Love Field Modernization Program Update: Master Planning Recommendations

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2 Love Field Modernization Program Update: Master Planning Recommendations Briefing to the Council Transportation and Environment Committee April 28,

3 Briefing Objective Discuss the background and overview of the Love Field Modernization Program development process. Present the recommendations of the Master Plan effort (Terminal Area Redevelopment Program Study). Discuss Implementation, Project delivery. Recommendations and Next Steps. 2 2

4 Background Review The 5-Party Agreement to Repeal the Wright Amendment. Flight restrictions phased out by Limit Love Field capacity to 20 gates. Southwest Airlines 16 gates American and Continental Airlines 2 gates each The City must develop the Love Field Modernization Program, and invest a minimum of $150 M and a maximum of $200 M. The Love Field Modernization Program. Implements the 20-gate limit through reduced terminal size. Costs will be charged to airline rate base. City and Southwest Airlines will cooperate to determine the best methods to design, fund and manage the project. 3 3

Existing Terminal Area North Concourse: Southwest Training, Provisioning, CBS, Ground Service Equip East Concourse: American 3 Gates, Continental 2 Gates East Ramp: DHL General Aviation/Mfg:

5 Existing Terminal Area North Concourse: Southwest Training, Provisioning, CBS, Ground Service Equip East Concourse: American 3 Gates, Continental 2 Gates East Ramp: DHL General Aviation/Mfg: Gulfstream & Bombardier West Concourse: Southwest Gates ,000 sq ft, 43 gates. 20 gates active. Walking Distances: 1500 to farthest gates. Mid-1950 s terminal design & construction. Concession space insufficient for future passenger growth. Security systems must be retrofitted. Baggage systems lack automation and are labor intensive 4 4

6 Love Field Modernization Program Goals Comply with 5-Party Agreement and Wright Amendment Reform Act of Modernize the Terminal to Serve the Community and Traveling Public Efficiently and with Excellent Customer Service. 5 5

7 Love Field Modernization Program Objectives Work collaboratively with Southwest and our other airlines, per the 5-Party Agreement. Planning Development Agreement Achieve Efficiencies. Balance facility size to its needs (currently using half of available 860K square feet) System and Operational Processes Environmental Sustainability Upgrade to Current Design Standards with Flexibility to Adjust to Future Needs. Current, Future Security Requirements and Passenger Processing Technologies Passenger Flow, Congestion, Delay Customer Service and Concession Revenue Opportunities Achieve Schedule Goal: October 13, Affordable design Efficient financing strategy Effective delivery strategies 6 6

8 Overview of the Love Field Modernization Program Development Process Five Steps to Implementation: Master Plan (April 2008) (TODAY S DISCUSSION) Road Map for developing the Love Field Modernization Program Environmental Actions Determination Facilities Requirements: Spatial, Functional, Level of Service Conceptual Design Implementation: Project Financing, Development, Delivery Development Agreement Term Sheet (JUNE) Development Agreement (October 2008) Agreement on implementation, control and oversight Agreement on funding and financing means and methods Agreement on lease and use during project and after completion Design Development (Winter 2009) Determine financially feasible concept, project budget. Procurement and Construction (Fall 2009) Completion and Move-in Under normal development process Summer, Ability to achieve 2014 completion goal will require a creative approach to development. 7 7

9 Master Plan Terminal Area Redevelopment Program Study (TARPS) Scope of Study: Investigate Environmental Issues, documentation needed. Verify Traffic Forecasts of 2001 Master Plan and 2006 Update. Determine Facility Spatial, Landside Traffic, Parking Requirements. Recommend Architectural Standards, Passenger Level of Service Standards, Technical Design Standards. Determine Layout of Terminal and Support Facilities in Terminal Area. Determine Conceptual Layout and Potential Cost Range. Study Completed April 2008 Findings, Recommendations Follow 8 8

