The Mystery $600 Million

In their push to construct a new $1.2 billion terminal at Kansas City International Airport (MCI), officials with the Kansas City Aviation Department (KCAD) appear to be exaggerating the costs of terminal renovation and downplaying the costs of a new terminal.

According to KCAD, keeping MCI’s current configuration will require a $600 million renovation project in the next few years. This $600 million figure breaks down into $440 million for the terminal and $160 million for airside improvements (runways, aprons, drainage, etc.) and centralized de-icing pads. These airside costs are necessary under any plan, but the de-icing plan that KCAD lays out is expensive and assumes a new centralized terminal. In addition, it is unclear when and where these improvements will take place, as KCAD’s five-year capital improvement plan only calls for $144 million.

KCAD has yet to release an independent analysis of the supposed $600 million improvement costs. But if history is any guide, it is inflating costs. The last renovation of MCI’s terminals took place from 2000 to 2004, and cost the airport $183.4 million. It may be that construction costs have exceeded inflation, but the Aviation Department should explain why the new renovation would cost more than double the adjusted expense of the last.

KCAD may be downplaying the relative cost of a new airport by inaccurately comparing the costs of new construction versus maintaining its terminal. To put it simply, the costs of maintaining the current terminals are long-term and include incremental improvements over a number of years while the price tag of a new terminal is just the cost of its construction. These two prices cannot be accurately compared, as a new terminal would also require upgrades and refurbishment.

To fairly compare the costs of a new terminal with continuing upgrades, the KCAD must compare like to like. We need to see all the costs over the same period of time for any option. Although the origins of KCAD’s calculations are opaque, with a fair analysis, the relative expense of a new terminal may be greater than advertised.

Officials for KCAD and the Kansas City government have not demonstrated to the public why the current plan is the most cost-effective. Given the expenses of this new terminal, the Aviation Department would do well to seriously consider a whole slate of options. If KCAD has already done so, it should fairly and exhaustively explain why alternatives are not feasible.