What is the Great Hall Project?
More than two decades after opening, the Great Hall beneath the iconic tented roof of Denver International Airport’s (DEN) Jeppesen Terminal needs updating to address today’s aviation needs. This project will greatly enhance security and improve passenger flow. The Great Hall Project will include upgrades to Jeppesen Terminal, including restrooms and other infrastructure that is now 25 years old. These renovations will allow the airport to recapture the original spirit of the terminal as a relaxing and vibrant experience, via new shops and restaurants, enhanced technology, ample seating and more.
Why is the Great Hall Project needed?
With the growth DEN is experiencing and the aging infrastructure, we must plan for the future. The facility is starting to age and needs major maintenance and upgrades. Jeppesen Terminal was built to serve only 50 million annual passengers and we served over 69 million passengers in 2019. Currently, TSA checkpoints are at capacity. The airport also has an underutilized and inefficient ticket lobby space and is lacking the adequate amount of concessionaires to accommodate projected passenger growth.
What will happen with the TSA checkpoints?
The Great Hall Project is designed to make the security screening process more efficient and less stressful for travelers. The project will greatly enhance security by moving today’s TSA screening checkpoints from Level 5 to Level 6 and create a new prototype for TSA that will increase passenger throughput and increase safety.
Today, DEN has 30 standard checkpoint lanes. When the Great Hall Project is complete, it will have 34 state-of-the-art automated screening lanes, which can increase capacity by 30%. The new checkpoints, which will be consolidated from three areas of the terminal into two and will feature increase queuing space.
What is the status of the contract with Great Hall Partners?
In 2017, DEN entered into a 34-year contract with Great Hall Partners (GHP) to renovate the terminal and manage defined areas after completion of construction. Construction began in July 2018. In August 2019, DEN was no longer confident that GHP could deliver this complex project while maintaining the operations. As a result, DEN terminated the contract.
It is still necessary to renovate the aging infrastructure of the terminal and DEN will continue with the project to provide a quality facility for our passengers and to accommodate the rapid growth of our airline partners as DEN continues to experience record-breaking traffic.
How much will it cost for DEN to end the contract with GHP?
DEN will fund 100 percent of the project moving forward by refunding GHP’s investment in the project (approximately 25% of the construction cost) along with the lost return on their investment. In addition, the airport will pay for any outstanding invoices and costs related to work in place and materials procured, as well as certain termination costs related to contracts issued by GHP.
What will the Great Hall termination pay-out consist of?
As part of the termination of its contract with Great Hall Partners for the renovation of the Great Hall, DEN is obligated to reimburse Great Hall Partners for work done to date.
Great Hall Partners was funding about 27 percent of the project and DEN was funding about 73 percent. As a result of the termination, DEN must reimburse Great Hall Partners for the money that it spent on the project for work completed. DEN does not have to pay any fees or penalties simply for terminating the Development Agreement. Paying contract breakage and termination costs are typical when terminating a construction contract for convenience.
There are three categories that make up the termination payment:
- Net Lenders’ Liability: Refunding Great Hall Partners’ share of project costs to date, which is the amount of money Great Hall Partners spent to design, construct, and manage the work completed. DEN now owns all the work, including the intellectual property such as design drawings and calculations. Great Hall Partners will use the refunded money to pay back the bonds they issued.
Total: $90.4 million
- Breakage/Costs: Payment to Great Hall Partners for the work that was required for them and their subcontractors to wind down the work on the project. There are three types of costs:
- Contractor Breakage Costs – The costs incurred by Great Hall Partners and its contractors because of the termination, such as demobilizing from the site, materials and equipment ordered that cannot be stopped or returned (which DEN will use in its completion of the Project), and other similar costs;
- Redundancy Costs – Great Hall Partners’ costs for terminating employees who will not continue with their company, such as severance payments, unpaid accrued time off, and moving costs; and
- Transition Costs – The amount spent by Great Hall Partners during the 90-day transition to DEN (August 12 – November 12), such as continuing the fire watch, the cost to secure the site, and management of the work during this transition.
Total: $55.6 million (includes all costs above and also settles $290 million in claims for additional money filed by Great Hall Partners)
- Equity/Return on investment: The return on their investment that Great Hall Partners’ owners would have received over the 34-year life of the contract.
Total: $37.7 million
Will taxpayers be responsible for this construction in any way?
DEN is an enterprise of the City and County of Denver, so no taxpayer money is used from the city's general fund for any projects or operations at the airport.
What happens to the construction progress?
DEN took the Great Hall Project over from GHP on November 12. On February 18, the Denver City Council approved the general contractor/construction management contract with Hensel Phelps to complete Phase I of the Great Hall Project. Construction resumed in March 2020.
How will this change the project?
DEN intends to complete the design and construction at the original budget of $650M plus $120M contingency. DEN owns all design work and construction performed to date.
Moving forward, DEN will review the project plan, scope, schedule, and costs and decide the most efficient way to proceed. Adjustments will need to be made. This project will no longer be a P3 (public-private partnership).
What happens to the many subcontractors on the project?
DEN plans to continue to utilize local subcontractor partners as part of the project. They are familiar with the project and it’s most efficient to continue to work with them.
Regarding the concrete issues identified early in the project, is the airport safe?
In November 2018, concrete compression strength numbers were lower than originally reported. DEN acted quickly and hired outside experts to perform independent testing. In February 2019, these results determined that the concrete strengths were safe and construction on the terminal could continue.