10 Master Plan Major Findings & Recommendations Environmental Issues and Documentation Needed Findings Project Construction will not exceed emissions thresholds. Project will result in more efficient facility operation and will not increase impact. Action Items: General Conformity Applicability Analysis submitted to FAA FAA advised its intent to determine no significant impact from project Documentation pending, in support of a Categorical Exclusion from National Environmental Protection Act (NEPA) requirements. 9 9

11 Master Plan Major Findings & Recommendations Passenger and Aircraft Traffic Forecasts TARPS forecast methodology: See Appendix page for detailed information. Design Level Enplanement Forecast: Annual 5,865,580 Peak Month 697,442 Average Day 22,498 Peak Hour 2,250 Forecasts considered reasonable by airlines & and consistent with FAA forecasts

12 Master Plan Major Findings & Recommendations Facilities Requirements and Standards Level Of Service International Air Transport Association standard LOS FLOWS DELAYS COMFORT A Excellent Free None Excellent B High Stable Very Few High C Good* Stable Acceptable Good D Adequate* Unstable Acceptable for Short Periods Adequate E Inadequate Unstable Unacceptable Inadequate F Unacceptable System Breakdown Unacceptable Unacceptable *Note: Level C = standard minimum, Level D = peak periods Comparison service levels: LOS A - passengers would be able to move freely through the terminal facility without experiencing any delays in their movements and feel comfortable in doing so (High Cost). LOS E - passenger movements would be congested, uncomfortable and delays would be recognized as unacceptable (Low Cost). LOS C is recommended as the minimum design objective, as it represents good service level at a reasonable cost

13 Master Plan Major Findings & Recommendations Facilities Requirements and Standards Space requirements to accommodate enplanement forecasts See Appendix page 32 for detailed Space Program. Overall 602,000 sq. ft. Concession space tripled Future Parking expansion Design Level of Service (LOS) Proposed space results in upgrade to LOS C. LOS C = good service at reasonable cost 12 12

14 Master Plan Major Findings & Recommendations Concepts and Cost Range Considerations: 5-Party Agreement caps cost at $200 M. City and Southwest can agree to exceed the cap if desired. Agreement to exceed cap determined through negotiation of Project Development Agreement. Concept Development Approach: New terminal site examined. Southeast of existing terminal (East Ramp). Space limitations and added cost of new infrastructure made concept not feasible. Three concepts developed for existing terminal site. Allows economical re-use of portions of existing facility. All three concepts exceed the $200 M cap

15 Master Plan Major Findings & Recommendations Concepts: Option A Meets the requirements of the 5-Party Agreement. Demolish down to 20 gates. East Concourse Portions of North Concourse Walking distance remains 1500 ft to farthest gate. Remodel remaining gates and enlarge concession space. 16 gates in West Concourse 4 gates in North Concourse Ticketing and Security Screening capacity enhancements. Minimal Bag Claim, Curbside and Roadway enhancements. Lowest cost option exceeds the cap at $357 M

16 Option A OPTION A Scope Renovate West Concourse for 16 total SWA gates Temporary Gates on North Concourse to allow phased renovation of West, then become permanent location for AA and CO New T-Point and EDS Screening No work to Terminal Building or Curbside New Construction Existing Facilities 15 15

17 Master Plan Major Findings & Recommendations Concepts: Option B Renovate West Concourse (12 gates). Demolish East, and existing North Concourses. Construct new North Concourse (8 gates). Requires airlines to operate at 2 concourses Splits passenger traffic between 2 concourses Requires duplication of concessions for each concourse Walking distance decreases to 1384 ft to farthest gate New Ticketing Hall Renovate Main Terminal Lobby Expanded Passenger Screening Checkpoint Baggage Screening consolidated into one system for all airlines Expand Bag Claim Expand Curbside Highest cost of the 3 options ($608 M)

18 Option B OPTION B Scope Renovate and Expand West Concourse for 12 total SWA gates Demo North Concourse and rebuild in new location with 8 Gates New Ticket Hall Bag Claim Expansion Curbside Expansion Terminal Renovation New Construction Existing Facilities 17 17

