Quote:
Originally Posted by mello
So construction isn't going to start until Q1 2022, jeez this thing is really lagging. When you say economy being in a different place by then you mean magically it will all just be better or it will be in a much worse place?
Don't you see huge budget deficits for municipalities after a full year of way lower TOT revenues, no conventions, etc?
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It's actually only been delayed by ~6 months, and factors outside of COVID had a lot to do with that. Compare the timeline above to this one from summer 2019.
We're anticipating the economy/travel market to be in a better spot by late 2021 because it looks like one or more COVID vaccines will be in widespread circulation by then. But only time can tell.
SDIA is not run by a municipality, we don't take in tax dollars. Instead the airport funds itself though a combination of user fees (we take a % of every ticket sold and every sale made from our concessionaires) and direct funding from the airlines. The latter is most relevant to this conversation, user fees often don't even fully cover normal operations much less new construction. SDIA signed a lease agreement with the airlines in the summer of 2019, in which the airlines agreed to cover all the airport's residual costs after collecting user fees for the next 20 years. This includes the cost of building the new terminal. That agreement remains in effect, so unless the airlines go bankrupt there will be money for the new terminal.
In late 2021 the airport will try and issue revenue bonds to borrow against that future income. Because airport revenue is guaranteed by lease agreement with the airlines, historically airport revenue bonds have been considered rock solid investments with very low interest rates. With COVID the math on that is harder to figure, but things are looking optimistic. Definitely more optimistic than in April...