Interest rates for bonds sold to construct a new transit center at Bob Hope Airport came in lower than expected, reducing the annual debt obligation by more than $1.25 million, officials reported Monday.
About a half hour later, the Burbank-Glendale-Pasadena Airport Authority approved contracts totaling roughly $81.2 million to build the first phase of the center, which is slated to be completed in about two years. The project will consolidate all train, bus and car rental services under one roof.
Airport staff had expected interest rates of 6.25% and 7.5% for the two types of 30-year bonds that were sold to finance the project, bringing their estimated annual payment to a little more than $7 million.
But the rates actually came in at around 4.8% and 5.6%, pushing down the annual debt service to about $5.8 million, according to the airport authority.
The total amount of the bonds was a little more than $82 million, according John Hatanaka, the airport’s senior deputy executive director.
Prior to bond pricing, the estimated cost of the project was $108.9 million, Hatanaka said. The final cost estimate is $112.6 million, he added, due to costs incurred for the first design effort on the project and issuance of the bonds.
“Well, today’s the day,” said airport Executive Director Dan Feger, referring to the end of a two year-journey to get the project to the construction phase.
Airport officials were forced to go back to the drawing board last June after bids came in between $47 million and $69 million above a projected cost of $112 million.
Design changes included lopping off the center’s fourth floor and reducing the amount of pricey steel on a replacement parking structure.
Revised plans were given an additional $10-million trim in January when bidders were given approval to use concrete instead of steel on the transit center.
Newport Beach-based McCarthy Building Companies was awarded a $72.7-million contract for construction of the transit center and covered elevated walkway that will connect to the airport.
Bomel Construction Co., based in Anaheim Hills, will build the replacement parking structure for $8.5 million. The five-level structure with a capacity of 1,043 vehicles is being built to replace the parking spaces that will be lost because of the transit center and elevated walkway.
“This is an important day for the Bob Hope Airport,” said airport authority President Don Brown at the end of the meeting. “The [transit center] is the largest single capital project ever undertaken by the authority.”
The center will give people more choices in how they get to and from the airport and help lessen demand on surrounding roadways, he added.
The authority will pay the bond debt primarily through fees that are placed on rental car transactions, which total about $4.7 million a year, Hatanaka said. About 19% of the debt will be paid through rent paid by the rental car companies, he added.
The center will be built near Empire Avenue and Hollywood Way on a large portion of the former parking Lot D, which was closed earlier this month in preparation for the project.