19 Master Plan Major Findings & Recommendations Concepts: Option C Achieves all facility objectives (page 6). Construct single new 20-gate concourse. More efficient use of available Terminal Area site (smallest footprint) All airlines, passengers in same concourse Enables central concession area accessible by all passengers Walking distance reduces to 1,096 ft to farthest gate New Ticketing Hall Renovate Main Terminal Lobby Expanded Passenger Screening Checkpoint Baggage Screening consolidated into one system for all airlines Expand Bag Claim Expand Curbside Layout efficiency contributes to passenger convenience and Level of Service C. Cost $571 M. Exceeds Option A by $214 M, or 60%

20 Option C OPTION C Scope Demolish East, North and West Concourses and replace with new North Concourse with 20 gates New Ticket Hall Expanded Bag Claim Expanded Curbside Terminal Renovation New Construction Existing Facilities 19 19

21 Master Plan: Major Findings & Recommendations Concept Development: Performance Comparison Matrix Option A meets/exceeds target for 5 of 12 terminal requirements. Option B meets/exceeds target for 9 of 12 terminal requirements. Option C meets/exceeds target for 10 of 12 terminal requirements. Performance Requirements Performance Target Existing A Option B C Terminal Facilities Ticketing Counter Position Self-Service Devices Ticketing Curbside Positions Bag Claim (area sf) 12,500 19,000 19,000 23,400 23,400 Bag Claim (frontage lf) Passenger Security Checkpoints to to to 14 EDS Screening Devices to Concessions 73,013 20,400 29,100 73,000 75,000 Gate Holdroom (avg. sf/gate) 2,250 1,835 1,835 2,250 2,250 Landside Facilities Arrivals Curb 1, Departures Curb Commercial Curb

22 Master Plan: Major Findings & Recommendations Evaluation Matrix Score Range = = least desirable 5 = most desirable Option C score 46% higher than Option A Matrix supports Option C as preferred concept Option A B C Implementation Time To Implement Operational Complexity Customer Inconvenience Cost of Overall Program Operations Operational Efficiency Estimated Relative O&M Cost Customer Convenience Curbside Ticketing SSCP Holdrooms Concessions and Amenities Baggage Claim Walk Distance SUMMARY

23 Master Plan Major Findings & Recommendations Level of Service and Cost Comparison: Service component Option A B C Check-in Queue Area Gate Hold Room Baggage Claim Circulation and Waiting Areas Total Average LOS D C C Evaluation Matrix Score Planning Cost $357 M $608 M $571 M Preferred Option XX 22 22

24 Master Plan Major Findings & Recommendations Concept Development Planning Costs: Costs are very preliminary. More accurate project costs to be determined during design development (Winter, 2009), based on provisions of Project Development Agreement, to be approved by City Council

25 Implementation & Project Delivery Implementation As stated on page 3, the City and Southwest Airlines will cooperate to determine the best methods to design, fund and manage the project (5-Party Agreement). A Project Development Agreement (PDA) between the City and Southwest will represent agreement on the best methods. See outline of PDA, Appendix pages PDA to be proposed to City Council for approval. Term Sheet to Council for approval June,

26 Implementation & Project Delivery Schedule Efficiencies: Schedule goal (page 7) is the date of full repeal Oct, Terminal capacity needed for forecast passenger traffic However, projected completion date under normal City development process Opportunity for Cost and Schedule Efficiencies: Significant project elements can be assigned in the Project Development Agreement to Southwest Airlines. Creation of a Local Government Corporation (LGC) is a means provided by state statute, of assigning LFMP development to a third party. May be created to aid and act on behalf of the City to accomplish any governmental purpose of the City. LGC has power to contract and to issue debt to be secured by airlines. LGC to be proposed for City Council approval in June,

