After about 40 years of talking about how best to update New Orleans’ airport, the State Bond Commission on Thursday approved $650 million in borrowing to get started.
The money will be used to build a 650,000-square-foot, three-story terminal north (closer to Interstate 10) of the current facilities at Louis Armstrong International Airport.
Plans to make over the airport have been discussed since 1974, said Iftikhar Ahmad, the executive director of the New Orleans Aviation Board.
State Sen. Ed Murray, D-New Orleans, said a lot of different interests and people came together to finally get the airport renovations started.
The way the airport evolved since opening in 1946 had created difficulties, such as having different security checkpoints for each concourse, and a lot of wasted space. The hangarlike terminal that was the airport’s architectural signature opened in 1959. Over the years, additional concourses were tacked on. Much of that will be torn down.
The new north terminal will be about half the size of the existing terminal, which will decrease costs for maintenance and cooling, but the layout will be more efficient. Because of the airport’s present sprawling configuration, correcting the issues and modernizing the facility to attract more business would have caused considerable disruption for travelers and the airlines, Ahmad said.
The airport makeover will create two connected concourses, which would allow for easier transfers, and 30 gates, with expansion to 42 gates possible in the future. The gates will be accessed through a single security point, which can expand and contract as traffic dictates. Restaurants, a hotel and other concessions will be more efficiently arranged, which should translate into more money for the airport, he said.
The aim is to increase the amount of revenue from auxiliary sources in order to keep the fees charged to the airlines lower, which would mean more flights to New Orleans, he said. The airport could expand its international business that has largely left since the 1970s, much of it going to Houston.
“We’re trying to make New Orleans a better place for business,” Ahmad told the Bond Commission.
Remaking the airport will create economic development for the Baton Rouge-New Orleans corridor. He ticked a list of companies from around the country that moved to cities with more efficient airports.
The New Orleans airport handled 80.3 percent of Louisiana’s passengers in 2014, according to Bureau of Transportation Statistics. It was the nation’s fastest-growing airport in 2013, handling about 9.2 million passengers.
Armstrong International creates $485 million in state and local tax revenues and accounts for about $5.3 billion in local spending. In 2023, with a new terminal, the airport would create $534 million in state and local tax revenue and generate $6.4 billion in local spending, Ahmad said.
The north side terminal would cost $396 million; the rest of the money would go to other related projects, such as airport surveillance radar, a low-level wind shear alert system and construction of taxiways for the planes. Another $110 million would be used to build access for traffic and parking facilities.
Concourses A, B and much of C in the present facility will be torn down and the land will be leased to businesses needing to locate facilities near the airport. Concourse D will be renovated to handle charter flights and will be transformed into office space.
Third parties will pay for a hotel at the new terminal as well as construction of direct access to the airport from an Interstate 10 exit for passengers driving in from Baton Rouge and points west, according to the Bond Commission’s analysis. About 35 percent of the passengers using the New Orleans airport now drive in from the west and have to exit onto Williams Boulevard, turn right, then left, then drive alongside a runway to reach the terminal.
The bond would be repaid from non-airline related revenues, Ahmad said. The airport makes money from parking, restaurants and associated businesses without directly affecting the fees charged to airlines for using the terminals. But the airlines using the facility have agreed to help if those projected revenues fall short.
With the State Bond Commission’s approval, the Aviation Board can close on the loans by Feb. 26. The designs should be completed by the end of June and construction contracts taken care of over the summer.
Ahmad said construction could begin in the fall and new airport facilities will be opened by May 2018, in time for the city’s 300th anniversary.