Friday, September 17, 2004

Discrepancies in RDU's Story

Step 1: In August 2002, after acquiring the Terminal C lease from American Airlines, RDU stated its plans to renovate and expand Terminal C (note the absence of demolition from these plans) -- scroll down to Page 1 of this document.

Step 3: Today the Airport claims that its project to demolish Terminal C and start over will cost $350 million, qualified in 2003 dollars (which are already inflating). The Airport also claims that this project will cost only $1.5 million more than mere renovation and expansion would have, making the new project worth it.

Here's some quick math. The Airport is saying that the cost estimate without demolition was exactly $348,500,000, or 0.43% less. That figure does not sound like an "estimate," and the tiny differential is probably statistically insignificant. I challenge the Airport Authority to send local journalists historical documentation of the $348,500,000 figure. (Hint: Try not to get Dan Rather involved.)

The problem is Step 2: Some time between August 2002 and May 2003, the Airport dropped the renovation plan in favor of a rebuilding plan that was supposed to cost $500 million. Various references to this figure include this airport contractor's website and this USA Today story.

So, if the renovation-expansion project was going to cost $348.5 million (or less, as may be the case -- could it really be that much?), and if the Airport dropped that project in favor of a $500 million demolition-expansion project, then the Airport made that decision, Step 2, based on other factors besides costs, which were clearly going to be much higher. Step 3 came later, at least in part by May 2003, according to the USA Today article.

(Since the Airport claims that renovation-demolition was estimated at $348.5 million, then by definition, the $500 million figure refers to the different, demolition-expansion project on ACM's website above.)

Interesting Note: Before 9-11-01 and the Airport's acquisition of Terminal C's lease from American, the Airport's plan was to rebuild Terminal A (mentioned here, among other places). It seems that virtually all users agree that Terminal A requires an intense overhaul. By doing Terminal C first and instead, the Airport Authority is not only addressing the wrong problem; it is guaranteeing that hundreds of millions extra will be spent on airport construction during the next decade, and it is delaying by years the date at which this historical phase of expansion will be complete.

A suggested alternative for RDU expansion: The Airport should focus on rebuilding Terminal A, possibly from scratch. (This could include shifting driving lanes to the old parking next to the new parking deck, and bringing the ticketing part of the building out to the present drop-off lanes, and shifting baggage claim & pick-up lanes one story lower.) Reconstructing Terminal A may or may not require expanded capacity in Terminal C during construction. If so, the answer is to expand gates and ticketing northward and/or southward in Terminal C, and to widen the security-check hallway northward and/or southward; those answers (plus an interior overhaul of Terminal C) do not require demolition.

5 Comments:

Blogger Eric J. Horton said...

Where do you get this stuff? You say, "But if Terminal A is overcrowded because a whole concourse of Terminal C is about to be shut down and demolished, and then someone argues that Terminal C needs to be expanded because Terminal A is overcrowded, you have yourself a circular argument." Terminal A was overcrowded before there were plans to redo Terminal C. Show me proof of one airline that had to go to Terminal A due to C's construction.

Mr. Vanke, you may be an activist type but you are no expert on airport operations or airport needs in general. Please answer all the following:

1. Where do you get your information? Is it only from the web and press releases or have you had discussions with members of the RDUAA?

2. Have you spoken with a single member of any airline? Have you asked them if the upcomming construction has forced them to either be placed in or remain in Terminal A? If you have not then you need to stop "SPECULATING" on why Terminal A is overcrowded.

3. Did the RDUAA need a brand new facility to operate from? Are you aware they have spent millions on a new building to give them the room and facility they felt they needed for the future?

4. Was the money spent on a new maintenance facility well spent?

5. Is the money being spent on the new General Aviation complex worthwhile? Are you even aware of that project?

What do the last three questions have in common? All are projects where either demolishion and or total rebuilding took place. Why where these projects not of your time to object? None of them have any direct inpact on the everyday commercial flyer. They will not enhance RDU's ability to gain future business from airlines.

My point is that it takes money to make money. If we simply put a "band-aid" on Terminal C now, we will have to pump more money into it down the road. It is a long term investment in our community that both the long-lived Triangle area person or those who just pass through while generating revenue can utilize and be proud of.

One last question. When the new terminal is complete, will you continue to reap the benifits of better check-in, shorter lines and more space or will you limit yourself to departing from the terminal that RDUAA packed full?

September 17, 2004 at 12:14 PM  
Blogger Jeff Vanke said...

EH:

1. Yes, I get my information from publicly available sources. If RDU gives a press release including the explicit purpose of explaining the motivations for its plans, and the RDUAA lays out passenger flow and increased security capacity as major reasons, then I am left to believe that those are some of their best justifications. And I have addressed them in my initial postings. I am open to other explanations, but I'll most believe the ones that appear signed in writing.