27 Implementation & Project Delivery Local Government Corporation (LGC) Addresses Project Challenges: Project Financing Vehicle for issuing bonds secured by airlines (rather than airport revenues). Demanding schedule for 2014 completion Empowered by state to contract and assign project development to third party: Enables fast-track procurement and delivery methods; Preserves City Council approvals and governance. Project cost containment Costs to be borne by airlines. Allows airline co-management of costs through negotiated PDA. Project complexity Demolition of existing, and construction of new facilities while still in use. Maintaining growing operations of 3 airlines and 2 major concessionaires throughout project. Extensive construction phasing and tenant relocations. Successfully used for recent City project. Mercantile/Forest City Project developed under an LGC. City has also financed other public projects managed by 3 rd party entities: Performing Arts Center, American Airlines Center

28 Recommendations Summary Recommend the City Council approve the Terminal Area Redevelopment Program Study (TARPS) as the master plan for the Love Field Modernization Program (LFMP). Provides viable concepts which: Comply with the 5-Party Agreement; Accommodate passenger levels forecast to nearly 12 million annual passengers by 2014; Provide a Level of Service standard C. Recommend the City Council approve Option C as the preferred concept to be developed further, pending final recommendation after design and budget development pursuant to a Project Development Agreement (PDA), to be negotiated between the City and Southwest Airlines. Term Sheet defining terms of proposed PDA to Council for approval June, Final recommendation to Council for Terminal Concept Option C approval

29 Next Steps City Council approval of Terminal Area Redevelopment Program Study as the Master Plan for the Love Field Modernization Program. City Council Agenda for approval May 21, Develop proposal to create a Local Government Corporation (LGC) as a means of developing the Love Field Modernization Program in the most efficient and cost effective manner possible. City Council Agenda for approval June 25, Negotiate a Project Development Agreement (PDA) with Southwest Airlines, for City Council approval, to enable commencement of design development. Term Sheet of agreement to City Council for approval June 25, Recommendation on Terminal Concept to City Council for approval June 25,

30 Appendix Passenger Traffic Forecast Methodology Facilities Space Program 32. Project Development Agreement Outline

31 Master Plan Major Findings & Recommendations Passenger and Aircraft Traffic Forecasts 2006 Update of the 2001 Master Plan estimated the effects which might result from the proposed repeal of the Wright Amendment. Data used as the basis for the TARPS forecast. FAA Terminal Area Forecast (TAF) for Love Field: Standard forecasting model used to test validity of airport-specific forecast. Results exceed the 2006 Update, but validates current TARPS forecast. TARPS forecast methodology: Constraint 20 Gates. Constraint Voluntary Curfew (17 hours of operation) Variable Aircraft size: assume , 137 seats. Note: American & Continental currently operate 50 seat Regional Jets. The forecast assumes greater demand for larger aircraft when all restrictions phase out in Variable Turns per Gate: 10 turns per gate (assumes min ground time per turn reasonable on consistent basis). 15 turns per gate (assumes 15 min ground time per turn achievable but not consistently) 30 30

32 Master Plan Major Findings & Recommendations Forecasts Design Level Consultation with airlines concerning these peak hour passenger levels indicate that they are within a reasonable range Love Field during the forecast period. FAA TAF validates the TARPS 10-turn per gate projection for post-wright Amendment conditions. However, it assumes on-going growth rate, which fails to recognize physical constraint of 20 gates and practical operating constraint of 10 turns per gate, as limiting factors on growth. TARPS projection for 10 turns in 2014 constitutes the design level of passenger enplanements. Design Level Enplanement Forecasts Historical Annual Peak Month Average Day Peak Hour ,439, ,032 10,033 1, % 31 Days 11.60% TAF Projected ,275, ,691 12,474 1, ,889, ,679 17,183 1, ,967, ,588 23,245 2, ,653, ,675 25,248 2, Turn Projected ,865, ,442 22,498 2,250 Compounded TAF Annual Growth Rate % 4.39% 4.39% 4.39% Sources: City of Dallas, Department of Aviation (historical annual activity) FAA Terminal Area Forecast (projected annual air carrier activity) Ricondo & Associates, Inc. (peak month and peak hour activity) Gresham, Smith and Partners (update and turn project activity) Prepared by: Ricondo & Associates, Inc, updated by Gresham, Smith and Partners 31 31

