Public Notice of Opportunity to Comment on Los Angeles World Airports Passenger Facility Charge Application at Los Angeles International Airport
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1 Re: Public Notice of Opportunity to Comment on Los Angeles World Airports Passenger Facility Charge Application at Los Angeles International Airport Los Angeles World Airports (LAWA) intends to submit a Passenger Facility Charge (PFC) application at Los Angeles International Airport (Airport or LAX) to the Federal Aviation Administration (FAA). LAWA is posting this public notice as part of the PFC Application process under 14 CFR LAWA will be accepting public comments on the proposed new PFC Application through May 15, As part of this process, the following information is being provided: (1) project descriptions and brief project justifications, (2) PFC collection level, estimated PFC revenue, proposed charge effective date, and estimated PFC expiration date, and (3) LAWA point of contact. PROJECT DESCRIPTIONS AND JUSTIFICATIONS A. Terminal 6 Improvement Project Project Amount: $290,415,721 PFC PAYGO: $0 PFC Bond Capital: $129,790,000 PFC Bond Financing & Interest $80,341,523 Federal Grants (TSA): $18,502,216 Local Funds: $61,781,982 PFC Collection Level: $4.50 Start Date: April 2011 End Date: December 2013 Description. On April 4, 2010, the Board of Airport Commissioners of the City of Los Angeles (Board) approved a Settlement Agreement with Alaska that settled all outstanding litigation. One condition of the Settlement Agreement was execution of a new lease for space in Terminal 6 that required Alaska to make certain renovations to Terminal 6. On April 4, 2011, the Board approved the Terminal Facilities Lease and License Agreement with Alaska for space in Terminal 6 at the Airport (Lease), which was executed on June 24, The Lease required Alaska to make renovations in Terminal 6 and LAX to acquire such completed improvements, including but not limited to: Design and implement a new in-line checked baggage inspection system (CBIS) and baggage sorting system for use by all Terminal 6 airlines (Terminal 6 is used
2 Page 2 of 6 by Alaska, Delta, United, Allegiant Air (split operations between Terminals 5 and 6), Frontier, and Copa for domestic and international operations). Upgrade holdrooms and provide Federal Inspection Station (FIS) capability to at least two additional gates that currently only have domestic capabilities. Install Common Use Systems to allow any airline to use Alaska s gates for processing passengers. Expand the Terminal 6 west ticket counter lobby. Enlarge the passenger security screening checkpoint. Refurbish the arrival/baggage claim area. Create consolidated operations space Build a new premium passenger lounge and other improvements branded and unique to Alaska s operational needs (fully funded by Alaska). In summary, the Terminal 6 Improvement Project consists of improvements made as part of the modernization of Terminal 6, including a new in-line baggage screening system, renovated ticketing/check-in lobby with kiosks for check-in and bag-check, new boarding areas, a new passenger lounge, new gate information displays, and renovated FIS facilities to accommodate international passengers. Project Need/Justification. Much of Terminal 6 has not seen re-investment for over 50 years, and the last time any significant work was done to Terminal 6 was 30 years ago. Major renovations to the infrastructure and improvements/upgrades to the interior are long overdue, which was the result of a number of factors including, but not limited to, past 40-year leases with airlines that became barriers to LAWA s planned improvements. B. Elevators/Escalators/Moving Walkways Replacement Program Project Amount: $178,750,601 PFC PAYGO: $110,000,000 PFC Bond Capital: $0 PFC Bond Financing & Interest: $0 Federal Grants: $0 Local Funds: $68,750,601 PFC Collection Level: $3.00 Start Date: April 2009 End Date: October 2016 Description. The Elevators/Escalators/Moving Walkways Replacement Program includes the replacement and modernization of approximately 200 elevators, escalators, and moving walkways in the terminals. These units to be replaced were installed at different times ranging from the 1950 s through the early 1980 s. The replacement of units is based on units with the greatest maintenance demands and
3 Page 3 of 6 highest failure risk being done first. Following this schedule there are a planned four (4) construction phases to complete all units in During replacement all airline service areas are to remain operational. The replacement units are all heavy duty, Transit-Rated type units designed to provide higher levels of service and safety in the high traffic airport environment. The new Transit-Rated units have a 40 year life cycle, while operating with lower maintenance and power requirements. Advanced features, such as motion sensors that enable units to reduce speed and power when no traffic is present are included as part of the Transit-Rated design as well. LAX is one of the first airports in the United States and the first facility in California to use sleep mode on the new escalators. If the escalator is not used for a set period of time, this feature will automatically reduce escalator speed to 20 percent of normal speed. The benefits are significant savings in power usage and maintenance and repairs. In addition, all elevators have improved safety features such as 3D infrared light curtains that operate during door movements. The detectors emit green light as doors open and flash and turn red as doors close. The Elevators/Escalators Program will replace and upgrade many of the units that have exceeded their 25 year operational life span which should increase passenger safety and convenience. Project Need/Justification. Last year LAX had a total of 67 million passengers compared to 56 million approximately six years ago during the recession. Therefore, it is imperative that passengers can move quickly and safely through the terminals which will occur with the newer and faster elevators plus there will be a major reduction in units that are placed out of service due to the more frequent repairs with the older elevator/escalator/moving walkway equipment. The completion of this program will expedite the movement of passengers and their baggage within the Airport s Central Terminal Area (CTA). C. Central Utility Plant (CUP) Replacement Project Project Amount: $426,495,242 PFC PAYGO: $190,000,000 PFC Bond Capital: $0 PFC Bond Financing & Interest: $0 Federal Grants: $0 Local Funds: $236,495,242 PFC Collection Level: $3.00 Start Date: March 2009 End Date: March 2015 Description. This project provides for the replacement of the existing CUP at the Airport, which currently provides heating and cooling to the Airport s Central Terminal Area (CTA). When completed, the $426 million, four-story, 64,000 square foot facility will enhance passenger comfort, reliability of utility service and safety by providing additional capacity for air conditioning and heating of the airline terminals, Administration East Building and the Theme Building.
