $4.50 and isn’t inclined to raise it in the face of strong opposition from airlines.

Other potential changes recommended by the 12-member task force are within the control of the airport and local governments. They include:

? Increase landing fees paid by airlines and establishing a new landing fee for general aviation flights.

? Charge a $2 access fee for cars and trucks visiting the RDU campus.

? Persuade the four local governments that own RDU — Raleigh, Durham and Durham and Wake counties — to contribute more to the airport. Each government currently pays $12,500 a year to RDU.

? Reallocate the local share of rental car taxes to the airport. The part of those taxes that don’t go to state government are now used to support mass transit and, to a lesser extent, the general fund of county government.

? Consider building a new terminal north of Terminal 2 and getting airlines to pay for it.

? Revisit the airport’s Vision 2040 master plan “given the reality of an adjacent, beloved state park.” The master plan called for allowing a quarry or some other industrial use on 105 acres of airport land next to William B. Umstead State Park, causing an uproar that has landed in court.

The task force was divided over whether the quarry is a good idea. Under the lease approved by the Airport Authority last March, Wake Stone Corp. is expected to pay RDU $20 million to $25 million, mostly in royalty payments, over the next 25 to 35 years.

But that amounts to less than 2% of the projected gap, and it comes at a price to RDU, the task force wrote.

“The controversy over the quarry has clearly created a distraction, consuming valuable staff and board time, energy, focus, and political capital,” it wrote. “And this issue has thus far been a lost opportunity to have a needed conversation with the region about the sheer magnitude of the funding gap facing the airport — that gap will be $1 (billion) to $2 billion, whether or not the quarry moves forward.”

RDU’s development plan calls for building a new 11,500-foot runway capable of handling flights to Asia by 2025, and then adding new gates to Terminal 2 by building extensions, or piers, off the existing building. In the meantime, the airport is also considering adding as many as a dozen more gates to Terminal 1, along with the new baggage, ticketing and security screening areas needed in a bigger terminal.

The Regional Transportation Alliance’s RDU report can be found at www.letsgetmoving.org/RDUAID.

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