33 Master Plan Major Findings & Recommendations BASIS FOR 10-TURN SPACE PROGRAM CALCULATIONS DALLAS LOVE FIELD LANDSIDE TERMINAL BUILDING Key Type of space Units Sq.Ft. AIRLINE SPACE Airline Ticket Counter AS-2 Ticket counter agent positions 14 AS-2 Ticket counter ATMs 12 AS-2 Curbside counter agent positions 49 AS -2 Ticket counter (lineal feet) - 90 AS -3 Ticket counter (area) 1,454 AS -4 Ticket counter queuing area 7,938 AS -5 Ticket counter support office 2,250 AS -6 Baggage Makeup 2,250 93,000 Baggage Claim AS -7 Number of devices 5 AS -7a Total lineal feet 729 AS -8 Bag claim area 12,500 AS -8a Baggage Claim Input 10,400 AS -9 Holdrooms 87,841 AS -10 Clubrooms - AS -11 Airline Offices - Landside Terminal 7,512 AS -11a Airport Administration - Landside Terminal 35,000 AS -12 Airlines Offices - Airside Terminal 4,000 AS -13 Airline Operations 60,000 Subtotal 321,895 CONCESSIONS C -1 Food & beverage 53,518 C -2 Rental Car area 3,400 C -3 News/sundries (5% of Gross Terminal Area) 16,095 Subtotal 73,013 PUBLIC SPACE PS -1 Security Checkpoints 14 14,000 PS -1a TSA Administration 4,000 PS -2 Ticket Lobby 4,500 PS -3 Baggage Claim Lobby 9,200 PS -4 Restrooms 18,260 PS -5 Terminal Services 15,600 PS -6 Concourse Circulation 80,375 PS -7 Mechanical & Services 60,884 Subtotal 206,819 Curbside and Parking CS -1 Curbside - Departures 992 CS -2 Curbside - Arrivals 1,043 CS -3 Curbside - Shuttle 568 P-1 Employee Parking Spaces 1,000 Subtotal TOTAL 601,

34 Implementation & Project Delivery Project Development Agreement (PDA) An agreement between the City and Southwest Airlines specifying the goals and objectives of the LFMP and agreeing to the manner in which it will be developed, financed and operated. Scope of the Agreement: Intent of the Project Project scope Commitment to interests of each party Cooperation with other airlines Safety, security, maintenance of operations Program Management Team Consists of representatives for City and Southwest Responsibilities & authority defined Controls, reporting, costs, payments Program Description Individual projects comprising the LFMP Exclusions and interfacing projects FAA funding, standards, grant assurance conformance 33 33

35 Implementation & Project Delivery Project Development Agreement (PDA) (cont d.) Program Definition Manual Project planning & phasing Design Procurement & solicitation Construction, completion, acceptance City ordinances & requirements Codes, ordinances, Life Safety Master Plan Environmental remediation M/WBE, DBE participation Art in Public Places, LEED Certification Project labor agreement, wage rates Sales tax exemption, Record documents Construction staging and parking Dispute Resolution 34 34

36 Implementation & Project Delivery Project Development Agreement (PDA) (cont d.) Contract forms Contracting authority Design, Construction, Program/Construction Management Contract forms, bond/insurance requirements Project title Default Plan of Finance Sources of funds, schedules Grants, PFC, airport revenues, airline funds Financing obligations Requisition of funds Agreement on Rates & Charges 35 35

37 Implementation & Project Delivery Project Development Agreement (PDA) (cont d.) Effectiveness of agreement City, airline approvals FAA Record of Decision Indemnification Airline use and lease agreement / lease amendment Responsibilities of Agencies Department of Aviation Public Works TSA FAA Building Permits 36 36

38 Questions and Answers 37

Amended & Restated Lease of Terminal Building Premises (Airport Use & Lease Agreement)

Amended & Restated Lease of Terminal Building Premises (Airport Use & Lease Agreement) Briefing to the Transportation and Environment Committee Department of Aviation October 27, 2008 Purpose Review 5-Party