4 Page 4 of 6 The existing CUP also has a cogeneration function that generates electricity that provides power to the CUP, with excess power sold to the Los Angeles Department of Water and Power. The CUP Replacement Project includes the following components: Replacement of the existing CUP and maintenance shop building, including replacement of the boilers and electrical cogeneration equipment. Replacement of the existing cooling tower system. Construction of an underground thermal energy storage tank the site of the existing CUP. Electrical upgrades to include a new electrical substation and a retro-fit of the existing substation. Replacement of the direct buried chilled and hot water service lines in the CTA. Demolition of the existing CUP and associated ancillary facilities. Project Need/Justification. The existing CUP was constructed in 1961 and, although considered technologically advanced at the time it was installed, is now considered to be obsolete. More specifically, it no longer meets energy and safety codes. As the equipment ages, the associated costs to repair and maintain the existing CUP, control air pollution emissions, and comply with environmental rules and regulations increase. Furthermore, the facility is facing capacity shortfalls, and replacement of the existing CUP is needed to accommodate both existing and anticipated demand for heating and cooling within the CTA. The new CUP is necessary to maintain system efficiency and accommodate recently expanded building capacity at LAX. D. Midfield Satellite Concourse North Project (EIR and Advanced Planning) Project Amount: $5,960,000 PFC PAYGO: $5,960,000 PFC Bond Capital: $0 PFC Bonding Financing & Interest: $0 Federal Grants: $0 Local Funds: $0 PFC Collection Level: $4.50 Start Date: June 2012 End Date: April 2014 Description. LAWA has commenced a multi-billion dollar modernization program at the Airport designed to provide improved, state-of-the-art facilities for travelers. The Midfield Satellite Concourse (MSC) Program is part of these improvements.
5 Page 5 of 6 The MSC Program includes a new passenger concourse facility, as shown on the approved ACIP. The MSC facility will be located in the central area of the airfield, west of Tom Bradley International Terminal. The MSC Program also includes a Central Terminal Processor, conveyance systems for passengers and baggage, and new taxiways/taxilanes and airport aprons. The MSC Program will (1) permit greater flexibility in scheduling improvements at other facilities without disrupting day-to-day airline operations, (2) reduce reliance on remote gates, and (3) ensure a high level of service for Airport passengers during modernization upgrades, which may at times require the temporary closure of existing gates. Due to the size and scale of the MSC Program, LAWA proposes to develop the MSC Program in demand-driven phases. Phase 1 (MSC North Project) of the MSC Program is the construction of the northern portion of the multi-story MSC facility and associated improvements. The MSC North Project is intended to improve the terminal operations, concessions facilities, and overall passenger experience at the Airport. The facility will be designed to serve both domestic and international traffic. For this PFC application, the project being funded with PFC revenue on a PAYGO basis will include the development of a project level Environmental Impact Report (EIR) to comply with California law for the MSC North Project, as well as program definition work for this facility. Program definition for the MSC North Project will refine key areas that are important to the efficient operation of the facility and passenger experience. Examples of key areas include detailed analysis of the positioning of passenger loading bridges to optimize flexibility of aircraft parking positions; identifying alternative interfaces to landside connectors and circulation systems (particularly the separation of sterile international arrivals from secure domestic passengers); busport and passenger loading areas; baggage systems and rooms; back of house service corridors; and baggage rooms. Project Need/Justification. Modernization is a continuing process at the Airport as the needs of the travelers and airlines change and as improved safety measures are implemented. The MSC North Project will provide LAWA with the flexibility to accommodate demand for aircraft gates at LAX. PFC LEVEL, PROPOSED CHARGE EFFECTIVE DATE, ESTIMATED CHARGE EXPIRATION DATE, AND ESTIMATED TOTAL PFC REVENUE PFC collection level: $4.50 per eligible enplaned passenger. Estimated charge effective date for the PFC Application: December 1, 2019 (which reflects the estimated charge expiration date for PFC Application No C-00-LAX that is currently being reviewed by the FAA). Estimated charge expiration date for the PFC Application: Based on five years of PFC Quarterly Reports, the Airport collected approximately $650,400,000 in PFC revenues at a $4.50 collection level for the 60 months ending December 31, 2013 (including interest earned), or approximately $10,840,000 per month. As a result, it is expected that the additional $516,091,523 in PFC revenue (see below) would be collected within approximately 48 months (or until collected PFC revenue plus interest
6 Page 6 of 6 thereon equals the allowable costs of the approved projects, as permitted by regulation). Therefore, the charge expiration date for this PFC Application No C-00-LAX is estimated to be December 1, Estimated total PFC revenue to be collected under this PFC Application: $516,091,523. LAWA POINT OF CONTACT Any comments regarding this public notice should be sent to Doug Schmidt of LAWA at the following address: Los Angeles World Airports Los Angeles International Airport 1 World Way Los Angeles, CA If there are any questions regarding this proposed new PFC Application, Mr. Schmidt can also be reached at (424) or at dschmidt@lawa.org.
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