2. I addressed this in another thread here. It's a basic supply-and-demand question. All things being equal, if Terminal C northern concourse were open and available under the same financial and operational conditions, but with less crowding, it would make sense for some airlines to locate there. Yup, that's speculation. All business decisions involve some amount of speculation. If you want to maintain that no airline would occupy the entire northern concourse, if it were open, that's your own speculation. We're not going to resolve this one.

3, 4, 5. No, I don't know much about those projects. So what? Are you telling me it's related? If so, I'm interested to learn more. If not, it's a different issue; you may as well ask me why I'm not using this space to protest corruption in Durham city government. I'm not here to hound RDU about anything and everything.

Your penultimate paragraph implies that anyone should agree that any long-term investment is a good long-term investment. Ask Ted Turner about his AOL stock.

To your last question, Yes, I pledge that once a new terminal is built, I will never ever use it. So there. Not! That was a stupid rhetorical question that discredits your other points.

September 17, 2004 at 4:01 PM  
Anonymous Anonymous said...

1. How much of an authority are you when it comes to expensing the redesign of terminal C as opposed to rebuilding?
2. The reason RDU decided to change their concentration from rebuilding A and going to C is available in press and news releases. American Airlines SOLD the terminal back to RDU in 2002 and then leased gate space. You have to remember that C was built by RDU for American to buy, and so American had a lot to do with the original design which does not conform to the amenities of a public multi-airline terminal. I remember the authority was thinking of a renovation, but a lot of renovation would still leave the airport with another problem, they are growing, (hint-try checking past feb of 2004 for passenger numbers).
3. One way or another one of the terminals was going down. the original plan was to demolish A if you recall. And as I can see below you suggest this still. However there is a Huge problem with this suggestion. (Remember C can't handle more than 3 or 4 airlines) Where do they go? Terminal C has 26 Gates, Terminal A has 23) currently 14 in C are in use and 21 in A. So you can't just demolish A and have 35 gates of traffic in C and you can't just demolish C and throw them all to A.
4. With the demise of Midway, a perfect solution occurred. C could be demolished one half at a time,( here is where the RDUAA changed heart), since midway was no longer gonna have a Hub after they went chapter 7 30 October 2003
Midway Remembered
(Please remember they tried to revive service in 2002)
5. In the long term plan prior to 9/11 the airport plan called for the
a.building of a temp terminal
b. demolition and rebuilding of A.
c The rebuilding of C

Now RDUAA can drop step a, and switch the other 2.

6. You seem to claim that the tech boom is over. I disagree. I think it may not be in the telecom's, but it will be in other companies out there. Health, government, Biomed, space, and countless other industries that will eventually take their place.

7. The world is headed for urbanization, so cities and regions like RDU will contine to grow.


I still don't understand why you are so against this when workers will have jobs, and money will circulate in the economy and more people and jobs will come to the area

September 18, 2004 at 12:58 AM  
Blogger Eric J. Horton said...

Well at least I didn't get personal. I could have easily bent over to your level but I didn't. I was simply asking a question and a simple "yes" or "no" would have sufficed. As you mentioned, you are an activist. I was wondering if you felt strong enough about your position to forgo using a facility that you consider "wasteful". How is that lacking credability?

And why are you such an expert on what makes others credible? I could say you lack crediblilty on many issues but I don't generalize all of your comments as uncredible.

September 18, 2004 at 4:27 AM  
Blogger Jeff Vanke said...

Mr. Horton, I apologize. I found your question unnecessarily provocative, but you have qualified it, and I was wrong in how I interpreted its intent. You're right, such a boycott is the sort of behavior that some activists would engage in; I'm a pragmatic sort.

To the preceding Anon., your remarks -- and this whole debate -- boil down to your belief that the renovation-expansion of Terminal C would cost just as much as the demolition-expansion. Frankly, I don't believe that statement by the Airport, which I addressed in the post that started this thread.

(Also, I have already actually linked the February 04 passenger data in a previous post. January-February 04 are still more than 20% below 2000 levels.)

Am I an expert on airport construction and this particular Terminal C? No. But I am well educated and well informed, and so far, I find that the Airport has made nowhere near a convincing case that Terminal C would cost anywhere near $350 million to renovate and expand. And since the Airport Authority includes multiple construction people, I'm inclined to believe that they are inclined to offer and believe in solutions carried by their own industry. If, on the other hand, the Authority were run by the budget managers of the four governments that appoint the Authority, they might just come up with something different.

When the Authority comes out with this extremely coincidental 0.43% cost differential, that undergirds my skepticism in its will to pursue cost-effective solutions.

September 18, 2004 at 1:29 PM  

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