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Cost of replacement airport terminal estimated to soar over $1 billion

Cost of replacement airport terminal estimated to soar over $1 billion
Although a 355,000-square-foot, 14-gate replacement terminal is feasible on an area known as the B-6 site at Hollywood Burbank Airport, the overall project is estimated to cost more than $1 billion, according to officials. (File Photo)

The Burbank-Glendale-Pasadena Airport Authority took a somber look this week at the estimated costs of the replacement terminal project, coming in over $1 billion, which was higher than initially anticipated.

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An official from BuroHappold Engineering presented a report during an authority meeting on Monday regarding the feasibility of a 14-gate, 355,000-square-foot terminal on an area known as the B-6 site.

Although it was determined that constructing the terminal in the northeast quadrant of the airfield — which was formerly where Lockheed Corp. had its Skunk Works operation — could be done, BuroHappold conservatively estimated the entire project will cost roughly $1.24 billion, said David Herd, the North America managing director of the consulting firm.

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BuroHappold estimated construction costs, which include building the new terminal and demolishing the existing facility, at about $844 million alone. Originally, the the terminal was expected to cost about $400 million, though the demolition was not part of that estimate.

Herd added that soft costs — some of which include designing the terminal, inspections and permitting — came in at about $285 million. Being conservative about its estimates, the firm also factored in about $110 million as contingency.

Herd said although the report determined that a terminal can be built on the B-6 site, it was merely an exercise to see if it could be done.

The concept mocked up for the analysis was based on what was laid out in a development agreement and does not factor in the design of the facility.

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Airport officials are limited to designing up to 25% of the project until the review of an environmental impact study is completed by the Federal Aviation Administration, which is projected to be completed in about two years.

The consultant noted that various parts of the project, some of which include the depth of the terminal, airport access, public parking structure and air-traffic control tower, will be addressed during the design phase, which is projected to occur during the third quarter of 2020, Herd said.

Airport officials also presented their own cost estimate for the project, in which the overall costs would be about $1 billion.

The airport estimated construction costs to be about $724 million, soft costs at about $210 million and the contingency to be about $70 million.

John Hatanaka, the airport’s senior deputy executive director, told authority members their numbers are just as conservative as the recently released estimates.

However, he added that it’s better to overestimate costs and work down rather than continuously add to the project’s budget.

To fund the project, Hatanaka said the authority will be contributing $100 million from its airport development fund. The airport will also be using about $137 million from federal grants.

Hatanaka added that airport officials also plan to take out a bond with the U.S. Department of Transportation.

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Zareh Sinanyan, the authority’s president, said he was not completely shocked by the project’s price tag, but he was concerned about how the high cost will affect airport operations.

“I hope this change is not going to have a material impact on the feasibility of this project,” he said.

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