Rising Costs Prompt Changes to Terminal Expansion Plans at Northern Colorado Regional Airport

Sep. 3—Plans to build a new terminal at the Northern Colorado Regional Airport are still proceeding, but a steep rise in construction costs over the past year has forced the airport commission to reconsider the original design.

At the city of Loveland's recent budget workshop, airport director Jason Licon told City Council that the revised plans reduce the facility size substantially, but bring the price tag down to a more manageable level.

"We've cut the facility down by about a third of what we had originally set out to design," he said. "As a result of that, we're still at about a $21 million estimated cost, which is a $4.5 million gap with what we currently have available."

The expansion plans have been in the works since 2020, after the airport was awarded a $16.7 million grant through the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act.

According to the project website, the seven-member airport commission conducted a "thorough analysis" of the airport's needs, before concluding that an update to the 30-plus year old terminal would be the best use of the "once in a lifetime" funding.

In early 2021, the commission embarked on the design process for the new terminal, starting with a series of workshops with contractors and local stakeholders. After a six-month process, the group finally decided to move forward with a design for a 26,350 square-foot facility featuring a new indoor baggage area, a concession area and brand new parking lot.

At that time, estimated costs for construction were $26.7 million, leaving a budget gap of up to $7.4 million.

By April of this year, at the 50% design milestone, the cost estimate ballooned to $33 million, and the budget gap to $16 million. After a few revisions, the costs were estimated at $31 million in July, though expected to climb from there due to ongoing inflation and supply chain disruptions.

With the clock ticking on the CARES Act funding—the money has to be spent by the end of 2024—and few alternatives to close the large budget gap, the commission decided it might be time to go in a different direction. At the Aug. 24 airport commission meeting, they elected to move forward with a functional, but more cost-effective design.

The revised plan calls for a 19,500 square foot building, but many of the amenities in the original design are removed, including the outdoor waiting area and canopies. The site also keeps the existing parking lot.

"There's a lot of federal requirements for airport terminals," Licon said. "The proposal that we're calling level four addressed all of that, and further cuts would be difficult. We've been able to cut everything that we possibly can, and that gives us that $4.5 million gap at this point."

The shortfall will be made up through grants from the Federal Aviation Administration and money from the airport's reserve funds, Licon said. He also plans to ask both the city of Loveland and the city of Fort Collins, joint owners of the airport, for a capital appropriation of $1 million each.

But getting the money from Fort Collins could prove difficult unless the plans are revised even further to meet Leadership in Energy and Environmental Design (LEED) level gold building standards. That could add up to $2 million to the final construction costs, making the gap even harder to overcome.

However, Fort Collins City Manager Kelly DiMartino, a member of the NOCO airport commission, said that the extra costs could be justified in the long term.

"When you look at the total lifecycle cost of the building, how might that factor in," she said. "Because if you think about more long-term energy efficiency, and some of those things, there may be some additional upfront costs, but would it be more cost efficient for the long-term lifecycle of the building."

The commission will be hearing more from contractor Hensel Phelps about the added costs and potential benefits of further design changes at an upcoming September meeting.

In the meantime, Licon and his team are proceeding with the updated design specs and looking for other potential sources of funding. The revisions have put the project a few months behind schedule. While he is not yet worried about missing the CARES grant deadline, Licon is keeping his eye on the calendar.

"We've got two years, and we're anticipating 12 months for building, so we still have plenty of time," he said. "But we're at the point now where we have to make some really important decision to enable us to utilize that funding most effectively."

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