Memphis airport officials Thursday gave a green light to a $110 million bond issue for a new airfield maintenance facility and an improved system for keeping de-icing fluid out of stormwater runoff.
The Memphis-Shelby County Airport Authority board also voted to negotiate with consultants for an airport master plan to replac a 2007 document that was rendered obsolete by Delta Air Lines' elimination of its passenger hub.
The airport expects to take advantage of low interest rates and issue the new debt at less than 2 percent over a 13-year term, chief financial officer Forrest Artz said.
It would be the airport's biggest debt offering in at least 13 years, chief executive officer Scott Brockman said.
Airport officials have deliberately reduced the facility's total debt from $650 million to less than $300 million during that time, while issuing about $30 million in new bonds for projects including a parking and rental car garage and security checkpoint widening in Terminal B, Brockman said.
Artz said the $110 million issue would be funded by revenues from airfield operations, including landing fees paid by prime tenant FedEx Corp. and passenger airlines.
Another bond issue looms as design of a B Concourse modernization is completed, possibly by next month, and a financing package is crafted from terminal rents paid by passenger airlines and vendors.
De-icing operations would be consolidated in one location on the airfield as part of an estimated $126 million glycol management system. Currently glycol-based de-icing activities occur in a dozen or so scattered locations.
Brockman said the new system would make it easier to collect, treat and account for glycol under the terms of the airport's stormwater permit, an anti-pollution measure.
In addition to the bonds, airport officials plan to spend federal grant money and capital dollars on the de-icing project, Brockman said.
The new airfield maintenance facility, an estimated $35 million project, is proposed to be built on the south side of the airport in a more central location than the current facility at Tchulahoma and Winchester.
The airport authority has an agreement to lease the current maintenance facility and an administrative office building on Tchulahoma to FedEx.
The authority received responses from seven consulting firms after a request for qualifications for a master plan. Jacobsen/Daniels Associates LLC of Detroit received a top ranking and is first in line for contract negotiations. Jacobsen/Daniels projected about 20 percent participation by local companies and 54 percent participation by disadvantaged business enterprises.
Brockman said a new master plan has been overdue since the airport lost about 75 percent of its flights due to Delta's dehubbing.
"We waited until we could get beyond the dehub and get to what I call clear air so we could plan for the future," Brockman said.
The planning process will include obtaining input from the public and the airport board and will attempt to forecast growth, analyze facility needs and anticipate what the future holds for passenger and cargo airlines, Brockman said.
