Here are some of the most frequently asked questions about the Great Hall project:
Why is this 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 is in need of major maintenance/upgrades. Jeppesen Terminal was built to serve only 50 million annual passengers, and we served over 58 million passengers in 2016. Currently, TSA checkpoints are at capacity. We also have an underutilized and inefficient ticket lobby space and DEN is lacking the adequate amount of concessions space to accommodate projected passenger growth.
What are the ultimate benefits of this project?
- Increases capacity of the terminal to more than 80 million passengers per year (currently at 50 million)
- Increases TSA throughput by an estimated 50-70 percent
- Consolidates ticket lobbies to the south end of level 6, better utilizing the space
- Creates a new meter/greeter area at the south end of the terminal, and a new “front door” to the airport
- Improves food and retail offerings in the terminal
- Upgrades entire facility: escalators, elevators, restrooms, security
- Enhances the passenger experience – both pre- and post-security
How will the airport accomplish this project?
To achieve the vision for a revitalized terminal, DEN is pursuing a public-private partnership (P3) model that seeks the creativity, expertise and capital from the private sector to help reimagine the layout and use of the terminal. At the same time, DEN is working closely and collaboratively with the Transportation Security Administration (TSA) to design an innovative new security screening prototype that is more efficient and passenger friendly.
What are the benefits of a P3 model?
The P3 model is used to deliver major projects across the globe because it transfers many of the financial risks to the private sector, often speeds up project delivery and leans on the expertise of private firms that have experience working on specific types of projects around the world. The P3 model allows us to leverage the expertise and resources (financial and technical) of the private sector to share both the risk and the reward.
Consultants estimate that the P3 method will deliver the project in nearly half the time of a normal design build. DEN believes that this project could have taken upwards of seven years to construct and under the P3 method it could take as little as four. The reason for this is because of the more efficient expenditure of funds and the assumption of risk on behalf of the private partner, and the idea that you get more work for the investment. Also, the private partner is taking on the maintenance of the project for potentially 30 years, which reduces the amount of maintenance funding needed.
Will private companies own parts of the airport?
In the agreement, GHP will be responsible for constructing all the improvements but managing only the terminal concessions. The airport will maintain control over the airline ticket lobbies, security screening area and public circulation areas.
How was the developer for this project selected?
The airport began a robust, fair and highly competitive procurement process in January 2015 by reaching out to the private development community for qualified partners. The airport then released a Request for Qualifications, which sought teams with the financial capacity and credentials needed for a project of this scale. As a result of that process, the airport identified four teams that were shortlisted to bid on a final Request for Proposals for the project. Three firms responded to the airport’s Request for Proposals.
Who are the Great Hall Partners?
The Great Hall Partners include a very qualified group of local, national and international firms with experience in P3s and airports. The P3 provides DEN an opportunity to partner with private sector firms, utilizing their creativity, expertise and capital to help DEN return the Great Hall into the travelers oasis it once was by consolidating airline ticket counters, moving TSA and improving the passenger experience through the creation of a uniquely Colorado environment. The pre-development contract with Great Hall Partners includes participation from other local, national and international companies:
Equity Partners: Ferrovial Airports International Ltd., JLC/Saunders joint venture, which includes Saunders and Magic Johnson Enterprises & Loop Capital
Design & Build partners: Ferrovial Agroman and Saunders Construction, Inc.
Architects: Luis Vidal + Architects, Harrison Kornberg Architects and Anderson Mason Dale
Local Engineers/Contractors: Intermountain Electric, Civil Technology, Gilmore Construction, Sky Blue Builders
Equity Partners Legal Advisors: Gibson, Dunn & Crutcher
Financial Advisor: Citibank
What are the next steps?
Since August 2016, Denver International Airport (DEN) has been engaged in pre-development negotiations with Great Hall Partners. That work has included developing the design, cost and partnership details. Now, those negotiations are nearly complete and the airport anticipates bringing the final terms of a development agreement to the Denver City Council for public consideration this summer.
What is the structure of contract with the Great Hall Partners – assuming it is approved this summer?
While this is a public-private partnership (P3), our agreement will be a bit different than other P3s, as our project is not a stand-alone facility, but an island in the middle of a 24/7-365 operation. The agreement will be for 34 years, covering four years of construction and 30 years of operation. In the agreement, GHP will be responsible for constructing all the improvements but managing only the terminal concessions. The airport will maintain control over the airline ticket lobbies, security screening area and public circulation areas. Additionally, over the 30-year operating period, DEN will pay GHP to operate and maintain the terminal concessions areas. It is also during the operational period that revenues will be generated by the project, and we have decided to split the concessions revenue and associated risk, with 20% going to GHP and 80% to DEN. DEN will retain 100% of all other terminal and A bridge revenue, including the rent paid to us by the airlines.
What happens if the P3 isn’t approved by City Council or the deal doesn’t make sense for the airport anymore?
DEN plans to move forward with the airline ticket counter and TSA screening relocation regardless of whether an agreement is reached on the public-private partnership. Should this occur, DEN would utilize another project delivery method, and would own all of the intellectual property (i.e., project designs, etc.) completed to date.
Will this project impact passengers?
DEN is committed to a phased construction program that would impact only sections of the terminal at a time to help minimize disruption to travelers. Ultimately, this project will change the overall flow of passengers into the secured and non-secured areas of the airport.
When does construction start and how long will it last?
If approved later this summer, construction on the project could begin in summer 2018. The project is expected, at this point, to last until fall of 2021.
When do concessionaires get to compete for contracts and how?
The Great Hall Partners will not operate any concessions directly, but will select and manage concession operators. The project will require that 70% of concession locations must be competitively procured.
What happens to the existing ticket counters when construction begins? How will it affect passengers?
The construction of the project will take place in phases so that there will no delays in service to passengers. Passengers will need to pay attention to signage and notifications of changes to locations for ticket counters so that when they arrive at the airport they aren’t delayed. Because of construction, ticket counter locations may shift temporarily according to the phase of construction, but it will be well signed and communicated to the public.
Will taxpayers be responsible for this construction in any way?
As is the case with all DEN projects, no tax dollars general or General Fund money will be used for the Great Hall project.
Has this ever been done before in other airports?
Yes, mostly in Europe, Australia, Heathrow, Netherlands, Poland and locally at LaGuardia. They are not exactly the same, however, because in some of these instances parts of the airport were privatized, in DEN’s case the City and the airport still maintain the ownership and the private partner is in a long-term lease.