New NoCo airport terminal one step away

FORT COLLINS – Construction on a new terminal for Northern Colorado Regional Airport is likely to begin this summer, assuming the Fort Collins City Council gives final approval Tuesday to a $1 million city contribution to fill a funding gap.

Although scaled back from its original $31 million design to an estimate of $25 million, the 19,000-square-foot terminal still is being designed to include two airline gates — in hopes that it can once again lure scheduled commercial airline service, which it lost in 2019 when Allegiant Travel Co. (Nasdaq: ALGT) canceled its routes from the airport to Mesa, Arizona, and Las Vegas, and last June, when Avelo Airlines suspended flights to Las Vegas and Burbank, California, after just eight months.

Airport officials are eager to get the construction under way, hoping for completion by late 2024, but Fort Collins City Manager Kelly DiMartino warned them at a Feb. 16 airport commission meeting, “Don’t get ahead of the March 7 council approval.”

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The existing terminal, built in 1989, was meant to be temporary, and the need for expansion became evident when modern needs for security lines required more space than is available. The redesign process began in January 2021, and airport officials have said it’s 60% complete but a bit more design work is needed before construction can begin.

The airport has access to $21 million in federal Coronavirus Aid, Relief, and Economic Security (CARES) Act money — which has to be used by July 2024 or else the feds need to be paid back — and the airport has reserves of $2 million. That left a $2 million gap to be covered by the airport’s owners, the cities of Loveland and Fort Collins.

The Loveland City Council voted unanimously to pay its $1 million match, but Fort Collins council members balked, insisting on a series of performance metrics, some of which carried monetary penalties if not met. However, at its Feb. 21 meeting, Fort Collins council members dropped the repayments from the conditions after Mayor Jeni Arndt, who also sits on the airport commission, pushed back.

The ordinance the Fort Collins council was considering included this provision: 

“If for any calendar year from 2024 and 2027 the city is obligated under its current airport agreement with Loveland to pay its share of the airport’s operation and maintenance costs, the city shall be entitled to a credit of up to $50,000 as a set-off to that obligation for each such year and the city of Loveland shall pay any shortfall resulting from the credit; (2) if any of the performance indicators for Silver LEED, public art commitment, building carbon footprint, and enhanced access are not achieved by Sept. 30, 2024, the city shall be repaid $150,000 of the capital contribution for each performance indicator not timely achieved; (3) if the airport’s annual outbound passengers served by air and bus are not 33,000 or more passengers for the calendar year 2027, the city shall be repaid $200,000.”

Those terms would have had to be negotiated with the city of Loveland and included in a new intergovernmental agreement, an idea that left the Fort Collins mayor uncomfortable.

Arndt told BizWest on Tuesday that the repayment provision made no sense because both cities jointly own the airport and “we’re giving this to ourselves.” And at the Feb. 21 meeting, at which the council eventually approved the $1 million outlay on first reading, she asked members to look at the provision from Loveland’s point of view.

“I have a fundamental question of how you can share half of ownership of something and try to force the other 50% to pay you back if certain metrics aren’t met,” she said.

Council member Kelly Ohlson was the lone “no” vote in the council’s 5-1 first-reading approval, noting that he disagreed with the airport’s co-ownership arrangement as well as how the facility is governed.

One Fort Collins resident who also was left uncomfortable with the arrangement forwarded to BizWest some emailed responses he received from airport manager Jason Licon, including his question about the wisdom of building a terminal without an airline tenant.

“The Fort Collins based Landline Co. currently utilizes the terminal, providing ground-based transportation services to and from Denver International Airport offering nine roundtrips daily,” Licon wrote. “Demand forecasts indicate that air service is something that is a sustainable option if adequate infrastructure is available to support it. The vision for the airport under the current dual-city ownership model is to provide more ability for the region to directly benefit from the airport to serve as a multi-modal travel hub.

“The new terminal will replace existing infrastructure that is highly inefficient and costly to operate and maintain since it consists of temporary modular facilities,” Licon wrote. “Air service also provides a strategic advantage since most federal funding is provided to airports with commercial air service. The terminal is designed to enhance this federal financial support that is provided directly through taxes and fees on aviation users.”