Long Beach Airport will slowly begin work on an $80 million overhaul of its facility despite plummeting passenger numbers worldwide. The City Council gave the go-ahead to start when it approves a $3.9 million portion of the contract Tuesday night.
That limited chunk of money will go toward improvements to the checked baggage inspection system and the underground systems, including utilities, foundation, and concrete slab. Some of the money will also go to a proposed new ticketing building, but actual construction of that building will be put on hold due to the financial uncertainty brought on by COVID-19.
Originally approved in 2018, the overhaul was expected to bring rental car services into the main lobby of the airport while pushing ticketing services to a new structure to the south of the historic terminal building. Roadway improvements, a ground transportation center and improvements to the terminal building were also projected to be completed.
The council approved increases to the overall contract in February that could see the project cost as much as $110 million.
However, a free-fall in domestic flights that has seen passenger loads decline by more than 95% at Long Beach could put the project in question. Long Beach Airport Director Cynthia Guidry said that the airport is projecting a “very slow recovery period” as it anticipates a budget decrease of about $10 million to $20 million this year.
“You save money for rainy days and it’s pouring right now,” Guidry said of the airport’s usage of reserve cash to navigate through the current pandemic.
Funding for the improvements was expected to partially paid by a $21 million bond, but the remainder was projected to be financed through airport revenue, which is generated by passenger activity, parking fees and existing lease agreements for the airport’s surrounding property.
The project does have a number of exit clauses in it, which could allow the airport to stop construction, albeit with some penalties. The amended project approved by the council in February allowed for deferral or cancellation of work if there were a downturn in the economy. However, the airport would still have to pay for 1.5% of the remaining authorized work.
The Long Beach Business Journal reported last month that the airport received an $18.4 million grant from the federal government through the CARES Act but Guidry said that money will go toward operational costs and was expected to last only about six to seven months.
What parts of the project get done and when will depend on the future economic outlook for the air travel industry.
Stefan Lum, a civil engineer with the airport, said that some parts of the project would be pushed back significantly. The new baggage claim could be delayed by 17 months with Lum pointing out that the airport currently has a functioning baggage area.
Overall completion of the project, which was supposed to happen in 2022, is now being pushed into 2023.
Lum said that the first exit ramp for the contract will come into play during the first quarter of 2021 when the airport might have to decide if it’s in the position to move forward and start construction on the ticketing building.
Flight activity over the next year could determine if other parts of the project will have to be delayed, altered or abandoned altogether.