October 25, 2014
Rate this
Runway projects cleared for takeoff
John Howell
ALL SMILES: Mayor Scott Avedisian (back to camera) talks with Senator Jack Reed, Governor Lincoln Chafee and Peter Frazier, interim CEO of the Rhode Island Airport Corporation, prior to Tuesday’s announcement that RIAC is in line to receive $110 million for runway and noise abatement projects.

Senator Jack Reed delivered the news Tuesday that will transform designs for an extended Green Airport into reality and bring to an end a more than a decadelong debate over the airport’s future.

Reed said he talked with acting FAA administrator Michael Huerta on Monday who assured him the Rhode Island Airport Corporation (RIAC) is in line to receive $110 million in federal grants.

The money will go toward three projects – the runway extension, improved protection zones at the shorter runway and noise abatement for homes affected by the airport.

Financing of the runway projects clears the way for the acquisition of properties and the commencement of construction.

Work will start next June on the runway protection zones for Runway 16-34, with completion slated for December 2015. Since there is not space for 1,000-foot safety zones at the ends of the runway, the project includes the use of concrete tiles that are designed to collapse under the weight of an aircraft and stop it. Demolition of Hangar 1, which is part of the safety improvements, is scheduled to start next June and be completed by December of 2013. The cost of that project is estimated at $40.2 million, of which 75 percent will be paid with federal funds.

Construction of the extension to Runway 5-23, requiring acquisition of 16 properties to relocate a section of Main Avenue, will start in June of 2015 and take two years to complete.

Unlike the runway safety improvements that RIAC must have in place by 2015 to meet FAA standards, the extension is not a requirement. This left in question at what level the $83 million project would be funded, if at all.

RIAC requested the maximum 75 percent funding, hopeful of getting at least 50 percent. As it turned out, the FAA approved about 61 percent funding.

“It’s a go,” said RIAC acting CEO Peter Frazier.

“Truly, this is a champagne day for Rhode Island,” he added.

The final piece of the funding package will finance 80 percent of the $30 million noise abatement program.

In keeping with an agreement RIAC and the City Council reached, lifting the threat of a legal challenge of the longer runway and guaranteeing the relocation of the Winslow Park playing fields, among other things, Frazier said letters defining the timing for acquisition of Main Avenue properties, which is not voluntary, would be going to owners and the city by the end of this week. Also, 65 property owners within the runway protection zone will receive notices as to when they can expect to be acquired by early next week.

In addition, Frazier said yesterday that the owners of 444 homes eligible for sound insulation would receive notices once the program has been designed. Homes are to be insulated incrementally over the next five years.

Finally, once the extended runway is operational, RIAC projects another 81 homes will become eligible for the voluntary acquisition program that would be rolled out between 2017 and 2027.

According to Tuesday’s announcement, federal funding will occur over the next five years under what Frazier termed as a “pay-go system.” This is a departure from earlier plans for a letter of intent that RIAC would use to borrow funds until it is reimbursed. Under the pay-go system, federal grants will be used directly to pay construction invoices.

RIAC’s share of the cost will come from bonds it issues and pays off with airport-generated revenues and passenger facility charge revenues that is a part of airline ticket costs.

“This is a day we have been working for, for many, many years,” Reed said.

He noted those efforts have happened at many levels, from the city and state up to the federal government.

Reed called the projects essential to keep Green competitive and building the infrastructure for the state’s future. He cited federal grants flowing into the state in recent years that also strengthen the state’s infrastructure and enhance its ability to attract businesses and jobs, including $55 million for freight rail, $47 million to dredge the Providence River channel, $32 million to extend commuter rail service to Wickford Junction and $32 million for Quonset Port, including the acquisition of a crane for cargo containers.

Reed said, with completion of the projects, Green will be “one of the premier airports in the country and the world.”

Governor Lincoln Chafee hailed the federal funds, not only for the airport but also other projects listed by Reed, as good news for the short and longer term.

“Good things are happening with the delegation,” he said of the congressional leaders. He identified education and infrastructure as crucial for the state’s future.

“The smartest thing you can do is invest in education and infrastructure,” he said.

Mayor Scott Avedisian observed that runway proposals have been discussed for the past 15 years, involving countless hours and resources. Despite differences, he noted, the parties were capable of eventually working together and coming to an agreement. Such cooperation bodes well for Rhode Island, he said.

“It’s all part of a bigger vision for Rhode Island.”


Comments
14 comments on this item

WOW...LONNNGGG wait for any gains from the expansion of the runway!!

RIAC management seems to have forgot a couple of things -- like $100 million!

Here is a quote from the governor's 2013 budget that has gone unanswered in this report in the Beacon and all the other papers:

T. F. Green Airport – General Improvements

The Corporation requests $50.3 million for the period FY2013 through FY2017 to finance general

improvements at T. F. Green Airport. ... The focus for FY2015 through

FY2017 will shift to runway rehabilitation and a master plan update.

