City Hits Snag in Talks with Airlines to Pay for New Terminal at Cleveland Hopkins Airport
CLEVELAND, Ohio – The city’s plan to pay for a new terminal at Cleveland Hopkins International Airport has hit a snag, as several airlines have questions about the project and its increasing costs.
Airport director Bryant Francis, speaking before a Cleveland City Council committee Wednesday, said the city initially hoped to have a new lease agreement with the airlines in place by the end of this year. The agreement would outline a plan to pay for the first phase of the project, now slated to cost about $1.1 billion.
Instead, the city plans to extend the existing lease agreement for another two years, while negotiations continue on the scope and cost of the new terminal.
The project calls for the near-complete rebuilding of the aging, cramped terminal, which dates back to the 1950s. New construction will take place on the footprint of the existing terminal, in a series of phases triggered by increasing passenger numbers.
Previously, the entire project, spread across a decade or more, has been listed at a cost of about $2 billion.
Documents shared with City Council show the total cost of the project now at $2.9 billion, including $1.1 billion for the first phase and $1.8 billion for later phases, which include rerouting roadways into and out of the airport.
After the meeting, Francis offered this explanation for the increase in costs: “As we are gaining more clarity surrounding construction timelines, combined with the fact construction costs in the U.S. have increased since then, our consultants have refined cost estimates and will continue to do so going forward as necessary.”
In addition, the project timeline shared with City Council included an anticipated groundbreaking in January 2026. Officials previously said they hoped to break ground in 2025, the centennial anniversary of Cleveland Hopkins, which was the first municipally owned airport in the country.
Francis said that early work on the project will likely commence in 2025, with an official groundbreaking in 2026.
But before construction begins, the major airlines that operate at Cleveland Hopkins have to agree to pay for the project.
Francis said he is confident a deal can be reached.
“What’s clear to me is all airlines recognize there is a need for infrastructure investment and improvement – that isn’t being questioned whatsoever,” said Francis, who started work at Cleveland Hopkins in May. “It’s all in the details, as with anything, and that’s where we will focus much of our discussions in 2024.”
Though the lease will be extended for two years, Francis said he hopes the city and airlines can come to an agreement next year.
Talks with the airlines regarding those fees commenced in 2022 and were expected to conclude this year.
“However, as that time approached, it became evident that several airlines were not ready to execute a new agreement,” Francis told city council. “Questions remain surrounding the total cost and how we got to that number.”
Francis said he, along with airport Chief Financial Officer Christine Gilmartin, met with representatives from each airline individually, “to better understand their unique positions.”
After those conversations, a decision was made to extend the existing lease agreement.
The Plain Dealer/cleveland.com reached out for comment to the three largest carriers at Cleveland Hopkins – United, American and Frontier.
The first phase of the rebuild includes an expansion of the main terminal building, including new spaces for ticketing, customs, baggage claim and security, plus new concourses, additional parking and a relocated car rental facility.
The airport will take on debt for the project, to be paid back via airline fees and rent, as well as other airport revenue, including parking and concessions. No local tax dollars will be used.
Francis told council that the airport is on pace to welcome about 10 million passengers in 2023 – about the same number as 2019, the year before the COVID pandemic brought air travel to a near standstill.
Other highlights from the meeting:
* Parking revenue for 2023 is exceeding projections, according to Gilmartin. Money generated via city-owned lots on the airport grounds was initially projected at $38.2 million for 2023, but will be about $43 million, she said.
* A restroom renovation project is scheduled to get underway in early 2024, funded in part by a grant from the Federal Aviation Administration.
* Also in 2024, the city plans to invest in additional security measures around the perimeter of the airport. The airport has had several high-profile perimeter breaches in recent years, including an incident last year that shut down the airport on the day before Thanksgiving. Dina Wilson, chief of administration and operations for the airport, declined to provide specifics about what was planned but said investments would focus on early detection. “It’s about that rapid response and how we can mitigate problems quickly,” she said.
Read more:
Frontier Airlines to open crew base at Cleveland Hopkins airport, with more than 400 new jobs
Cleveland Hopkins officials begin talks with airlines to finance new $2 billion airport rebuild
Relief is coming: Cleveland Hopkins airport bathrooms slated for $2 million in improvements
©2023 Advance Local Media LLC. Visit cleveland.com. Distributed by Tribune Content Agency, LLC.
