O.C. Air Terminal Cost Isn’t Out of Line : Project Is Mid-Priced Compared to Similar Projects, Survey Finds

Despite months of controversy about cost overruns and design changes, John Wayne Airport’s new $50-million passenger terminal is neither cheap nor expensive when compared to similar projects nationally, according to an informal Times survey.

A Times survey of 21 projects throughout the U.S. showed a wide price range, from $59 per square foot of new terminal space in Fargo, N.D., to $357 per square foot at Chicago’s splashy new United Airlines complex.

John Wayne’s new terminal is running about $148 per square foot.

Plagued by controversy from the start, the terminal is part of a $310-million expansion program that also includes new garages, roads, bridges and airfield improvements--the county’s biggest public works project ever. The project has been beset by design errors, cost overruns, and mistakes in price estimates.

But with the topping off of the ironwork last month, the new terminal appears to be progressing more smoothly.

Behind Schedule

The Orange County Grand Jury, in one of its periodic progress reports, last week warned that the project is 14 weeks behind schedule. But officials still predict that the new structure will be occupied by April 1, although some interior walls may not be painted by then and some gates may not be open to aircraft.

To be sure, issues remain, such as the siting for a million-gallon, above-ground fuel storage facility, business disputes between prime contractor Taylor Woodrow California Construction Ltd. and subcontractors, and difficulty in reaching the goal of 10% participation by firms owned by women and minorities.

But according to Project Manager Richard Begley: “The worst is behind us. You will see enormous progress from this point forward.”

Begley has contended that the problems at John Wayne hardly stand alone.

Some examples found in The Times survey:

* In San Jose, a soils engineering firm failed to discover an underground stream at the site of the city’s new passenger terminal, causing delays for pumping. Delivery of tons of granite from Italy fell behind schedule. And an airport spokesman said the city is probably going to seek reimbursement from the architect for some errors and omissions discovered in blueprints.

* In Nashville, Tenn., where a new $105-million facility nearly twice the size of the new John Wayne terminal was completed in only 21 months, two subcontractors went broke in mid-project. The head of the agency in charge of Nashville’s airport expansion was embroiled in a controversy over his ownership of land near the airport. A fish on the endangered species list was found in a stream near the new terminal site, and airport neighbors have sued to block construction of a new runway that environmental impact documents previously failed to mention.

* In Albuquerque, N.M., where a project doubling the size of the airport’s existing terminal will be completed later this month, the sandy soil beneath the building shifted. The roof leaked on airline employees. The heating and cooling systems failed.

* In Chicago, work began on some sections of the $500-million United Airlines terminal before others had been designed. The new terrazzo floor cracked. Construction workers went on strike. And the multimillion-dollar glass roof, which was reflecting blinding streams of light into the eyes of air traffic controllers, had to be etched with acid after it was already in place.

Despite such problems, officials at each of these airports used phrases like “running smoothly” to describe their terminal-construction projects.

Problems occur, airport and airline industry officials say, because airport projects are large, complex, and rely on armies of workers who have trouble communicating. Some officials, such San Jose airport spokesman Steve Grossman, are fatalistic. “I believe that on almost any project you’re going to find some of these things,” he said. “But the bottom line is that, here at least, they have not delayed the expected completion date because you make up time as you go along.”

The frenzied pace of airport building is part of a national boom in terminal construction and remodeling due to intense competition among airlines for market share and a need to replace inadequate, worn-out facilities that were built to accommodate first-generation jetliners 30 years ago.

Denver, for example, plans to build a new airport at a cost of more than $2 billion. Chicago is going through a $2-billion airport-improvement program that includes the recently opened, $500-million United Airlines terminal. National Airport in Washington and its sister airfield, Dulles International Airport, are jointly planning $1.2 billion in improvements. Dallas-Ft. Worth and JFK in New York are each planning improvements totaling more than $1 billion. Orlando, Fla., is in the midst of a $430-million expansion program, and San Francisco anticipates spending at least $300 million.

And at Los Angeles International Airport, which was remodeled for the 1984 Summer Olympics, Delta Airlines last year spent more than $85 million reconstructing its terminal, and several airlines are spending another $200 million combined on other terminal remodeling projects. The Federal Aviation Administration reports that annual requests for airport development grants have jumped from $4.5 billion to $7.5 billion just in the past three years.

“We need this construction boom,” says Tom Browne, manager for airport policy and administration at the Air Transport Assn., the industry group that represents air carriers. “Most everything (new) that’s going in is capacity related. . . . There are more passengers and more planes. And some of the capacity gains involve replacing the old with the new.”

