VIPA’s Board Explores Public/Private Partnership for Airport Terminal Expansion Projects
The Virgin Islands Port Authority Board of Governors authorized the Executive Director to pursue a Public/Private Partnership (commonly referred to as a P3) financial model for the modernization and upgrading of the Henry E. Rohlsen Airport and the Cyril E. King Airport. At its regularly scheduled meeting on September 21, 2022, in St. Croix, the Board authorized VIPA Executive Director Carlton Dowe to issue a Request for Qualifications (RFQ) to solicit firms and groups who may be interested and qualified to participate in a P3 airport financing project. Interested firms will be selected to submit a proposal for the financing of the airports’ modernization. Once a firm is selected, VIPA will negotiate a long-term contract with the firm to finance, design, build, operate and maintain the airports as a means for the company to be repaid and gain a return on their investment.
VIPA has already begun the first of four phases to expand both the HERA and CEKA terminal using hurricane recovery grants awarded to the Authority in 2019 by the U.S. Economic Development Administration (USEDA). The first phase of the HERA Terminal project was completed in December 2021, which entailed the expansion of the domestic passenger lounge. The project was funded via a $7 million USEDA grant. In March 2021, VIPA began the construction of a parking and transportation center at the King Airport on St. Thomas that will house all taxi and rental car operations and provide more than 570 parking spaces for travelers. This $20.8 million project was also primarily funded via a $20 million grant from the USEDA.
However, finding a means to fund the remaining phases of each terminal’s expansion project which is estimated require significant investment in the hundreds of million dollars range has proven to be extremely challenging for VIPA. The cost to add multiple jet bridges to both terminals, more concession spaces and amenities to enhance the customer experience, improvements to passenger flow within the airport terminal building and improved landside traffic flows and improve the aesthetics at the territory’s airport terminals is escalating as time passes, said Director Dowe. “VIPA’s Board has authorized us to pursue a P3 option as a financial and procurement alternative to improve the customer experience add capacity to meet market demand modernize our aging airport terminals and infrastructure while also focused on resiliency and sustainability. The CEKA Terminal is more than 33 years old, and the HERA Terminal has had no major renovations since it was expanded in 2000.
VIPA Executive Director Dowe said, “We have outgrown the footprint of both terminals and the mechanical infrastructure is outdated. This causes a multitude of operational complications for our tenants and airport users. Improving our terminals will also improve the arrival and departure experience at our airports for residents and visitors who expect modern amenities when traveling to and from a territory of the United States.” He added that VIPA must improve its airports to remain competitive as a premier tourist destination.
VIPA has engaged its financial consultant, Frasca and Associates LLC to provide strategic analysis, financial advisory, and P3 advisement throughout the process. Over the last three months, VIPA has met with federal and local stakeholders and its employees to discuss the agency’s intent to explore the P3 method to finance the airports’ improvements. Dowe said that the feedback has been positive and encouraging – particularly from the users of the airports who experience the difficulties of working in aging terminals every day.
Dowe added that the project is still in its early stages. While VIPA is seeking a private partner to invest in terminal improvements and enhancements and operations at its Airports, VIPA will remain the owner of the territory’s airports. The RFP will be issued before the end of this year and will be available on VIPA’s website, www.viport.com.
At the meeting, the board also:
Ratified poll votes approving Federal Aviation Airport Improvement Program Grants to purchase aircraft rescue and firefighting equipment and to rehabilitate the runways and taxiways at the Rohlsen and King Airports.
Approved the renewal of the non-exclusive lease agreement for Texas Pit to sell food at the Charlotte Amalie Waterfront bulkhead.
Approved a payment plan agreement between VIPA and O’Neale’s Trucking and Trailer Transport for $45,407.77 to address past due rent.
Approved a one-year landscaping contract with Double-A Cleaning Services in the amount of $159,800 to maintain VIPA’s non-aeronautical properties on St. Thomas.
Approved a generator maintenance and repair service contract with MLC Holdings LLC dba Import Supply for a period of one year with an option to renew for an additional one year of service in the St.Thomas/St. John District.
Approved a contract in the not-to-exceed amount of $147,746 with Bermello, Ajamil & Partners to conduct a rate study of the Authority’s marine operations to meet and comply with the Indenture of Trust Agreement between the Authority and the U.S. Bank National Association.
Approved a contract in the amount of $1,335,173 with Rodriguez & Garland, Inc. to renovate the Loredon Lorence Boynes, Sr. Dock in Cruz Bay, St. John. This project is funded via appropriations from the Legislature of the U.S. Virgin Islands.
Approved a contract in the amount of $209,817.50 with Continental Construction and Engineering for the Urman Victor Fredericks Marine Terminal Restroom Renovations Project.
Approved Amendment No. 1 to Task Order No. 11 issued to VIPA’s CEKA aviation Consultant Kimley-Horn & Associates to provide construction phase services related to the Parking and Transportation in the not-to-exceed amount of $1,199,840.
Approved Task Order No. 38, authorizing VIPA’s CEKA aviation consultant Kimley-Horn & Associates to provide construction phase services for the CEKA Taxiway A West Reconstruction project in the not-to-exceed amount of $1,775,065.
Approved Task Order No. 39 to Kimley-Horn & Associates to provide design services related to the Runway 10-28 Rehabilitation project in the not-to-exceed amount of $1,618,175.
Authorized Task Order No. 20B issued to American Infrastructure Development (AID), VIPA’s HERA aviation consultant to provide construction phase services related to the Taxiway A and B Rehabilitation project in the not-to-exceed amount of $233,558.
Rescinded the Board’s action to award TMZ Construction for the storm panel repairs at Ann E. Abramson Marine Facility that was given at the board meeting held on February 16, 2022.
Authorized the Executive Director to accept the bid proposed by Tang How Brothers, Inc. for the Repair of Storm Panels at Ann E. Abramson Marine Facility Project in the amount of $321,700. This project is funded via an appropriation from the 34th Legislature.
Approved the Change Order Request #17 submitted by AT Construction Solutions LLC for the replacement of exterior soffits of the Gordon A. Finch Marine Cargo Terminal in the not-to-exceed amount of $60,227.36.
Approved Change Order Request #18 submitted by AT Construction Solutions LLC for the relocation of the air handling unit condenser of the Gordon A. Finch Marine Cargo Building in the not-to-exceed amount of $26,290.91 to adhere to the requirements set forth by the Department of Planning and Natural Resources (DPNR).
Authorized the Executive Director to accept the bid from Tang How Brothers, Inc. to repair the old Engineering/Purchasing building at HERA in the amount of $267,400.
No executive session was conducted at the meeting. Board members in attendance included Board Chairman Willard John of St. Croix, Board Secretary Kevin Rodriquez, Tourism Commissioner Joseph Boschulte, Attorney General Denise George, and members Celestino A. White Sr. of St. Thomas and Lionel Jacobs of St. Croix. Public Works Commissioner Derek Gabriel, who is the Board’s Vice Chairman, was absent. There are two vacancies on VIPA’s board – a representative for St. Thomas and a representative for St. John.