February 20, 2012

BWI renovations likely funded through FAA fees

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By Dan Menefee
Dan@MarylandReporter.com

The Maryland Aviation Administration will spend $216 million on capital projects in fiscal year 2013 — $94 million more than the current fiscal year — to fund federally mandated runway improvements and connect Concourses B and C at Baltimore-Washington Thurgood Marshall Airport.

BWI Airport

Baltimore-Washington Thurgood Marshall International Airport

The projects will have little impact on the Transportation Trust Fund because the MAA plans to issue $300 million in non-traditional revenue bonds to fund the projects, pending approval from the FAA to use the Passenger Facility Charges to pay the debt service.

The Passenger Facility Charge is a $4.50 fee collected for the FAA assessed to each passenger that passes through the airport.

MAA Executive Director Paul Wiedefeld told the House Appropriations Committee on Monday that approval from the FAA to use the fees for bond repayment is expected in March.

Passenger traffic through BWI-Marshall Airport broke a record last year of 22.4 million, and revenue from the fee is expected to exceed $90 million in FY 2013.

Weidefeld said connecting Concourses B and C needs to be done to expand security screening checkpoints and widen Concourse C to meet fire safety codes.

A silver lining for the Silver Diner?

To clear the way for renovations to Concourses B and C, the MAA has agreed to relocate the Silver Diner, the airport’s largest food concession, for $1.2 million more than the state is contractually obligated to pay.

An analyst with the Maryland Department of Legislative Services raised concerns at the hearing Monday because the agreement could set a bad precedent with vendors in the future.

But Wiedefeld told the committee the agreement was more than fair to keep 100 people working while renovations were underway. Otherwise, the diner would have to close for nine months and struggle to meet the debt it incurred in 2006 to establish the airport location.

Wiedefeld said the Silver Diner accounted for $1.35 million in revenues to the MAA in the first four years of operation and that the company has agreed to pay base rent of $600,000 annually when renovations are complete in July 2013, an increase of $167,000 a year.