DEPARTURE DELAYED
Pittsburgh International Airport’s $1.1 billion modernization hits turbulence — COVID-19
Pittsburgh International Airport’s $1.1 billion modernization has been grounded by the coronavirus.
All preliminary work related to the massive project has come to a halt because of Gov. Tom Wolf’s order closing all nonessential businesses, including those involving construction.
As a result, it’s unlikely that site preparation work will begin April 23, as originally anticipated.
At one time, the Allegheny County Airport Authority, which operates Pittsburgh International, had hoped to start construction of a new terminal for ticketing, baggage and security this summer. But that timetable now is in jeopardy.
“I am expecting that will be pushed back,” said Christina Cassotis, the authority’s CEO.
In an interview, she refused to make any predictions as to when the project would get rolling given the extent of the COVID-19 crisis, the stay-at-home orders and the economic turmoil.
“I don’t know when we will be in construction mode,” she said.
The proposed modernization includes the new landside terminal, to be tucked between the C and D arms of the airside building, where travelers get on and off planes, as well as a 3,000-space parking garage and new roads.
Ms. Cassotis said the potential delays are not all related to the halt in construction.
The authority has yet to complete new long-term leases with the airlines operating from
Pittsburgh International. That’s a must before construction can start because the airlines will be paying for the improvements through new rates and charges.
Securing those commitments could be a bit more tricky given the economic havoc facing airlines because of travel bans and very low demand. But Ms. Cassotis remained optimistic the leases would be finalized.
Those negotiations are not the only wild card.
In discussion with consultants, underwriters and others, the authority also is trying to figure out when would be the right time to float the revenue bonds needed to pay for the modernization.
It had hoped to pitch the project to bond rating agencies in early April and then go to the market in May. But that no longer is the case, as advisers have pushed for a delay given the tumult in the financial sector.
“We agreed as a team that this is not the right time to go to the rating agencies,” she said.”There’s a lot of uncertainty right now.”
While the construction and financial aspects of the modernization have been put on hold, the authority is continuing to move ahead with design “in order to be ready when the time is right,” Ms. Cassotis said.
She is confident the airlines will continue to back the project despite the COVID-19 turbulence they are encountering right now.
“This is very future-focused. We all believe that at some point the industry will get back to some
sort of normal,” she said. “This is all about right-sizing and modernizing. Those goals are still valid.”
Ms. Cassotis has said she is expecting the $1.1 billion price tag to increase, although she has yet to say by how much.
She has insisted the cost to board a passenger should stay in the $10 range (in 2019 dollars) for the airlines even with the spending on the upgrades. The carriers now pay $9.29 per enplanement.
Once the new terminal has been completed, the current landside building will be demolished or repurposed. The tram that takes travelers to the airside building will be eliminated.
One bright spot for the airport amid the issues related to the coronavirus is Neighborhood 91, the proposed hub for additive manufacturing to be built on 195 acres of land just west of the terminal.
The authority already has landed one tenant, Lehigh County-based Arencibia.
Trying to sign more tenants has been impacted by the coronavirus, but not nearly to the extent that other business has been, Ms. Cassotis said.
“We are looking for letters of intent to get signed. We are moving forward with plans surrounding the master developer. We are still seeing interest expressed in Neighborhood 91 from throughout the world,” she said.