Air travel demand is expected to reach 750 million passenger boardings per year by 2001, compared to 450 million projected for 1989.

Most airport terminal construction or remodeling is financed with revenue bonds, which are repaid with airline landing fees and rents collected from food vendors and car-rental agencies. When leased airport space goes up in price due to remodeling or new construction, concessionaires charge the public accordingly.

A Continental Airlines official, for example, recently stated that if Denver builds a new, $2.3-billion airport, it could add $36 to ticket prices for passengers going to or from that facility.

One industry official, who spoke on condition of anonymity, said the new passenger terminal at John Wayne Airport could add $5 to $7 to the airlines’ cost for each boarding passenger.

Comparing projects to see who is getting the most terminal for the money is nearly impossible, according to airport managers, contractors and airline industry officials.

San Jose has almost completed a new $33-million, 225,000-square-foot terminal that will cost about $132 per square foot. For that price, San Jose is getting 10 new passenger gates, vaulted ceilings, a lot of glass and a stone-clad exterior. In comparison, John Wayne’s $50-million, 337,900-square-foot terminal will cost about $148 per square foot and will have 14 gates, with most of the same amenities. Conditions at the two construction sites are similar.

Nashville last year added a $105-million, 750,000-square-foot, 46-gate terminal, for only $140 per square foot. The new terminal includes special facilities equipped with fax machines and word-processing services for business travelers. Nashville benefited from lower labor and materials costs due to regional economic differences that set it apart from both the West and East Coasts, or even the Chicago-Detroit area, contractors say.

Andrew Carlson, president of Sacramento-based Continental Heller, the general contractor for San Jose’s new terminal, considered the John Wayne project but did not bid on it.

“We knew it was going to cost $55 million to $60 million, not the $42 million that was budgeted,” he said.

At John Wayne, the low bid was $18 million higher than the $42 million budgeted by the county, leading to a major cost-cutting effort. A cost estimator said that contractors were overcharging. A consulting firm countered that the cost estimator had inaccurately priced many materials such as steel and concrete.

Because terminal designs vary, comparing costs can be difficult, Carlson said.

“You have to look at how much renovation is going on, and whether or not the facility has to remain open for business while you’re working,” Carlson said. “The Orange County terminal is going to be very stylish, and that adds to the cost. But even that doesn’t compare with Chicago, where the new United terminal was designed as a masterpiece by a red-hot architect (Helmut Jahn). National Airport in Washington, D.C., in contrast, is (going to be) a nice, simple building--nothing flashy.

“So asking what a new terminal should cost is kind of tough, says Carlson. “Tell me. What does an automobile cost?”

21 AIRPORT TERMINAL PROJECTS IN U.S.

Square Cost/ Airport Gates Feet Sq. Ft. Completion Date Albuquerque 22 485,000 $103 June,1989 Baltimore 9 160,000 $125 July,1988 Charlotte 25 131,000 $153 April,1990 Chicago 48 1,400,000 $357 December,1988 Cincinnati 4 32,000 $344 June,1989 Dallas/Ft. Worth 9 100,000 $300 October,1988 Dayton 0 *119,000 $252 May,1989 Detroit 7 23,500 $245 Fall,1989 Dulles (D.C.) 0 **140,000 $169 Summer,1990 Fargo 4 76,000 $ 59 January,1986 John Wayne 14 337,900 $148 April,1990 La Guardia 9 250,000 Unavail. Mid-1992 Los Angeles 16 300,000 $283 June,1988 Nashville 46 750,000 $140 September,1987 National (D.C.) 32 876,300 $158 Mid-1993 Newark 41 875,000 $291 May, 1988 Omaha 10 150,000 $247 February,1987 Orlando 24 515,320 $250 July, 1990 Philadelphia 11 275,000 $330 Mid-1991 San Francisco 26 1,500,000 $200 Mid-1992 San Jose 10 175,000 $132 September,1989

*Dayton renovated and enlarged main terminal extensively but did not add new gates. **Dulles does not use traditional gate system. Passengers are transferred via trams. Note: Cost data was calculated by The Times based on terminal size and expense information supplied by airport or airline officials. The data can mislead. For example, Albuquerque and Los Angeles both doubled the size of an existing terminal, so square footage includes old as well as new space. The remodeled Los Angeles terminal (Delta Airlines) utilizes more expensive materials, including marble and exotic tropical plants, and has more gates. But Albuquerque’s gates are open to all airlines and serve more daily flights.