New Haven Register (New Haven, CT)
Costs double for Tweed upgrades
NEW HAVEN — The cost estimate has more than doubled for near-term improvements to Tweed New Haven Regional Airport’s existing facilities on the New Haven side of the airport to accommodate Avelo Airlines’ upcoming service, Tweed officials said Tuesday.
On May 6, cost to renovate the existing terminal off Burr Street and the old terminal that now is used as the airport’s administration building originally was announced to be $4 million.
It later was pitched in various meetings at $5 million.
The Tweed New Haven Airport Authority, after meeting in closed-door executive session, approved an amendment to the
management agreement with Avports LLC that raised it to “up to $11 million,” authority Executive Director Sean Scanlon and Chairman John Picard both confirmed.
Asked whether the plan changed or the initial cost estimate was inaccurate, Scanlon said, “It’s a little bit of both.”
“The initial cost estimate was based on our understanding of the needs ... at the time we approved it, in May,” said Scanlon.
“Once the board approved it in May, we were able to do a more thorough analysis ... and when you combine that with the rising cost of materials, which is happening worldwide.” it resulted in the higher price estimate, he said.
“I don’t think it will be up to $11 million, but the board wanted to be sure we had the cushion” Scanlon said.
Avelo will begin serving Tweed in early November with flights to three Florida cities, ramping up to five cities — Orlando, Tampa, Fort Lauderdale, Fort Myers and Palm Beach — by mid-December.
Under the near-term plan, Tweed and Avport will renovate the existing terminal and the airport’s older administration building into departure and arrival terminals and add 271 parking spaces and several temporary trailers.
Passage of the change, billed on the authority’s Sept. 15 agenda as “Amendment No. 1 to Amendment No. 5 of the Management Agreement for the operation of the Airport between Tweed New Haven Airport Authority and Avports, LLC,” won’t affect the airport’s bottom line, Scanlon and Picard both said.
“It’s a loan technically from Avports, so they’re fronting us the cash and giving us a loan,” said Scanlon. But ‘if the deal with Avports goes through, then they’ll forgive the loan.”
Avelo has agreed to pay $1.2 million toward the total for the project. The authority has hired Walsh Construction Co. to do the work.
A major part of the authority’s deal to have Avports, owned by a subsidiary of Goldman Sachs, step in as a broader partner in the years to come and assume full responsibility for Tweed’s operation costs, was approved Thursday when the Board of Alders unanimously approved a 43-year extension of the authority’s lease of Tweed.
The authority now has to negotiate a long-term contract with Avports, which has operated the airport for 22 years and would do so for at least another 43 if the agreement is approved.
Avports CEO Jorge Roberts and Avports spokesman Andrew King said in a statement, “Our initial cost estimate reflected our understanding of needs and requirements based on best available information.
“Subsequently, the approval of the fifth amendment afforded the airport the time and resources required to do a complete analysis of what is needed for a complex renovation of two aged buildings that need to be ready to service increased activity as Tweed New-Haven adds new direct flights to new destinations,” they said.
“This analysis, along with rising costs of goods and services throughout the construction industry, resulted in an increased projected costs, Roberts and King said. “The First Amendment to the Fifth Amendment reflects our full understanding of all needs and requirements, our plans for bringing an old property up to current code, a buffer for unforeseen renovation challenges, and our commitment to an improved passenger experience at HVN.”
Tweed’s longer-term plans calls for a broader partnership under which Avports will invest an initial $70 million, and up to $100 million, to extend Tweed’s runway from 5,600 feet to 6,635 feet and build a new, 74,000-square-foot, carbon-neutral terminal with 4-6 departure gates on the East Haven side of the airport. A new entrance would be constructed off Proto Drive in East Haven.
Avports also would be fully responsible for Tweed’s operating expenses, eliminating the need for $1.8 million in state and city subsidies.
Picard estimated that 10-15 percent of the increase for the near-term improvements “was the cost of product, labor — everything went up,” he said. “I’m not sure if the project, the original scope, was underestimated.”
But the work “is a necessity for us,” he said.
The authority unanimously approved the change, with one member, East Haven appointee Anthony Verderame, abstaining.
Verderame, athletic director for the East Haven Public Schools system, expressed concern that “the $11 million is quite high. I’m not totally satisfied with the budget and the list I was given for the costs on this,” he said.
Beyond that, “The town will not be supporting any eminent domain of the residents of East Haven. Also, we’d like to have all studies done on the East Haven side, as was done for New Haven side,” and “have those studies vetted by our boards and commissions and elected officials prior to my approval.
“Additionally, we would like the confirmation that there will not be any cargo ... coming through the roads of East Haven,” Verderame said.
Scanlon said later during a virtual meeting, which was recorded and archived on the Tweed website, “I heard you loud and clear and I appreciate the feedback.”