What is that all about? Is that the $50 million Senator Reed is talking about? Unfortunately not. Other RIAC documents show that $40 million of that $50 million is for runway rehabilitation. That runway rehab was originally part of the $165 million scheduled for the EIS. Take that away and you get $125 million. Now that we know that FAA is to provide $80 million and RIAC must come up with $10 million for the crosswinds runway and $30 million for the extension ($50 million = 62% of x - according to another newspaper) leaves RIAC with $30 million for its share of the expansion. So at the end of the day -- believe it or not -- the $80 million provided by FAA plus the $40 million provided by RIAC plus the $40 million in the governor's budget for the runway rehab comes up with -- surprise -- $160 million. This is almost the same number we have been hearing for the past two years. RIAC is to pay $80 million for these projects when you include the runway rehab that is in the governor's budget that has been carved out of the story today.

But that is not all. Remember the glycol plant? First report is due on October 15, 2012 - the baseline. River study is due in July 2013. Built reports due in early 2014. This means RIAC needs to come up with another $20 million for the glycol plant.

Currently RIAC pays $28 million in debt service. That is almost 50% of all revenues - and astounding number. Now RIAC needs another $100 million of borrowing. This will drive the rating agencies nuts. Estimated interest rate of the bonds that can finance this - my guess 7% this means $7 million in more debt interest plus $3.3 million in payback ($100 million / 30) So this debt service will end up at $38 million which is two thirds or all RIAC revenue. Since RIAC lost $6 million this year according to its audited financial report it has no extra revenue for this additional debt service. The projects would end up with over $10 million of systemic losses per year for the foreseeable future.

How come RIAC officials did not tell the press about that problem?

Sure seems like the city will be losing a lot of property and vehicle tax revenue with the eradication of all those parcels. The rest of us can expect a healthy tax increase to make up for it I'm sure.

Richard stop trying to second guess and run numbers different ways. They just got awarded 110 million dollars for the project !!!!! That is a lot of money. In addition, the last batch of money they received what was it 30 million? So obviously this is a top priority for the State and the Gov't. You are trying to bark up and 3,000 foot tree. I don't think you get it. The money is flowing to the project (you said it wouldn't), the red tape has been removed if you will (who would have thought), and top politicians are orchestrating this project. It's going to happen !!!!

Michael: Sorry FAA only came up with $80 million spread over five years or $16 million per year. The other $30 million is for noise mitigation -- to buy people out up to a majical line where one neighbor goes and the other lives with the airport forever. The governor's budget requires an additional $50 million mostly for runway rehab - ironically the original reason for the EIS which was then ignored by the feds when it came to financing the deal. And then of course there is the $22 million for the glycol plant. The entire scope of this project is over $500 million. $16 million per year for five years does not even scratch the surface literally.

The $100 million that RIAC is required to borrow is very real. The debt service on this (about $10 million per year) needs to be covered by additional earnings of at least $12.5 million per year - a solid number not a horses *** projection. Last year the airport "earned" -- actually lost -- $6 million partially due to Intermodal issues. So, in order to finance this project RIAC needs about $18 million in new net earnings. The way RIAC has cut its "profit sharing" deal with the airlines -- where the airlines share in profits if they ever show up (thanks to Mr. Dillon) the required net earnings increase is more like $30 million which would be based on revenues minus expenses. Under this profit sharing agreement how much revenue would be required to pay the debt service? Probably double what the airport earns now. Do you really think that will happen years before the extension is built and the airlines start setting up non stop flights to Calfornia?

Here's the bottom line. FAA throws in $30 million for safety improvements for which RIAC has to dump in $10 million from its cash kitty. Then RIAC takes out another $22 million from its cash kitty for the glycol plant. This leaves RIAC with absolutely no ability to borrow even one dollar for the extension when it RIAC needs at least $30 million for that project and probably a whole lot more. So don't tell me to stop seconding guessing our elected officials! They are the ones barking up the 3,000-foot tree.

Michael2012...Why can't people express their thoughts and/or opinions...YOU DO!!

Let's get this project going before the price goes up some more. It should have been completed years ago, but like so many things in Rhode Island, another critical piece of the state's infrastructure falls behind the times before something is done.

Latitude41: How do you propose to deal with the following section of the Final EIS which is backed up in the Record of Decision?

Chapter 5 - Environmental Consequences 5-213

Without the proposed deicer management system which will be in place by 2015, increased glycol usage could impact water quality. However, the use of the glycol blending facility and deicer management system (both constructed as part of the No-Action Alternative) would not substantially increase glycol use or discharge. ...

RIDEM has indicated that the projects are viewed on a cumulative basis and therefore the filing of a RIPDES NOI and SWPPP would be required for all projects that do not require a Freshwater Wetlands Permit regardless of the area of disturbance from construction activities.

This requires an additional $23 million that RIAC has yet to identify. Nothing can move forward on the crosswinds project until RIDEM sees that money coming in and is documented in its Stormwater Pollution Prevention Plan (SWPPP).

The question about the runway rehab is really important too. That $40 million project seems to be unaccounted for. Here is the primary purpose for the EIS project:

Chapter 2 – Purpose and Need Page 2-3

Safety

Runway 16-34 Safety Areas (RSAs) and pavement rehabilitation

RSAs: FAA Advisory Circular (AC) 150/5300-13, Change 15, Airport Design; 14 CFR Part 139, Certification of Airports, Section139.309; Public Law 109-115; FAA Order 5200.8, Runway Safety Area Program Rehabilitation of Runway 16-34 pavement.

Here is the question: Why is there $40 million in the RIAC budget for runway rehab. Is that just for Runway 16-34 or for both runways? Nobody knows. If it is for both runways then about $17 million of that would be for 16-34. How much will the overrun arresting project cost? I can see that being put in place within the existing runway bed leaving the runway about 1,200 feet shorter than it is now. But any effort to extend the runway further into the Buckeye Brook watershed will blow the documented $40 million budget for the crosswinds project into the stratosphere.

If your main concern is airport capacity at T.F. Green you should immediately realize that this length of the crosswinds runway needs to be buttoned down. Does the $40 million in the Beacon story include the pavement rehab? By the way the ROD reports this pavement as "poor." And it was the entire reason for the EIS when it was initially kicked off before RIAC officials started talking about lengthening the main runway. If the $40 million does not include the rehab funds, where will they come from?

The way I read all of this RIAC needs to come up with $23 million for the glycol plant, at least $17 million and maybe $40 million for the runway rehab, $10 million for the RIAC match for the crosswinds project and at least $30 million for the runway extension. That adds up to a RIAC bond of $80 million. To be on the safe side consider $100 million. RIAC is currently paying $28 million for debt service up from $7 million in 1994 when the terminal was replaced. Straight revenues before FAA grants is about $40 million. The debt service on an additional $100 million bond would be about $3 million per year in payback (the bond must be paid back in 30 years - long past RIAC's lease for the airport) plus a probable interest rate of 7% for a junk bond -- which it clearly would be. That would leave about $3 million per year to pay the RIAC officials, heat the place, sweep the floors, plow the runways, and operate the glycol plant etc. Are you beginning to get the picture now?

who cares about the glycol plant ? The way I see it Richard you live close enough to the airport for it to bother you but you don't choose to move away.... you are allowed your opinion of course, it's just tiresome to hear the same old rhetoric. p.s. I wouldn't fish in the Buckey brook, as I wouldn't fish in a lot of places in RI especially in Johnston near the land fill. Common sense

oh and Richard you may think you know but you don't. How you can you know more than the RIAC people ? You constantly are using numbers but I can use what if numbers as well. Lets say Romney gets elected and the economy improves so much so that people are flying in and out of TF Green like crazy. Revenue spikes. That could happen couldn't it ??? Are you not just figuring it worst case scenerio doomsday ? I for one like to be think positive and be optimistic instead of doom and gloom.

sorry that was poorly written. I was being distracted at the time.

Michael2012 asks "How you can you know more than the RIAC people?"

Well I was right about the proposed letter of credit - which was denied. I was right about the timing of the award - after October 1st. I was even right about keeping the cross winds runway out of the Airport Road corridor. And I was right about the final $30 million required to complete Intermodal - a problem that was only cured two years after that facility opened.

This is not a contest between me and Peter Frazier of RIAC. I even suggested to the RIAC board that they keep him on as the executive director of the airport partially because he has a keen legal mind and understands what would happen if RIAC/EDC/Governor Chafee tried to ignore the RIPDES permit signed by DEM on July 30, 2012 with an effective data of September 12, 2012. Governor Chafee would become the laughing stock of the nation no matter who wins the presidential election. All FAA grants would be recinded. RIAC's, EDC's and the state's bond ratings would be decimated. All EPA and NOAA grants directed to the State of Rhode Island would be in jeopardy.

There are some things that are more important than a longer runway at Green Airport. The glycol management plant is one of them. Why would you risk shutting Rhode Island off from all FAA, EPA, and NOAA federal aid to advocate building a longer runway that RIAC cannot raise the funds to build? Why would you advocate a $38 million per year debt service for RIAC against about $40 million in revenue before expenses? What you are advocating is the bankruptcy of the Airport if not the state itself. That kind of attitude is a primary reason why our state is in so much trouble including the 38 Studios fiasco -- which by the way was a project by the same organization (EDC) which is bringing us this RIAC movie.

Oh, by the way. I just recently saw the Monthly Airport Passenger Activity Summary for September 2012

Looks Good!

Total number of passengers enplaned... 147,423 down 10.11% compared to the same time a year ago.

Total number of passengers... 291,277 down 10.57% compared to the same time a year ago.

B.T.W. I got my "eviction" notice on 10/20/2012. I have to be out by 01/31/2015...

Not a happy trooper.

Passenger counts down 10% again in September. This is a disaster.

You must be logged in to post a comment. Click here to log in.
Welcome to RIjobs.com
Copyright © 2014, Beacon Communications. Powered by: Creative Circle Advertising Solutions, Inc.